Climate crisis and agriculture: Economic impacts and strategic responses

Climate change poses significant and extensive threats to the global economy, impacting both long-term economic growth and short-term stability. Projections indicate that by 2049, climate change could cost the global economy approximately $38 trillion annually, potentially leading to a 19% contraction in economic activity.

The research underscores that these losses are six times greater than the costs associated with mitigating global warming. A primary concern is the increasing frequency of natural disasters, such as wildfires and hurricanes, which exacerbate economic damage. The agrarian sector, including agriculture, is particularly vulnerable to these changes, which in turn affects broader aspects of human livelihoods and well-being.

In general, as a result of negative changes in nature in recent years, the agricultural sector has faced great damage. This global problem encourages the explore of effective solutions in Azerbaijan as well.

Thus, the Republic implements various measures in order to organize the efficient operation of the agricultural sector. According to "Azerbaijan 2030: National Priorities for socio-economic development", a clean environment and "green" growth, which is one of the five National Priorities in the country, should be realized in the next 6 years. At the same time, the mentioned National Priorities are also of special importance in the direction of the implementation of the obligations arising from the "Transformation of our world: Agenda for sustainable development until 2030" of the United Nations Organization.

It should be noted that, according to the adopted priorities, a significant place should be given to the application of environmentally friendly technologies, the use of clean energy sources, waste recycling, and the restoration of polluted areas should be encouraged. This is intended to make an important contribution to the efforts made in the direction of maintaining the gas emission that creates a heating effect at a level consistent with international standards.

Along with the prospective economic development of the country, the improvement of the environment, rapid restoration and increase of greenery, efficient use of water resources, and sustainable energy sources were taken as the basis. This priority envisages the realization of goals such as a high-quality ecological environment and a green energy space in the strategic period.

As an example, state programs for the transition to "green energy" and support for "green agriculture" are implemented in our country. In this regard, it is worth emphasizing that the Ministry of Agriculture and the Ministry of Ecology and Natural Resources have adopted a Joint Action Plan for the support of "Green Agriculture" in relation to mitigating the adverse effects of climate change. Within the framework of that Action Plan, preparation of a plan for adaptation of agriculture to the effects of climate change, economic benefits of olive, pistachio, pomegranate, mulberry, etc. measures are being taken to support the use of plant species, to use the waste generated as a result of agricultural activity as a source of bioenergy, and other issues.

Climate change is leading to increased extreme weather events, such as hurricanes, floods, and droughts. These events cause significant damage to infrastructure, agriculture, and energy sectors, resulting in increased economic losses from natural disasters.

Depletion of resources and price increases in the agricultural sector

Climate change can lead to a decrease in water and land resources, reducing agricultural productivity. This, in turn, can drive up the prices of agricultural products and create food security issues. In Azerbaijan, addressing these challenges is a priority. The Azerbaijan State Water Resources Agency is focusing on various initiatives, including physical infrastructure projects, the construction of new reservoirs, the reconstruction of irrigation canals, the development of new and alternative water sources, and the study of efficient use of sea, treated waste, collector-drainage, and rainwater.

Irrigation needs: Altered precipitation patterns can affect the availability of water for irrigation. In drought-prone areas, this can lead to increased competition for water resources and higher irrigation costs.

Water supply: The availability of freshwater from sources such as rivers and aquifers can be impacted by climate change. Changes in snowmelt patterns and river flows can affect water availability for agriculture.

Food security

With rising temperatures, changing precipitation patterns, and more frequent extreme weather events, ensuring sustainable agricultural practices is crucial for addressing future challenges related to the planet and food security. The UN Food and Agriculture Organization (FAO) has highlighted this issue in a report, which states that by 2050, climate change could reduce global food production by 10-25 percent. This poses a significant risk, particularly for developing countries, affecting agricultural production and farmers' economic situations. To mitigate these impacts, adopting climate-resilient agricultural practices is essential. For example, research by the World Bank suggests that widespread adoption of sustainable farming practices could boost productivity by up to 50 percent in developing countries.

Access and availability: Changes in agricultural productivity can impact food availability and prices, affecting access to food, particularly in regions heavily reliant on agriculture.

Nutritional quality: Climate change can affect the nutritional quality of crops. For example, higher CO2 levels can reduce the concentration of essential nutrients in some staple crops.

Suitability of crops: The geographical range of many crops is changing. Some regions may become unsuitable for traditional crops, while others may become more suitable. This necessitates the development and adoption of new crop varieties that are more resilient to changing conditions.

Pests and diseases: Warmer temperatures and changing precipitation patterns can expand the range and increase the prevalence of pests and diseases that affect crops. This can lead to increased use of pesticides and other control measures, potentially affecting crop yields and quality.

Soil Erosion: Increased rainfall and extreme weather events can lead to soil erosion, which depletes soil nutrients and reduces its fertility. This can decrease crop yields and increase the need for fertilizers.

Soil Moisture: Changes in precipitation affect soil moisture levels. Both drought and excessive rainfall can impact soil structure and health, affecting its ability to support healthy crop growth.

Economic implications

Cost of production: Increased costs due to the need for additional irrigation, pest control, and soil management can impact the profitability of farming. Insurance costs may also rise as risks associated with extreme weather increase.

Market prices: Fluctuations in crop yields due to climate change can lead to price volatility in agricultural markets. This can affect both producers and consumers, potentially leading to food insecurity.

Crop diversification: To mitigate risks, farmers may diversify their crop portfolios to include more resilient varieties or alternative crops better suited to changing conditions.

Technological innovation: Advances in technology, such as precision agriculture, can help farmers optimize resource use and improve resilience to climate impacts.

Policy and support: Governments and organizations can play a crucial role in supporting farmers through subsidies, research and development, and policies aimed at enhancing resilience to climate change.

In conclusion, the impact of climate change on agriculture is significant and requires a multifaceted response involving technological innovation, policy support, and adaptation strategies. The sector faces challenges in maintaining productivity and ensuring food security as it adjusts to the changing climate. Addressing these challenges will be crucial for sustaining global food systems and supporting the livelihoods of farmers worldwide.