Climate Change and Agricultural Adaptations: Insights from Iran on Crop Choices and Irrigation Shifts

Abstract

Agriculture in the Middle East faces severe climate risks, including rising temperatures, declining precipitation, and more frequent extremes. This paper examines long-run adaptation in Iran using farmland rental prices to capture overall productivity impacts. By combining cross-sectional and panel models, we distinguish short-run weather effects from long-run climate responses and quantify adaptation benefits. While hotter and arid regions experience losses of −5.3% to −41.8% without adaptation, long-run adjustments generate gains of 11.7%–15.2%, depending on climate scenarios. Farmers primarily adapt by shifting irrigation sources toward deep wells and reallocating acreage to heat-tolerant crops. Beyond estimating the overall value of adaptation, we examine how climate change shapes these major adaptation practices, highlighting sustainability concerns, including groundwater depletion and distributional impacts in resource-constrained, developing-country settings. Our findings link long-run climate responses to both productivity gains and sustainability trade-offs.