NO. 2015-PB10

How are Chinese Farmers Responding

to Climate Change?

A summary of EEPSEA Research Report No. 2015-RR14: ‘Farmers’ Adaptation to Climate Change and Their Risk Preferences in Yongqiao District, China,

by Jin Jianjun, Gao Yiwei, Wang Xiaomin, and Pham Khanh Nam. Comments should be sent to: College of Resources Science and Technology,

Beijing Normal University, Beijing, China. Tel.: +86-10-58805049; fax: +86-10-58808178. E-mail address: jjjin@bnu.edu.cn (Jin Jianjun).

Climate change is a significant risk for many farmers in China. However, up until now,

there has been little research into how Chinese farmers are adapting to this threat

and into the factors that influence their decisions to act. Now, a new EEPSEA study

has assessed how farmers in one of the country’s largest districts are adapting to

climate change. It also looked at how their attitude to risk is affecting their behavior. The study is the work of a team led by Jin

Jianjun from Beijing Normal University.

The study finds that most farmers in Yongqiao District are aware of climate change

and that they are taking a number of key measures to protect their livelihoods from this

threat. Their perceptions of climate change and their decisions to act are affected by various

factors including their educational levels, genders, and incomes. In addition, the more

averse a farmer is to risk, the less likely that s/he will plant new drought-resistant crop varieties or

adopt new technology; and the more likely it is that he or she will purchase weather-related crop

insurance. The study recommends a number of steps to help farmers take the necessary steps to adapt to

climate change.

How and why farmers adapt to climate change

There is general consensus that China’s agriculture sector will be significantly affected by climate change and that its rural people are particularly vulnerable, especially to extreme weather events such as droughts. However, there has been little research on how the country’s farmers are responding to this challenge. There has also been little research on farmers’ attitudes to risk—although this is acknowledged as an important factor that can affect their decision to act to meet the climate change threat.

In order to provide valuable information to help fill these knowledge gaps, Jin Jianjun’s team assessed the level of farmers’ awareness on climate change and looked at the measures they

are taking to cope. The team also looked at the factors influencing the farmers’ decisions to adapt, especially their attitudes to risk. The study team used two different mechanisms to assess the farmers’ attitudes to risk and compared the results of both. This was done to provide additional information on the best experimental approach to take to risk assessment.

The study area: Youngqiao District

The study was based in Yongqiao District, which is located on the north of Anhui province. Yongqiao is the biggest county-level district in China. In 2012, its population was about 1,880,000 people, 78% of the populace were involved in agriculture. The average per capita GDP in the district is about CNY 20,059 (USD 3280).

Questionnaire surveys were used to collect information on farmers’ perceptions on climate change, farm areas and crops, and demographic and socioeconomic make-up of households. The respondents were also asked about the climate change adaption measures they had taken. Since the main potential impact of climate change in Yongqiao is drought, respondents were specifically asked whether they had planted new drought-resistant crop varieties, adopted relevant new technologies, invested in irrigation infrastructure, and purchased weather-related insurance.

Assessing farmers’ attitudes to risk

The respondents were also asked to give an assessment of their general willingness to take risks on a scale of 0 –10. They were also asked to assess their likelihood of engaging in risky activities with respect to five different areas of life (i.e., social, health and safety, ethical, recreational, and investment). In addition, they were asked to take part in a risk assessment experiment. In particular, the participants were asked to make a total of eight binary choices. For each choice they had to pick either Option A (the “safe” option) or Option B (the “risky” lottery).

If a participant choose the safe option (Option A), they could be sure that they would get a certain amount of money (the “payoff”). If they choose the lottery (Option

B), they would have a 50% chance of getting a payment of CNY 20 (USD 3.3), which was higher than the payment under the safe option (except for the first set of choices). However, they would also have a 50% probability of getting nothing. The payoff associated with Option A declined systematically throughout the eight choices, while the payoff for Option B remains unchanged.

Given this set up, it was possible to assess a participant’s level of risk aversion by noting at which point s/he switched from preferring Option A to preferring Option B. For example, only risk-loving subjects would have opted for the lottery when the offered safe option was higher than CNY 10 (the “average” that participants could expect to “win” by choosing the lottery option).

Farmers’ perceptions on climate change

The study team found that an overwhelming majority of farmers perceived that there had been an increase in average temperatures over the past 10 years (82%), and that there had been a decrease in average precipitation (80%) over the same time period. About 95% of the farmers in the survey had heard about climate change. This suggests a high level of awareness of the issue in the study area. This can be attributed to an extensive awareness-raising campaign that has been undertaken in recent years using electronic media and social networks.

The most common adaptation measures taken up by the farmers in the survey involved the adoption of new crop varieties and an increased investment in irrigation infrastructure. About half of the respondents stated that they had adopted new cropping technology. In addition, more than half of the respondents said that they had purchased weather-related insurance to protect their wheat from drought.

Farmers’ perceptions of risk

The results of the study’s risk questionnaire show that there is substantial uniformity in the farmers’ attitudes toward risk. Roughly 8% of all individuals indicated a complete unwillingness to take risks. About 0.5% indicated that they are very willing to take risks. The mean response was 4.68, indicating that, on average, participants are relatively risk averse.

In the study’s risk experiment, only 15% of the sample exhibited risk-loving behavior (i.e., they preferred the lottery to safe amounts above CNY10). About 38.5% of the subjects were risk-neutral, while 44% of the subjects were risk averse (i.e., they preferred not to play the lottery even when offered a safe payment smaller than CNY10). Finally, 6% of subjects always selected the safe option, indicating a high degree of risk aversion. Thus, the study’s experiment indicates that most farmers in the study area are risk- averse. It is therefore clear that both the study’s survey and field experiment produced similar results.

In addition, the responses of individuals to the general risk question in the survey had a strong link to the decisions they made in the study’s experiment. This suggests that the general risk question can help explain the choices that people made in the experiment. It also indicates that the study’s questionnaire survey was a valid way of assessing people’s attitudes to risk. This is an important finding as many researchers have cast doubts on the validity of self-reported risk assessments.

Factors affecting risk

The study also looked at how the various demographic and socioeconomic characteristics of the farmers in the study were linked to their attitudes to risk. It reports that men are significantly more willing to take risks than women. It also finds that willingness to take risks decreases significantly with age. Taller and healthier people are more willing to take risks than shorter and less healthy people. Interestingly, the study found that self-employed individuals were more likely to take risks. It also found that participants were most risk-averse when considering ethical and financial matters. In other words, their attitudes to risk were context dependent.

As expected, the results revealed that self-reported happiness had a positive impact on people’s willingness to take risks. One possible explanation for this is that happier people might have an underlying optimism that gives them a positive state of mind.

Figure 1. Yongqiao district, Anhui, China

Table 2. Farmers’ adaptation strategies

Definitions Percentage of Respondents

No adaptation 2

Adopting new technology 52

Increased investment in irrigation infrastructure 79

Planting new crop varieties 80

Purchasing wheat drought weather index insurance 53

Table 1. Experiment design

Task Option A Option B EVA EVB Risk Aversion Class

1 CNY 20 CNY 20 if heads; CNY 0 if tails CNY 20 CNY 10 –a

2 CNY 15 CNY 20 if heads; CNY 0 if tails CNY 15 CNY 10 Very risk loving

3 CNY 12 CNY 20 if heads; CNY 0 if tails CNY 12 CNY 10 Risk loving

4 CNY 10 CNY 20 if heads; CNY 0 if tails CNY 10 CNY 10 Risk neutral

5 CNY 8 CNY 20 if heads; CNY 0 if tails CNY 8 CNY 10 Slightly risk averse

6 CNY 6 CNY 20 if heads; CNY 0 if tails CNY 6 CNY 10 Risk averse

7 CNY 4 CNY 20 if heads; CNY 0 if tails CNY 4 CNY 10 Very risk averse

8 CNY 2 CNY 20 if heads; CNY 0 if tails CNY 2 CNY 10 Highly risk averse

Factors affecting the uptake of climate change adaptation measures

The study found that men are more likely than women to adopt new technology and to increase the amount of money they invest in irrigation infrastructure in order to protect themselves from climate change.

It also found that more educated farmers and farmers who had high awareness of climate change are more likely than their less educated peers to increase their investments in irrigation infrastructure and to purchase weather-related crop insurance. Not surprisingly, the study also found that wealthier households are more likely to plant new drought-resistant crop varieties than poorer farmers.

Farmers who are more willing to take risks are also more willing to plant new drought-resistant crops varieties and to adopt new technology that will help them combat climate change. On the other hand, risk-averse farmers are more likely to buy weather-related insurance.

Recommendations for action

As the study team found that farmers’ risk attitudes are context-dependent, they recommend that researchers should make their survey instruments context-specific and gear them toward whatever problem is being assessed. Moreover, they suggest that further research is necessary to examine the relationship between risk surveys and experiments.

The study underscores the fact that people’s ability to respond effectively to climate change is determined by the quantity and quality of the information available to them and by the ease by which they can access this advice. Consequently, it recommends that climate change policies should emphasize the importance of providing information on better agricultural production techniques. The power of the media should be fully utilized to strengthen awareness of climate change and to educate people on effective response strategies.

Moreover, the study shows that farmers’ awareness of the impact of climate change can positively influence their take up of adaptation measures. There is therefore a need to increase the

awareness level of farmers and the public as a whole on the key climate change issues. The study shows that educational levels have a significant positive impact on the degree to which households adapt to climate change. Thus, investment in education should be seen as a key policy in the response to the challenge.

Finally, while the indigenous practices adopted by farmers over the years have helped them cope with a changing climate, it is clear that farmers will need to adopt modern technologies and farming techniques if they are to cope with the more extreme weather that climate change will bring. This should be acknowledged by policy makers who should provide farmers with the information and support their need to adopt these practices.

Figure 2. Histogram of responses to the risk question

Note: (0 = not willing to take any risks; 10 = fully prepared to take risks)