1. Agricultural adaptation during
times of change
Thilak Mallawaarachchi, David
Adamson, John Quiggin and Peggy
Schrobback
Risk and Sustainable Management Group, The
University of Queensland, Brisbane 4067
Paper presented to the CCRSPI Conference 2011, The National Climate Change Research Strategy for Primary
Industries, February 15-17 2011, Melbourne Cricket Ground (MCG).

2. Adaptation
• Adaptation to climate change
– finding ways to live with scarcer water, higher
peak temperatures, higher sea levels and weather
patterns at odds with those under which today’s
settled patterns of farming developed
The Economist, Nov 25, 2010
Photo credit: Anthea McClintock, Jemalong, NSW, 151210

3. Agricultural Adaptation
• Crop adaptation – sole basis of agriculture*
– The relationships between the environmental
factors and the growth response of plants
– Matters of ecology, with elements of geography,
physiology, genetics, meteorology, and agronomy
• Climate risks include issues beyond farm
– Linked through markets and trade, and social
imperatives such as food security and poverty
*Wilsie, CP & Shaw, RH 1954, 'Crop Adaptation and Climate', in AG Norman (ed.), Advances in Agronomy, Academic Press, vol. Volume
6, pp. 199-252.

4. Climate risks
• Increasing uncertainty
– Affects the set of available options
– And the nature of outcomes of decisions
• Potential payoffs are dictated by knowledge and
endowment
Faced with the prospect of learning, increasing
uncertainty leads to a preference for more flexible
strategies
Problem
How to find the set of flexible and efficient strategies
when the distribution of the states of nature is
widening

5. Farm sector performance
Agricultural Returns (2010 Values)
$60 250
Billions
$50
200
$40
150
Gross Value of Production
$30
Farm Costs
100
Net Return
$20
Terms of Trade
50
$10
$0 0
1983-84
2001-02
1969-70
1971-72
1973-74
1975-76
1977-78
1979-80
1981-82
1985-86
1987-88
1991-92
1993-94
1995-96
1997-98
1999-00
2003-04
2005-06
2007-08
2009-10
1989-90
Source: ABARES

6. TFP and TOT
Source: Shen, Grey & Mullen (2010)

7. Dairy: Less Cows But Increased Output
Dairy Statistics
7,000
6,000
5,000
4,000
3,000
Dairy Cows
2,000 Milk (L/Cow)
1,000
0
1968-69
1965-66
1971-72
1974-75
1977-78
1980-81
1983-84
1986-87
1989-90
1992-93
1998-99
2001-02
2004-05
2007-08
1995-96

8. History matters
• Path dependence
• Explanations for path dependence
– increasing returns (size economies)
– self-reinforcement (complementarity)
– positive feedbacks (early-mover advantage)
– lock-in (popular choices, capital fixity)
... and more ...

9. Real Value of Australian Agricultural Output by Commodity
$60
Billions
Livestock
$50 Cereal for grain
$40 Milk
Wool
$30 Vegetables
$20 Fruit and nuts
Cotton
$10 Other
Grapes
$0
Sugarcane
Oilseeds

10. $16
Billions
$14
$12
$10
$8 Fruit and nuts
$6 Cereal for grain
$4 Livestock
$2
$0

11. Broadacre Farm Performance over
time
Sheng et at 2011

12. Economies of size and technology
Sheng et at 2011

13. Issues for exploration
• Path dependence of farmers’ technical choices for
managing climate risk when farmers have
difficulty in separating climate change from
natural variability
• Adopting sub-optimal decisions in the interim in
adapting to change
• Understanding the role of externalities in defining
sub-optimality for society
• Linking agroecological and institutional innovation
for optimal decisions under uncertainty

14. Global effects
1
Global climate change
2
Sectoral effects National effects
3
Economic growth
Population
Technology
Governance
Strategic planning
Agricultural systems

15. Schematic representation of methods used to combine crop and climate models.
Challinor A J et al. J. Exp. Bot. 2009;60:2775-2789

16. Cross-scale interactions
over time
Regional/ Landscape
Farming system
Plot/paddock
Represent uncertainty as states of nature and their range of probabilities

17. Understanding the full picture
It is argued that the Indian peasants in Chiapas, Mexico are
backward, they produce only two tons of maize per hectare as
against six on modern Mexican plantations. But this is only part
of the picture. The modern plantation produces six tonnes per
hectare and that’s it. But the Indian grows a mixed crop.
Amongst his corn stalks, that also serve as support for climbing
beans, he grows squash and pumpkins, sweet
potatoes, tomatoes and all sorts of vegetables, fruit and
medicinal herbs. From the same hectare he also feeds his cattle
and chickens. He easily produces more than 15 tons of food per
hectare and all without commercial fertilisers or pesticides and
no assistance from banks or governments or transnational
corporations.
Jose A. Lutzenberger, former Minister of the Environment for Brazil.
http://www.afgventuregroup.com/dispatches/afg-venture-group-newsletter/october-2010-primary-industries-with-a-focus-on-agriculture-and-agribusiness/

18. Decline of the Sheep Industry?
Australian Sheep Numbers (Million)
200
180
160
ACT
140
Tas
120
WA
100
80 SA
60 QLD
40 VIC
20 NSW
0
1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009