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GTAP Resource #3241

"Climate Change, Agricultural Productivity and its Impacts on the Food Industry: A General Equilibrium Analysis"
by Ludena, Carlos and Carla Mejia

This paper analyses the impacts of climate change on food processing sectors worldwide. Specifically, we analyze the impacts that changes in agricultural productivity might have for seven food industry sectors, namely meat, vegetable oils and fats, dairy, sugar, processed rice, other food and beverage and tobacco. We use a general equilibrium approach, given the advantages that this methodology provides for worldwide analysis of productivity and its impacts on production, trade and prices of primary agriculture, and ultimately, food processing sectors. We use the GTAP model and database aggregated into 10 regions and 12 sectors, with special emphasis on food processing sectors. We analyze two different scenarios of crops yield changes based on Müller et al. (2009), one with full CO2 fertilization and one without it. With carbon fertilization, crop yields increase for almost all regions, but without fertilization, most regions present productivity declines. Overall, food processing output increases or decreases less with full fertilization. This holds in all regions for dairy products, beverages and tobacco and other food products. However, results across regions are mixed for vegetable oils and fats and processed rice, and to a lesser extent for meat and sugar. With full fertilization, prices drop for all food processing sectors, especially for oils and fats, processed rice and sugar. Without carbon fertilization, prices of food processing increase. Most of these results are driven by the effects on primary crop and livestock production, and the participation of these sectors in the overall cost structure of the food processing sectors.

JEL Classification: L66, Q54, C68
Keywords: Climate change, productivity, agriculture, food industry

Resource Details (Export Citation) GTAP Keywords
Category: GTAP Application
Status: Not published
Date: 2010
Created: Ludena, C. (4/12/2010)
Updated: Batta, G. (5/11/2010)
Visits: 1,493
- Climate change policy
- Asia (East)
- Middle East
- Africa (Southern)
- European Union
- North America
- South America
- Central America
- Caribbean

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