The current issue and full text archive of this journal is available on Emerald Insight at:

[Link]

Food security
Food security in South Asia in South Asia
under climate change and
economic policies
Sun Yan 237
School of Economics, Xi’an University of Finance and Economics,
Xi’an, China, and Received 3 October 2021
Revised 20 December 2021
23 January 2022
Shahzad Alvi 29 January 2022
Department of Economics, School of Social Sciences and Humanities, 12 February 2022
Accepted 19 February 2022
National University of Sciences and Technology, Islamabad, Pakistan

Abstract
Purpose – The first purpose of this study is to examine the impacts of climate-caused cereal productivity
changes on food security, welfare and GDP in South Asian countries. The second purpose is to assess the
agricultural subsidies and South Asia Free Trade Agreement (SAFTA) as policy responses to climate change.
Design/methodology/approach – The present study uses the computable general equilibrium (CGE)
framework and econometric approach in an integrated manner to examine the economic impacts of climate-
caused cereal productivity changes in South Asian countries. An econometric model is used to identify the
impact of climate change on cereal yields and CGE approach is used to assess the future effect of climate
change through simulations. In this course, the econometric findings are applied to Multiregional Global
Trade Analysis Project 10 and then the model is calibrated for future projection.
Findings – The results indicate that there is a decrease in cereals production because of climate change and
eventually it increases the prices of cereals, decreases the local consumption and GDP and, as a result, causes a
loss in welfare. Subsidies and SAFTA have been found to have no substantial impact on increasing food
security in South Asia.
Originality/value – The present study uses the concept of food demand for all cereals in an integrated
way and focuses on the fiscal and trade policy responses to climate change.
Keywords Food security, Climate change, South Asia, Yields, Fiscal policy, Trade policy, GDP,
Welfare, SAFTA
Paper type Research paper

1. Introduction
Extreme weather events are becoming more frequent and intense. The events such as flood,
drought and storm surges threaten the land, livestock, crops and food supplies (Godde et al.,
2021). Climate change causes water tables to become depleted, make it more difficult for

© Sun Yan and Shahzad Alvi. Published by Emerald Publishing Limited. This article is published
under the Creative Commons Attribution (CC BY 4.0) licence. Anyone may reproduce, distribute,
translate and create derivative works of this article (for both commercial and non-commercial
International Journal of Climate
purposes), subject to full attribution to the original publication and authors. The full terms of this Change Strategies and
licence may be seen at [Link] Management
Vol. 14 No. 3, 2022
This work is supported by the Social Science Fund Project of Shaanxi Province (2018HD06), Scientific pp. 237-251
Research Project of China (Xi’an) Institute for Silk Road Research (2019YA05) and Major theoretical and Emerald Publishing Limited
1756-8692
practical research projects in philosophy and social sciences of Shaanxi Province (2021ND0145). DOI 10.1108/IJCCSM-10-2021-0113
IJCCSM people to get and stand in the way of attempts to boost agricultural production (Kirby et al.,
14,3 2017). People in fragile environments, who are already at risk of hunger, are most affected
by climate change (Mahapatra et al., 2021). The number of people suffering from
malnutrition has risen around the world. The most affected regions are Africa and South
Asia [World Health Organization (WHO) 2020]. The prevalence of stunting is 30.7% in
South Asia, which is higher than the global average of 22.0% (Micha et al., 2020).
238 Currently, one-fourth of the world’s population is living in South Asia and it will grow
40% by 2050. In the future, feeding an ever-increasing population will be a major challenge
[World Health Organization (WHO) 2020]. South Asia is one of the most vulnerable regions
to climate change because of high rates of population growth and natural resource
degradation, as well as persistently high rates of poverty and food insecurity (Barbier and
Hochard, 2018; Hussain et al., 2020). Over the past century, extreme climate events have
increased in South Asia. In tropical areas, where the major crops are grown in South Asia,
rising temperatures will have a negative impact on crop yields. The temperature tolerance in
these areas is already at the threshold. While direct effects from rising temperatures are
likely, indirect effects from changing soil moisture status and disease incidence are also
likely (Sivakumar and Stefanski, 2010; Lal, 2021). Small rainfed farmers are affected more
because of climate change because of their limited access to financial institutions and
technical ability to adapt to climate change (Satishkumar et al., 2013).
Socioeconomic progress has been achieved in South Asian nations over the past decade,
but these countries still face difficulties, including reducing poverty and hunger, as well as
ensuring food security for the people to achieve a good quality of living and healthy
lifestyles. South Asian nations have the largest percentage of hungry and impoverished
people, even though the region had significant economic development after 2000. The
Millennium Development Goals in South Asia have not been fulfilled in a major manner. In
2015, countries adopted the sustainable development goals (SDGs) and SDGs 2 and 3 are
directly related to food security. SDG 2 aims to “end hunger, achieve food security and
improved nutrition, and promote sustainable agriculture”, as well as help the poor and those
whose situation is rapidly deteriorating [United Nation General Assembly (UNGA), 2015;
Heidkamp, 2021]. The third SDG focuses on promoting good health and well-being.
Furthermore, because all SDGs are linked to food and agriculture in some way, they are
responsible for progress towards stable food security.
In this era of globalisation and competition, micro and macroeconomic policy measures
are urgently needed to ensure the long-term sustainability of food provision by making the
economy more competitive through structural change. As a result, general equilibrium
economic models, also known as general equilibrium models (GEMs) are developed for this
purpose. The economy, according to GEM’s analysis, is made up of a complex network of
several independent components, including factors of production, various industries and
institutions and international economic conditions (Ianchovichina et al., 2001; Calzadilla
et al., 2010; De-Salvo et al., 2013). One of the GEMs’ features is that they can adapt to global
changes that occur at the country level and measure climate change in their economic
sectors (Calzadilla et al., 2013; Nikas et al., 2019).
Few studies have developed the economic model for South Asia under climate change,
including Hertel et al. (2010), Cai et al. (2016), Dissanayake et al. (2019) and Chalise et al.
(2017). These studies focus on climate change along with GDP and population growth. The
aim of the present study is to analyse the impact of climate change along with fiscal and
trade policies on food security in South Asia. This study serves as a focal point for better
understanding and assessing the impacts of climate change on agriculture production in
South Asia, as well as the vulnerability that comes with it. The computable general
equilibrium (CGE) framework used in the present study is different from the previous Food security
studies because it uses the real concept of food demand for all cereals in an integrated way in South Asia
instead of investigating the impact of climate shock separately for each cereal crop.
Therefore, this study adds to the literature that provides simulations for all cereals not
separately but lumped together for a meaningful analysis. Furthermore, this study
contributes to the literature by concentrating on the fiscal and trade policies as
compensatory responses to climate change, which are mostly ignored in the previous 239
literature. We focused on four South Asian countries: Pakistan, India, Bangladesh and Sri
Lanka. These countries have close economic structures, follow similar policies and the
majority of the South Asian population is living in these countries. The agricultural sector is
recognised as one of the most important in these countries, and staple food production is
safeguarded owing to food security.
This study is organised as follows: Section 2 is about methodology; Section 3 is about
results of cereal yields responses to temperature and precipitation; Section 4 is about future
projections; Section 5 simulates the economic impact of climate change; and Section 6
discusses the results of fiscal and trade policies. Section 7 brings the study to a close and
makes policy recommendations.

2. Methodology
2.1 Conceptual framework
The CGE framework in an integrated manner is used for scientific research that links the
main features of society and economy with the biosphere and atmosphere into a single
modeling framework. This method starts with general circulation models (GCMs). GCMs
use physical, chemical and biological concepts to model the relationship of the earth system
and their reactions to increasing greenhouse gas levels (IPCC, 2013). GCMs often consider
the estimates of socioeconomic pathways that include population, income rise, energy
consumption policies and other factors that affect greenhouse gas emissions levels. Using
various socioeconomic mechanisms and assumed greenhouse gas emission trends, GCMs
offer a set of predictions for potential climate change (IPCC, 2014). GCMs forecasts are then
used as inputs to economic models to predict economic responses to climate change impacts
and investigate the feasibility of possible strategies to combat and respond to climate
change. Our CGE framework focuses on the future economic impacts of climate change by
using the forecast of GCMs and taking into the policy responses to climate change. The
current research developed a comprehensive CGE framework in an integrated manner by
following Cai et al. (2016) and Alvi et al. (2021). Figure 1 explains the conceptual framework,
which is used in the present study, which follows four steps:
(1) In the first step, an econometric model is estimated to identify the impact of climate
change on yields in South Asian countries, namely, Bangladesh, India, Pakistan
and Sri Lanka.
(2) Secondly, we use future temperature and precipitation projections from GCMs
used in the Coupled Model Inter-comparison Project Phase 5 (CMIP5) to calculate
implied future crop yield changes using the previous econometric model.
(3) Thirdly, the yield variations are fed into a multiregional Global Trade Analysis
Project (GTAP) model for calibration, resulting in a decrease in grain sector factor-
augmenting productivity. Using the CGE modeling approach, we also assess the
macroeconomic impacts of climate change on Bangladesh, India, Pakistan and Sri
Lanka.
IJCCSM
14,3

240

Figure 1.
Conceptual
framework

(4) Finally, through the CGE model, the present study also evaluates the effect of fiscal
and trade policy responses to climate change.

2.2 Empirical model for cereal yields response to temperature and precipitation
To check the impact of climate change on yields, an econometric model is estimated with
climatic and non-climatic variables. Yields (kg/ha) are influenced by both climatic and non-
climatic factors (Di-Falco, 2014; Alvi and Jamil, 2018). We used growing degree days (GDDs)
instead of average temperature because using an average temperature can hide extreme
temperatures during the growing season of a crop (Schlenker and Roberts, 2009; Alvi et al.,
2021). The regression can be expressed as follows:

lnyit ¼ g 1 GDDit þ g 2 GDD2it þ g 3 Prit þ g 4 Pr2it þ g 5 lnGFCFit

þ g 6 lnLFit þ b t þ ai þ « it (1)

where yit is the crop yields, Pr is precipitation, GFCF is the gross fixed capital formation
and LF is the labour force. A time-invariant country-fixed effect ai is used to control for
regional heterogeneity. bt is the time effect, which is introduced to capture the other
development over the time period, such as improvement in seeds quality and farmer’s
practices. Subscript i is the country index and t is the year index. To capture the
nonlinearity of GDD and precipitation, quadratic form of GDD and precipitation are
included in the regression.
2.3 Data and variable description Food security
The GDDs were used in this study, which is the sum of heat received by a crop over in South Asia
the growing period between lower and upper thresholds (Schlenker and Roberts,
2009). For each crop, the upper and lower thresholds are still being debated. The
current study used 8°C as the lower threshold. Each crop has a different growing
season in each of the South Asian countries. Rice crop sowing and harvesting dates in
Pakistan, for example, differ from those in Bangladesh. In this study, different
growing seasons are used for each crop and country. The average daily temperature
241
during the growing season is used to calculate the GDDs for each crop. The method to
calculate GDD is as follows:
(
0 if T # 8
GDDðT Þ ¼ (2)
T8 if T > 8

For the period 1990 to 2015, data on climatic variables was obtained from NASA-POWER
([Link]). NASA-POWER provides global coverage of satellite and model-
derived agrometeorological data on a 1° latitude and 1° longitude grid. The data of climatic
variables and cereal yields are made consistent with the satellite scans and images that
show the areas where a specific cereal crop is growing.
The Food and Agriculture Organization (FAO, 2020) provided data on cereal yields,
including wheat, rice and maize, for Bangladesh, India, Pakistan and Sri Lanka from 1990 to
2015. FAO also provides data on gross fixed capital formation and labour force in the
agriculture sector.
This study uses the GTAP 10 database by focusing on four South Asian-countries,
namely, Bangladesh, India, Pakistan and Sri Lanka, and three crops, namely, maize, rice and
wheat, which are aggregated into one in the GTAP 10 database.

3. Results and discussion

We have started our analysis with descriptive statistics. The results of descriptive statistics
are given in Table 1. It is found that the average cereal yields from 1990 to 2015 is found
highest (3,509 kg per hector) in Bangladesh followed by Sri-Lanka, India and Pakistan. The
average GDDs are observed highest (7,199 degrees Celsius) in Sri Lanka and lowest (4,228
degrees Celsius) in Pakistan. The descriptive statistics results show that the average

Cereal yields Growing degree days Precipitation

Country (kg per hector) (Celsius) (millimeters)
Mean Max Min Mean Max Min Mean Max Min

Bangladesh 3,509 4,617 2,475 6,311 6,618 6,101 2,240 2,900 1,787
India 2,433 2,969 1,926 6,041 6,279 5,839 1,018 1,160 835
Pakistan 2,417 3,001 1,805 4,582 4,809 4,228 313 427 192
Sri Lanka 3,414 3,974 2,902 7,009 7,199 6,870 1,715 2,097 1,397
Maize yield Rice yield Wheat yield
(kg per hector) (kg per hector) (kg per hector)
Bangladesh 3,671 6,984 734 3,532 4,552 2,533 2,156 3,086 1,503
India 1,986 2,610 1,376 3,075 3,691 2,609 2,675 3,177 2,121
Pakistan 2,569 4,424 1,396 3,055 3,752 2,315 2,356 2,832 1,824 Table 1.
Sri Lanka 1,749 3,590 969 3,480 4,055 2,993 2,515 3,154 2,071 Descriptive statistics
IJCCSM precipitation in Bangladesh from 1990 to 2015 is recorded 2,240 millimeters followed by
14,3 1,715 millimeters in Sri Lanka and 1,018 millimeters in India. However, in Pakistan, average
precipitation level from 1990 to 2015 is 313 millimeters, which are quite low as compared to
other regional countries. Further, we have also calculated the average, maximum and
minimum yields for the three major crops, maize, rice and wheat from 1990 to 2015. The
average maize yield is the highest recorded in Bangladesh and the lowest average is in Sri
242 Lanka. The average yield of rice is the highest calculated in Bangladesh and the lowest
average is in Pakistan. Wheat is also one of the major staple food. The average wheat yield
in India is the highest (2,675 kg) and the lowest average in Bangladesh (2,158 kg). Similarly,
we have calculated the minimum and maximum values of three major crops and climatic
variables (see Table 1).
We have applied the fixed-effects technique on data spanning the years 1990–2015.
Maize, rice and wheat yields are dependent variables, while GDDs, precipitation, gross
fixed capital formation and labour force are independent variables. Table 2 summarises
the findings. The results indicate that GDDs have a significant effect on maize, rice and
wheat crops at 99%, 95% and 90% confidence intervals, respectively. To account for the
nonlinearity, we introduced the square of GDD. The coefficient of GDD squared is
significant for maize, rice and wheat at 99%, 95% and 90% confidence intervals,
respectively, indicating that a nonlinear relationship exists and that GDD increases
yields but at a decreasing rate. The relationship between GDD and maize, rice and wheat
yields is an inverted U-shaped relationship. Precipitation and crop yields also have a
nonlinear relationship. Additionally, this indicates that increasing precipitation to a
moderate level is beneficial. Crops are harmed by low or excessive precipitation. The
precipitation coefficient and its square are significant for the three crops. The findings of
this study corroborate with those of Schlenker and Roberts (2009) for the USA and Chen
et al. (2016) and Zhang et al. (2017) for China. As the farmers are rotating their crops and
people of developing countries are more concerned about the availability of overall grains
(Alvi et al., 2020), it is important to see the impact of climate change on overall cereal
yields. We ensembled the three cereal crops (maize, rice and wheat), and the results
indicate that the GDD and precipitation affect the cereal yields significantly at a 99%
confidence interval. It is also found that the relationship of cereal yields with GDD and
precipitation is nonlinear because the coefficients of the square of GDD and precipitation
are significant at a 95% confidence interval. The results also indicate that the increase in
the gross fixed capital formation and labour force in South Asia’s agriculture sector
increases crops’ yields.

Variable Maize Rice Wheat Cereals

GDD 0.192*** (0.0024) 0.291** (0.037) 0.317** (0.013) 0.310*** (0.001)

GDD2 0.096*** (0.001) 0.143** (0.025) 0.061*** (0.001) 0.139** (0.019)
Pr 0.044** (0.042) 0.071*** (0.008) 0.070*** (0.010) 0.093*** (0.001)
Pr2 0.034** (0.032) 0.022** (0.025) 0.049* (0.076) 0.060** (0.002)
GFCF 0.255*** (0.001) 0.211*** (0.004) 0.295*** (0.002) 0.276* (0.072)
LF 0.138* (0.053) 0.133** (0.037) 0.290** (0.061) 0.259* (0.081)
Table 2.
Adjusted R-square 65.25 63.91 60.38 71.85
Impact of climate
change on cereal Notes: ***, **and *denote significance at the 99, 95 and 90% confidence interval, respectively
yields Source: author’s calculations
4. Projection of cereal yields – 2050 Food security
We forecast future cereal yields for the four South Asian countries of Bangladesh, India, in South Asia
Pakistan and Sri Lanka using the value of climate change impacts. The Representative
Concentration Pathways (RCP) 6.0 scenario is used for this purpose; this scenario uses a
high rate of greenhouse gas emissions and is a stabilisation scenario in which total radiative
forcing is stabilised after 2,100 through the use of a variety of technologies and strategies for
reducing greenhouse gas emissions. Global warming is expected to increase by an average
of 1.3°C by the mid-century and 2.2°C by the century’s end (IPCC, 2014). The future
243
projection of cereal yields is calculated by using ten GCMs’ CMIP5, Community
Climate System Model (CCSM), Geophysical Fluid Dynamics Laboratory (GFDL), Goddard
Institute for Space Studies (GISS), Institute Pierre Simon Laplace Climate Model 5 A (IPSL-
CM5A), The Norwegian Earth System Model (NORESM), Beijing Climate Center Climate
System Model (BCC-CSM), Community Earth System Model (CESM), Commonwealth
Scientific and Industrial Research Organization (CSIRO), First Institute of Oceanography
Earth System Model (FIO_ESM) and MIROC Earth system model (MIROC-ESM). The
maximum, minimum and average values in percentage decrease in cereal yield are
calculated from the ten models and the results are given in Table 3. The projection indicates
that the cereal yields will be significantly decreased in four countries of South Asia because
of climate change. The average impact of climate is high in Bangladesh and Pakistan, which
is 16.4% and 10.7%, respectively.

5. Economic impacts of climate change

Using the CGE modeling framework, we discuss the economic impacts of climate-caused
cereal productivity changes in South Asia for each country in this section. Maize, rice and
wheat are combined in a multiregional GTAP model that is calibrated to the GTAP 10
database and incorporates the future decrease in cereal yields data from the previous
section. According to the findings, GDP in India, Pakistan, Bangladesh and Sri Lanka could
fall by up to 2.6%, 7.2%, 8.9% and 7.8% in the mid-century compared to the base year of
2015. We discovered that as a result of climate change, prices will rise, with the highest
increases expected in Bangladesh and Pakistan, at 50.7% and 43.2%, respectively. The price
of cereal grains has increased by 13.7% in India and 31.5% in Sri Lanka. Our simulations
also show that because of climate-caused changes in cereal production in South Asia,
imports could rise. At the same time, by the middle of this century, exports could be
drastically reduced, with Bangladesh and Pakistan being the most affected countries.
Furthermore, we discover that a decrease in cereal production raises cereal prices and has an
impact on individual household consumption. In the mid-20th century, all four countries saw
a decrease in cereal consumption. This could mean that these South Asian countries will
face more food security issues because they are already lagging behind developed countries
in average yields and have a large population that is undernourished (Cai et al., 2020).

India Pakistan Bangladesh Sri Lanka

Minimum 6.8 9.7 11.8 8.8

Maximum 11.9 17.1 21.8 15.4
Average 7.1 10.7 16.4 9.5
Table 3.
Note: The above values are in the percentage decrease in cereal yields Projection of future
Source: author’s calculation cereal yields – 2050
IJCCSM Climate change has also resulted in a loss of welfare worth US$41.8bn in India, US$27.5bn in
14,3 Pakistan, US$24.7bn in Bangladesh and US$4bn in Sri Lanka (see Figure 2).
The results support the previous studies’ findings, which predicted that average crop
yields decreased in 2050 as a result of climate change in South Asia (Aryal et al., 2020).
Because of a decrease in cereal yields, the average calorie availability is expected to decline
by around 15% in 2050, with cereal consumption projected to decline by as much as 24% in
244 South Asia (Nelson et al., 2009). Bangladesh, India and Pakistan are most susceptible to
declining crop yields because of decreasing water resources, glacial melting, flood, droughts
and unpredictable precipitation (Ahmad et al., 2020; Miller and McGregor, 2020). Wang et al.
(2017) predicted the average total economic losses for the mid-century are 9.4% for
Bangladesh, 8.7% for India and 6.5% for Sri Lanka.

6. Fiscal and trade policy responses

In this study, a set of policy directions of South Asia’s economies under an integrated
framework is developed by keeping in view the real concept of food security. Thus, it is
important to note the role of the policymakers to prepare compensatory policies to mitigate
the adverse impacts of climate change on food security. There can be two options that could
be considered: first, provision of subsidies at a country level, and regional agreements in
form of free trade. Subsidies provide insight on food security in the presence of improving
the facilitation to the farmers. The subsidies are coupled to output and create incentives for
producers to expand production. These subsidies are usually provided on fertilisers,
pesticides or improved seeds to influence production practices and processes. The objective
of subsidies is to attain self-sufficiency in staple food items. First, we simulate the model
with a very optimistic approach, in which we consider that if the South Asian countries start
giving subsidies to the farmers equivalent to Europe, then how it will affect the situation.
European countries subsidise farmers, undermining market access for some of the world’s
poorest producers. Currently, European countries are given 25% subsidies on average to
their farmers. The findings suggest that output will improve in all of the South Asian
countries. However, this progress is insufficient to compensate for the losses caused by
climate change. Subsidies have an impact on other sectors of the economy as well as GDP.
Instead of compensating, an increase in subsidies causes a drop in GDP. Subsidies allow for
lower consumer prices, lower imports, improved exports and a slight increase in food
availability for individual households. However, all of these improvements are insufficient

150

100
Percentage change

50

0
Figure 2. GDP Consumer prices Imports Exports Consumpon
Impact of climate
-50
change on GDP,
consumer prices,
imports, exports and -100
consumption India Pakistan Bangladesh Srilanka
and do not compensate for the climate change shock. Even our simulations show that Food security
welfare has not improved as a result of subsidies (see Figures 3–9). in South Asia
Intra-regional trade constitutes less than 5% of South Asia’s total trade, compared to
25% and 61.8% in the ASEAN and European Union (World Bank, 2012), respectively.
According to international trade theory, allowing for more free trade in food grains between
nations will drive gains in productivity and growth in food production, principally
increasing market size and price stabilisation. Many studies have demonstrated that
lowering trade barriers between SAARC member nations will benefit all countries in the 245
region (Iqbal and Amjad, 2012). Nonetheless, other analyses imply that the advantages
would be negligible or moderate at best, given low per capita incomes, poorly developed
infrastructure, similar patterns of comparative advantage and high transaction costs
(Kumar and Singh, 2009; Kemal et al., 2000). This study focuses on the role of the South
Asian Free Trade Agreement (SAFTA) as a compensatory policy response to climate
change if it is used in the true sense of having no tariffs between South Asian countries. For
cereal grains, South Asian countries currently rely on a variety of interventionist policies,

Cereals producon
0.0
–2.0 India Pakistan Bangladesh Srilanka

–4.0
Percentage Change

–6.0
–8.0
–10.0
–12.0
–14.0 Figure 3.
–16.0 Impact of
compensatory
–18.0
policies on cereals
With Climate Change Subsidy SAFTA production

GDP
0.0
India Pakistan Bangladesh Srilanka
Percentage Change

–2.0

–4.0

–6.0

–8.0 Figure 4.
Impact of
–10.0
compensatory
With Climate Change Subsidy SAFTA policies on GDP
IJCCSM Consumer Prices
14,3 60

50
Consumer Price
40
246
30

20

10
Figure 5.
Impact of
0
compensatory
India Pakistan Bangldesh Srilanka
policies on consumer
prices With Climate Change Subsisdy SAFTA

Cereals imports
120.0
100.0
Percentage change

80.0
60.0
40.0
Figure 6. 20.0
Impact of
compensatory 0.0
policies on cereals India Pakistan Bangladesh Srilanka
imports With Climate Change Subsidy SAFTA

which have resulted in forced domestic adjustments rather than trade solutions. In this
context, it is expected that strong yield growth will protect the situation and that any
disruption caused by climate change will result in a rapid deterioration of the regional food
balance (Laborde et al., 2012). We run the model by taking into account future regional trade
developments in South Asia, where SAFTA is a hot topic. SAFTA has been applied and
implemented to see what will happen to the economic variables, and the results are shown in
Figures 3–9. It is indicated that SAFTA is not very effective at compensating for climate
change. It has a chance of failing to improve food security in South Asia. SAFTA will
provide little benefit to Bangladesh. Previous studies by Laborde et al. (2012) and Bandara
and Cai (2014) support the results of our simulations. Both studies found that South Asia is
the region most negatively impacted by climate change on agricultural yields. SAFTA’s
implementation and increased agricultural subsidies have failed to significantly improve
agricultural yields.
Simulations based on the integrated framework reveal a threatening situation in terms of
food security for South Asian countries by the middle of this century, in spite of the fact that
these countries already have a large number of undernourished people. In this situation,
 Cereals exports Food security
in South Asia
0.0
India Pakistan Bangladesh Srilanka
–20.0
Percentage change

–40.0 247

–60.0

–80.0 Figure 7.
Impact of
–100.0 compensatory
policies on cereals
With Climate Change Subsidy SAFTA exports

Cereals consumpon
0.0
India Pakistan Bangladesh Srilanka
–5.0
Percentage change

–10.0

–15.0
Figure 8.
–20.0 Impact of
compensatory
–25.0 policies on cereal
With Climate Change Subsidy SAFTA
consumption

Welfare
0.0
India Pakistan Bangladesh Srilanka
–10.0
Billion $

–20.0

–30.0

–40.0
Figure 9.
Impact of
–50.0
compensatory
With Climate Change Subsidy SAFTA policies on welfare
IJCCSM South Asian countries must become more globally integrated and find a solution other than
14,3 SAFTA, which is ineffective in ensuring food security. Furthermore, providing farmers with
subsidies does not ensure food security, both locally and regionally. Climate change-related
welfare losses can be mitigated by shifting the economy from agriculture to manufacturing,
resulting in a significant increase in per capita income and, consequently, food security.

248 7. Conclusion
With the help of the CGE modelling framework, the current study has examined the
economic consequences of climate-caused changes to cereal productivity for four South
Asian countries, namely, India, Pakistan, Bangladesh, and Sri Lanka. For this purpose, first,
we have estimated the econometric model to check the impact of climate change on cereal
yields. Then, these findings are used to calculate the future macroeconomic effects because
of climate change by using the CGE approach. According to the findings, climate change is
causing a decrease in cereal production in South Asia. The prices of cereals will eventually
rise, while local consumption and GDP will fall, causing a decrease in overall welfare as a
result of climate change. A simulation of the impact of subsidies and SAFTA on food
security in response to climate change is also included in the study, but it does not find any
significant contributions. As a result, the study recommends that free trade opportunities be
explored in addition to SAFTA. Instead of providing subsidies, another possible policy
approach is to provide training to farmers in order for them to be better prepared for and to
cope with the underlying factors that may drive the adoption of new technology in the first
place.
Agriculture is the most dependent on weather and climate, especially for growing crops.
Farmers are vulnerable to the impact of climate change-related problems. The people of
South Asia are already struggling with the challenges of extreme weather, low incomes and
hunger and poverty. Climate change adaptation strategies are now an absolute necessity for
all vulnerable populations, and these populations are already disproportionately affected.
To produce substantial benefits for food security and climate change adaptation and
mitigation, an integrated strategy using adaptive, mitigation priorities and long-term
approaches is required. The actions that yield the most benefit with respect to mitigating the
consequences of climate change while also offering substantial co-benefits include
increasing soil carbon sequestration in forestry and agro-forestry initiatives and tillage
practices, improving nutrient management efficiency and restoring degraded lands.
Using CGE framework in an integrated manner to assess the implications of climate
change for food security, this study highlights the significance of various policy
interventions. First, it is critical to demonstrate that no single country can overcome the
issue of food insecurity, whereas the South Asian region is jointly vulnerable, meaning,
thereby, these countries have to look out of the region to formulate some sort of trade
liberalisation with relatively secure countries. Trade diplomacy is a critical policy tool that
should be taken on an upright agenda of foreign policy. Second, control measures are hardly
available for controlling or optimising the precipitation, whereas it has an exponentially
damaging impact after reaching a certain threshold. Therefore, it is critical to devise a policy
for introducing small water reservoirs. These can be used as an additional source of water
for various purposes, including farming. Third, the positive impact of capital formation
identifies the importance of using more technologically advanced equipment and machinery
for farming purposes. However, the availability of financing is a critical barrier for the
farmers to deal with this dilemma. It thus identifies the need to provide financing facilities to
the farmers. Last but not the least, appropriate training of farming community to deal with
climate change should be on the priority agenda of the respective governments.
References Food security
Ahmad, M.D., Stewart, J.P., Peña-Arancibia, J.L. and Kirby, J.M. (2020), “Punjab water outlook: impacts in South Asia
of climate change and dam sedimentation on water for irrigated agriculture”, March 2020.
Technical Report, Sustainable Development Investment Portfolio project, CSIRO, Australia,
p. 50.
Alvi, S. and Jamil, F. (2018), “Impact of climate change and technology adoption on cereal yields in
South Asian countries”, European Journal of Sustainable Development, Vol. 7 No. 3, pp. 237-237,
doi: 10.14207/ejsd.2018.v7n3p237. 249
Alvi, S., Jamil, F., Roson, R. and Sartori, M. (2020), “Do farmers adapt to climate change? A macro
perspective”, Agriculture, Vol. 10 No. 6, p. 212.
Alvi, S., Roson, R., Sartori, M. and Jamil, F. (2021), “An integrated assessment model for food security
under climate change for South Asia”, Heliyon, Vol. 7 No. 4, p. e06707, doi: 10.1016/[Link].2021.
e06707.
Aryal, J.P., Rahut, D.B., Sapkota, T.B., Khurana, R. and Khatri-Chhetri, A. (2020), “Climate change
mitigation options among farmers in South Asia”, Environment, Development and
Sustainability, Vol. 22 No. 4, pp. 3267-3289, doi: 10.1007/s10668-019-00345-0.
Bandara, J.S. and Cai, Y. (2014), “The impact of climate change on food crop productivity, food prices
and food security in South Asia”, Economic Analysis and Policy, Vol. 44 No. 4, pp. 451-465, doi:
10.1016/[Link].2014.09.005.
Barbier, E.B. and Hochard, J.P. (2018), “Land degradation and poverty”, Nature Sustainability, Vol. 1
No. 11, pp. 623-631, doi: 10.1038/s41893-018-0155-4.
Cai, Y., Bandara, J.S. and Newth, D. (2016), “A framework for integrated assessment of food production
economics in South Asia under climate change”, Environmental Modelling and Software, Vol. 75,
pp. 459-497, doi: 10.1016/[Link].2015.10.024.
Cai, J., Ma, E., Lin, J., Liao, L. and Han, Y. (2020), “Exploring global food security pattern from the
perspective of spatio-temporal evolution”, Journal of Geographical Sciences, Vol. 30 No. 2,
pp. 179-196, doi: 10.1007/s11442-020-1722-y.
Calzadilla, A., Rehdanz, K., Betts, R., Falloon, P., Wiltshire, A. and Tol, R.S. (2013), “Climate change
impacts on global agriculture”, Climatic Change, Vol. 120 Nos 1/2, pp. 357-374, doi: 10.1007/
s10584-013-0822-4.
Calzadilla, A., Rehdanz, K. and Tol, R.S. (2010), “The economic impact of more sustainable water use in
agriculture: a computable general equilibrium analysis”, Journal of Hydrology, Vol. 384 Nos 3/4,
pp. 292-305, doi: 10.1016/[Link].2009.12.012.
Chalise, S., Naranpanawa, A., Bandara, J.S. and Sarker, T. (2017), “A general equilibrium assessment of
climate change–induced loss of agricultural productivity in Nepal”, Economic Modelling, Vol. 62,
pp. 43-50, doi: 10.1016/[Link].2017.01.014.
Chen, S., Chen, X. and Xu, J. (2016), “Impacts of climate change on agriculture: evidence from China”,
Journal of Environmental Economics and Management, Vol. 76, pp. 105-124, doi: 10.1016/j.
jeem.2015.01.005.
De-Salvo, M., Begalli, D. and Signorello, G. (2013), “Measuring the effect of climate change on
agriculture: a literature review of analytical models”, Journal of Development and Agricultural
Economics, Vol. 5 No. 12, pp. 499-509.
Di-Falco, S. (2014), “Adaptation to climate change in Sub-Saharan agriculture: assessing the evidence and
rethinking the drivers”, European Review of Agricultural Economics, Vol. 41 No. 3, pp. 405-430.
Dissanayake, S., Mahadevan, R. and Asafu-Adjaye, J. (2019), “Is there a role for trade liberalization in
mitigating the impacts of climate change on agriculture?”, Economic Analysis and Policy, Vol. 62,
pp. 307-324.
FAO (2020), Food and Agriculture Data, Food and Agriculture Organization of United Nation, available
at: [Link]/faostat/en/#data (accessed 20 June 2020).
IJCCSM Godde, C.M., Mason-D’Croz, D., Mayberry, D.E., Thornton, P.K. and Herrero, M. (2021), “Impacts of
climate change on the livestock food supply chain; a review of the evidence”, Global Food
14,3 Security, Vol. 28, p. 100488, doi: 10.1016/[Link].2020.100488.
Heidkamp, R.A., Piwoz, E., Gillespie, S., Keats, E.C., D’Alimonte, M.R., Menon, P., Das, J.K., Flory, A.,
Clift, J.W., Ruel, M.T. and Vosti, S. (2021), “Mobilising evidence, data, and resources to achieve
global maternal and child undernutrition targets and the sustainable development goals: an
agenda for action”, The Lancet, Vol. 397 No. 10282, pp. 1400-1418, doi: 10.1016/S0140-6736(21)
250 00568-7.
Hertel, T.W., Burke, M.B. and Lobell, D.B. (2010), “The poverty implications of climate-induced crop
yield changes by 2030”, Global Environmental Change, Vol. 20 No. 4, pp. 577-585, doi: 10.1016/j.
gloenvcha.2010.07.001.
Hussain, M., Butt, A.R., Uzma, F., Ahmed, R., Irshad, S., Rehman, A. and Yousaf, B. (2020), “A
comprehensive review of climate change impacts, adaptation, and mitigation on environmental
and natural calamities in Pakistan”, Environmental Monitoring and Assessment, Vol. 192 No. 1,
pp. 1-20.
Ianchovichina, E., Darwin, R. and Shoemaker, R. (2001), “Resource use and technological progress in
agriculture: a dynamic general equilibrium analysis”, Ecological Economics, Vol. 38 No. 2, pp. 275-291.
IPCC (2013), “Climate change 2013 of the physical science basis”, Working group I, fifth assessment
report of intergovernmental panel for climate change, Summary for policy makers, IPCC,
Switzerland.
IPCC (2014), Climate change: synthesis report, Contribution of Working Groups I, II and III to the fifth
assessment report.
Iqbal, M. and Amjad, R. (2012), “Food security in South Asia: strategies and programmes for regional
collaboration”, Regional Integration and Economic Development in South Asia, University
Library of Munich, Germany.
Kemal, M.A., Qadir, U. and Mohsin, H. (2000), “Impact of trade reforms on poverty”, The Pakistan
Development Review, Vol. 39 No. (4 Part II), pp. 1127-1137.
Kirby, M., Mainuddin, M., Khaliq, T. and Cheema, M.J.M. (2017), “Agricultural production, water use
and food availability in Pakistan: historical trends, and projections to 2050”, Agricultural Water
Management, Vol. 179, pp. 34-46.
Kumar, R. and Singh, M. (2009), “India’s role in South Asia trade and investment integration”, ADB
Working Paper Series on Regional Economic Integration (No. 32), Asian Development Bank.
Laborde, D., Lakatos, C., Nelson, G., Robertson, R., Thomas, M., Yu, W. and Jansen, H.G. (2012), Climate
Change and Agriculture in South Asia: Alternative Trade Policy Options, World Bank,
Washington, DC, available at: [Link]
Lal, R. (2021), “Climate change and agriculture”, Climate Change (third edition), Elsevier, Amsterdam,
pp. 661-686.
Mahapatra, B., Walia, M., Rao, C.A.R., Raju, B.M.K. and Saggurti, N. (2021), “Vulnerability of agriculture to
climate change increases the risk of child malnutrition: evidence from a large-scale observational
study in India”, PloS One, Vol. 16 No. 6, p. e0253637, doi: 10.1371/[Link].0253637.
Micha, R., Mannar, V., Afshin, A., Allemandi, L., Baker, P., Battersby, J., Bhutta, Z., Chen, K., Corvalan,
C., Di Cesare, M. and Dolan, C. (2020), 2020 Global nutrition report: action on equity to end
malnutrition.
Miller, F.P. and McGregor, A. (2020), “Rescaling political ecology? World regional approaches to
climate change in the asia pacific”, Progress in Human Geography, Vol. 44 No. 4, pp. 663-682, doi:
10.1177/0309132519849292.
Nelson, E., Mendoza, G., Regetz, J., Polasky, S., Tallis, H., Cameron, D. . . . and Shaw, M. (2009),
“Modeling multiple ecosystem services, biodiversity conservation, commodity production, and
tradeoffs at landscape scales”, Frontiers in Ecology and the Environment, Vol. 7 No. 1, pp. 4-11.
Nikas, A., Doukas, H. and Papandreou, A. (2019), “A detailed overview and consistent classification of Food security
climate-economy models”, in Doukas, H., Flamos, A. and Lieu, J. (Eds), Understanding Risks and
Uncertainties in Energy and Climate Policy, Springer, Cham, available at: [Link] in South Asia
978-3-030-03152-7_1
Satishkumar, N., Tevari, P. and Singh, A. (2013), “A study on constraints faced by farmers in adapting
to climate change in rainfed agriculture”, Journal of Human Ecology, Vol. 44 No. 1, pp. 23-28.
Schlenker, W. and Roberts, M.J. (2009), “Nonlinear temperature effects indicate severe damages to US
crop yields under climate change”, Proceedings of the National Academy of Sciences, Vol. 106 251
No. 37, pp. 15594-15598.
Sivakumar, M.V. and Stefanski, R. (2010), “Climate change in South Asia”, Climate Change and Food
Security in South Asia, Springer, Dordrecht, pp. 13-30.
United Nation General Assembly (UNGA) (2015), Transforming our world: the 2030 agenda for
sustainable development, 21 October 2015 (Vol. 16301), A/RES/70/1.
Wang, S.W., Lee, W.K. and Son, Y. (2017), “An assessment of climate change impacts and adaptation in
South Asian agriculture”, International Journal of Climate Change Strategies and Management,
Vol. 9 No. 4, pp. 517-534.
World Bank (2012), “Why one South Asia”, [online], available at: [Link]/en/programs/
south-asia-regional-integration/trade (accessed 12 December 2021).
World Health Organization (WHO) (2020), UNICEF/WHO/The World Bank Group Joint Child
Malnutrition Estimates: levels and trends in child malnutrition, key findings of the 2020 edition.
Zhang, P., Zhang, J. and Chen, M. (2017), “Economic impacts of climate change on agriculture: the
importance of additional climatic variables other than temperature and precipitation”, Journal of
Environmental Economics and Management, Vol. 83, pp. 8-31.

Further reading
Lal, M. (2011), “Implications of climate change in sustained agricultural productivity in South Asia”,
Regional Environmental Change, Vol. 11 No. 1, pp. 79-94, doi: 10.1007/s10113-010-0166-9.

About the authors

Sun Yan (1979) has a doctorate degree and she is an Associate Professor at the Xi’an University of
Finance and Economics. Her research direction includes rural economy and innovation economics.
Shahzad Alvi has a doctorate degree in Economics and is currently serving as Assistant Professor
at the Department of Economics, School of Social Sciences and Humanities (S3H), National University
of Sciences and Technology (NUST), Islamabad, Pakistan. His research interests include development
economics, environmental economics and CGE modelling. Shahzad Alvi is the corresponding author
and can be contacted at: [Link]@[Link]

For instructions on how to order reprints of this article, please visit our website:
[Link]/licensing/[Link]
Or contact us for further details: permissions@[Link]