Impacts of climate variability on sugarcane production in the Upper Northeastern part of Thailand

Abstract

This study aims to compare costs and benefits of sugarcane and alternative crops while taking into consideration the effects of climate variability on the productivity and planting area of sugarcane. Using primary data from 421 interviews of farm households alongside climate related secondary data, a cost-benefit analysis is conducted. Further, CropWat and Positive Mathematical Programing (PMP) models are applied. The results indicate that while, on average, sugarcane farmers’ income exceeded variable costs by 1,496.26 baht/rai, alternative crops may be more lucrative. This is driven by high variable costs (e.g., labour) in sugarcane production compared with alternatives such as wet-season rice, dry-season rice and cassava. When taking into account farm size, the study finds that this is of particular relevance for small-scale farmers. Regarding climate variability, the CropWat model determines that the yields of sugarcane 7.2 percent and dry-season rice 6.7 percent decrease in severe El Niño years, whereas other alternatives are not affected when compared with the 2018/19 baseline. The results of PMP modelling show that the occurrence of El Niño and severe El Niño years will result in not only the reduction of productivity in the survey area, but also a decline in planted area of sugarcane, which will greatly reduce overall production in the study area by between 7-19 percent. The following recommendations are drawn from the study: First, small scale sugarcane farmers should cooperate in farming groups in order to reach economies of scale or exit sugarcane production in favour of alternative crops. Second, government agencies should encourage farmers to insure their crops against climate variability which rain delay is expected to increase in frequency. Third, we recommend that support irrigation systems be established to depress risk of sugarcane shortage in long run.