Climate change has become a great challenge for the agrarian economy of Pakistan. A serious threat is to the crop sector
which is vulnerable to change in temperature and rainfall. This study traced the impact of climate change on the agriculture of
arid region by employing a cross sectional data collected through a structured questionnaire in Rawalpindi division in
addition to using time series data of climatic variables obtained from metrological stations. A Ricardian approach was
operated to test the relationships between Net Farm Revenue (NFR) and climate across the arid region. Wheat crop was the
core of the subject matter. It was found that temperature increase has significant negative impact on agriculture production.
Moreover, an increase in revenue was visualized with the increase in rainfall. The overall extent of negative impact of
temperature is greater than the positive effect of rainfall in the region. It was revealed that one percent increase in temperature
would lead to loss of Rs. 4180 to the net revenue per annum. Dissemination of new farming techniques including new
irrigation methods, new methods of crop farming and adapted cropping pattern would be the appropriate derivatives of
paradigm shift required in the agriculture sector of arid region.
