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A system dynamics analysis of the impacts of climate change on the rice

supply chain West Nusa Tenggara, Indonesia


ABSTRACT
The impacts of climate change on agriculture have been felt by some countries across the world. The
negative impacts of climate change on the rice supply chain will be especially harmful as the rice
supply chain is associated with sun drying and limited drying places. This study develops a
preliminary system dynamics model representing interaction among climate, and production factors
in the rice supply chain. The model intends to explore the impacts of climate change on the rice
supply chain in West Nusa Tenggara, an eastern Indonesian province. Preliminary simulations are
introduced in this paper to understand how climate change may impact the rice supply chain. In
addition, two possible options to tackle the impacts of climate change are simulated.
Keywords: climate change, paddy drying, rice milling, paddy moisture, supply chain management,
sustainability, performance measurement, the rice supply chain, Indonesia.
1. INTRODUCTION
Some studies explain that the rice yields will probably decrease around the world. Owing to
changing climate, rice yields are indicated to decrease in all parts of the world such as Nepal
(Palazzoli et al., 2015), Australia (Manigbas et al., 2014), South East Asia, South Asia and Southern
Africa (Lobell et al., 2008; Lobell et al., 2011; Lobell & Gourdji, 2012; Matthews et al., 1997). This
means that the international rice production will probably decrease, leading to limited rice supply in
the international market. In other words, each country that highly depend on rice as a main staple food
should aware the effects of climate change on its rice supply.
Asia, the largest rice producers and consumers (Gnanamanickam, 2009), will probably
experience a food shortage as Asian regions such as Philippines, China and Vietnam has already
experienced the negative effects of high minimum temperature on rice yields (Peng et al., 2004;
Welch et al., 2010).

The impacts of minimum temperature may be worsened as maximum

temperature in Asia is relatively close to its rice threshold (Devkota, 2011).


While the high temperature will probably decrease rice yields, a lower rainfall owing to El Nio,
might reduce rainfall and delay the rice planting seasons (Naylor & Mastrandrea, 2009). Moreover,
El-Nio would decrease rice output and delay paddy planting seasons between 10 and 30 days
(Sumarno et al., 2008). Although La-Nia tends to increase rice output and start earlier paddy planting
seasons (Sumarno et al., 2008), La-Nia also leads to higher paddy moisture, leading to a longer
paddy-drying time.
In short, climate change and climate variability might influence the rice supply chain. A lower
precipitation and higher temperature could reduce rice yield so that the rice supply chain could not
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distribute sufficient rice supply. Again, a lower precipitation could hinder planting season, so the rice
supply chain may delay in distributing rice to market. Furthermore, a higher rainfall leads to a longer
paddy-drying time owing to a higher paddy moisture. Therefore, this study aims to investigate
impacts of climate change on the rice supply chain and assess possible options to tackle the negative
impacts.
2. LITERATURE REVIEW
Some studies show that statistical models can be used to assess the impacts of climate change on
crops such as maize, corn and rice (Lobell et al., 2008; Lobell et al., 2011; Lobell & Gourdji, 2012).
Those studies also unravel the magnitude impacts and different impacts of climate change and climate
variability on crops. For example, Lobell et al. (2008) claim that climate change might decrease rice
yields about 5% in some parts of the world by 2030. Other studies (Lobell et al., 2008; Lobell et al.,
2011; Lobell & Gourdji, 2012; Mottaleb et al., 2015; Sarker et al., 2012) indicate that the impacts of
temperature is more pronounced than that of rainfall. Moreover, some statistical studies show that
minimum temperature might negatively affect rice yields while maximum temperature might
positively affect rice yields (Sarker et al., 2012; Welch et al., 2010).
Other studies (Bocchiola, 2015; Dueri, 2007; Matthews et al., 1997; Richter, & Semenov, 2005;
Tao et al., 2008) show that the impacts of climate change on crops might be assessed by crop models.
Crop models can be used to assess the impacts of climate change on crop phenology such as the
impacts of climate change on panicle or on the photosynthesis rate.
With regard to their assessment of the impacts of climate change on crops, those studies may be
incomplete. Although those studies (Lobell & Gourdji, 2012; Tao et al., 2008) suggest some options to
tackle the negative impacts of climate change such as heat-tolerant crop varieties, those did not
evaluate possible options to tackle the impact of climate change. Moreover, those studies fail to
consider the effect of climate change on the crop moisture. The latter is important as the crop moisture
can influence crop quality such as a milling ratio (Swastika, 2012) and nutrient quality (Setyawan &
Doddy 2011; Yulia & Casper, 2011). Again, the food quality is one important performance of the food
supply chain as its products are consumed by human being (Aramyan, 2003).
The system dynamics approach has been applied to investigate impact of climate change on
systems such as water supply, economic systems and supply chain. One study concludes that climate
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change can affect quality and availability of water in Turkey (Koca & Sverdrup, 2012). Moreover, a
system dynamics approach was applied to estimate climate change impacts in Burkina Faso
(Kopainsky et al., 2013), concluding that climate change could negatively affect GDP, agriculture
yield and the livestock production in the country. A study claims that coordination among supply

chain parties is needed to decrease demand uncertainty on the food supply chain (Kumar &
Nigmatullin, 2011). Another system dynamics study finds that due to droughts, the sheep slaughter
rate tends to rise, leading to a higher meat supply (Adl & Parvizian, 2009).
Compared with studies that apply statistical models and crop models, system dynamics studies
can elucidate wider impacts of climate change more than those of statistical models or crop models.
For instance, statistical studies only focus on the impacts on crop yields, while system dynamics
studies can unravel the impacts on more aspects such as GDP and agriculture yields (Kopainsky et al.,
2013). Moreover, system dynamics (Kopainsky et al., 2013; Kumar & Nigmatullin, 2011) might
assess possible options to tackle the negative impacts on the supply chain. System dynamics is used as
this study has non-linear relationships and limited data. For instance, the impact of rainfall on paddy
moisture is not linear. Also, there is limited information about available drying places in the locus of
this study.
To our knowledge, there is no empirical study that applies the system dynamics approach to
assess the impacts of climate change on the rice supply chain. This paper uses the system dynamics
approach to assess the impacts of climate change on the rice supply chain in three consecutive steps.
Firstly, this study develops a system dynamics model and then validate the model. Secondly, this
study runs the sensitivity analysis to obtain sensitive parameters. Thirdly, this study assesses possible
options to tackle the negative impacts of climate change on the rice supply chain.

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