Sarcouncil Journal of Economics and Business Management

Abstract: Agriculture is one of the sectors most affected by changes in weather patterns and extreme events. The agricultural sector in member countries of the Organization for Economic Cooperation and Development (OECD), despite having developed economies and advanced agricultural systems, are not immune to the negative impacts of rising temperatures, increased frequency of natural disasters such as droughts, floods and changes in rainfall patterns. The vulnerability, public nature, and externalities of the sector emphasize the importance of government fiscal support. The study explores the potential relationship between aspects of climate change, macroeconomics, and the level of public spending for the agricultural sector in selected OECD countries. Results from the GLS model shows that government spending and average temperature had significant negative impacts on public expenditure for agriculture, while the debt-to-GDP ratio, greenhouse gases from agriculture, and support for agricultural research and development have positive impacts.