Abstract

Ricardian model was used to estimate the impact of climate change on granary level net revenue of paddy sector in Malaysia. Panel data from eight granaries was used in this study and the annual net revenue was regressed against climate variables and other controlled variables. The results indicate that climate is one of the determinants of Malaysian paddy granaries’ profitability. Given future predicted climate scenario indicates that farmers are predicted to lose an average of about 67% of revenue within the period of 2020 to 2029, 88% within 2050 to 2059, and 127% within 2090 to 2099. The losses might affect the livelihood of 296,000 paddy farmers in Malaysia. Thus, immediate adaptation strategies are critical in order to deal with such predicted effects.

Key words: Climate change, Malaysia, paddy, Ricardian model.