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IMPORTANCE OF CLIMATE TO ESTIMATE PADDY YIELD

THROUGH A PRODUCTION FUNCTION


A Case study in West Nusa Tenggara, Indonesia

Author: Muhamad Khairul Bahri,


PhD candidate
School of Management,
Rutherford House, 10th Floor
Victoria University of Wellington,
Wellington, New Zealand
Email:muhamad.bahri@vuw.ac.nz

ABSTRACT
There have been raising concerns to understand impacts of climate change on rice production.
Existing studies have already affirm that climate change, through rainfall and temperature,
can negatively impact rice production. However, these studies only consider impacts of
specific climate, either rainfall or temperature, on rice production. Existing studies also lack
of explaining how climate variables can be attached into a production function. In turn, this
study intends to explore simultaneous impacts of rainfall and temperature on rice production.
Particularly, this study explores impacts of minimum and maximum temperature on rice
production. In addition, this study offers a production or statistical function of combination
climate and production factors to estimate paddy production appropriately. This papers
affirms that embedding climate variables into a production function is a must to get an
appropriate production function. This study also points out that effect of minimum
temperature is more pronounced than effect of rainfall and maximum temperature.

I. Introduction
Constructing production functions to estimate paddy productions has been considered in
Indonesian studies. In case of Indonesian paddy production, some studies (Djauhari, 1999;
Mariyono, 2013; Suakesih, 2001; Triyanto, 2006; Widodo, 1986) develop production
functions to estimate paddy yield. These studies measure the paddy yield, through production
functions, involving some production factors such as fertilizer, pesticide, labour and capital.
These studies, however, lack of embedding climate into production functions.

Some existing studies explain impacts of climate on Indonesian paddy production. Indonesian
rice production mainly is affected by precipitation (Naylor, Falcon, Wada, & Rochberg, 2001,
2002; Roberts, Dawe, Falcon & Naylor, 2004; Naylor et al. 2007). Furthermore, water
sources for farming areas such as dams, rivers and lakes highly depends on precipitation so
that a lower rainfall because of climate change could directly affect rice output in Indonesia
(Sumarno et al., 2008).

Another climatic condition that could affect Indonesia rice production, owing to climate
change, is higher temperatures at midday (maximum temperature) and at night (minimum
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temperature). It is widely known that higher temperatures can affect rice yield because they
can increase respiration maintenance rate (Peng et al., 2004; Mohammed & Tarpley, 2009;
Welch et al., 2010). It appears that two important variables including precipitation and
temperature could influence rice production (Ackerman & Stanton, 2013; Lobell, Schlenker,
& Costa-Roberts, 2011; Slingo, Challinor, Hoskins, & Wheeler, 2005).

Thus, this paper intends to explain importance of climate on paddy productions. In doing so,
climate variables are directly embedded into a production function. Moreover, this study goes
beyond available studies in two ways. Firstly, this study will involve maximum and minimum
temperature. This is very important as IPCC (2013) projects that an increase of minimum
temperature tends to higher compare to maximum temperature. Lastly, this study integrates
production factors and climate to estimate paddy production in Indonesia.

II. Data and Methods


The locus of this study is a province in eastern Indonesia, West Nusa Tenggara. This province
is renowned as a host national rice producer in Indonesia. This region also contributes its
paddy production to other Indonesian provinces such as East Nusa Tenggara and Bali.
Moreover, paddy production in West Nusa Tenggara is recognised as main sources of
employment, economy and nutrition.

Data used in this study is drawn from some governmental institutions in Indonesia including
BPS (The Bureau of Indonesian Statistics) and BMKG (The Bureau of Indonesia
Meteorology and Geophysics). Both institutions are prominent institution in their field and
their data is widely used by some scientists from Indonesia and foreign countries. Multiple
year data of paddy production and related production factors is collected from BPS and all
climate data is collected from BMKG.

Available data from BPS provides information of seasonal paddy production and production
factors from 1976 to 2011. BMKG provides data of precipitation, minimum and maximum
temperature in term of monthly indicators. In addition, recent is available in electronic files,
while old data was retyped as this data is only available on hardcopy.

In case of climate variables, seasonal climate is used as seasonal climate tends to affect crop
production. This aims to directly capture effects of climate on paddy production. Indonesian
farmers usually sow their paddy in early wet seasons around September and the final harvest
is around August next year. Due to this, seasonal climate from September and August (next
year) is used in this study.

Production factors are separated into four clusters including labour, capital, pesticide,
fertilizer and a time variable. These inputs are used as some studies (Mariyono, ) affirm that

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all of them are important to paddy production. In order to have dimensional consistencies,
this study modifies a T21 model (Bassi et al., 2010) as follows:

Yt = Yo * (K/Ko)α * (L/Lo)β * (C/Co)γ * (T/To) ............. (1a)


ln (Yt/Yo)= α ln (K/Ko)+β (L/Lo)+π ln (Mit/Mio)+ρ π ln (Mxt/Mxo)+ σ ln (T) ...... (1b)
where,
Yt = paddy yield in tonnes/ha
Yo = initial paddy yield in tonnes/ha
K = payment of hired capital in monetary term (Indonesian rupiahs)
Ko = initial payment of hired capital in monetary term

L= payment of hired labour in monetary term


Lo= initial payment of hired labour in monetary term
Mit = seasonal minimum temperature in celsius
Mio = initial seasonal minimum temperature in celsius
Mxt = seasonal maximum temperature in celsius
Mxo = initial seasonal minimum temperature in celsius
T = time variable with To (initial time variable is set to be 1)

Statistical analysis is conducted in two forms of statistical equations (ie. production


functions). The first form is used equation 1b without embedding climate variables. The
second one is equation 1b with full climate variables including precipitation, minimum and
maximum temperature. Assessment of both forms of production functions will be analysed
using two popular statistical error measurements: MAPE (Mean Absolute Percentage Error)
and RMSE (Root Mean Square Error). At the end, a production function associated with the
lowest MAPE and RMSE is considered as the best production function.

III. Results and Discussion


Before turning on results and discussion of this study, it is approriate to introduce some
information about West Nusa Tenggara. This region is located in eastern Indonesia at 1150 46’
- 1190 5’ East Longitude and 80 10’ - 90 5’ South Latitude (BPS NTB, 2010). Maximum
temperature ranges from 300C to 320C (the highest temperature is in November), and
minimum temperature varies between 210C and 250C (the lowest temperature is in June or
July). Maximum temperature in rainy seasons is about 310C and minimum temperature in
rainy seasons is about 220C. The relative humidity is between 74 % and 81 % with the
annual rainfall is about 1,600 mm.

Figure 1 below shows two maps: Indonesia and West Nusa Tenggara. As shown in figure 1a,
Indonesia consists of 33 provinces from Aceh (in western Indonesia) until Papua (in eastern
Indonesia. West Nusa Tenggara is located in southern Indonesia, close to Bali and East Nusa
Tenggara.

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Figure 1a. Indonesia (source: http://www.indonesiamatters.com/86/indonesian-provinces-map/)

Figure 1b. West Nusa Tenggara (source: http://indonesianlombokernas.com/west-nusa-tenggara/)

Figure 2 shows the percentage of food consumption in WNT. Paddy is the highest consumed
food in WNT (about 25%), following by prepared food and beverages (about 20%). In other
words, paddy is a main source of energy and protein for people in WNT (Pemerintah Nusa
Tenggara Barat, 2011).

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Figure 2 The percentage of food consumption in WNT (BPS NTB, 2010)

Figure 3 and 4, consecutively, show the percentage of gross domestic product (GRDP) and
percentage of employment by industry in WNT. Although agriculture is the second highest
sector by GRDP contribution (25% of GRDP, mining is the highest one with 30%),
agriculture has the highest contribution, about 45%, to the total employment in WNT.

Figure 3. The percentage of gross domestic product (GRDP) by


industrial origins in WNT (BPS NTB, 2010)

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Figure 4. Percentage of Employment by Industry in WNT (BPS NTB, 2010)

Based on data in multiple years between 1976 and 2013, two statistical models are
assembled. The first statistical equation is a production function represented relationships
among factor productions and paddy productivity for irrigated land. The second one is similar
to the first, but involving climate as independent variables. In order to assess statistical
models, available data will be separated into 2 categories. As Lobell (2010) points out data
that 20 year data is sufficient to construct an appropriate statistical equations, data in the
period 1976-1995 is used to estimate production functions. In order to validate the models,
data from 1996 to 2011 is used to assess production functions.

Table 1 summarizes coefficient for each production function. The first column includes all
coefficients for a production function without climate variables and the second column
describes all coefficients for a production function with climate variables. This table also
shows MAPE (Mean Absolute Percentage Error), RMSE and R-adjusted correlations of each
equation.

It seems that a production function unconcerned climate tends to overestimate effects of


production factors. For instance, the first production function estimates an increase of paddy
productivity by 0.052, while the second projects a rise of 0.02. Furthermore, the second
production function is more pronounced as it has lower error indicators. For instance, the
second production function has R-adjusted square and MAPE about 0.972 and 3.06 %
consecutively. Whereas the first one has about 0.965 and 4.2% for the same indicators
consecutively.

Figure 5, in addition, shows that better error indicators also can be seen appropriately. This
figure affirms involving climate into production function leads to more fitted values. As seen,

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Variable Names Climate Without climate

Rainfall relative 0.05 -


Minimum temperature relative -3.836 -
Maximum temperature relative 0.901 -
Total labour relative 0.02 0.052
Total capital relative 0.015 0.022
Total fertilizer relative -0.021 -0.002
Total pesticide relative 0.074 0.041
Total seed relative -0.189 -0.207
Time relative 0.113 0.224
MAPE 3.06% 4.2%
RMSE 0.92% 1.14%
R-adjusted square 0.972 0.965
Table 1 Coefficients of each production function for data between 1976-1995

In order to assess both production functions, the functions are used to estimate paddy
productivity between 1976 and 2011. Again, attaching climate into production functions lead
to better predictions. Statistical tests show that the second production function has MAPE,
RMSE and adjusted square about 3.42 %, 0.87% and 0.97. While its counterpart has about
4.54%, 1.14% and 0.96 consecutively. In turn, a production function describing effects of
climate on paddy productivity has lower MAPE, RMSE indexes and a higher R-adjusted
square. The latter indicates that involving climate into production functions should be
enocuraged.

3.8.1 The effect of climate and factor production on rice productivity


In case of temperature, both farming types have different responses to temperature and
rainfall. As minimum temperature already has exceeded its thresholds (220C), wetland paddy
tends to experience a lower paddy productivity due to high minimum temperature. As
maximum temperature is below than its threshold (350C), maximum temperature tends
increase paddy productivity in both farming types, wetland and dryland. Rainfall, in addition,
tends to rise paddy productivity in both farming types. These findings corroborate existing
studies concluding that minimum temperature is highly vulnerable to paddy productivity
instead of maximum temperature (Peng et al., 2004; Jagadish et al., 2010; Mohammed &
Tarpley, 2009). Again, this study affirms that maximum temperature may rise paddy
productivity, especially if maximum temperature below its treshold (Welch et al., 2010).

In case of factor productions, fertilizer tends to decrease paddy productivity. This conforms
with available data of fertilizer uses. Available data in the period 1976-2011 shows that
farmers apply more than its recommended use. In particular, farmers applied fertilizer of
phospate more than its recommended dose, 50 kg/Ha. Again, paddy productivity tends to
decrease as farmers in this region apply a higher dose of 45 kgs/ha seed compared to its

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recommended dose at about 30 kgs/ha. Pesticide, on the other hand, tends to rise paddy
productivity. The latter conforms that WNT tends to vulnerable to pests and diseases (Diperta
NTB, 2012).

Conclusion
It is obvious that climate change could negatively affect rice production in the West Nusa
Tenggara province. Climate change could negatively affect rice production through higher
temperatures and decreasing precipitation. Meanwhile, the positive effect of CO 2 is limited as
its effect is highly negated by higher minimum temperatures through respiration maintenance
process.

Local minimum temperature in the region close to the minimum temperature observed by
Peng et al. (2004). Because of this, it could conclude that nighttime temperature in the
province has already reduced the local rice production, at least, the negative impact of
nighttime temperature should be seen in near future. In the case of the maximum temperature,
since there is a gap about 3 oC between the local maximum temperature (32 oC) and
temperature threshold for rice (35oC), the negative impact of maximum temperature will not
be seen in near future. However, because future precipitation will be a lower so that there is
limited transpirational cooling, the negative impact of maximum temperature should be
appropriately observed.

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