Contribution of agricultural investments to stabilizing international rice price volatility under climate change - simulation for eight ASEAN countries -

Abstract

The role of agricultural investment growth in alleviating climate risks to rice production systems and rice markets was examined using a partial equilibrium model. The Rice Economy Climate Change (RECC) model covers the rice markets in 15 countries and regions. The rice yield in each economy is estimated from minimum and maximum temperatures, precipitation, and agricultural investments. The rice area harvested is estimated from rice and wheat producer prices and precipitation. We examine how future agricultural investments will affect the world rice market. The volatility of international rice prices in the baseline is expected to increase during 2010/12 to 2030 with climate change. However, a constant increase in agricultural investments in eight ASEAN countries will contribute to reducing international rice price volatility. In particular, investments in Thailand and Vietnam are most important for stabilizing international rice prices under future climate change conditions.