Aridification, Precipitations and Crop Productivity: Evidence from the Aridity Index

The economic effects of global warming have gained considerable attention in recent economic literature. While the relationship between rainfall and agriculture is well known, precipitations alone do not capture the soil water availability, which depends on the evaporation of the water (PET). This paper presents evidence of the relationship between aridification and agricultural productivity. We show that areas that have experienced increased precipitations have become arider due to increased PET. We then project future aridification patterns. We find that the global arid area will increase by 3.9% by 2040. This implies a global loss of about 20 million tons of maize, 19 million tons of rice, 8 million tons of soybeans, and 21 million tons of wheat until 2040 if no action to combat desertification is taken.