Potential benefits of climate forecasting to agriculture

Climate variability leads to economic and food security risks throughout the world because of its major influences on agriculture. Accurate forecasts of climate 3-6 months ahead of time can potentially allow farmers and others in agriculture to make decisions to reduce unwanted impacts or take advantage of expected favorable climate. However, potential benefits of climate forecasts vary considerably because of many physical, biological, economic, social, and political factors. The purpose of this study was to estimate the potential economic value of climate forecasts for farm scale management decisions in one location in the Southeast USA (Tifton, GA; 31 degrees 23'N; 83 degrees 31'W) for comparison with previously-derived results for the Pampas region of Argentina, The same crops are grown in both regions but at different times of the year. First, the expected value of tailoring crop mix to El Nino-Southern Oscillation (ENSO) phases for a typical farm in Tifton was estimated using crop models and historical daily weather data. Secondly, the potential values for adjusting management of maize (Zea maize L.) to different types of climate forecasts (perfect knowledge of (a) ENSO phase, (b) growing season rainfall categories, and (c) daily weather) were estimated for Tifton and Pergamino, Argentina (33 degrees 55'S; 60 degrees 33'W). Predicted benefits to the farm of adjusting crop mix to ENSO phase averaged from US$ 3 to 6 ha(-1) over all years, depending on the farmer's initial wealth and aversion to risk. Values calculated for Argentina were US$ 9-15 for Pergamino and up to US$ 35 for other locations in the Pampas. Varying maize management by ENSO phase resulted in predicted forecast values of US$ 13 and 15 for Tifton and Pergamino, respectively The potential value of perfect seasonal forecasts of rainfall tercile on maize profit was higher than for ENSO-based forecasts in both regions (by 28% in Tifton and 70% in Pergamino). Perfect knowledge of daily weather over the next season provided an upper limit on expected value of about US$ 190 ha(-1) for both regions. Considering the large areas of field crop production in these regions, the estimated economic potential is very high. However, there are a number of challenges to realize these benefits. These challenges are generally related to the uncertainty of climate forecasts and to the complexities of agricultural systems. (C) 2000 Elsevier Science B.V. All rights reserved.