http://globalfutures.cgiar.org/

1. Climate Shocks and Adjustment
for Selected Crops
The IMPACT 3 Model Team:
Sherman Robinson, Daniel Mason D’Croz,
Shahnila Islam, Mark Rosegrant, Keith Wiebe
London, February, 2015

2. • Rapid income growth and urbanization – effects
on diets and patterns of agricultural production
• Increased consumption of fruits and vegetables
• Rapid growth in meat consumption and demand
for grains for feed
• Change in diets to convenience foods, fast foods
• Higher food energy, more sugar, fats and oils
• Half of growth in grain demand will be for
Livestock feed
• Increased pressure on land and water
Drivers of Agricultural Growth
and Food Security
2

3. • Supply drivers
– Climate change
– Water and land scarcity
– Investment in infrastructure
– Investment in agricultural
research
– Policy
Drivers of Agricultural Growth
and Food Security
3

4. The IMPACT Global Simulation Model
• International Model for Policy Analysis of
Agricultural Commodities and Trade
• Global partial equilibrium model
–Multimarket model
–Water models
–Crop models
–Livestock model
–Malnutrition model
4

5. What is new in IMPACT 3?
• Geographic and crop disaggregation (2005 base year)
– 58 agricultural commodities
• Prices and markets
– Three markets: farm gate, national, international
– Tradability: traded and non-traded commodities
• Land Allocation to crops
• Activity-commodity value chain framework
• New Water Models: hydrology, water basin
management, water stress on crops
• Modularity of the IMPACT model “system”
5

6. 6
IMPACT 3 Geography
159
• Countries
154
• Water Basins
320
• Food
Production
Units

7. IMPACT 3 Model System
7

8. IMPACT – A Suite of Linked Models
• Modularity: “a la carte”
– Use only the modules you need
– Modules can be run in “standalone” mode as separate
models (e.g., water models)
• Linking Modules
– Model system is driven by core multimarket economic
model (IMPACT 3)
– Standardize data transfer between modules
• Information flows: dynamic interaction with core model
8

9. Marketing
Margin
9
Markets and Prices
Farm:
Producer Price • Price at Farm/Factory Gate and market
• 𝑃𝑃 × 1 + 𝑀𝑀 = 1 + 𝑃𝑆𝐸 × 𝑃𝐶
Market:
Consumer
Price
• Commodity prices consumers face
• 𝑃𝑀 = 𝑃𝑊 × 1 + 𝑡𝑚 × 1 + 𝑀𝑀
• 𝑃𝐶 = 𝑃𝑀 𝑓𝑜𝑟 𝑡𝑟𝑎𝑑𝑒𝑑 𝑔𝑜𝑜𝑑𝑠
Port: World
Price
Marketing
Margin
Trade
Regime

10. • Commodities can be
globally traded or non-
traded
• This option can be set
exogenously
– E.g. sugar beets
• Or endogenously through
the
following
inequality
10
Tradability in IMPACT 3
PC
Export
Price
Import
Price
𝑃𝐸
= 𝑃𝑊
× 1 − 𝑡𝑒
× (1
− 𝑀𝑀𝑒)
𝑃𝑀
= 𝑃𝑊
× 1 + 𝑡𝑚
× (1
+ 𝑀𝑀 𝑚)
< <PE PM

11. Water Models in IMPACT
• Global hydrological model (GHM) assesses water
availability
• IMPACT Water Simulation Model (IWSM) optimizes
water supply according to demands
– Monthly time step
– Domestic, industrial (linked to GDP/population)
– Livestock
– Environment
– Irrigation
• Water stress model
– Delivers crop yields to the IMPACT food module
11

12. Land Allocation to Crops
• Land types: irrigated and rainfed land
• Demand for land by crop is a function of
commodity price and shadow price of land
• Total supplies of irrigated and rainfed land are
fixed in each region (FPU)
• Shadow price of land varies to equate supply and
demand for land by type and region
– Solution determines allocation of land to crops and
equilibrium shadow price
12

13. Value Chains: Activity-Commodity
• Commodities are:
– Produced (activities)
– Traded (commodities)
– Consumed
– Can be endogenous
or exogenous
• Maize has endogenous production and demand
• Oilseeds have endogenous production and both
endogenous and exogenous demand (biofuels)
• Fertilizers is an exogenous commodity with fixed price
13

14. Example: Oilseed Activity-Commodity
Value Chain
14
Activity
• Soybean
Farm
(jsoyb)
• Demands
land,
fertilizer,
labor
Activity
Output
• Soybean
Commodity
(csoyb)
Activity
• Soybean
Processing
(jsbol)
• Demands
soybeans
(csoyb) at
market
price
Processed
Commodities
• Soybean
Oil (csbol)
• Soybean
Meal
(csbml)

15. Baseline Model Results
• Core drivers: population, GDP, land
• Changes in technology
• Climate change:
– Suite of Global Circulation Models (GCMs) of climate
change
– Different assumptions about climate drivers:
socioeconomic and greenhouse gas pathways
15

16. 16
Drivers – Population, GDP, and Land

17. Sources of Technology Change
• Underlying Intrinsic Productivity Rates (IPRs)
– Exogenous trends in yields
• Climate Change:
– Water: Hydrology, water basin management, water
stress on crop yields
– Temperature: Crop Models (DSSAT)
• Market Effects
– Changes in prices affect farmer behavior and yields
(e.g. fertilizer use)
17

18. Inflation-adjusted prices for
corn, wheat and soybean (1912-2011)
18

19. Climate Change - Base Suite
• NoCC – Historical climate
• Four Global Circulation Models (GCMs), IPCC -
AR5, with one Shared Socio-economic Pathway
(SSP2) and Representative Concentration Pathway
(RCP) 8.5
– IPSL:
– HADLEY:
– MIROC:
– GFDL:
19

20. 20
What about climate change?
Source: IPCC AR5 WG2 SPM, Figure 4(B), 31Mar2014
Global annual average surface temperature

21. World Prices over time (NoCC, indexed to 2010)
Source: IMPACT 3 (2014)
21

22. 2050 World Prices under Climate Change (%
difference from NoCC)
22
Source: IMPACT 3 (2014)

23. Global Yields over time (NoCC, indexed to 2010)
23
Source: IMPACT 3 (2014)

24. 24
Historical climate change impacts on yields 1960-2013
Source: IPCC AR5 WG2 SPM, Figure 2(C), 31Mar2014

25. 2050 Global yield under Climate Change
(% diff from NoCC)
25
Source: IMPACT 3 (2014)

26. 2050 Wheat Yields: Climate Change Effects
for Top 10 Wheat Producers
26Source: IMPACT 3 (2014)

27. Thank you
S.Robinson@cgiar.org
27

28. 28
Production Shock Scenario Specification
Scenario Crop Region Shock
Multi-Crop Shock Wheat North America (NAM)
Europe, Russia, Western Asia
20%
20%
Maize North America
Europe, Russia, Western Asia
Brazil, Argentina
25%
20%
20%
Soybeans North America
Brazil, Argentina
12%
10%
Maize Shock Maize USA
China
30%
40%
Rice Shock Rice China
South Asia
25%
10%
Wheat Shock Wheat Eastern Africa
Western Asia
Central Asia
North America
40%
50%
60%
50%

29. World Prices (2005=1)
63% increase from ref
20% decrease from ref
34% increase from ref
8% decrease from ref
42% increase from ref
12% decrease from ref
33% increase from ref
6% decrease from ref
6% increase from ref
2% decrease from ref
3% increase from ref
1% decrease from ref

30. Changes in Production by Scenario
30
Regions Shocked

31. Changes in Production by Scenario
31

32. Changes in Production by Scenario
32

33. Changes in Production by Scenario
33

34. Changes in Trade by Scenario
34
-60
-40
-20
0
20
40
60
80
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
EAP EUR LAC MEN NAM SAS EAP EUR LAC MEN NAM SAS EAP EUR LAC MEN NAM SAS
Maize Wheat Soybean
Multi-Crop Scenario Net Trade by Region (million mt)
Reference MultiCrop1 MultiCrop2

35. Changes in Trade by Scenario
35

36. Changes in Trade by Scenario
36

37. Changes in Trade by Scenario
37