The study also examined some simple climate scenarios to see how agricultural production in the country would respond to climate change. The uniform scenarios showed that a 2.5 _°_ C increase in temperature would decrease net farm revenues by US$0.4 billion for all farms and increase it for farms with irrigation by US$0.3 billion. The study also examined the impact of a 5 _°_ C increase in temperature and the results showed that net revenues would decrease across all farms, rainfed farms and farms with irrigation by US$0.4 billion, US$0.5 billion and US$0.003 billion respectively. A 7% and a 14% decrease in precipitation would result in a decrease in net farm revenue by US$0.3 billion for all farms. The study also examined the impacts of three SRES climate change scenarios, CGM2, HadCM3 and PCM. These scenarios predicted that by 2100 net farm revenues would decrease by US$0.8 billion, US$ 1.3 billion and US$ 1.4 billion across all farms, rainfed farms and farms with irrigaion respectively.

The study also showed that farmers are already making efforts to adjust to changing climatic conditions – 68% indicated that they are doing something while only 32% indicated they are not doing anything. Common adaptation strategies being employed by farmers include dry and early planting, winter plowing, planting short and drought resistant crop varieties and water harvesting. The analysis shows it is important for the government, research units and private companies to invest resources in equipping farmers to help cushion them against further adverse climatic conditions.

The policy message from the empirical findings is that there is great need for the government through the meteorological department, research and extension, private sector and NGOS to provide adequate extension information services to ensure that farmers receive up-to-date information about rainfall patterns in the forthcoming season so that they can make wellinformed decisions about their planting dates. Another important policy message is that the government, research and extension, private sector and NGOs can improve net farm performances for smallholder farms by ensuring increased farmer training, increasing access to credit and aid facilities, and helping farmers acquire livestock and other farm assets. Furthermore, ensuring the availability and accessibility of fertilizers and crop seeds before the onset of the next cropping season can significantly improve net farm performances.

# **8. Limitations and directions for future research**

The empirical findings in this study are based on aggregate district level cross-sectional data and need to be treated with some caution since important farm-level decision making and other important variables that affect net farm revenues may have been missed. It is therefore important for future research to focus on the micro-level analysis of the impacts of climate on net farm revenues. In addition the study focused on smallholder farming households and it is important for future research to consider the commercial large scale sector comprising the new resettlement areas that have high level technology and irrigation facilities. This would enable the analysis to capture the impacts of technology and irrigation on net farm revenues.

Furthermore, this study quantified the economic impacts of climate change using the Ricardian approach but did not analyze any welfare effects of climate change. Future research should analyze the effect of climate change on the welfare of farm households and the country as a whole. In addition, it would be important to do regional analysis of the impacts of climate change in addition to the country level analysis.

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