The specter of global climate change has many farmers in sub-Saharan Africa worried. They rely on rainfall to water their crops, irrigation not being a common practice. With climate change threatening to increase average temperatures and alter rainfall patterns, maize production in the region is expected to drop 22 percent by mid-century.
But climate change won’t affect countries in the same way. According to a new analysis, Tanzania might benefit from unexpected trade opportunities resulting from climate change—if the country enacts policies to take advantage of them.
The study, conducted by researchers at the World Bank, Stanford University, and Purdue University, shows that Tanzania moves out of step with other countries when it comes to climate change’s effects. Climate modeling predicts that in years when its trading partners are experiencing severe droughts and reduced agricultural yields, Tanzania will be only mildly affected. That difference means that Tanzania could increase its grain exports and take advantage of higher prices on the world market. The extra income from those exports could alleviate rural poverty in the country, the study’s authors say.
In the past, however, Tanzania has not taken advantage of the price spikes brought about when maize supplies shrink around the world. “Just at the time when the world market needs more trade, Tanzania—like many other countries—has a history of putting on export bans,” says coauthor Thomas Hertel, an agricultural economist at Purdue University. “It’s a strategy that doesn’t serve the rural population well, but [the government] hopes it serves to keep down prices in the urban areas.”
To reap the benefits from its unique position, Tanzania will have to participate more actively in the global trading system, Hertel says. Export bans keep grain prices low domestically, which is a popular stance with people in the more politically influential urban areas. But in the long run, fetching higher prices for farmers and boosting their income would benefit the rural areas, where most of the poverty is located.
“There’s good reason to believe that a reasonably efficient and fair trading system is the best way to accommodate the shocks from climate change,” says Channing Arndt, an agricultural economist at the University of Copenhagen. One challenge, though, is that Tanzania needs to improve its estimates of national maize production and surpluses. Without that information, world markets won’t know how to react—and Tanzania won’t be able to reap the benefits of that reaction.
Syud Amer Ahmed, Noah S. Diffenbaugh, Thomas W. Hertel, & William J. Martin, “Agriculture and Trade Opportunities for Tanzania: Past Volatility and Future Climate Change,” Review of Development Economics 16, 2012.