WHAT DOES CLIMATE CHANGE MEAN TO FOOD CONSUMPTION OF LOW-INCOME GROUP IN RURAL CHINA？

LI Yun，Institute of Agricultural Economics and Development，CAAS;YU Wen，Agricultural Information Centre, CAAS

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Outline

•Motive•Data•Model and estimation•Conclusions and implication

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Motive• Climate change: a global issue.• climate warming: Many studies find evidence indicating that

climate changing in general will benefit crop yield increase annually (Zhao et al., 2010；Li et al.，2010; Yang et al.,2010; Wang et al., 2011).• climate warming will make the north boundaries of food crops move

toward northwest and southeast direction; suitable acreage of some crops expands;

• the yield of rain-fed wheat in most regions of China will increase, as suggested by Sun et al. (2005).

• Climate change also means the increase of extreme climate including rainstorm, hail, frost, and drought etc. • Wu et al. (2008) finds that drought among various plagues was the

chief disaster that severely affected major grain production in northwest China.

• Li et al. (2008) show that the decline of rice meteorological yield was caused by the cold wet weather in spring and summer drought.

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Motive• Climate change: Household income? Food consumption?• Quite a few studies investigate the income effect on

household consumption. • Almost all studies suggest that price and income elasticity for

individual food and food collection for China is in general relatively lower（Li et al., 2010; Cheng et al., 2009；Liu et al, 2009; Li et al, 2005）.

• However, less research links food consumption at household level with climate change.

• This paper aims to fill in gap in this field.

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Data• 10 western provinces are studied. They are Inner Mongolia, Guangxi,

Sichuan, Guizhou, Yunnan, Shaanxi, Gansu, Qinghai, Ningxia, and Xinjiang. 1. Total sown area of farm crops:47.85 million hectares in 2009, 30% of the

national total. 2. 47.21 million hectares farm lands were hit by disasters in 2009 all over

China, of which 31% were in these 10 western provinces. 3. Rural population:206.44 million in 2009, 28.9% of China’s rural population. 4. Lower income: Per capita net income of rural households in each of the 10

provinces is far below nation average level in 2009. The average of per capita net income of rural households of the ten provinces is around 70% of national average.

• China Statistics Yearbook and Agriculture Statistics Yearbook;2000-2009.

• Including farm household income, agricultural income, cultivated area, disaster-covered area, disaster-afflicted area, price index of crop products, and growth rate of rural population.

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Model and Estimation

Year Per capita Net Income (a)

Net Agricultural Income (b) (b)/(a)

Mean Std.Dev.Coef. Mean Std.Dev.Coef.

2000 1701.34 0.14 872.80 0.45 51.3%2001 1753.08 0.15 890.40 0.39 50.8%2002 1861.07 0.17 901.29 0.44 48.4%2003 1961.98 0.16 932.57 0.46 47.5%2004 2107.04 0.17 996.28 0.43 47.3%2005 2272.57 0.18 1084.59 0.44 47.7%2006 2439.85 0.18 1101.55 0.46 45.1%2007 2690.22 0.20 1189.80 0.48 44.2%2008 2900.11 0.20 1214.42 0.50 41.9%2009 3140.61 0.19 1284.76 0.49 40.9%

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Model and Estimation•

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Climate change• w1:About 34.5% of the cultivated farm land are actually

covered by different kinds of disasters annually in 2000s. • w2: About 19.7% of the cultivated farm land are actually

afflicted by different kinds of disasters annually in 2000s.

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w1, 31.2

w2, 14.2

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1015202530354045

(%)

the impact of climate change on agricultural income•

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Climate change & Agri. incomeEquation (2)-1 Equation (2)-2

w1 pindex rpop T w2 pindex rpop TInner Mogolia 0.0347 -0.00137 7.416*** 0.247*** 0.0514 -0.00142 7.421*** 0.247***

(0.27) (-0.88) (39.91) (20.63) (0.39) (-0.88) (40.22) (23.53)

Guangxi -4.016*** -0.0151*** 9.431*** 0.254*** -7.102*** 0.0151*** 5.570*** 0.320***

(-7.24) (-5.21) (17.32) (11.99) (-5.52) (5.06) (24.45) (26.29)Sichuan 1.019 * -0.00375 7.317*** 0.0132 1.353 * -0.00376 7.433*** -0.00404

(2.26) (-1.05) (11.69) (0.23) (2.05) (-0.81) (10.16) (-0.06)Guizhou -0.663*** 0.0141*** 4.732*** 0.205*** -0.723*** 0.0135*** 4.749*** 0.200***

(-3.98) (20.23) (68.83) (29.56) (-3.46) (22.02) (66.20) (30.32)Yunnan 0.175 * 0.00223 6.308*** 0.147*** 0.350 * 0.00144 6.423*** 0.138***

(2.02) (0.95) (19.92) (5.85) (2.17) (0.56) (18.20) (4.80)

Shaanxi -0.141 0.00514*** 5.572*** 0.225*** -0.292*** 0.00512**

* 5.599*** 0.218***

(-0.71) (6.33) (27.79) (9.66) (-4.51) (6.52) (36.15) (10.53)

Gansu -0.226 -0.00455 7.138*** 0.163*** -0.640***-0.00385***

7.113*** 0.174***

(-1.37) (-1.45) (20.10) (7.71) (-11.81) (-6.70) (94.89) (41.34)

Qinghai -0.405*** 0.0022 5.906*** 0.122*** -0.407*** -0.000221 6.175*** 0.0985***

(-5.16) (1.71) (30.88) (5.87) (-10.30) (-0.18) (30.70) (4.77)Ningxia -0.519 0.00648 5.689*** 0.379** 0.921 -0.00283 6.692*** 0.257***

(-0.60) (0.72) (5.18) (3.23) (1.02) (-0.49) (9.06) (3.39)

Xinjiang -0.449*** 0.00357*** 6.784*** 0.106*** -0.529 0.00315 6.797*** 0.111***

(-3.39) (3.46) (50.35) (8.58) (-1.75) (1.87) (34.47) (6.96)

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Results summary of equ.2• The results show that disasters induced by adverse

climate do invade net agricultural income.• The increase of price index of agricultural products has a

statistically significant impact on per capita net agri. income in Guangxi, Guizhou, Shaanx, Gansu, and Xinjiang.

• the increase of rural population facilitate the increase of agriculture income.

• Time trend factors including technology and infrastructure progress contribute to the increase of agricultural income. • trend factors contribute to the increase of net agri. income by

1.1~1.46% annually.

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Food Consumption (per capita kg/year)

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year rice wheat vegt oil meat pork beef lamb poultry egg fish

2003 80.0 102.8 88.6 5.5 18.9 14.9 1.3 2.8 2.2 2.2 1.0

2004 78.6 103.0 88.0 4.0 18.3 14.7 0.9 2.7 2.2 2.0 1.0 2005 79.4 105.1 86.0 5.1 20.3 16.6 1.1 2.6 2.6 2.1 1.1 2006 77.5 98.4 83.7 5.1 20.7 16.6 1.4 2.3 2.6 2.3 1.2

2007 75.9 95.5 81.1 5.0 18.7 14.8 1.3 2.7 2.9 2.2 1.3

2008 77.2 93.7 80.3 5.1 17.3 14.0 1.1 2.3 3.4 2.6 1.3

2009 77.2 88.1 86.0 5.3 20.9 15.1 1.1 2.5 3.4 2.5 1.3

Total 78.0 98.1 84.8 5.0 19.3 15.2 1.2 2.6 2.8 2.3 1.2

Food consumption & Climate change•

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the determinant of food consumption of western rural residents: a GMM estimation

variable rice wheat veg oil pork beef lamb poultry egg fishPs/pr 3.319*** 4.078*** -0.00423 6.819*** 0.157 3.271 0.419 -0.816* 1.665

(3.96) (4.74) (-0.01) (6.36) (0.07) (1.14) (0.50) (-2.15) (1.71)w1 -2.469* 2.124 -1.051** -0.728 3.214*** 0.996 3.153* -1.409* 0.59 -0.445

(-2.22) (1.76) (-2.95) (-1.81) (3.98) (0.89) (2.11) (-2.02) (0.79) (-0.57)

pindex 0.0214 0.0326 0.0283*** -0.00613 0.0428* -0.0505 -0.0992* 0.0337* 0.0487*** 0.0472*

(0.97) (0.87) (4.62) (-0.59) (2.15) (-1.61) (-2.25) (2.30) (3.77) (2.24)rpop -0.281 -6.692 1.683* 3.228* -9.814** 12.23* 12.56* -9.029*** -1.716 -4.91

(-0.11) (-1.31) (1.97) (2.27) (-3.29) (2.33) (2.14) (-3.65) (-0.81) (-1.34)trend 0.381 0.531 0.325*** 0.0399 0.119 -0.0697 -0.78 0.0798 0.466*** 0.325

(1.66) (1.31) (5.32) (0.34) (0.63) (-0.22) (-1.84) (0.46) (3.78) (1.54)lnpr -2.511* -0.86 -1.215*** -0.368 0.848 -2.569* -0.938 2.271** -1.648** -1.694

(-2.49) (-0.36) (-4.06) (-0.82) (1.10) (-2.22) (-0.62) (2.86) (-2.81) (-1.28)Ps/pr 2.902*** 4.160*** -0.0161 6.828*** 0.0879 3.364 0.28 -0.781* 1.623

(3.37) (4.53) (-0.03) (6.34) (0.04) (1.26) (0.34) (-2.10) (1.65)w2 -4.479** 2.758 -1.562** -0.81 4.099*** 2.303 5.501** -1.313 0.578 -0.698

(-2.91) (1.61) (-2.62) (-1.65) (3.79) (1.54) (2.78) (-1.28) (0.48) (-0.65)

pindex 0.0229 0.0367 0.0267*** -0.00743 0.0474* -0.0504 -0.0929* 0.0311 0.0501*** 0.0466*

(1.07) (1.00) (4.50) (-0.68) (2.22) (-1.67) (-2.19) (1.96) (4.09) (2.24)rpop -0.116 -7.205 1.772* 3.513* -10.90** 11.62* 11.1 -8.705*** -1.868 -4.67

(-0.05) (-1.44) (2.13) (2.30) (-3.12) (2.25) (1.90) (-3.37) (-0.92) (-1.27)trend 0.418 0.525 0.309*** 0.0378 0.114 -0.0945 -0.781 0.0705 0.476*** 0.327

(1.83) (1.27) (5.05) (0.31) (0.58) (-0.31) (-1.95) (0.39) (3.72) (1.57)lnpr -2.567** -0.437 -1.115*** -0.458 1.174 -2.357* -0.716 2.246** -1.654** -1.753

(-2.67) (-0.18) (-3.43) (-0.94) (1.40) (-2.08) (-0.48) (2.64) (-2.65) (-1.34)

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Results1. the impact of climate change on food consumption

• Climate change has statistically significant and negative impact on rice and vegetable consumption of rural residents. However, climate change has significant and positive impact on pork and lamb consumption.

2. the impact of substitute products on food consumption• results show that rice and wheat, as staple food in western

China, act evidently good substitute to each other. Eggs are strong substitute for pork. There is no evidence to show that pork acts a substitute for edible oil and the result is statistically insignificant.

3. The result suggests that the increase of producer price of agricultural products actually increase rural residents’ consumption of vegetables, pork, eggs, and aquatic products, and do not affect staple food consumption including rice and wheat.

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Results4. the impact of population growth and time trend on

food consumption• the consumption of vegetables, edible oil, beef and lamb

increases as rural population grows, but the consumption of pork and poultry meat declines.

• rural residents’ consumption preference to vegetables and eggs goes up over time.

5. price elasticity and food consumption• Results indicate that the consumption of rice, vegetables,

beef, and eggs is price elastic. Increase of price of these items will significantly reduce their consumption.

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Conclusions and Implication1. The impact of climate change on agricultural income varies

among different regions. Six out of ten provinces are affected adversely and significantly. This might suggest adaptation capability in these provinces particularly need to be strengthened to tackle with adverse climate change.

2. The impact of climate change on food consumption differs in accord with food varieties. Adverse climate change has negative impact on the consumption of rice, vegetables and poultry. However, climate change helps to increase meat consumption including pork and lamb.

3. Rural population growth is an important factor affecting household income. Per capita agricultural income increases with the increase of rural population growth. One possible explanation is that agricultural labor is deficient in many rural regions as most prime rural labors migrate to the urban.

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Conclusions and Implication4. Rural residents’ consumption of vegetables and eggs

increases over time, which indicates an improvement in food nutrition balance. However, rural residents’ consumption of certain food items including vegetables, beef, and eggs are quite elastic to price change.

5. Time trend variable including technological progress factors plays a positive role in agricultural income growth. However, the coefficient is relatively low.

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