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This paper develops the structural
Ricardian method, a new approach to modeling agricultural
performance using cross-sectional evidence, and uses the
method to study animal husbandry in Africa. The model is
intended to estimate the structure beneath Ricardian results
in order to understand how farmers change their behavior in
response to climate. A survey of over 5,000 livestock
farmers in 10 countries reveals that the selection of
species, the net income per animal, and the number of
animals are all highly dependent on climate. As climate
warms, net income across all animals will fall, especially
across beef cattle. The fall in net income causes African
farmers to reduce the number of animals on their farms. The
fall in relative revenues also causes them to shift away
from beef cattle and toward sheep and goats. All farmers
will lose income but the most vulnerable farms are large
African farms that currently specialize in beef cattle.
Small livestock and large livestock farms respond to
climates differently. Small farms are diversified, relying
on dairy cattle, goats, sheep, and chickens. Large farms
specialize in dairy and beef cattle. Estimating a separate
multinomial logit selection model for small and large farms
reveals that the two types of farm choose species
differently and specifically have different climate response
functions. The regressions of the number of animals also
reveal that large farms are more responsive to climate. The
results indicate that warming will be harmful to commercial
livestock owners, especially cattle owners. Owners of
commercial livestock farms have few alternatives either in
crops or other animal species. In contrast, small livestock
farms are better able to adapt to warming or precipitation
increases by switching to heat tolerant animals or crops.
Livestock operations will be a safety valve for small
farmers if warming or drought causes their crops to fail.
