Agricultural supply chains are global in nature. Many farmers (especially those situated in developing nations) do not operate in commercial quantities and run on low budgets. As many farmers operate on a small-scale basis, it has become very important for them to be environmentally conscious of environmental challenges faced around the world. The negative impacts associated with climate change are enormous. They can range from sea-level rise, storms, extreme temperatures, water scarcity and so on. And all these can cause farmers to suffer financially if they do not adapt to changing environments. Farmers could be financially burdened by changing environmental conditions if they are caught unaware or not prepared for it.
To avert or reduce the negative financial consequences of climate change, farmers need to be aware of the impacts associated with it in the first place. And consider them in decision-making and planning processes. For example, environmentally aware farmers can choose to consider flood risk areas and decide not to operate in such areas or take precautionary measures and operate in such areas. Having a good environmental plan in place will save farmers a lot of stress in this current climate.
A few environmental issues that might cause farmers to record financial loss will be highlighted and discussed briefly.
Floods: Floods are climate change impacts. Sea levels may rise due to melting ice sheets, leading to floods. It can disrupt and damage agricultural land areas and crops. Some land areas are prone to flooding due to their landscape characteristics. Farmers should, therefore, consider this in flood-prone land areas and use appropriate control measures.
Wildfires: Climate change can cause wildfires. It is an uncontrolled fire that is capable of wiping away land areas and crops. Climate change can change temperature and precipitation levels, making land areas drier. And once a fire is started by lightning strikes or human errors, the dried land areas (affected by climate change) may fuel and increase the fire’s magnitude, thereby causing severe damages to farm crops in surrounding areas.
Water scarcity: Farmers need water to nourish and grow farm crops. Climate change can cause droughts and water scarcity. And farm crops will be affected, leading to low crop yields and financial loss to farmers. Farmers can avert this by planning ahead and finding alternative water means. Apart from changing environmental conditions, farmers that are unaware of rising environmental regulations and green- conscious customer demands might suffer financially as discussed below:
Environmental Regulations: Environmental regulations are increasingly being enacted and everyone with operations that are capable of interfering with the environment is required to comply. Some regulations are even backed with economic instruments. And financial sanctions are in place for non-compliance. For example, there are places in the world where businesses have to pay for any carbon or waste produced from their operations. And paying for what could have been reduced will amount to a financial loss for them.
Customers: People are increasingly aware of the environment and are demanding sustainable items. Businesses that are not able to demonstrate sustainability stand a high risk of losing customers and this will also lead to a financial loss for environmentally unfriendly businesses.