Saturday, September 08, 2012

Africa's Farmers Adapt to Climate Change

How nimble are small farmers in adapting to new climate conditions?  This article about Africa's farmers suggests some optimism.  As basic microeconomics would predict as such farmers anticipate that climate conditions are changing and that they face more risk of temperature extremes and rainfall extremes (both drought and flood risk), they are responding by;

1.  growing a more diversified set of crops (i.e similar to asset diversification the farmers are growing some crops that boom if rainfall is strong while others that can still be grown even if there is low rainfall).
2.  Using futures contracts that allow them to hedge risk
3.  Using information technology to provide real time updates about the challenges they face

The economic question here is;  "given that more farmers are taking these adaptation steps, are their real incomes as farmers rising?  Or even though they are taking these steps, their farming incomes are declining?" For those farmers who are suffering income losses, they can move to the cities.   Migration to Africa's cities offers challenges and opportunities. For those looking for an even handed report on Africa's recent progress, take a look at this.

How far can self protection go to allow individuals to protect themselves against new shocks?  When we refuse to collectively work together (i.e pass a global carbon mitigation treaty), what happens next? Can rugged self interested individuals take care of themselves as they trade through free markets?