Rehman Ahmad2022
Rehman Ahmad2022
Rehman Ahmad2022
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RESEARCH ARTICLE
Abstract
This study assesses climate change impact on rice productivity in 28 top rice-producing districts in Pakistan. Driscoll and
Kraay estimation is applied on panel data from 1981 to 2019. The cross-sectional dependency test results reveals that climatic
factors such as rainfall, humidity, and temperature have correlation issue in different selected regions. The study observes
that temperature, rice productivity, and rainfall have inverted U-shape relationship. Rice productivity response is quadratic
instead of linear towards average rainfall and temperature during the particular cultivation time, comprising of harvesting,
flowering, and planting. The coefficient of temperature during planting time is positive and significant, while the square of
temperature during planting time is negative and significant. Temperature during flowering and harvesting time is significant
and positive, while the square of temperature during flowering and harvesting time is negative and significant. Rain fall dur-
ing planting and flowering time are positive and significant; besides that, fertilizer usage stimulates and humidity hinders
rice productivity in selected districts of Pakistan. Our empirical results considered the issues of spatial dependency, serial
correlation, and heterogeneity.
Keywords Environment, Agricultural productivity, Climate patterns · Driscoll and Kraay Model · Pakistan
Introduction the country is directly dependent upon this sector for its
livelihood (Govt. of Pakistan 2021); thus it is the main
Due to structural changes, Pakistan’s economy have been source of food security, and apart from that, this sector is
shifted from agricultural sector to industrial and services a big source of raw materials for industries (Akhuand and
sector as a result agricultural sector’s share in GDP has Abbas 2021; Abbas 2021; Khan et al. 2021a; Koondhar et al.
shrunk to 19.3% (Khan et al. 2021a, 2021b; Ho and Shi- 2021; Ifeoma et al. 2021) as most of the country industries
mada 2021). Despite of this, still agricultural sector is con- are agricultural based. Agriculture is also the main source
sidered as back bone of Pakistan’s economy as it is main of earning foreign exchange reserves. Pakistan’s 75 exports
source of employment. It has engaged largest portion of are based upon agriculture sector (Govt. of Pakistan 2021)
labor force, i.e., 42.3% and 65 to percent of population of which includes textile, cotton, vegetable, fruits, sugar, and
rice (Abbas and Waheed 2021). Rice is mostly exported to
United Arabs Emirates, Saudi Arabia, Iran,and Afghanistan.
Responsible Editor: Ilhan Ozturk
Besides rice as source of foreign earing, it is the second
* Faheem Ur Rehman staple food of Pakistan used in the consuming habits as it
rehman@urfu.ru deliver 22% of human energy per capita and 16% of protein
per capita (Abbas 2021; Li et al. 2021a; Gong et al. 2021;
1
Graduate School of Economics and Management, Ural Ahmad and Afzal 2021).
Federal University, Mira 19, 620002 Ekaterinburg, Russia
Rice production seems influenced by unforeseen future
2
Department of Economics, The University of Haripur, contingencies linked with carbon dioxide, global warming,
Haripur 22620, Pakistan
rainfall, and temperature. Prompt variation in climate pat-
3
Department of Economics, Kohat University of Science terns can be detected from thrilling weather situations and
and Technology, Kohat, Pakistan
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its impact on wheat production and creation of food security by the climatic issue (Rehman and Noman 2020; Suresh
problems (Abbas 2022; Khan et al. 2020; Li et al. 2021b; et al. 2021; Bakhsh et al. 2020). South Asian agricultural
Xin and Tao 2021; Ozdemir 2021). Prior literature reveals production will be more affected compared to the rest of
that changes in climate patterns instigate upsurge in tem- the world (Rasul 2021; Xuefeng et al. 2021; Sultan 2012).
perature and concurrently make source of adverse effect on Agriculture sector is mainly dependent on weather condi-
rice crop and eventually reduce its quality and productivity tions along with other factors (Shaffril and Idris 2020 and
(Shahzad et al. 2021). It was shown by an inclusive simu- Kumara et al. 2020). Therefore, Pakistan should focus on cli-
lation research studies that fluctuation in climate patterns, mate change and its effect on her agriculture because climate
since 1961, reduced rice yield by 12.6%, but with leading change impacts on every stage of agricultural crops from
contribution of radiation dropped. The negative and posi- germination to maturity. It is barely possible for the poor
tive response of yield in diverse regions was established by farmers of Pakistan to utilize costly technology apparatus to
empirical analysis of climate indicators and observed pro- combat climatic and environmental issues (Modi et al. 2021;
ductivity. Mean temperature fluctuations, increasing changes Richards et al. 2018; Shah et al. 2022).
in weather conditions and increasing sea level forecasted Existing literature on climate change is based on Ricard-
less but probably have even more substantial impact on rice ian approach, crop simulation, and empirical data regression
production (Chandio et al. 2020; Masia et al. 2021; Khan analysis. Various studies on temperature impact on agricul-
et al. 2019; Rasul 2021; Ogundari and Onyeaghala 2021). tural production such as Li et al. (2021a) and Masia et al.
Climate change impact on production of rice is an impor- (2021) applied simulation techniques that forecast impact
tant area of research. Researchers are interested in climate of variation in climate variables like humidity, temperature,
change effects on rice quality and quantity produced (Abbas and rainfall on agriculture production. This technique takes
2022; Surendran et al. 2021; Saeed et al. 2021; Ji et al. 2021). into account the upcoming climate changes and its effects
For this purpose, crop model is used by some researchers on agricultural production (Rehman et al. 2020; Müller
for measurement of past and current climate pattern impact et al. 2015; Lewis and Witham 2012), although these sug-
on national and regional agriculture (Sirsat et al. 2019 and gestions are not applicable for developing economies as it
Wang et al. 2021; Iqbal et al. 2021). For example, a standard cost a lot. These techniques overestimate the climate effect,
regional crop model was adopted by Jie et al. (2014) con- and it is not applicable for crop due to substitution because
cluded that temperature increase by 1 °C in rice producing if one crop is affected by climate, so the former substitute to
area, the rice production is decreased by 4 percent. Also, another crop that is comparatively less affected by climate
perception regarding increase in temperature, reduced rice changes, or the former adopt other agriculture methodolo-
production is confirmed by Masia et al. (2021) for 16 regions gies like the use of machinery in agriculture and use seeds
of Bangladesh. Many researchers used econometric model that are comparatively resistive to climate changes.
to investigate climate effect on agriculture production by The Ricardian model is different from the simulation
keeping social and market factor constant for crop standard- model for crops as it takes into account substituting and
ized model (Ho and Shimada 2021; Singh and Dhadse 2021; adopting alternative methods in crops (Hossain et al. 2020;
Shahbaz et al. 2021). Guo et al. (2020) applied fixed effect Rehman et al. 2020; Hossain et al. 2019; Lotze et al. 2015).
estimation model and investigated that temperature variation By assuming fixed input and output prices and considering
has more impact on agriculture production in Africa com- the former substation to adopt new method, the Ricardian
pared to rainfall changes and other variables of climate. The model finds out relationship between climate change effect
increased maximum temperature level had excessive adverse on land rent and land value and found out positive relation-
effect on rice production compared to minimum temperature ship between farm value and farm rent with productivity of
effect (Emran et al. 2019; Ankrah and Jiang 2021; Mahmood the farm, i.e., a farm with more productivity will have higher
et al. 2021). rent or higher value in market as compared to a farm with
Ali et al. (2021) applied Ricardian model of climate low productivity (Ali et al. 2021; Hossain et al. 2020). Gouel
change impact on agricultural productivity and concluded and Laborde (2021) critically evaluated the Ricardian model
that increase in temperature has adverse effect, while and pointed out that the model is based upon unrealistic
increase in rainfall has positive impact on agriculture pro- assumption such as fixed output price, which means that
ductivity. They further elaborated that temperature effects when crop supply increases, the price will not be decreased
are greater than rainfall effect (Huo et al. 2021). Therefore, like economic basic law of supply, and in the same way fixed
climate change will have more adverse effects on the agri- input price means that its price will not be changed with
culture-based developing countries like Pakistan in terms of changes in the demand, again against the law of demand.
its level of vulnerability compared to developed countries. Moreover, this approach correlates climate change with that
This is because of developed countries’ more reliance on of farm rent or value instead of crop production. Farm rent or
service and manufacturing industries that are hardly affected value in case of developing countries is not determined with
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5000
4000
3000
2000
1000
in the “Results and discussions” section. Empirical model of Development Centre Islamabad. Moreover, Pakistan major
the study is explained in Methodology section. The “Con- crop season are shown in Fig. 4.
clusion and policy recommendations” section shows results
and discussions. The conclusion and policy implication are
presented in the last section. Spatial dependency test
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Y. After Eq. 2 estimation, a null hypothesis on the slope In presence of cross-districts interdependency and unit-
parameter is constructed. H0 ∶ 𝛽i = 0 for all i against root characteristics approval allows us to employ.
H1 ∶ 𝛽i < 0 for i.
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Fixed effect with Driscoll and Kraay standard error Cross-sectional dependency may arise when the error
terms across several panels are interrelated. Specifically,
We construct six empirical models including non-linear and when j and i are distinct panels, cross-sectional depend-
linear form, for reducing the rainfall and temperature over ency infers: 𝜌ij = 𝜌ji = corr 𝜀it , 𝜀jt , ≠ 0
( )
lapping effects in cultivation season. The foundation for the This problem is most common in panel data sets of
presence of quadratic terms is that a particular rainfall and financial or macroeconomic indicators with somewhat
temperature are essential for the sophisticated and high rice long time periods (Torres-Reyna 2007). Furthermore De
production. Once the rainfall and temperature surpass the Hoyos and Sarafidis (2006) highlighted that the current
threshold can be unfavorable to productivity. issue become more common in macro-economic indica-
tors because indicators of financial and economic inte-
RPit = 𝛼i + 𝜏 + 𝛽1 Fertilizeri,t + 𝛽2 Humidityi,t gration generate different countries prone to the same
(M1.1) unobserved phenomenon. Assume that the dependency
+ 𝛽3 Temp_Plai,t + 𝛽4 Rain_Plai,t + 𝜀it
is triggered by unobserved indicators that are linked to
residuals across panelsʼ series but not to the regressors.
RPit = 𝛼i + 𝜏 + 𝛽1 Fertilizeri,t + 𝛽2 Humidityi,t + 𝛽3 Temp_Plai,t +
(M1.2) In that scenario, the coefficient parameter estimations in
+ 𝛽3 Temp_Pla2i,t + 𝛽4 Rain_Plai,t + 𝛽5 Rain_Pla2i,t + 𝜀it
fixed-effects will be stable, but its significance will be
incorrect because of standard errors biasness (De Hoyos
RPit = 𝛼i + 𝜏 + 𝛽1 Fertilizeri,t + 𝛽2 Humidityi,t and Sarafidis 2006). The Pesaran test is used to see if the
+ 𝛽3 Temp_Flowi,t + 𝛽4 Rain_Flow2i,t + 𝜀it
(M2.1) indicator data had any cross-sectional dependency (Pesa-
ran et al. 2004) devised on Breusch and Pagan (1980)
RPit = 𝛼i + 𝜏 + 𝛽1 Fertilizeri,t + 𝛽2 Humidityi,t + 𝛽3 Temp_Flowi,t + study to apply a test for cross-sectional dependency in
+ 𝛽3 Temp_Flow2i,t + 𝛽4 Rain_Flowi,t + 𝛽5 Rain_Flow2i,t + 𝜀it
(M2.2) balanced and unbalanced panel time series data by apply-
ing coefficient correlation pair-wise from within-panel
ordinary least square regressions. For sufficiently long
RPit = 𝛼i + 𝜏 + 𝛽1 Fertilizeri,t + 𝛽2 Humidityi,t
(M3.1) time series data and no cross-sectional dependency null
+ 𝛽3 Temp_Flowi,t + 𝛽4 Rain_Flowi,t + 𝜀it
hypothesis, test statistic assembles a normal distribu-
tion N approaches infinity. At significance level of 5%,
RPit = 𝛼i + 𝜏 + 𝛽1 Fertilizeri,t + 𝛽2 Humidityi,t + 𝛽3 Temp_Heri,t + Pesaran test statistic is significant, indicating the exist-
+ 𝛽3 Temp_Her2i,t + 𝛽4 Rain_Heri,t + 𝛽5 Rain_Her2i,t + 𝜀it
(M3.2) ence of cross-sectional dependency in the data set. For
cross-sectional dependency the study applies two cor-
Here, RPit denotes rice productivity for i zone and over rections. Driscoll Kraay standard errors is the first one,
time t, 𝛼i presents a regional fixed effect, τ shows time which is unaffected by autocorrelation, cross-sectional
effect, Fertilizeri,t is fertilizer use, Humidityi,t is humidity dependency and heteroscedasticity. Driscoll and Kraay
level, Temp_Plai,t denotes plantation time average tempera- (1998) developed on the research study of Newey and
ture, Temp_Pla2i,t is the square of plantation season average West (1987). The Driscoll and Kraay (1998) method
temperature, Temp_Flowi,t presents the average temperature entail taking product average between explanatory factors
during flowering season, Temp_Heri,t signifies the average and residual term and after that apply on the data. These
temperature during harvesting time, Rain_Flowi,t shows data are used in estimator of weighted HAC for standard
average rainfall during flowering time, Rain_Plai,t displays errors generation that are now resilient against cross-
average rainfall during planting time, Rain_Heri,t presents sectional dependency. Driscoll Kraay standard errors are
average rainfall during harvesting time, Temp_Flow2i,t preferable to Huber White standard errors or Newey West
stands average temperature during flowering season square standard residuals in the current studyʼs variable data set
form, Temp_Her2i,t denotes average temperature during har- since all three issues are present. For a comprehensive
vesting season square form, Rain_Pla2i,t displays square empirically usage of standard errors of Driscoll Kraay,
of average rainfall during planting season square form, see Hoechle (2007) or Driscoll and Kraay (1998). Sec-
Rain_Flow2i,t is square of flowering stage average rainfall, ondly, Pesaran test suggests that cross-sectional depend-
Rain_Her2i,t is square of harvesting time average rainfall ency exists, and it provides no information about how
and 𝜀it is error term. strong the relationship is or between which panels it may
( ) exist. As a result, the study claims that cross-sectional
𝜌ij = 𝜌ji = corr 𝜀it , 𝜀jt , ≠ 0
dependence is considerably more likely to exist among
distinct zones with similar characteristics.
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Results and discussions correlations among the cross-sections, whereas the fourth
and fifth columns signify CIPS (Z-t-bar) statistics for level
Table 1 indicates descriptive statistics of the study. The and first difference forms of particular indicators, respec-
standard deviation (std. dev.) in logarithmic form and rice tively. Table 2 shows spatial dependency of all variables
productivity mean value are 2.965 and 8.633, respectively, except productivity of rice. Moreover, CIPS test reveals that
presenting the observations are different from mean value in all variables of the study are integrated at level (0), indi-
a minor range. Humidity mean value is 6.105 and std. dev. cating that selected indicators are stationery. After prac-
value is 1.483 that shows fluctuation in humidity in a narrow tice panel unit root, the current study advances to choose
range over time period in chosen 29 districts of Pakistan. the estimation model. Particular heterogeneity in variables
The mean value of fertilizer is 5.754 and 1.523 is its across zones and spatial dependency, we employ two-way
Std. Dev., which indicates that both values are within the fixed effect with Driscoll and Kraay estimator. Furthermore,
small range. However, the)Std. Dev. of temperature during Figs. 5, 6, 7 and 8 show that productivity of rice and climate
planting time Temp_Plai,t is 1.523 while its mean value is explicatory variables have quadratic relationships; therefore,
(
1.637, donating that Temp_Plai,t fluctuates within the tem- we also examines non-linearity in the model used in our
perature range across the nominated districts of Pakistan. study.
Three (03) linear and nonlinear models are considered by
(Like, the Std.)Dev. of temperature during flowering time
Temp_Flowi,t is 1.053 and mean value is 4.435 that shows the study for reduction rainfall and temperature overlapping
that Temp_Flowi,t varies with in the small ranges. The Std.) effect over the cultivation season. In Table 3, M1.1, M2.1,
Dev. of temperature during harvesting time Temp_Heri,t and M3.1 are harvesting, flowering, and planting season’s
(
is 1.754 and mean value is 4.845 showing that both values linear models. Along, M1.2, M2.2, and M3.2 designate
vary across the zones with(a small variation. Similarly, rain- nonlinear models for harvesting, flowering, and planting
fall during planting time Rain_Plai,t , standard deviation times. M1.2 and M1.1 comprised rainfall and temperature
)
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Table 3 Climate response to DV: RP Model 1.1 Model 1.2 Model 2.1 Model 2.2 Model 3.1 Model 3.2
rice productivity
Humidityi,t − 3.057*** − 0.554*** − 0.124* − 1.426*** − 0.767** − 0.919***
Stand. Error 0.699 0.029 0.094 0.367 0.328 0.089
Fertilizeri,t 0.156*** 1.553*** 0.197* 0.918** 0.170** 0.324**
Stand. Error 0.375 0.194 0.015 0.013 0.094 0.144
Temp_Plai,t 1.6017*** 0.531***
Stand. Error 0.820 0.019
Temp_Pla2i,t − 1.317***
Stand. Error 0.132
Temp_Flowi,t 1.430*** 1.565***
Stand. Error 0.203 0.249
Temp_Flow2i,t − 0.434***
Stand. Error 0.0513
Temp_Heri,t 1.183*** 1.176***
Stand. Error 0.150 0.139
Temp_Her2i,t − 1.214***
Stand. Error 0.119
Rain_Plai,t 1.534*** 1.251***
Stand. Error 0.054 0.071
Rain_Pla2i,t 0.735***
Stand. Error 0.062
Rain_Flowi,t 1.210*** 0.975***
Stand. Error 0.306 0.060
Rain_Flow2i,t 0.427***
Stand. Error 0.078
Rain_Heri,t 0.150 0.139
Stand. Error 0.028 0.306
Rain_Her2i,t − 0.635***
Stand. Error 0.078
Contsant − 2.033** 1.7532 2.754 2.852 1.643 1.732
Stand. Error 0.425 0.523 0.109 0.041 0.623 0.527
R − sqaured 0.632 0.602 0.721 0.650 0.616 0.691
Time Effect No No No No No No
Regional Fix. Ef No No No No No No
productivity during flowering and planting time. Fifth, fer- critical to have a policy for more targeted adaptation to
tilizer usage seems significant and positive, controlling the climate patterns in place of a single standard home policy.
rainfall and temperature during the planting season. Sixth, in
all model’s humidity is steadily injurious, representing that
greater humidity is harmful to rice productivity. Author contributions FUR write the first draft of the manuscript by
collecting the data and analysis, and EA revised the manuscript by cor-
The current studyʼs empirical findings have a number recting the English language and also works in methodological section.
of important policy implications. The impact of climatic All authors revise the manuscript and approve.
indicators on rice productivity should be given more atten-
tion in order to increase rice productivityʼs resilience to Data availability Not applicable.
climate trends. Second, large agricultural research and
development expenditures should be made to enhance Declarations
the varieties of rice crops that are adaptable to climate
patterns, i.e., higher production, heat tolerance, and viral Ethics approval The authors not reported any potential interest of con-
flict.
attack resistance. Finally, because climate patterns do not
always sway all Pakistani districts in the same way, it is
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Environmental Science and Pollution Research
Consent to participate Not Applicable. Govt. of Pakistan (2018) Economic survey of Pakistan. Federal Bureau
of Statistics, Ministry of Finance, Islamabad
Consent to publish Not Applicable. Gong L, Liu D, Jiang (2021) Distribution characteristics of climate
potential productivity of soybean in frigid region and its response
Competing interests The authors declare no competing interests. to climate change. Environ Sci Pollut Res. https://d oi.o rg/1 0.1 007/
s11356-021-15879-y
Gouel C, Laborde D (2021) The crucial role of domestic and interna-
tional market-mediated adaptation to climate change. J Environl
Econ Manag 106:102408
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