Abstract

This article analyzes the potential impacts of climate change on agriculture in Mexico using a Ricardian model with panel data. The analysis uses economic data from 2,431 municipalities for the period 2003 to 2009. The study distinguishes between irrigated, rainfed and mixed farms and includes extreme weather events as an additional variable. The results indicate that irrigated farms are more vulnerable to temperature variations, while rainfed farms are more vulnerable to precipitation changes and extreme weather events. The projected impact in net revenue per hectare, considering a temperature rise of 2.5°C and a 10% reduction in precipitation, are between -18.6 and -36.4% of net revenue considering all type of farms. This climate scenario predicts average losses of net revenue ranging from, 26 to 55%; 14 to 25% and 27 to 37% for irrigated, rainfed and mixed municipalities, respectively.

Key words: Climate change, agriculture, Latin America, Ricardian model, panel data.