Economic impact of climate change on maize production in the Free State Province, South Africa

Abstract

Higher concentrations of CO2 in the atmosphere is a major influence on climate change globally. Climate change is caused by greenhouse gases trapping too much heat from the sun in the atmosphere and thus, altering the climate through a rise in global surface temperatures and changing precipitation patterns. CO2 is the most prominent greenhouse gas found in the atmosphere and it is reported that by the turn of the century the CO2 concentration levels will have doubled if the current rate of emissions continues. However, the increase in atmospheric levels of the gas has been found to increase the capacity of maize plants and their water use efficiency to achieve higher yields through CO2 fertilisation. Simulation experiments conducted by the Rhodes University Botany Department found that the effect of elevated levels of CO2 of double the current concentration offsets the negative effects of drought on maize. A case study was conducted on commercial maize farmers in two regions of the Free State province in South Africa to estimate the economic impact of climate change on maize production. Although production is increasing in the province, adaptation to the changing climate is key to the sustainability of production. There is a trade-off between the negative effects of higher CO2 levels changing the climate and the positive effect of CO2 fertilisation. As predicted, the economic impact of climate change is the disruption of farming practices and the increase in costs of production as a result of adapting to climate change. Using a gross margin analysis, the study found that the larger maize farmers who benefit from economies of scale are able to adapt and grow their production whilst the smaller farmers are being pushed out of the market.