National Workshop on Water Resources and Livelihoods in the Dry Areas Considering Climate Uncertainty Hammamet, Tunisia, September 2014 ECONOMIC ANALYSIS OF AGRICULTURAL ADAPTATION TO CLIMATE CHANGE IN ARID AREAS: THE CASE OF ZOGHMAR (SIDI BOUZID) HAMED DALY, CAROLINE KING

Introduction Objectives Methods and case study Results Discussion Conclusions OUTLINE

The drier central and southern regions are expected to be the most severely impacted by climate change (periodic droughts) and rangeland degradation Agricultural land is expected to be unsuitable for cereal cropping : The traditional barley-livestock system is expected be reduced by 80% in drought years (GIZ 2007). However, combined livestock and crop net revenue is more climate resilient in Africa (Seo, Mendelsohn et al., 2009) INTRODUCTION (1)

Suitability to barley cropping A1B SRESA2 SRES % (MS) 6.9% (NS) 100% (MS) % (MS) 6.9% (NS) 100% (MS) % (MS) 22.8% (NS) 93.1% (MS) 6.9% (NS) Annual rainfall ( ) : 229 mm Barley grain yield ( ) : 223 kg/ha (CRDA) Using other models : GCM= HadGEM2-ES/ Crop model= DSSAT The barley yield may increase due to rainfall patterns change and interaction with CO 2 level and other weather parameters: T… (Annabi, preliminary results)  Need to Compare many GCM Climate change and its impacts on barley production : Case of Sidi Bouzid MS : Marginally suitable, NS : Non suitable - Source : World bank, 2011

Decision makers need an evaluation of different adaptation options Irrigation, olive tree plantation and plantation of forage species Alternatives could give higher income for farmers but lower social benefits Thus, there is a need for public action to avoid negative externalities or increase public benefit INTRODUCTION (2)

Objectives - To assess the profitability of these interventions from a private and social perspective - To analyze the contribution of adaptation techniques to improving farmers’ income

Method : Cost-benefit analysis (CBA) Please insert a picture that represents your work A useful tool to analyse individual options, especially those publicly-funded producing both private and public benefits. Justify investments for different interventions Allows comparisons between land use options May expand to include the range of benefits & costs ‘With’ and ‘without’ interventions comparisons

Stages for conducting CBA Please insert a picture that represents your work a)Identify the improved alternative impacts b)Quantify impacts c)Estimate costs and benefits d)Predict the magnitude of annual incremental costs & benefits over the life span of the alternative e)Discounting f)Measure of main indicators g)Sensitivity analysis to consider risks and uncertainties.

Agricultural surface area : 2400 ha Sheep livestock production integrated with pasture and cereal production Surface area/household : 14.7 ha Number of ewe/household : 26 Rainfall : 240 mm ( ) Frequent drought risk : 6 years in a decade Net income per household (2013) : 5616 TD/year, mainly from animal production, 28% external to agriculture (INRAT, 2013 survey).  Annual increase : 2.2% ( )  compared to 6.1% for Tunisia  Very high poverty rate : 60% compared to 15.5% for Tunisia (2010) (INS, 2012) Case study site : Zoghmar (Sidi Bouzid) Source: INRAT Survey, 2013

Decrease of cereal cropping from 85% of the surface area in 1991 to 44% in 2013 Increase of olive tree plantation form 10% to 19% in the same period Increase of cactus plantation (6% whole plantation +11% in alley) Increase of livestock from 20 ewes per farm in 1991 to 26 in 2013 Case study site : Land use changes in Zoghmar Source: CRDA 1991; INRAT 2005; INRAT Survey, 2013

Current land useAlternatives Rangeland Cactus Cactus in alley Barley with cactus in alley cropping Rainfed barley Cactus Barley with cactus in alley cropping Olive tree plantation Irrigated barley Irrigated olive trees a. Adaptation techniques in zoghmar-Sidi Bouzid area

COSTS CONSIDEREDBENEFITS CONSIDERED 1. FARMER COST OF PLANTATION COST OF EMPLOYED LABOR COST OF WATER LOSS OF CROPPED AREA ON SITE INCREASED AGRICULTURAL PRODUCTION 2. NATIONAL SOCIETY COST OF PLANTATION COST OF LABOR FULL COST OF WATER (OPPORTUNITY COST + COST OF WATER DEGRADATION) LOSS OF CROPPED AREA ON SITE AND OFF SITE +. REDUCED EROSION 3. GLOBAL COMMUNITY ON SITE AND OFF SITE +. CARBON SEQUESTRATION b1. Identification of costs and benefits

Survey for valuation of private costs and benefits of different land uses Data about yield of barley and olive trees (CRDA) Market price for Private valuation Real price / opportunity cost of labor/ Full Cost of water for Social valuation c. Valuation of costs and benefits

RESULTS : COMPARISON BETWEEN DIFFERENT ALTERNATIVE LAND USES IN RANGELANDS : CASE OF ZOGHMAR Net present value (NPV) (8%, 20 years) in TND/ha Alternative land uses Farmer’s perspectiveNational perspective Cactus Cactus in alley + pasture Cactus in alley+ barley Non action : Rangelands

RESULTS : COMPARISON BETWEEN DIFFERENT ALTERNATIVE LAND USES IN RANGELANDS : CASE OF ZOGHMAR NPV (8%, 20 years) in TND/ha Alternative land uses Farmer’s perspective Social perspective Cactus Cactus in alley Cactus in alley cropping with barley Irrigated barley Non action : Rainfed barley

RESULTS : PROFITABILITY OF OLIVE TREES PLANTATION AT FARMER, NATIONAL SOCIETY AND GLOBAL COMMUNITY PERSPECTIVE : CASE OF ZOGHMAR NPV (8%, 60 years) in TND/ha Without intervention NPV at farmer perspective (DT/ha) NPV for national society (DT/ha) NPV at global perspective (DT/ha) Pasture Rainfed barely Irrigated barley

RESULTS : IMPACT OF CACTUS FEEDING ON FARMER’ INCOME

- A Sensitivity analysis is needed to examine the effects of risks and uncertainties: Yields (alley cropping) Water for irrigation Water erosion, water degradation - There is a need to improve knowledge, through models and tools, about the effects of climate change on agricultural production and environmental degradation DISCUSSION

Plantation of cactus in alley is the best alternative when integrated to sheep breeding. In economic perspective, olive trees plantation in rainfed area should not be conducted Olive tree plantation in irrigated area is profitable at private and social perspective This analysis confirms that integrated livestock, crop and forage net income is more climate resilient. Irrigation constitutes the best adaptation alternative at farm perspective, but better information is needed to assess the cost of water degradation. CONCLUSIONS

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