be independent of soil moisture. Surface wetness variance curiously increases the likelihood of cropland in both the US and Brazil. Once again, this effect is larger than the effect of the surface wetness normals. The results suggest that the advantages of occasional wet years outweigh the disadvantages of occasional dry years. Farmers appear to be attracted to the very phenomenon they most bitterly complain about-climate variance.

# **CONCLUSION**

The paper tests the relative importance of climate normals and climate variance in explaining both the net revenue from cropland and the fraction of all land used for cropland. Samples are drawn from the United States, Brazil, and India. For the first time in this type of analysis, satellite data are used to provide consistent measures of climate across all three countries.

The data analysis concludes that climate normals and climate variance both play a role in determining net revenue and percentage of cropland. Interestingly, the results are mixed across the three countries in determining which set of variable is most important. In the United States, climate normals are far more important than climate variance in explaining net revenue per hectare but climate variance is slightly more important in explaining percentage of cropland. Temperature variables in general are slightly more important than surface wetness variables. In Brazil, climate variance and climate normals are equally important in explaining net revenues but climate variance is more important in explaining percentage of cropland. Surface wetness variables are more important explanatory variables for net revenues and but temperature is slightly better explaining percentage of cropland. Finally in India, climate normals, especially surface wetness variables, are more important than climate variance in explaining net revenue but only temperature normals explain percentage of cropland.

The results indicate that global warming could have a large influence on agriculture as it changes the climate normals and possibly also climate variance. Warming will tend to decrease net revenues per hectare and probably also cropland. If warming reduces soil moisture, this will have additional harmful effects on dry countries such as India and Brazil, although it might actually help the United States. If warming simultaneously increases temperature variance, this may have beneficial effects in the United States and India but harmful effects in Brazil. However, if warming increases the variance of soil moisture, it is expected to be harmful to all countries, although it may increase the amount of cropland. Warming impact specialists must consequently pay close attention to not only the changes in climate normals, but also possible changes in climate variance.

Of course, the net effect of global warming on agriculture must also take into account the effects of carbon dioxide fertilization. The widespread field and laboratory evidence that crops will be more productive in a CO2 enhanced world (Reilly et al 1996) is not reflected in this cross-sectional evidence. The beneficial CO2 fertilization effects must be added to these cross sectional results to get an unbiased expected net effect.

Efforts to adapt to global warming must focus closely on how to react to changing normals and variance. Successful adaptation will depend first and foremost on adjusting 66