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Climate Risk Management in 
              China's Agricultural Sector
                                   Claire Hsu
          Intern, International Food Policy Research Institute (IFPRI)

Presented at the International Conference on Climate Change and Food Security 
  Organized by the Chinese Academy of Agricultural Sciences (CAAS) and the 
              International Food Policy Research Institute (IFPRI) 
                     November 8, 2011 , Beijing, P.R. China
Climate Risk Management in China's 
         Agricultural Sector
I. China's Agricultural Development and its Challenges
      Food Safety and Security
      Tightening Resource Constraints
      Extreme Weather Events
      Growing Rural‐Urban Inequality
II. The Impact of Climate Change on China's Agriculture
      Direct Impacts of Climate Change on Chinese Agriculture
      Indirect Impacts of Climate Change on Chinese Agriculture
      Uncertainties of Forecasts
III. Building Agricultural Resilience Through Climate Risk Management
      Developing an Agricultural Climate Risk Management Framework
      Key Agricultural Climate Risk Management and Adaptation Measures
IV. Summary and Policy Recommendations
China's Agricultural Development and its 
                              Challenges

Figure 1: Strengthening China’s food 
security (in terms of proportion and 
number of people living below $1.25 a day) Figure 2: China’s agricultural production growth rates




                                            Source: Huang and Rozelle (2009)
Source: Fan (2010)
China's Agricultural Development and its 
             Challenges: Food Safety and Security
Greater attention paid to supply 
chain management in addition to 
enhancing productivity

Many innovations have enabled high‐
quality food production and better‐
linked production to consumers

Deploying food safety policies in 
concert with existing self‐sufficiency 
policy regime
China's Agricultural Development and its 
Challenges: Tightening Resource Constraints

Rapid industrialization and urbanization have spurred demand 
for land for industrial and residential use
 » The acreage of arable land decreased from 1.95 billion mu in 1996 to 1.826 
   billion mu by the end of 2007, a decrease of 123 million mu over ten years, 
   with a 12.3 million mu average annual decrease. 
 » The per capita acreage of arable land decreased from 1.59 mu to 1.39 mu 
   over the same period.


In 2006, China’s per capita water resources were only 24% of the 
world level and agricultural access to these limited resources is 
increasingly threatened by:
 » Combined changes in temperature and precipitation
 » Industrialization and urbanization
 » Decreasing water table levels 
China's Agricultural Development and its 
  Challenges: Extreme Weather Events

Figure 1: Agricultural areas under disasters in China 1978‐2009 (in kilo hectares)




Source: China National Bureau of Statistics (2010)
China's Agricultural Development and its 
Challenges: Growing Rural‐Urban Inequality

The rural‐urban income ratio has increased from 1.9 in 1985 to 
3.4 in 2009. 

China's rural areas remain key in terms of population and 
employment. Permanent rural residents account for over half of 
the total population, while people employed in rural areas 
account for 2/3 of total employment.

The food security concerns of poverty stricken populations are 
especially acute and as China’s rural poverty rate is 8.3 percent, 
many in these rural areas are most at risk of food insecurity.
The Impact of Climate Change on China's 
Agriculture: Direct Impacts of Climate Change 
           on Chinese Agriculture
 Direct Impacts of Climate Change on Chinese Agriculture
  »   Climate Change Impacts on Crop Yields. 
  »   Climate Change Impacts on Cropping Patterns. 
  »   Climate Change Impacts on Livestock.
 Indirect Impacts of Climate Change on Chinese Agriculture
  »   Impacts of Climate Change on Agricultural Production.
  »   Impacts of Climate Change on Crop Prices and Trade. 
  »   Food Security. 
  »   Regional Implications. 
 Sources of Uncertainty
  »   Climate Models and Scenarios.  
  »   Uncertain CO2 Fertilization Effects.  
  »   Other Sources of Uncertainty. 
Building Agricultural Resilience Through 
                      Climate Risk Management
           Building Agricultural Resilience Through Climate Risk Management



     Risk: "the combination of the probability of an event and its negative 
     consequences" (UNISDR 2009)

Figure 2: Sources of hazard, exposure and vulnerability



 Sources: Rural Survey Department of the National Bureau of Statistics (2011) and Balzer and Hess (2010)




Sources: Rural Survey Department of the National Bureau of Statistics (2011) and Balzer and Hess (2010)
Building Agricultural Resilience Through 
       Climate Risk Management
  Developing an Agricultural Climate Risk Management Framework




 Source: Adapted from Jha et al. (2011)
Building Agricultural Resilience Through 
       Climate Risk Management

 Building Agricultural Resilience Through Climate Risk Management: 
                            Hazard Assessment

 Hazard analysis involves the estimation of the geographic impact of a 
 risk event in terms of its severity, and frequency,  and probability of 
 future occurrence. 



 Hazard assessment requires scientific understanding of relevant natural 
 phenomena, interpretation of historical records of the occurrence of 
 extreme events, and interaction with projected climate scenarios, and it 
 provides the basis for the identification of hazard zones, which can be 
 presented on maps at various scales. 
Building Agricultural Resilience Through 
       Climate Risk Management

 Building Agricultural Resilience Through Climate Risk Management: 
                            Hazard Assessment




                                 t

                                                   Source: United Nations 2007
Building Agricultural Resilience Through 
       Climate Risk Management

 Building Agricultural Resilience Through Climate Risk Management: 
                          Exposure Assessment

 Exposure is defined as "the total value of elements at risk" and is 
 quantified using "the number of human lives and the value of the 
 properties or assets that can potentially be affected by hazards.”

 Exposure assessment is used to define the spatial distribution of the 
 asset(s)‐at‐risk and to categorize them according to the entailed 
 potential damage according to the relevant levels of hazards. 

 Comprehensive agricultural exposure analysis should include residential 
 (population and households) and infrastructural (roads and railways) 
 exposures in addition to agricultural (crop area and its production) 
 exposures
Building Agricultural Resilience Through 
       Climate Risk Management
 Building Agricultural Resilience Through Climate Risk Management: 
                        Vulnerability Assessment

 The vulnerability of a system refers to "the characteristics and 
 circumstances of a community, system or asset that make it susceptible 
 to the damaging effects of a hazard.”

 There are many dimensions of vulnerability, due to various physical, 
 social, economic, and environmental factors, such as improper design 
 and construction of buildings, insufficient protection of assets, 
 insufficient public information and awareness, limited official 
 recognition of risks and preparedness measures, and poor 
 environmental management.

 Vulnerability varies significantly within a community and over time and 
 the goal of vulnerability assessment is to quantify the vulnerability of 
 assets subjected to hazards
Building Agricultural Resilience Through 
       Climate Risk Management
 Building Agricultural Resilience Through Climate Risk Management: 
                    Estimate the Damages and Losses



 The probability estimation for specific loss scenarios involves the consideration 
 of established probabilities of natural event occurrence and expected structural 
 performance.

 Damage to the crop sub‐sector consists of damage to soil, irrigation 
 infrastructure (mainly in the public sector), irrigation network, and agriculture 
 buildings and machinery. Crop loss consists of the potential production loss from 
 seasonal crops (one season) as well as from perennial fruit (over the multi‐year 
 period required to initially bear fruit) and is estimated using farm gate prices.

 Damage to the livestock sub‐sector consists of animal deaths that are due to 
 climate hazards. Loss refers to the potential production loss from animals over 
 the multi‐year period required for young animals to start producing milk or meat. 
Building Agricultural Resilience Through 
         Climate Risk Management
 Building Agricultural Resilience Through Climate Risk Management: Find 
                         the Best Adaptation Options

Figure 5: Climate risk typologies and adaptation strategies (risk layer one: purple; 
    risk layer two: orange; and risk layer three: red)




Sources: Adapted from Ramasamy (2011), Goodland (n.d.), and Luxbacher and Goodland (n.d.)
Building Agricultural Resilience Through 
       Climate Risk Management
 Building Agricultural Resilience Through Climate Risk Management: 
                     Implement the Adaptation Plan



 Action‐oriented coordination.

 Enhance awareness of adaptation.

 Improve inter‐departmental coordination of adaptation policy and action. 

 Coordinate planned adaptation and autonomous adaptation. 

 Mainstream adaptation and institutionalize adaptation funding. 

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Claire Hsu — Climate risk management in china's agricultural sector

  • 1. Climate Risk Management in  China's Agricultural Sector Claire Hsu Intern, International Food Policy Research Institute (IFPRI) Presented at the International Conference on Climate Change and Food Security  Organized by the Chinese Academy of Agricultural Sciences (CAAS) and the  International Food Policy Research Institute (IFPRI)  November 8, 2011 , Beijing, P.R. China
  • 2. Climate Risk Management in China's  Agricultural Sector I. China's Agricultural Development and its Challenges Food Safety and Security Tightening Resource Constraints Extreme Weather Events Growing Rural‐Urban Inequality II. The Impact of Climate Change on China's Agriculture Direct Impacts of Climate Change on Chinese Agriculture Indirect Impacts of Climate Change on Chinese Agriculture Uncertainties of Forecasts III. Building Agricultural Resilience Through Climate Risk Management Developing an Agricultural Climate Risk Management Framework Key Agricultural Climate Risk Management and Adaptation Measures IV. Summary and Policy Recommendations
  • 3. China's Agricultural Development and its  Challenges Figure 1: Strengthening China’s food  security (in terms of proportion and  number of people living below $1.25 a day) Figure 2: China’s agricultural production growth rates Source: Huang and Rozelle (2009) Source: Fan (2010)
  • 4. China's Agricultural Development and its  Challenges: Food Safety and Security Greater attention paid to supply  chain management in addition to  enhancing productivity Many innovations have enabled high‐ quality food production and better‐ linked production to consumers Deploying food safety policies in  concert with existing self‐sufficiency  policy regime
  • 5. China's Agricultural Development and its  Challenges: Tightening Resource Constraints Rapid industrialization and urbanization have spurred demand  for land for industrial and residential use » The acreage of arable land decreased from 1.95 billion mu in 1996 to 1.826  billion mu by the end of 2007, a decrease of 123 million mu over ten years,  with a 12.3 million mu average annual decrease.  » The per capita acreage of arable land decreased from 1.59 mu to 1.39 mu  over the same period. In 2006, China’s per capita water resources were only 24% of the  world level and agricultural access to these limited resources is  increasingly threatened by: » Combined changes in temperature and precipitation » Industrialization and urbanization » Decreasing water table levels 
  • 8. The Impact of Climate Change on China's  Agriculture: Direct Impacts of Climate Change  on Chinese Agriculture Direct Impacts of Climate Change on Chinese Agriculture » Climate Change Impacts on Crop Yields.  » Climate Change Impacts on Cropping Patterns.  » Climate Change Impacts on Livestock. Indirect Impacts of Climate Change on Chinese Agriculture » Impacts of Climate Change on Agricultural Production. » Impacts of Climate Change on Crop Prices and Trade.  » Food Security.  » Regional Implications.  Sources of Uncertainty » Climate Models and Scenarios.   » Uncertain CO2 Fertilization Effects.   » Other Sources of Uncertainty. 
  • 9. Building Agricultural Resilience Through  Climate Risk Management Building Agricultural Resilience Through Climate Risk Management Risk: "the combination of the probability of an event and its negative  consequences" (UNISDR 2009) Figure 2: Sources of hazard, exposure and vulnerability Sources: Rural Survey Department of the National Bureau of Statistics (2011) and Balzer and Hess (2010) Sources: Rural Survey Department of the National Bureau of Statistics (2011) and Balzer and Hess (2010)
  • 10. Building Agricultural Resilience Through  Climate Risk Management Developing an Agricultural Climate Risk Management Framework Source: Adapted from Jha et al. (2011)
  • 11. Building Agricultural Resilience Through  Climate Risk Management Building Agricultural Resilience Through Climate Risk Management:  Hazard Assessment Hazard analysis involves the estimation of the geographic impact of a  risk event in terms of its severity, and frequency,  and probability of  future occurrence.  Hazard assessment requires scientific understanding of relevant natural  phenomena, interpretation of historical records of the occurrence of  extreme events, and interaction with projected climate scenarios, and it  provides the basis for the identification of hazard zones, which can be  presented on maps at various scales. 
  • 12. Building Agricultural Resilience Through  Climate Risk Management Building Agricultural Resilience Through Climate Risk Management:  Hazard Assessment t Source: United Nations 2007
  • 13. Building Agricultural Resilience Through  Climate Risk Management Building Agricultural Resilience Through Climate Risk Management:  Exposure Assessment Exposure is defined as "the total value of elements at risk" and is  quantified using "the number of human lives and the value of the  properties or assets that can potentially be affected by hazards.” Exposure assessment is used to define the spatial distribution of the  asset(s)‐at‐risk and to categorize them according to the entailed  potential damage according to the relevant levels of hazards.  Comprehensive agricultural exposure analysis should include residential  (population and households) and infrastructural (roads and railways)  exposures in addition to agricultural (crop area and its production)  exposures
  • 14. Building Agricultural Resilience Through  Climate Risk Management Building Agricultural Resilience Through Climate Risk Management:  Vulnerability Assessment The vulnerability of a system refers to "the characteristics and  circumstances of a community, system or asset that make it susceptible  to the damaging effects of a hazard.” There are many dimensions of vulnerability, due to various physical,  social, economic, and environmental factors, such as improper design  and construction of buildings, insufficient protection of assets,  insufficient public information and awareness, limited official  recognition of risks and preparedness measures, and poor  environmental management. Vulnerability varies significantly within a community and over time and  the goal of vulnerability assessment is to quantify the vulnerability of  assets subjected to hazards
  • 15. Building Agricultural Resilience Through  Climate Risk Management Building Agricultural Resilience Through Climate Risk Management:  Estimate the Damages and Losses The probability estimation for specific loss scenarios involves the consideration  of established probabilities of natural event occurrence and expected structural  performance. Damage to the crop sub‐sector consists of damage to soil, irrigation  infrastructure (mainly in the public sector), irrigation network, and agriculture  buildings and machinery. Crop loss consists of the potential production loss from  seasonal crops (one season) as well as from perennial fruit (over the multi‐year  period required to initially bear fruit) and is estimated using farm gate prices. Damage to the livestock sub‐sector consists of animal deaths that are due to  climate hazards. Loss refers to the potential production loss from animals over  the multi‐year period required for young animals to start producing milk or meat. 
  • 16. Building Agricultural Resilience Through  Climate Risk Management Building Agricultural Resilience Through Climate Risk Management: Find  the Best Adaptation Options Figure 5: Climate risk typologies and adaptation strategies (risk layer one: purple;  risk layer two: orange; and risk layer three: red) Sources: Adapted from Ramasamy (2011), Goodland (n.d.), and Luxbacher and Goodland (n.d.)
  • 17. Building Agricultural Resilience Through  Climate Risk Management Building Agricultural Resilience Through Climate Risk Management:  Implement the Adaptation Plan Action‐oriented coordination. Enhance awareness of adaptation. Improve inter‐departmental coordination of adaptation policy and action.  Coordinate planned adaptation and autonomous adaptation.  Mainstream adaptation and institutionalize adaptation funding.