It is irrefutable that climate change has had, and will continue to have, a negative impact on the agricultural industry of sub-Saharan Africa (SSA).⁽²⁾ Climate change is reportedly responsible for the steady rise in aggregate temperature as well as increasingly volatile precipitation patterns. Other contributing factors to Africa’s disposition in this regard are a growing population, and a subsequent increase in demand for food, a lack of physical infrastructure, as well as inadequate adaptation programmes and mitigation policies. This paper aims to highlight that an environmental phenomenon – in this case climate change – could have negative economic consequences and, as such, has a negative impact on livelihoods.

The sugarcane industry is responsible for quite a substantial percentage of the agricultural industry’s Gross Domestic Product (GDP) in SSA. This paper will focus on two large sugarcane producers in SSA, namely South Africa and Mauritius. South Africa makes the largest contribution to the sugarcane industry, while Mauritius is third in line.⁽³⁾ Any changes in the sugarcane industry, specifically in these two countries, would reflect in the outcomes of the whole region’s agricultural industry. The economic ramifications could be extensive throughout the region.

Climate change will affect the production and net revenue of sugarcane cultivation. Farmers will have fewer yields and the supply to the domestic and international markets will decrease. The economic ramifications of a slump in the sugarcane industry also extend to various direct and indirect actors and stakeholders in the sector. This paper examines the potential negative impacts of climate change on the agricultural sector in SSA, with a specific focus on the sugarcane industry. The discussion also proposes potential methods, such as climate forecasting, to mitigate and adapt to climate change in SSA, and the associated challenges facing these methods.

Agriculture in SSA

Sub-Saharan Africa’s economy relies greatly on its agricultural industry. Approximately 75% of employment is provided by agriculture and the industry contributed an average of 30% of GDP in 2005 and more than 40% of exports.^(4,5) The size of the sugarcane industry in SSA is considerable. There are 28 countries that produce sugarcane, 11 of which can boast an output of more than 200 thousand tonnes. South Africa produces the most, accounting for almost 35% of the region’s total output, according to 2008 statistics.⁽⁶⁾ Mauritius produced over 500 thousand tonnes of sugarcane in 2008, the third most in the region.⁽⁷⁾

A large number of people earn a living from the industry with approximately 85,000 employees, 35,000 direct and indirect employment opportunities. Furthermore almost a million people are dependent on the sugar industry.⁽⁸⁾

The composition of the sugar industries in terms of size and scale vary amongst SSA countries. Sugarcane is grown on large estates or by smallholders and subsistence farmers. Large estates generally produce the bulk of sugarcane, but smallholders contribute quite substantially in some countries. In Mauritius, approximately 26,000 smallholders contribute roughly 30% of cane supply, while in South Africa a smaller amount - 12% - of cane supply is produced by approximately 45,000 smallholder farmers and the rest is produced by 1,729 large-scale growers.⁽⁹⁾

According to the International Sugar Organisation⁽¹⁰⁾ (ISO) the annual average growth of sugarcane production in SSA has experienced fluctuation for the period 2000 to 2006 and ended in an overall negative growth for the industry. Sugarcane productivity drives the cost competitiveness of the industry and therefore impacts the overall income and cash flow of farmers.⁽¹¹⁾ The steady decrease in the production of sugarcane in SSA consequently decreased the income generated from sugarcane.

In terms of trade, South Africa’s incentive to export is smaller than that of Mauritius, because of a higher domestic demand. The sugarcane industry in South Africa contributed ZAR 1.9 billion to the country’s foreign exchange earnings in 2000/2001 which is a substantial contribution to the country’s GDP.⁽¹²⁾ The value of South African sugar exports for the period 2009/2010 was ZAR 2.352 billion.⁽¹³⁾ According to the South African Sugar Association (SASA)⁽¹⁴⁾ the total saleable sugar produced between 1996 and 2010 by South Africa for the international market is increasingly less than the supply for its national market.

Considering the number of people directly involved in sugarcane production in SSA, and in particular South Africa and Mauritius, it is clear that any negative economic performance of the crop would affect the livelihoods of a large section of the population. A slump in the sugarcane industry would thus reach beyond the industry itself, because of the number of people that are indirect beneficiaries of sugarcane production, as well as other industries that depend on the welfare of sugarcane production.

The impact of climate change

Across all regions in the world, the agricultural sector will likely be the most severely impacted by climate change.⁽¹⁵⁾ Agriculture directly depends on climatic factors for the production of crops, while it is also indirectly affected by landscape and environmental changes brought about by climate change. Although it is held that some regions in the world will enjoy positive impacts on agricultural production through climate change (a slight increase in temperature could offset crop production), the impact on SSA would be negative.⁽¹⁶⁾

Changes in rainfall patterns and precipitation could adversely impact agricultural activities in SSA where most farming activities rely on rain for the supply of its water; such is the case with sugarcane production. As a result of climate change, the volume and spatial distribution of rain would change, sometimes unexpectedly, from historical patterns. Areas would be put under water stress, limiting the agricultural productivity and peoples’ basic living conditions.⁽¹⁷⁾ Temperatures are predicted to rise steadily by between 1.4° and 5.8°C over the next 100 years.⁽¹⁸⁾ Increased temperature leads to the exacerbation of drought periods, a reduction in soil fertility and places limits on the availability of water resources,⁽¹⁹⁾ all of which would negatively impact on any agricultural production activities.

In 2005, a study on the impact of climate change on sugarcane in South Africa for the period of 1977 to 1998 indicated that the net revenue per hectare of sugarcane would decrease with future increases in temperature.⁽²⁰⁾ Changes in precipitation would also impact sugarcane production, but not as severely as temperature changes would. Data from SASA⁽²¹⁾ confirms that the total area under sugarcane crop has steadily decreased since 2002 coupled with an even steeper decrease in hectares harvested for milling, as well as yields per hectare of harvested cane. One of the possible causes for less land being used for the cultivation of sugarcane could be that the changes in climate renders land and soil, as well as the climate of the geographical area, no longer suitable for sugarcane cultivation.

The Mauritius Sugar Industry Research Institute (MSIRI)⁽²²⁾ captures data on climatic factors and sugarcane crop growth on a monthly basis. For the year 2010, weather conditions were overall unfavourable for sugarcane production. Data shows that the sugarcane industry in Mauritius experienced a prolonged drought caused by a mean amplitude in temperatures while at the same time rainfall was below the long-term mean and insufficient to meet the water requirements of most crops.⁽²³⁾ The outlook for the crop of 2011 is again highly dependent on weather conditions and it is improbable that it would be more favourable than that of 2010.

Towards adaptation and mitigation of climate change

Climate forecasting is one way to mitigate and adapt to climate changes. When the uncertainty of climatic changes is overcome, there is more potential for mitigation and adaptation strategies to become more effective. In light of this, more accurate seasonal forecasts for SSA would enable stakeholders to implement more effective agricultural management and circumvent negative economic impacts.^(24,25) Rural livelihoods would thus be more secure, and food security less volatile.

The Global Framework for Climate Services and ClimDev-Africa are two initiatives in SSA that, following the El Niño phenomenon of 1997/98, supports the seasonal forecast information services for agriculture. Although these two policy and institutional incentives have provided invaluable support for the agricultural industry in terms of disseminating information on possible climate conditions, there remain some systematic errors.⁽²⁶⁾ Inaccurate information would not assist in risk aversion, but could be rather detrimental instead. Without doubt, further research on seasonal forecast information systems for agriculture would be welcomed in SSA. Improvement in institutional capacity, information dissemination systems and the alignment of government and private efforts would increase the effectiveness of available climate forecasts.

Another effort to reduce the potential risk of the impact of climate change on agriculture, and in this discussion sugarcane production, adaptation and mitigation strategies on farm level could be applied. Farmers are generally risk-averse and would rather wait for adverse and crisis climate conditions to pressure them into adaptation management, than attempt to optimise on average conditions. The input costs and investment exceed the profits in this case. It is estimated that the greatest loss for farmers is actually with the lost ‘opportunity cost.’ Farmers tend to cultivate a less risky crop at a lower profit rate, instead of investing in improved technology and adaptation mechanisms for crops that are more fragile under climate change but more profitable.⁽²⁷⁾

Conclusion

Climate change is an environmental phenomenon that will impact many sectors of society, including agriculture, in SSA. Numerous people, many of whom are poor, depend on agriculture for a livelihood. The economic value of land is interlinked with the net revenue per hectare that land could potentially produce. As climate change negatively affects the production of sugarcane, not only do farmers receive less income, but their farmland loses value as well. The financial position of farmers and all who have a livelihood dependent on the sugarcane industry is thus significantly weakened. If climate change adversely affects the ability of agriculture to be productive and profitable, a large portion of society in SSA will suffer directly, while everyone else will carry the burden with an increase in prices. Although there are institutional mechanisms in place to implement mitigation and adaptation strategies, it will only be successful if all the stakeholders align their efforts to firstly, curb climate change and secondly, support the agricultural industry with improved technology, research, infrastructure, financial institutions and general economic development to minimise the detrimental effects of climate change.^(28,29)

NOTES:

(1) Contact Sanette Vermeulen through Consultancy Africa Intelligence’s Enviro Africa Unit ( enviro.africa@consultancyafrica.com This e-mail address is being protected from spambots. You need JavaScript enabled to view it ).
(2) Antle, J.M., 2008. Climate change and agriculture: economic impacts. Choices: The Magazine of Food, Farm and Resource Issues, 23(1), pp. 9 – 11, http://www.choicesmagazine.org.
(3) International Sugar Organization, ‘Sugarcane smallholders in Sub-Saharan Africa: status, challenges and strategies for development’, Market Evaluation Consumption and Statistics Committee, 2008, pp. 1-24 and pp. 43-45, http://www.sugarindustrydev.co.za.
(4) Calzadilla, A., et al., 2009. Economy-wide impacts of climate change on agriculture in Sub Sahara Africa. Working Paper FNU-170, http://www.fnu.zmaw.de.
(5) Centre for Environmental Economics and Policy in Africa, ‘Climate change and agriculture in Africa’, 2011, http://ceepa.co.za.
(6) International Sugar Organization. 2008. Sugarcane smallholders in Sub-Saharan Africa: Status, Challenges and Strategies for Development. Market Evaluation Consumption and Statistics Committee,(08)05, http://www.sugarindustrydev.co.za.
(7) Ibid.
(8) Deressa, T., Hassan, R. M., Poonyth, D., 2005. Measuring the impact of climate change on South African agriculture: the case of sugar-cane growing regions. Agrekon, 44(4), pp.524 – 539, http://purl.umn.edu.
(9) Ibid.
(10) Ibid.
(11) Ibid.
(12) Deressa, T., Hassan, R. M., Poonyth, D., 2005. Measuring the impact of climate change on South African agriculture: the case of sugar-cane growing regions. Agrekon, 44(4), pp. 524 – 539, http://purl.umn.edu.
(13) Republic of South Africa Department of Agriculture, Forestry and Fisheries, ‘Abstract of Agricultural Statistics 2011’, http://www.daff.gov.za.
(14) SASA, ‘Total cane/sugar production’, http://www.sasa.org.za.
(15) Deressa, T., Hassan, R. M., Poonyth, D., 2005. Measuring the impact of climate change on South African agriculture: the case of sugar-cane growing regions. Agrekon, 44(4), pp. 524 - 539, http://purl.umn.edu.
(16) Antle, J.M., 2008. Climate change and agriculture: economic impacts. Choices: The Magazine of Food, Farm and Resource Issues, 23(1), pp. 9 – 11, http://www.choicesmagazine.org.
(17) Calzadilla, A., et al., 2009. Economy-wide impacts of climate change on agriculture in Sub Sahara Africa. Working Paper FNU-170, http://www.fnu.zmaw.de.
(18) Centre for Environmental Economics and Policy in Africa, ‘Climate change and agriculture in Africa’, 2011, http://ceepa.co.za.
(19) Ibid.
(20) Deressa, T., Hassan, R. M., Poonyth, D., 2005. Measuring the impact of climate change on South African agriculture: the case of sugar-cane growing regions. Agrekon, 44(4), pp.524 - 539, http://purl.umn.edu.
(21) SASA. Crop data, http://www.sasa.org.za.
(22) MSIRI. Sugarcane crop reports for 2010. January – December 2010, http://www.msiri.mu.
(23) Ibid.
(24) Antle, J.M., 2008. Climate change and agriculture: economic impacts. Choices: The Magazine of Food, Farm and Resource Issues, 23(1), pp. 9 – 11, http://www.choicesmagazine.org.
(25)Hansen, J.W., et al., 2011. Review of seasonal climate forecasting for agriculture in sub-Sahara Africa. Experimental Agriculture,47, pp.205 – 240, http://journals.cambridge.org.
(26) Ibid.
(27) Ibid.
(28) Nelson, G.C., et al., 2009. Climate Change: Impact on Agriculture and Cost of Adaptation Food Policy Report. International Food Policy Research Institute, pp. 1 -17, http://www.ifpri.org.
(29) Antle, J.M., 2008. Climate change and agriculture: economic impacts. Choices: The Magazine of Food, Farm and Resource Issues, 23(1), pp. 9 – 11, http://www.choicesmagazine.org.

Written by Sanette Vermeulen ⁽¹⁾