Impacts of climate change on agricultural yield and the economic feasibility of adaptation. Key takeaways from the UCT-UCR seminar
We begin 2026 with new excitement for the seminar series. In the first instalment on 4 March 2026, we are joined by Prof. Katarina Elofsson from Aarhus University, Denmark, on the impacts of climate change on agricultural yield and the economic feasibility of adaptation in Sweden.
The discussion provided background on how climate change could negatively affect agricultural production through droughts, flooding, and high temperatures, noting that yield could fall by 38% by 2050. Considering that the population in 2050 will be an estimated 9 billion, these statistics signal food insecurity if not addressed. The discussion used econometric approaches to answer research questions, including: how the impact of precipitation on per-hectare yields varies across crops and seasons; whether the impact is non-linear; and whether it varies across space.
Key takeaways:
- The study used country-level panel data on agricultural yields per hectare from 1979–2021 with location-matched weather data on precipitation, temperature, relative humidity and soil moisture; with 3 seasons being captured: early growing season, main growing season, and harvest season.
- The identification strategy built on the country-level exogenous variation in seasonal precipitation once fixed effects were considered. The model used for estimation was the Poisson Pseudo-Maximum Likehood regressions with a high- dimensional Fixed effects model, where the yield is modelled against the effects of precipitation (linear + non-linear) + effects of temperature, humidity, and soil moisture + county characteristics + county‑specific time patterns + random noise.
- The results showed that for the early growing season, all four crops showed a significant linear effect and a significant negative quadratic term, showing that moderate early-season rain boosts yields, with winter wheat and oats benefiting the most (largest coefficients). In the main growing season, results differed in that the linear term was positive and significant; the quadratic term was reported as negative and significant. For the harvest season, precipitation in winter wheat showed a weakly positive relationship with yield.
To conclude the session, Prof. Elofsson highlighted how revenues drop sharply when precipitation decreases in the first growing season for winter wheat, which is the most sensitive to reduced rainfall, meaning farmers face higher financial risks if drought conditions occur. However, barley, spring barley and oats showed less dramatic declines in revenue when precipitation is reduced, and their revenue curves were flatter, suggesting they were more resilient to rainfall variability.
This presentation is part of the UCT-UCR Seminar Series: Water Economics and Politics, a joint initiative between the University of Cape Town (UCT) and the University of California, Riverside (UCR). About this presentation: Impacts of climate change on agricultural yield and the economic feasibility of adaptation