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This study assesses the long-run relationship and short-run dynamics between paddy yields and climate variables, particularly maximum and minimum temperature and rainfall, using time-series data from 1971 to 2014 in Nepal. Applying Autoregressive-Distributed Lag Regression or ARDL bounds testing approach for analysis of co-integration between the variables, we confirm that there is a long-run relationship among the variables. Furthermore, we employ Granger non-causality tests for robustness. The findings reveal that rainfall has substantial effects on the rice yield. Specifically, a positive and significant relationship exists between rice yields and rainfall and that this relationship is unidirectional. Rainfall impacts on rice yield and holding all things constant, a 1 mm increase in rainfall increases rice yields by 0.65 percent. Given the effects of temperature on rice crops and increasing climate change vulnerabilities, agricultural scientists should focus on research and development of temperature tolerant rice varieties in the production of rice yields.


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