THE EFFECTS OF CLIMATE CHANGE ON THE FARM SECTOR IN THE WESTERN CAPE

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Abstract
This paper links two different methodologies to determine the effects of climate change on the Western Cape farm sector. First, it uses a general circulation model (GCM) to model future climate change in the Western Cape, particularly with respect to precipitation. Second, a sector mathematical programming model of the Western Cape farm sector is used to incorporate the predicted climate change, specifically rainfall, from the GCM to determine the effects on key variables of the regional farm economy. In summary, results indicate that future climate change will lead to lower precipitation, which implies that less water will be available to agriculture in the Western Cape. This will have a negative overall effect on the Western Cape farm economy. Both producer welfare and consumer welfare will decrease. Total employment in the farm sector will also decrease as producers switch to a more extensive production pattern. The total decline in welfare, therefore, will fall disproportionately on the poor.