| Assessing the Economic Impact of Climate Change – National Case Studies |
Capacity to Estimate the Effects of Changes in Crop Yields on Net Farm Income Currently, no agricultural sector (agro-economic) models for the country exist. There are also no studies and hardly any organized data that would make it possible to estimate economic demand functions for domestic consumers. What do exist for some regions are the crop budgets and bottom-up engineering cost estimates for irrigation building projects and region-level farm models for both irrigated and non-irrigated farms. These are exactly the right kind of tools for estimating the economic impacts of climate-driven yield changes on farmer behaviour and net farm income. The limited availability of resources for the current scoping study did not make it possible to fully realize this opportunity. However, some preliminary work with a small scale model (farm level optimization model) did yield some interesting results regarding how a profit-maximizing farmer would alter their crop mix to adapt to climate change. In addition, the crop budgets for both irrigated and non-irrigated crops were used extensively in the case study to estimate the economic value of climate change damages and the benefits and costs of avoiding these damages by irrigation. It is worth noting that the fact that the country imports so much of its food from international markets at fixed prices, combined with the relatively small size of Macedonian farms (on the order of a few hectares) and the volatility of local markets for many products means that the consumption of domestic consumers in many cases does not have that great an impact on food prices.
Capacity to Estimate the Effects of Changes in Climate on Irrigation Water Supply FYR Macedonia has previously invested in developing the capacity to calibrate the MIKE-SHE rainfall-runoff model and implement it in water resources planning and management assessments. However, there are some problems with fully utilizing it. One reason cited for this is that Macedonian hydrologic conditions are, for many basins, so unique (especially mountain catchments with steep gradients and high energy flows) that either the model was very hard to calibrate and/or the results from these calibration exercises did not fit the observed data very well. Another reason is that the stream flow records for many catchments are not homogeneous or are unreliable for other reasons. It is hard to verify these reasons without extensive knowledge and information about the gauging network, stations and data collection methods. However, the inability to translate changes in precipitations and temperature into changes in runoff, at least on a monthly time scale, represents a serious shortcoming.
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