oct climate agri

Climate Change Impacts on Indian Agriculture : Climate Change Impacts on Indian Agriculture Jyoti Parikh Indira Gandhi Institute of Development Research, Mumbai And K.S. Kavi Kumar Madras School of Economics, Chennai


INDIA AND AGRICULTURE : INDIA AND AGRICULTURE CONTEXT Population : 1 billion + GDP from Agriculture : 34 % (1994), 42 % (1980) Area under Agriculture : 50 % (160 mha) Population dependent on Agriculture: 70% Average farm size: : 1 to5 ha Landless dependent on others T. Area Irrigated Prod Earnings % of GDP (mha) (mha) (mt). (Rs.) Rice 42 20 73 365 22 Wheat 24 21 57 208 12.6


Impact of Climate Change : Impact of Climate Change FCCC: ensure that food production is not threatened Rosenzweig and Parry: significant adverse impact on developing countries Parikh J and KaviKumar: a detailed analysis of Indian Agriculture d t 2.50C to 4.90C Rice Yield - 15% to -4.9% Wheat Yield -25% to -42% (without carbon fertilization effect)


Slide4 : With carbon fertilization effect: Smaller but similar impact With Adaptation T + 20C + 7% precipitation  GDPAgri  7% T + 3.50C + 15% precipitation  GDPAgri  25%  Poverty   Hunger 


Indian Agriculture – Strengths and Challenges : Indian Agriculture – Strengths and Challenges Strong strides made in increasing the production in the past 50 years, mainly due to adoption of HYVs and other technological developments Subsistence agriculture with small land holdings and skewed distribution of land Wide variation in regional productivities Majority still depend on rainfed agriculture Frequently affected by extreme weather events such as droughts and cyclones Significant proportion of population still reels under poverty, mal-nutrition and chronic hunger Emerging economic challenges – WTO, economic liberalization etc.


Vulnerability Assessment Framework : Vulnerability Assessment Framework


Socio-economic Impact Assessment Methodologies : Socio-economic Impact Assessment Methodologies Agronomic models are used first to predict climate change impacts on crop yields and the estimated yield changes are then introduced into economic models to predict output and price changes. Feasible to model CO2 fertilization effects. Relatively difficult to include all possible farm level adaptation options. Adams et al. (1990, 1999), Rosenzweig and Paryy (1994), Kumar and Parikh (2001b) Agronomic-Economic Approach


Agroecological Zone Approach : Agroecological Zone Approach Assigns crops to agroecological zones and estimates potential crop yields. As climate changes, the extent of agroecological zones and the potential yields of crops assigned to those zones changes. These acreage and yield changes are then included in economic models to assess socio-economic impacts. Darwin et al. (1995, 2000), Kumar (1998), IIASA (2002)


Ricardian Approach : Ricardian Approach Similar to Hedonic pricing approach of environmental valuation. The approach is based on the argument that, ‘by examining two agricultural areas that are similar in all respects except that one has a climate on average (say) 3oC warmer than the other, one would be able to infer the willingness to pay in agriculture to avoid a 3oC temperature rise’. Uses statistical analysis of data across geographic areas to separate climate from other factors (such as soil quality) that explain production differences across regions and uses the estimated statistical relationships to assess impacts of climate change. Main advantage of this method is that it incorporates all private adaptation measures. Assumes that relative prices do not change and hence biases the results. Not feasible to incorporate CO2 fertilization effects. Mendelsohn et al. (1994), Dinar et al. (1998), Kumar and Parikh (2001a)


Impacts on Indian Agriculture –Literature : Impacts on Indian Agriculture –Literature ·   Sinha and Swaminathan (1991) – showed that an increase of 2oC in temperature could decrease the rice yield by about 0.75 ton/ha in the high yield areas; and a 0.5oC increase in winter temperature would reduce wheat yield by 0.45 ton/ha. ·   Rao and Sinha (1994) – showed that wheat yields could decrease between 28 to 68% without considering the CO2 fertilization effects; and would range between +4 to -34% after considering CO2 fertilization effects. Aggarwal and Sinha (1993) – using WTGROWS model showed that a 2oC temperature rise would decrease wheat yields in most places. ·   Lat et al. (1996) – concluded that carbon fertilization effects would not be able to offset the negative impacts of high temperature on rice yields. ·  Saseendran et al. (2000) – showed that for every one degree rise in temperature the decline in rice yield would be about 6%. Aggarwal et al. (2002) – using WTGROWS and recent climate change scenarios estimated impacts on wheat and other cereal crops. All these studies focused only on agronomic impacts of climate change.


Potential Impact of Climate Change on Wheat Production in India : Potential Impact of Climate Change on Wheat Production in India Source: Aggarwal et al. (2002)


Socio-economic Impacts of Climate Change and Climate VariabilitySome recent estimates for India : Socio-economic Impacts of Climate Change and Climate Variability Some recent estimates for India Results Based on Agronomic-Economic Approach These results are obtained by incorporating crop yield changes associated with various equilibrium climate change scenarios into an applied general equilibrium model, and the reported figures correspond to the terminal period of the simulation.


Slide13 : Results Based on Ricardian Approach These results are based on climate response function estimated using district level time-series observations on farm management and crop output. Reported figures indicate percentage change in total net-revenue and the 95 percent confidence interval are given in brackets. Socio-economic Impacts of Climate Change and Climate Variability Some recent estimates for India


Slide14 : Ricardian Estimates with Climate Variation Socio-economic Impacts of Climate Change and Climate Variability Some recent estimates for India


Limitations of current estimates : Limitations of current estimates ·  The impacts estimated using agronomic-economic approach are likely to be upwardly biased (compared to the Ricardian estimates) as they do not account for adaptation. ·  On the other hand the Ricardian estimates by not capturing the carbon fertilization effects tend to over estimate the impacts. · The use of cross-section variation to predict time series behavior requires many assumptions to be satisfied: (a) that variations over time and space are equivalent, (b) only one steady state occurs per set of exogenous conditions, and (c) that a few climatic variables (say, average temperature and precipitation and perhaps a simple measure of variability) capture all the relevant information about climate change and its impacts on agriculture.


Slide16 : Excluded from the estimates Present estimates do not account for impacts due to extreme weather events, whose frequency and intensity is likely to get altered with climate change. A number of agronomic links – such as impact of climate change on behavior of pests and diseases - are still not very clearly understood and hence their economic implications are also not incorporated in the current estimates.


Climate Sensitivity Functions of the US and India – Applied to India : Climate Sensitivity Functions of the US and India – Applied to India 0 -0.2 -0.4 -0.6 -0.8 -1.0 -1.2 -1.4 -1.6 0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 US Response Function Indiaan Response Function Temperature Change, oC Impact on Farm Value/Net Income (billions of US $) Source: Mendelsohn and Dinar (2000)


Adaptation Options : Adaptation Options Possible at various levels - farmer, economic agent, macro Potential and costs of adaptation - possibly through historic analysis of technology penetration For example, Reilly and Schimmelpfenng (1999) show the relative speed of adoption of various measures:


Slide19 : Jodha (1989) using observations of adoption and technological response in post-independent Indian agriculture estimated response time of 5-15 years for items such as productive life of farm assets, crop rotation cycles, and recovery from major disasters. Broad categories of responses - some of which could be beneficial regardless of how or whether climate changes - include: Improved training and general education of populations dependent on agriculture. Identification of the present vulnerabilities of agricultural systems. Agricultural research to develop new crop varieties. Food programs and other social security programs to provide insurance against supply changes. Transportation, distribution, and market integration to provide the infrastructure to supply food during crop shortfalls. Removal of subsidies, which can, by limiting changes in prices, mask the climate change signal in the marketplace.


Thank You : Thank You