The Calculation of Yield Risk Caused by Climate Change for Rainfed Wheat in Ahar County: Weather Value at Risk Approach Application

Climate is one of the basic factors in nature that its change is one of the most important challenges in current century. Increasing emissions of greenhouse gases, as the most important affecting factor on climate change, lead to change of temperature, precipitation and other climatic parameters. Unlike the other sectors, agricultural sector is more vulnerable to damages caused by climate change, so that the atmosphere precipitation and temperature average patterns changing damages the horticultural and agricultural production which are the main food sources in society. Both amount and quality of production reduction arises from climate change, consequently put farmer's income at risk. In the group of cereals, wheat was the most important crop in the country during the 2013-2014 crop year with the highest cropping area of 51.22%. East Azerbaijan province with the cultivated area of 40.6% of the country's total wheat has ranked sixth among producers of this crop. Ahar, one of the largest producers of wheat, has 95.5% of the province's cultivated area. Rainfall and temperature variations show climate risks for wheat, which are the most important indicators of climate change. Usually, the highest correlation is found between wheat yield and rainfall, so that the correlation coefficient between wheat yield of Ahar and rainfall in wheat growing season (October to July) was 45%, which indicates that most of the variation of yield is explained by rainfall. Therefore, risk management in agricultural sector, particularly weather risk, is highly important; however, risk management strategy cannot be implemented properly without identifying and measuring it. Hence, with attention to the importance of weather risk measurement, in this present study we tried to measure the rainfed wheat yield risk caused by climate change in Ahar County in two base (1986-2015) and future periods (2016-2045).
We applied weather Value at Risk (VaR) and weather conditional value at risk (CVaR), aquacrop, HadCM3 general circulation models under A2 emission scenarios and downscaling Lars-wg application. For this purpose, we collected weather information between 1986 and 2015 from East Azerbaijan Province Meteorological Organization, yield and soil feature data of 1991-2015 crop years from Management of Agriculture of the city of Ahar. The concept of ‘Weather Value at Risk’ represents a method to measure non-catastrophic economic weather risks. It captures both a socio-economic indicator’s sensitivity and exposure towards weather variability. Weather-VaR (α) denotes the Value at Risk resulting from adverse weather conditions, and represents–for a given level of confidence [α] over a given period of time–the maximum expected losses. Conditional Value at Risk (CVaR) attempts to address the shortcomings of VaR model, which is a statistical technique used to measure the level of risk within a firm. Conditional Value at Risk (CVaR) also known as the expected shortfall is a risk assessment measure that quantifies the amount of tail risk an investment portfolio has. CVaR is derived by taking a weighted average of the “extreme” losses in the tail of the distribution of possible returns, beyond the value at risk (VaR) cutoff point.. AquaCrop was chosen because it is a crop water productivity model that simulates yield response to water of herbaceous crops, and can be used specifically in situations where water is a key limiting factor in crop production. AquaCrop has the additional advantage that it is relatively simple and robust and uses “a relatively small number of explicit and mostly-intuitive parameters and input variables requiring simple methods for their determination”. AquaCrop was specifically designed for “assessing water-limited, attainable crop yields at a given geographical location” and “carrying out future climate scenario analyses.
The results show that in the future period, precipitation, maximum and minimum temperature, solar radiation, maximum and minimum relative humidity, wind speed and evapotranspiration variables will shift 9.15 millimeters, 0.63 and 0.56 Celsius degrees, 0.06 MJ/m2/d, -0.61 and -0.29 percent, 0.03 m/s and 18.48 millimeters per year, respectively. Based on the weather variables change, the yield average will increase from 0.954 in the base period to 0.999 t/ha in the future period, and beta and wakeby distribution were selected for yield as the best distributions to measure risk. Compared to base period, yield risk is reduced. In three probability levels, that is 1, 5 and 10 percent, and based on VaR method the amounts of risk reduction were obtained 0.139, 0.83 and 0.61 for beta distribution, and 0.297, 0.81 and 0.31 tons per hectare, respectively for wakeby distribution, while in CVaR method for beta distribution were 0.158, 0.115 and 0.93, and for wakeby distribution were 0.403, 0.148 and 0.77 tons per hectare, respectively.
According to the results, evapotranspiration is one of the variables that increase the yield risk; therefore, it is recommended that farmers use the natural and artificial mulch to reduce evaporation from the soil surface.