Small-scale agriculture is one of the fundamental economic sectors in Chile. An increased frequency and intensity of extreme weather events due to climate change suggest a higher weather risk for the future, with potential consequences for crop choices. These effects are expected to be greater in dryland areas, where producers are more vulnerable to shocks and, therefore, less able to protect themselves against these risks. Using data from the 7th Chilean National Agriculture and Forestry Census, we explore small-scale farmers' cropland decisions as an adaptation strategy to cope with droughts. We use remote sensing data to identify drought events and model the impact of droughts on farmers’ decisions using a multivariate fractional model. This model assumes that farmers allocate shares of land over a crop portfolio. Our findings show that farmers in dryland areas reduce high-risk cropping activities after recent drought shocks, choosing crops with shorter growing periods and lower capital and technological costs, such as cereals. However, we found a different cropland pattern in areas with a higher frequency of droughts. In these locations, farmers prefer legumes and tubers, vineyards, fruits, and vegetables. Finally, maize and vineyards are more likely to be grown in places with higher temperatures. Results suggest potential crop adaptation strategies in the face of more arid environments in the future.
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