Uncertain water supply in an irrigated Mediterranean area: An analysis of the possible economic impact of climate change on the farm sector

Analysis of the possible economic impact of climate change at the local level is becoming increasingly relevant to agricultural policy, in terms of the definition of new measures to sustain adaptation of the farm sector. This study focuses on a Mediterranean agricultural zone to evaluate the economic impact of rainfall regime changes that modify the accumulation of irrigation water in a dam. The objective is to identify farm typologies that suffer more from rainfall changes, in order to target policy measures that increase farm sector capability to adapt to climate change. First, an analysis of historical series is conducted for precipitation. The decreasing trend in annual precipitation, as well as an increase in monthly rainfall variability, is shown to have a statistically significant influence on the regime of water accumulation in the dam. Density functions representing this regime are estimated for several periods, including the 1960s–1970s, the current time and a time interval that extends to 2015. A comparison of these functions reveals an increase in variability of water accumulation in the dam through time. Parameters of these functions are used in three models of Discrete Stochastic Programming to represent different expectations of irrigation water availability and to simulate the possible reaction of the farm sector in the study area to the different scenarios. The simulation results show that both income and employment are noticeably reduced in some farm typologies when scenarios with higher variability levels for water accumulation in the dam are considered. In addition, changes in the use of soil are seen, the use of inputs declines and the quantity of extracted groundwater increases.