under Harsh Water Scarcity in Southern California and Desert … · 2018-07-26 · Instead, we...
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Arisha Ashraf and Ariel Dinar University of California, Riverside Sustaining Agricultural Productivity under Harsh Water Scarcity in Southern California and Desert Counties Runoff recovery system in Imperial County, CA Photo courtesy of Dr. Khaled Bali
Transcript of under Harsh Water Scarcity in Southern California and Desert … · 2018-07-26 · Instead, we...
Arisha Ashraf and Ariel DinarUniversity of California, Riverside
Sustaining Agricultural Productivity under Harsh Water Scarcity in
Southern California and Desert Counties
Runoff recovery system in Imperial County, CA Photo courtesy of Dr. Khaled Bali
Outline
•California drought•The region•Ricardian analysis (impact)•Adoption analyses (soil moisture and salinity monitoring [only described])
•Parcel sale analysis ([only described])•Conclusion
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Abnormally Dry Moderate Drought Severe Drought Extreme Drought Exceptional Drought
Source: National Drought Mitigation Center
Spatial and Temporal Extent of Drought in California (2000-2016)Ex
tent
of a
rea
affe
cted
Time
2012-20162007-20102001-2004
Cayan (2010), using the high emissions scenario (A2), suggests that droughts will become more frequent and more severe in the second half of this century compared to those previously recorded.
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Presenter
Presentation Notes
MOTIVATION: DROUGHT! A study led by Cayan (2010) using the high emissions scenario (A2) suggests that droughts will become more frequent and more severe in the second half of this century compared to those previously recorded. For our purposes even more than we have experienced over the past decade. Specifically, intensified drought in the Colorado River Basin are intensified by the projections of warming, which reduces soil moisture.
1 0 0 % S u g a r b e e t
9 9 . 3 % D a t e s7 7 % S u d a n H a y
7 7 % A v o c a d o
6 8 % F l o w e r s &F o l i a g e
6 0 % L e m o n s
5 2 % R a s p b e r r i e sSource: CDFA, 20154
15%+ of State’s $50 billion salesIn 2015
Study Region and Respondents (n=187)
San Diego
Imperial
Riverside
Ventura
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Water Districts Represented in Survey Sample
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30
32
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36
38
40
42
44
46
48
50
2005 2006 2007 2008 2009 2010 2011 2012 2013 201440
42
44
46
48
50
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2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Janu
ary
30
40
50
60
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80
90
2005 2006 2007 2008 2009 2010 2011 2012 2013 201440
45
50
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60
65
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014Ap
ril
Riverside Imperial San Diego Ventura
July
Oct
ober
1 0 - y e a r t m i n
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Distribution of Farm Sizes Across the Study Region
San Diego
1 to 9 10 to 49 50 to 179
180 to 499 500 to 999 1000 plus
Riverside
1 to 9 10 to 49 50 to 179
180 to 499 500 to 999 1000 plus
Imperial
1 to 9 10 to 49 50 to 179
180 to 499 500 to 999 1000 plus
Ventura
1 to 9 10 to 49 50 to 179
180 to 499 500 to 999 1000 plus
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0 200 400 600 800 1000 1200 1400
0 to 2,499
2,500 to 4,999
5,000 to 9,999
10,000 to 24,999
25,000 to 49,999
50,000 to 99,999
100,000 plus
N u m b e r o f Farm s
An
nu
al G
ross
Rev
enu
e
Ventura San Diego Riverside Imperial
Source: USDA Farm and Ranch Irrigation Survey, County Summary Highlights 20129
Impacts to gross revenue at the farm-levelRicardian Analysis
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Based on the familiar class of analyses known as hedonic property models:where you evaluate how different land characteristics influence land value.For ag land earlier studies usually included several metrics on soil quality. The classic paper is Mendelsohn, Nordhaus and Shaw (1994) included a climate expectation variablesas well as variables on market access. They coined the term Ricardian as it is based upon David Ricardo’s theory that land rents reflect land productivity.
Presenter
Presentation Notes
So, let me do a quick introduction to Ricardian analysis. Comes from a more familiar class of analyses known as hedonic property models—where you evaluate how different land characteristics (for ag land earlier studies usually included several metrics on soil quality) influence land value. The classic paper is Mendelsohn, Nordhaus and Shaw (1994) in which they included a climate expectation variables as well as variables on market access. They coined the term Ricardian as it is based upon David Ricardo’s theory that land rents reflect land productivity.
Key Re s e a rc h Q u e s t i on s ( R i c a rdi a n S t u dy )
What is the marginal impact of microclimate on productivity, assuming long-run adaptations by the grower are taken into account?
To what extent do farm-level variables explain the variation in gross revenue per acre in Desert and Southern California agriculture?
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Presentation Notes
…that a Ricardian model is uniquely and parsimoniously able to explore.
Source: Mendelsohn, Nordhaus, and Shaw 199412
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Here are the production functions of 3 types of farming practices (and exiting/retirement). The value of a given farming practice changes in response to increasing temperature. Climate has a positive impact on productivity of a given agricultural activity up to a point where productivity reaches an optimum, after which changing climatic conditions introduces declining marginal productivity. In this particular representation, the production function is quadratic with respect to the climate variable. Under the assumption that growers have fully adjusted to long-run conditions, gross revenue is equivalent to the envelope function, represented by the bold lines.
Depen. Var.=log(gross revenue per acre) Coefficient Robust St. Err. t-value p-value
Constant 5.180 0.950 5.45 0.000Percent Agricultural Income:
(Baseline= <25%)25 - 49% 0.342 0.208 1.65 0.10150 - 74% 0.652 0.194 3.36 0.001
75 - 100% 0.538 0.165 3.26 0.001
water deficit perception -0.212 0.141 -1.50 0.136access to groundwater 0.520 0.142 3.67 0.000
senior water rights 1.309 0.285 4.59 0.000log(water price per acre-foot) 0.284 0.081 3.52 0.001
water price increase frequency 0.032 0.020 1.57 0.118log(annual min temp normal) 0.272 0.305 0.89 0.374
log(variation in annual min temp normal) -0.602 0.270 -2.23 0.027
Farm Type:(Baseline= orchard)
mixed -0.290 0.314 -0.92 0.358vegetable 0.209 0.239 0.88 0.382
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Presenter
Presentation Notes
DISCUSSION OF RESULTS: We also find that county fixed effects are not statistically significant, and farm type better captures the sub-groups within the dataset. As expected, farm type has a relatively large and significant impact on productivity. So, we do find a relationship with variation (as represented by the coefficient of variation) and minimum daily temperature normal. And, equally interesting, we are able to collapse the water source into these different factors, each of which is significant up to the 15% level. We interpret log-transformed coefficients as elasticities, i.e., percentage change in the geometric mean of the dependent variable with 1% unit increase in the geometric mean of a given independent variable (Wooldridge 2006). We removed one outlier from the regression (Cook’s Distance=0.18), which improved the robustness of the overall model and reduced the RMSE. Recall, the geometric mean is the nth root of a product of n numbers.
Discussion of Results
While holding all other variables constant …
A 5% increase in minimum temperature variability results in a 3% decline in productivity.
Relative to non-rights holders, growers with senior water rights have 3.7 times the productivity per acre.
A 5% increase in water price results in a 1.4% increase in productivity per acre.
Increasing the frequency of price increases by one unit increases the productivity per acre by 3.3%.
Growers with access to groundwater have 68% higher productivity per acre than those without.
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Presenter
Presentation Notes
This result captures fluctuations in long-run (i.e., 30-year) minimum temperature expectations across a given year. There are several negative implications associated with an increase in variability. It implies that certain seasons are experiencing extremes in heat or cooling, which are detrimental to crop growth (Mendelsohn and Dinar 2009). Thus, an increase in variability may be correlated with a decline in annual predictability. And, if a grower is unable to accurately predict seasonal climate from year-to-year, they are less likely to develop an optimal seasonal production/adaptation plan. Relative to non-rights holders, growers with senior water rights have 3.7 times (e1.309) the level of productivity per acre. Senior water rights holders (Imperial Irrigation District, Palo Verde Irrigation District, Coachella Valley, and Bard Water District) also have the lowest water prices in our sample, ranging from $20-33 per acre-foot. Even accounting for this, water price exhibits a positive (and significant) relationship with gross revenue per acre. For example, a 5% increase in water price results in a 1.4% increase in productivity per acre. This suggests that access to senior water rights may capture more than a low price, and likely captures the value of holding priority water rights. This finding may also suggest that, ceteris paribus, a higher water price motivates growers to improve water efficiency. We also find that increasing the frequency of price increases by one unit, increases productivity per acre by 3.3% (e0.032). This suggests that sending growers a signal of scarcity, such as more frequent price increases, growers respond positively by improving their productivity per acre. Access to groundwater also exhibits a positive and statistically significant relationship with productivity per acre. Growers with access to groundwater have 68% (e0.520) higher productivity per acre than those without. Other variables: Based on our sample, field crops and vineyards are 80% and 26% less productive than orchards.
Additional Aspects
• Adoption of water management practices at the farm-level as an adaptation to water scarcity
• Binary logit – adoption of individual technologies• Multinomial logit– adoption of technology bundles
• To what extent do short-run shocks, such as the droughts in CA from 2007-09 and 2011-16, influence land value (as opposed to gross revenue) at the parcel-level in Riverside County?
• To what extent does microclimate impact the likelihood of agricultural land parcel sales over the past decade in Riverside County?
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If time doesn’t permit
Distribution of Micro-irrigation Technology by Farm Type
17Field crops (=G) Mixed crops (=M) Vegetables (=R) Orchards (=T) Vineyards (=V)
micro-irrigation practices = micro-sprinkler, drip, sub-surface drip.
S o i l M o i s t u r e a n d S a l i n i t y M o n i t o r i n g Te c h n o l o g i e s
Note: Two technologies (checking with water provider and sending samples to lab) are not pictured.
Image Credits: (a) Walmart.com (b) amleo.com (c) lightinthebox.com (d) benmeadows.com (e) myronlproducts.com
(a) Auger, Lamotte Brand
(b) Tensiometer, Irrometer Brand
(c) Dielectric Sensor, No Brand Listed
(d) Gypsum Block, Delmhorst Brand
(e) Salinity Pen, Myron L Brand
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Adoption of Soil Moisture or Salinity Monitoring as Adaptation Behavior (Logit)•Logit (0/1)
•Adopted any monitoring practice
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Soil Monitoring (left) and Salinity Monitoring (right) with respect to Farm TypesCorrelation coefficient between dependent variables: ρ = 0.426
Green= Adopted monitoring Gray= Did not adopt monitoring
Field crops (=G), Mixed crops (=M), Vegetables (=R), Orchards (=T), Vineyards (=V).
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Presenter
Presentation Notes
Instead, we follow Caswell et al. (2001) and define adoption of soil moisture (or salinity) monitoring as the use of at least one of the soil (or salinity) technologies we identify in our survey (including an “other” category to capture any technology we may have missed). As such, the binary logits do not distinguish between growers who may be using more than one monitoring technology, or may be using one technology more frequently than another grower using the same technology.
0.11
0.28
0.02
0.08
0.03
0.25
0.13
0.26
0.05
Relative Frequency of Dif ferent Soi l Moisture and Sal inity Monitoring Practices
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Presentation Notes
Why these practices? individual water management practices amongst growers in our sample are not widespread. Studying adoption of any of these practices individually may lead to a loss of power. There are several reasons growers monitor soil moisture. Most immediately, it allows them to learn if they are applying an excessive volume of water, which is particularly important when they are testing new crops or crop varieties. Related to this, it provides growers information on the optimal amount of time lapse between irrigations under climatic conditions that are changing the timing and duration of the growing season (Cayan et al. 2010). Additionally, soil moisture monitoring provides information on distribution uniformity, which is a measure of how evenly water reaches each plant or a portion of the field in a given irrigation boundary (Escalera, Dinar, and Crowley 2015; Burt et al. 1997). Distribution uniformity is a key factor in ensuring that crop yield meets industry criteria (e.g., size, weight, color) relatively uniformly (Mission RCD, No date), and ultimately is a measure of efficiency. Based on discussions with extension specialists and previous survey research in California (Aguiar 2015; Gispert 2015; Escalera, Dinar, and Crowley 2015; USDA 2013), we constructed a list of soil moisture technologies. This was later refined after analyzing the results from our pilot survey. Ultimately, we included two less sophisticated soil moisture-monitoring approaches (i.e., gravimetric approaches using auger, cap or an oven; and tensiometers) and two more sophisticated methods (i.e., gypsum block and dielectric sensors). Monitoring the salinity of irrigation water and soil extract also serves multiple purposes. Growers want to be sure the salinity of the irrigation water is viable for the crops they grow. This requires regular monitoring as salinity levels fluctuate seasonally and through time. Salt accumulation in the soil must also be monitored as high concentrations of certain ions could inhibit plant germination and create drainage problems (Burt and Styles 2011, Tanji and Kielen 2002). Salt accumulation in the soil is sometimes even caused by fertilizer application. Salinity monitoring also serves the purpose of potentially reducing sub-optimal leaching. If a grower leaches too much then water is obviously wasted. However, if a grower leaches too little, water is also wasted through the production of a poor quality crop (where this water could have been allocated to other crops of presumably higher quality) and excess concentration of ions in the soil for the next round of crops. We implemented an analogous strategy as we did when developing the soil moisture-monitoring list, relying on extension specialists, previous survey research, and our pilot survey. Our survey included three salinity monitoring practices in order from least to most sophisticated: (1) consulting with water provider for information on salinity in water supply; (2) using a handheld salinity monitor or pen; and (3) sending water and soil samples to a lab. We also included an “other” category.
Adoption ofSoil monitoring Salinity monitoring
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depvar=soil moisture monitoring Odds RatioRobust Std.
Error z P>|z|
Constant 7.604 23.885 0.650 0.518
farm type
(baseline=tree )
mixed 0.702 0.448 -0.550 0.580
vegetable 0.151 0.127 -2.250 0.025
field 0.209 0.145 -2.250 0.024
vineyard 1.189 0.686 0.300 0.764
%age income from agriculture
(baseline=less than 25%)
25 – 49 1.736 0.938 1.020 0.308
50 – 74 4.302 2.793 2.250 0.025
75 – 100 1.183 0.698 0.280 0.776
ln (acre) 1.399 0.176 2.670 0.008
govt primary source of info 2.760 1.153 2.430 0.015
rate_frequency 1.092 0.057 1.680 0.094
5-year tmax mean 0.874 0.075 -1.570 0.116
5-year tmax CV 3.64E-14 1.36E-12 -0.830 0.408
n=187
McFadden R2 0.153
Sensitivity 46.67%
Specificity 87.50%
depvar=salinity monitoring Odds Ratio Robust Std. Error z P>|z|
Constant 9.691 30.706 0.720 0.473
farm type:
(baseline= tree)
mixed 0.679 0.478 -0.550 0.583
vegetable 1.443 1.225 0.430 0.666
field crop 0.713 0.588 -0.410 0.682
vineyard 1.707 1.444 0.630 0.527
%age income from agriculture:
(baseline=less than 25%)
25 – 49 2.454 1.457 1.510 0.131
50 – 74 0.993 0.629 -0.010 0.991
75 – 100 1.257 0.740 0.390 0.697
crop salt tolerance:
(baseline=moderate tolerance)
sensitive 3.442 2.163 1.970 0.049
tolerant 2.996 2.780 1.180 0.237
ln (acre) 1.498 0.180 3.370 0.001
govt primary source of info 2.355 1.224 1.650 0.100
rate_frequency 1.152 0.057 2.830 0.005
5-year tmax mean 0.812 0.074 -2.290 0.022
5-year tmax CV 5.07E-08 1.97E-06 -0.430 0.665
n=187
McFadden R2 0.176
Sensitivity 69.23%
Specificity 68.75%
Adoption of Soil Moisture and/or Salinity Monitoring as Adaptation Behavior (Multinomial Logit)
•Multinomial Logit (0 - 1)• Adopted none, either or, both, monitoring practice
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77
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both none salt only soil only
Relative Frequency of Multinomial Logit Categories
𝑃𝑃𝑖𝑖𝑖𝑖 =𝑒𝑒𝑄𝑄𝑖𝑖𝑖𝑖+𝜀𝜀𝑖𝑖𝑖𝑖
1 + ∑𝑒𝑒𝑄𝑄𝑖𝑖𝑖𝑖+𝜀𝜀𝑖𝑖𝑖𝑖∀𝑗𝑗 ∈ {1,2,3,4}𝑄𝑄𝑖𝑖𝑖𝑖 = 𝑄𝑄𝑖𝑖𝑖𝑖∗ 𝐼𝐼,𝑋𝑋,𝐶𝐶, 𝑆𝑆,𝑊𝑊,𝐺𝐺,𝐹𝐹 + 𝜀𝜀𝑖𝑖𝑖𝑖
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Presenter
Presentation Notes
We also implement a multinomial logit to study the factors influencing joint adoption of these technologies.
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Total Gross Revenue from Agriculture in Riverside County (2000-2015)Data Source: Riverside County Agricultural Commissioner Reports
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1400
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2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
$2014 in millions of dollars
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2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Total Parcels Sold in Dataset (2000-2016)
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Presentation Notes
About 6% of parcels were sold annually.
Conclusion
• Farm-level analyses help develop bottom-up incentives for adapting to climate change and addressing water scarcity.
• Arguably the most important variables in understanding how agriculture will be affected by climatic changes are those of human ingenuity at the farm level.
• Human ingenuity is simply the ability to adapt at farm level to climate change (high temp and water scarcity) in order to minimize welfare losses.
• We study differential impacts—based on farm type, and water source -- on productivity per acre and likelihood of adopting water management practices.
• Further, we are able to decompose water sources into price, frequency of rate increases, senior rights, and type of source (district and/or groundwater).
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Conclusion
• We find a significant relationship between grower productivity and climate and water source variables.
• As our results suggest, growers may need more predictability with respect to seasonal minimum temperature variability.
• Education and grant programs could target technologies and practices that help growers achieve this predictability, exploiting free-access data such as the California Irrigation Management Information System (CIMIS).
• We also find evidence that water price and the frequency with which this price is increased serve as incentives for increasing productivity per acre.
• This may not apply to senior water rights holders who continue to face a highly subsidized water price and secured supply.
• We do not find a significant relationship between farm-level productivity and most of the grower and farm characteristics tested. This is likely due to the heterogeneity of farm types represented and relatively small sample size.
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