This study examines the effect of climate variability and climate change on the productivity of Australian cropping farms between 1977–78 and 2014–15. The productivity of Australian cropping farms is heavily affected by climate variability, particularly the occurrence of droughts. While Australian farmers are well accustomed to managing this variability, the emergence of climate change is presenting some new challenges.
This study combines ABARES farm survey data with spatial climate data to estimate the effect of climate conditions (such as, rainfall and temperature) on cropping farm TFP (Total Factor Productivity, i.e the combined productivity of labor and capital). The study then presents climate adjusted productivity estimates with the effects of climate removed. For comparison, similar results are generated for farm wheat yields using the same data sources and methods.
