Measuring the Impact of Extreme Weather Phenomena on Total Factor Productivity of General Cropping Farms in East Anglia

Abstract

One of the main challenges of climate change on agriculture in UK is how to adapt to the potential changes to the availability of water. Changes in rainfall distribution may potentially lead to an increase in drought frequency, magnitude and duration. In this research a Data Envelopment Analysis (DEA) and a Malmquist Index (MI) are combined with a double bootstrap methodology to measure changes in Total Factor Productivity of general cropping farms in East Anglia. More specifically, the DEA technique was used to measure the year by year efficiency score for the farms in the sample and the MI and its components used to derive information on productivity over time. Data for the input – output models was obtained from the Farm Business Survey. Climate change is taken into consideration by using data for water cost as a proxy indicator of water consumption per farm. Results reveal changes in total, technical and scale efficiency and provide information on how the 2011 drought affect the TFP of the farms in the sample.