Agricultural production and trade implications from closing the global crop yield gap in the context of climate change
Global food security and production is under pressure due to increasing population and income, climate change, and trade disruptions (e.g., China-U.S. trade conflict, war in Ukraine) as well as supply-chain disruptions and labor shortages from the COVID-19 pandemic. Given those challenges, the long-term evolution of crop yields plays an important role in determining global food production. Attempting to close the so-called yield gap, i.e., the difference between actual/observed and potential yield, is considered central to ensuring future food security. Research estimates that food production can be increased by 28% to 70% if crop yields are brought closer to their potential. Those estimates are inflated because subsequent price and trade effects of higher crop supplies are not taken into account. That is, an increase in yields will lower crop prices and hence, farmers reduce their crop area planted and input use (e.g., fertilizer, pesticides, irrigation) dampening the rise in production. In addition, the effects of climate change on crop yields must also be considered when estimating the potential increase in yields and production.
This project fills both research gaps, i.e., market effects of closing the yield gap and the interaction with climate change, by coupling a dynamic vegetation model with an agricultural trade model to quantify plausible pathways of potential crop production at the global level until 2050. Preliminary results indicate that for the scenario SSP1-RCP2.6, crop prices for maize, rice, sorghum, and wheat decrease by 35%, 58%, 56%, and 46%, respectively, even if the yield gap is closed by only 25%. Price decreases trigger a reallocation of cropland and changes in production across countries. If the market effects from closing the yield gaps are not taken into account, global additional production is overestimated. For the major commodities maize, rice, and wheat, production is 8.0%, 7.1%, and 10.8% lower when market effects are considered in the scenario of closing the yield gap by 25%. If yield gaps are closed by 50%, production is lower by 14.3%, 14.5%, and 21.2% for maize, rice, and wheat, respectively.
Jerome Dumortier is an Associate Professor at the O’Neill School of Public and Environmental Affairs at Indiana University on the Indianapolis campus. He received his Ph.D. in Economics from Iowa State University in 2011. His research focuses on the interactions between agricultural, energy, and environmental policies. He quantifies the economic effects of climate change on agriculture using simulation models. Dr. Dumortier’s research on bioenergy and biofuels also led him to assess the effects of more electric vehicles on economic outcomes such as fuel tax revenue in the United States and electricity markets in the European Union. Dr. Dumortier is the Co-Editor-in-Chief of BioEnergy Research and a member of the Editorial Advisory Board of GCB Bioenergy.
Investigador del INTA, director de la Maestría en Agronegocios y profesor, Universidad del CEMA.
Director del Departamento de Economía Agrícola y profesor, Universidad del CEMA