1.

Introduction
It is generally believed that a higher concentration of CO2 (the main cause of human-induced climate
change) in the atmosphere may increase crop yields (Ackerman & Stanton, 2012; FAO, 2003; IFFRI,
2009, Roeder, 2011). As crops need CO2 for photosynthesis, a higher CO2 concentration tends to
increase crop yields. On the other hand, climate change tends to decrease crop yields due to a lower
precipitation and higher temperatures. For instance, higher temperatures and a lower precipitation
tend to decrease agriculture yields in India, USA, and Africa (FAO, 2003; IFPRI, 2009; Ackerman &
Stanton, 2012; Chijioke, Haile and Waschkeit, 2011).
Climate change impacts on agriculture could worsen since a slight change in the climate variables
such as a slight temperature variation is likely to affect crops severely (Ackerman & Stanton, 2012).
The gap between recent temperature and crops temperature threshold can be smaller time by time as
temperature rises due to climate change. Because of this, a slight increase of temperature could affect
crop yields as there is a small range between recent temperature and temperature thresholds.
Furthermore, a possible yield increase due to a higher CO2 concentration is clearly limited (Ackerman
& Stanton, 2012). It is due to a fact that a higher CO 2 concentration has limited impacts as crops
require other inputs to support photosynthesis such as nitrogen and water availability. It seems that a
positive impact of climate change on crop yields could be negated by its negative impacts (Ackerman
& Stanton, 2012; FAO, 2003; IFFRI, 2009).

Since developing countries lack sufficient technology and funding, the impact of climate change
could significantly affect the agricultural sector in these countries. Moreover, due to limited
knowledge and funding, farmers in developing countries need a longer time to adopt new farming
methods that are adaptable to climate change. In other words, developing countries like Indonesia are
more vulnerable to climate change than developed countries.
Since the agrifood supply chain highly depends on agricultural output, climate change could influence
the agrifood supply chain. Due to low rice yields (because of a lower precipitation), the rice supply
chain could not provide sufficient rice supply. Moreover, as higher precipitation could increase paddy

moisture (leads to a longer paddy drying time) above the ideal paddy moisture, the rice supply chain
may delay in supplying rice into market. Again, as rice has optimum temperature, higher
temperatures, due to climate change, could decrease rice yields. Therefore, this study will seek
impacts of climate change on the rice supply chain through rainfall and temperature changes.
As Indonesia is vulnerable to ENSO (El Nino Southern Oscillation), there are several studies that
explore impacts of El-Nino on Indonesian rice production. For example, using a statistical method of
some variables such as a time trend and sea surface temperature, some studies conclude that
Indonesian rice is vulnerable to ENSO (El-Nino Southern Oscillation) as ENSO could significantly
reduce rainfall and then it can delay rice planting seasons (Naylor, Falcon, Wada, & Rochberg, 2001,
2002; Roberts, Dawe, Falcon, Naylor, Smith, & Burke, 2004; Naylor & Mastrandrea, 2009).
In addition, several studies try to explain impacts of climate change on Indonesian rice production
(Naylor, Battisti, Vimont, Falcon, & Burke, 2007). Naylor et al. (2007) and claim that Indonesia is
projeted to be vulnerable to climate change as the country would experience a lower precipitation in
the future. To anticipate impacts of climate change, as these studies suggest, Indonesia should prepare
some adaptations to climate change such as better irrigation, drought tolerant rice varieties and
alternative staple foods.
Besides that, literature on climate change impacts on the Indonesian rice explain some negative
impacts of climate variability. For example, higher precipitation can cause high paddy moisture,
leading to a longer paddy drying time (Daulay, 2005; Suheiti, 2007; Badan Penelitian dan
Pengembangan Pertanian, 2011) and increase paddy drying time from 2-3 days to 4 days (Listyawati,
2007; Pusat Sosial Ekonomi dan Kebijakan Pertanian, 2010; Jamal et al., 2007). Again, La-Nina tends
to increase paddy output and start earlier planting seasons, while El-Nino would decline paddy output
and delay planting seasons between 10-30 days (Sumarno et al., 2008, Irianto & Suciantini, 2006).
In order to understand impacts of climate on the rice supply, Hasan (2010) claims that due to droughts
and floods, the rice supply chain cannot provide appropriate rice supply, leading to rice shortage in
Bangladesh. Hasan (2010) also claims that the rice SC can be categorized in three phases. The first

phase includes distribution production input such as fertilizer, seed and pesticide. The second stage (in
figure 9, this phase is circled by a blue line) consists rice production in farming areas that includes
interaction among climate, technology and labor. The third phase is delivering the milled rice to
household and industrial customers. As climate cannot be controlled, the second phase is difficult to
manage so that climate change and climate variability could be inherent sources of the rice SCUs in
the rice supply chain (Hasan, 2010).
In addition, SD approach also has been applied in the supply chain uncertainty arena. SD papers
explore some issues such as inventory decision, policy development, time compression, demand
amplification, supply chain design and capacity planning (Kumar & Nigmatullin, 2011). Kumar and
Nigmatullin (2011) explore effects of demand variability and lead time on the food supply chain.
Another study by Helo (2004) claims that improving the lead time is important to anticipate demand
uncertainty in the food industry. According to Helo (2004), high competition in the food industry
tends to push the industry to reduce manufacturing costs and lead time in order to sustain their profit.
Another study finds that climate uncertainty such as droughts could negatively affect the meat (sheep)
supply chain (Parvizian, 2009). Parvizian (2009) explains that due to droughts, the sheep slaughter
rate tends to increase, providing more meat supply and a lower meat price. However, a higher meat
price will occur in next seasons as a lower stock of sheep, owing to a higher slaughter rate, can reduce
the production capacity. In this case, providing meat stock can be a suitable solution to sustain an
appropriate meat price (Parvizian, 2009).
This study has two identified contributions. The first contribution is using system dynamics approach
to explore impacts of climate change and climate variability as inherent sources of the rice SCUs. A
lower rainfall leads to lower rice yields and a higher precipitation can increase paddy moisture,
leading to a higher paddy drying time. In other words, climate variability can negatively affect supply
chain performance in some aspects such as a lower paddy yield, a longer paddy drying time, a lower
ready-milled paddy and a lower rice supply. Therefore, this study will lead to some alternatives in
order to eliminate these negative effects of climate on the rice supply chain.

Moreover, while other SD studies (Parvizian, 2009; Hasan, 2010) explore impacts of climate change
on the supply chain through rainfall change, this study will give another contribution. That is, this
study will investigate climate change impacts on the supply chain through rainfall and temperature
variations. Because higher temperatures (due to climate change) can influence rice yields, impacts of
high temperature on the rice supply chain should be sought.