An Economic Study for Climate Change Impact on Wheat Production in the Northern West Coast Region of Egypt

This paper aimed to examine the impact of climate change on wheat productivity in the five rains- fed districts: El-Negaila, Sidi Barrani, El-Daba'a, Marsa Matrouh, and EL-Alamain in the northern west coast of Egypt in which the cultivated wheat area represents about 41.4% of wheat area in Matrouh Governorate (1990-2019). The productivity is fluctuated between 1.167 to 13.38 Ardab/Fadden accompanied with the fluctuation in precipitation between 24.35 to 115.10 MM3/Season, and fluctuation of average difference between Max. Min. temperature from 8.07 to 7 ºC. Fully Modified Ordinary Least Square (FMOLS) technique was applied to investigate the relationship between wheat productivity and the independent variables (precipitation, temperature, cultivated area, labor and technology). OLS function showed that the model suffers from endogenity and heteroscedasticity. LLC and IPS statistics of panel unit root test proved that the included variables have unit root, i.e. they are non-stationary at level. Pedroni panel residual cointegration test confirmed the long run relationship between the first-order integrated variables [I (1)]. FMOLS function proved that natural climatic variables are the main determinants of wheat productivity, as a 1% increase in annual rainfall improves wheat productivity significantly by 3.3%, while temperature affects the wheat productivity negatively by 5.7%. The far west districts are the most affected by rainfall, as 1% increase of rainfall in EL-Negaila and Sidi- Barrani districts increase wheat productivity by 8.4%, 5.1% respectively. Results in all districts except EL-Negaila and Sidi Barrani showed the extent of labor intensification to enhance productivity, also all districts showed the importance of technical improvements. It is recommend adopting water policy as rain harvesting, building stone dykes and cisterns to provide: 355.5, 301.7, 287.9, 339.8, and 245.8 MM3/Fadden in El-Negaila, Sidi Barrani, EL-Daba'a, Marsa Matrouh, and EL-Alamain districts respectively to improve wheat yield to 12 Ardab/Fadden under drought climate of north coast