Spatial Analysis of Climate Effect on Agriculture: Evidence from Smallholder Farmers in Cote dIvoire

Climate change has been affecting the agriculture sector over the past few decades. This impact could have serious consequences for farmers in developing countries. This paper applies the spatial approach to assess the response of agricultural net revenue to climate change in Cote dIvoire. It first uses a simple static comparative approach, to show that market imperfection induces spatial heterogeneity in agricultural product prices and hence spatial autocorrelation. Taking these findings as a point of departure, empirical analysis uses a Spatial Durbin Error Model based on 2016 World Bank Smallholder Household Survey POLICY BRIEF Spatial Analysis of Climate Effect on Agriculture: Evidence from Smallholder Farmers in Cote dIvoire Fabrice Esse Ochou and Pierre Dignakouho Ouattara October 2023 / No.785 2 Policy Brief No.785 Data from Cote dIvoire. Results reveal that rainfall has a non-linear direct effect and positive linear spillover effects on agricultural net revenue. In addition, the paper shows that the total marginal effect of rainfall is positive in the central, eastern and northern regions of the country and negative in the coastal and western regions. Moreover, predictions indicate that a decrease in average precipitation of between 5% and 10% leads in general to a decrease in the average net agricultural income from about 0.45% to 1.38% while an increase in the same ranges leads to a decrease in the average net agricultural income from about 0.02% to 0.05%