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Do climate change adaptation practices improve technical efficiency of smallholder farmers? Evidence from Nepal

Abstract

This paper provides one of the first empirical studies that examine the impact of climate change adaptation practices on technical efficiency (TE) among smallholder farmers in Nepal. An adaptation index is used to explore the impact of farmers’ adaptation on TE using the stochastic frontier analysis framework. Data for six districts of Nepal representing all three agro-ecological regions (terai, hill, and mountain) were collected from a focus group discussion, a stakeholder workshop and a household survey. The survey shows that about 91% of the farming households have adopted at least one practice to minimize the adverse impacts of climate change. Empirical results reveal that adaptation is an important factor explaining efficiency differentials among farming households. Those adopting a greater number of adaptation practices on a larger scale are, on average, found to be 13% more technically efficient than those adopting fewer practices on smaller scale. The empirical results also show that average TE is only 0.72, indicating that there are opportunities for farming households in Nepal to further improve productive efficiency, on average by 28%. Other important factors that explain variations in the productive efficiency across farming households include farmer’s education level, irrigation facilities, market access, and social capital such as farmer’s participations in relevant agricultural organizations and clubs. This study provides empirical evidence to policy makers that small scale adjustments made by farmers in response to climate change impacts are effective in improving farmers’ efficiency in agriculture production. This indicates a need for farmers’ involvement in climate change adaptation planning.

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Notes

  1. 1.

    The map of Nepal showing the ecological regions and the study districts is presented in Supplementary Figure 1.

  2. 2.

    A VDC is an administrative unit in Nepal similar to municipality which is further divided into nine wards. Each ward constitutes one several villages.

  3. 3.

    Total value of agricultural production is measured as the sum of the value of all the crops produced by a household. This includes the value of both the sold quantity and that kept in the house for family consumption. We used the market prices of all the produces as provided by the farmers.

  4. 4.

    Selection of these variables is based on existing literature (e.g., Binam et al. 2004; Chen et al. 2009; Coelli and Fleming 2004; Rahman 2011).

  5. 5.

    These questions were included both in the FGD and the household survey questionnaire.

  6. 6.

    One FGD was conducted with farmers in each district to understand their perception of climate change and to identify climate change adaptation practices adopted in the study area.

  7. 7.

    One stakeholder workshop was organized in each ecological region to assess the importance of different adaptation practices identified through the FGD.

  8. 8.

    The null hypothesis here is that Cobb-Douglas functional form better fits the data than the Translog form. The LR statistics, LR = − 2(log Likelihood (H0)–log Likelihood (H1)), LR = 74.64, reject the null hypothesis.

  9. 9.

    The principal crops dominating the agricultural sector are rice, maize, and wheat together accounting for more than 90% of the cultivated area and food grain production in Nepal.

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Correspondence to Clevo Wilson.

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Appendix

Appendix

Fig. 1
figure1

Weighting of adaptation practices by ecological regions based on effectiveness, feasibility and sustainability

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Khanal, U., Wilson, C., Lee, B. et al. Do climate change adaptation practices improve technical efficiency of smallholder farmers? Evidence from Nepal. Climatic Change 147, 507–521 (2018). https://doi.org/10.1007/s10584-018-2168-4

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