An econometric analysis of the impact of climate change on commercial beef production in Botswana from 1980-2016

Abstract

This study examined the impact of climate change on commercial beef production in Botswana using time series data from 1980-2016. We estimated a Ricardian model to quantify the impact of climate change on commercial beef production in a period of 36 years. The climate change variables used were temperature, rainfall and drought (dummy) and the non-climate change factors used in the model were beef producer prices and the outbreaks of diseases (Foot and Mouth Disease). We found that increasing temperature and rainfall have a significant effect on commercial beef production in Botswana. Drought also had a positive and significant impact on beef production which was unexpected. Beef producer prices were positive and significant and the outbreaks of diseases (Foot and Mouth Disease) were insignificant which was unexpected. , the error correction term coefficient of the average growth rate of beef production (LBP) has a corrective negative sign and is significant. We tested the models for unit root, cointegration and because there was cointegration analysis went further to estimate a Vector Error Correction Model (VECM). The results of the VECM showed that a significant error term implies a disequilibrium adjustment of each variable towards its long run equilibrium value. A significant error term provides validation of the existence of a long run relationship between the variables and speed of adjustment is 0.5 percent. The results all point at the need for raising farmer’s awareness of long term climate change and using the appropriate adaptation options to counter the likely adverse impact on commercial beef production.