The impact of climate changes is increasingly evident through movements of climatic variable such as temperature and precipitation. Quantification of this impact is necessary in order to better understand the economic implications these changes. Average global temperature has increased by 0.74 Celsius in the last 100 years; rainfall has trended downward during 1960–2000; and sea levels have risen between 1 to 3 millimeters per year [IPCC, 2007]. Agriculture is very sensitive to changes in the climatic variables such as temperature and precipitation as these climatic variables are direct components of the production process.

This paper combines historical crop yield data on two of the major crops grown around the world – rice and maize, with the respective temperature and precipitation data from 66 countries during 1971-2002 to study the impact of changes in mean and variability of temperature and precipitation on crop yields. Using Quantile Regression, we find evidence that increases in temperature and precipitation exceeding a certain threshold can be damaging for both rice and maize yields, while increases in the variability of the climatic variables has a greater negative effect on countries with lower yields for rice.