The annual Economic Survey released before the central government presents its budget indicates that India’s agrarian crisis is set to worsen because climate change may reduce farm incomes by up to 25%
Even as India grapples with an agrarian crisis, the Economic Survey 2017-18 has painted a grim outlook for the country’s farm sector, predicting that incomes of farmers may decline by as much 25% in some areas due to the impacts of climate change.
The survey, which is released every year just before the central government presents its budget in Parliament, has devoted an entire chapter to climate change and its impact on agriculture. Using district level data on temperature, rainfall and crop production, the survey has found that long-term weather patterns imply “climate change could reduce annual agricultural incomes in the range of 15% to 18% on average, and up to 20% to 25% for unirrigated areas.”
Prime minister Narendra Modi said in 2016 that his government aims to double farm incomes by 2022. But earning trends belie his hopes. Doubling of incomes would be a “miracle or miracles,” as it would imply a compounded annual growth rate of 12% every year, agricultural economist Ashok Gulati wrote at that time. After adjusting for rising costs, an Indian farmer’s income rose 5% per year over 2003-13, according to an IndiaSpend analysis of government data.
The latest Economic Survey has found that average temperatures across the country since the 1970s have shot up by 0.45 degrees Celsius during Kharif (summer) and by 0.63 degrees during Rabi (winter), the two main agricultural seasons in India. It also found that between 1970 and 2010, Kharif rainfall has declined on average by 26 mm and Rabi rainfall by 33 mm. These numbers are important because around 70% of the cultivated area in the country depends on adequate and timely rainfall for crops to grow.
The relation between increasing temperatures and decreasing rainfall with falling farm productivity is well established in scientific literature. Rising temperatures, erratic rainfall, droughts, floods and storms will not only reduce yields of staple foods in India but also diminish their nutritional value, putting millions at risk of hunger and malnutrition.
Productivity will have to be increased, and price and income volatility reduced, against the backdrop of increasing resource constraints, according to the latest Economic Survey. “Shortages of water and land, deterioration in soil quality, and of course, climate change-induced temperature increases and rainfall variability, are all going to impact agriculture,” it said.
“In a year where temperatures are 1 degree Celsius higher, farmer incomes would fall by 6.2% during the Kharif season and 6% during Rabi in unirrigated districts,” the survey predicted. “Similarly, in a year when rainfall levels were 100 mm less than average, farmer incomes would fall by 15% during Kharif and by 7% during the Rabi season.”
Climate change models by the Intergovernmental Panel on Climate Change (IPCC) estimate that temperatures in India are likely to rise by 3-4 degrees Celsius by the end of the 21st century. “These predictions combined with our regression estimates imply that in the absence of any adaptation by farmers and any changes in policy (such as irrigation), farm incomes will be lower by around 12% on an average in the coming years,” the survey said. “Unirrigated areas will be the most severely affected, with potential losses amounting to 18% of annual revenue.”
“Even more worryingly, it is possible the estimates arrived at in this chapter might be lower than the true effects of climate change, given the potentially non-linear impact of future increases in temperature,” said the survey.
Although the conclusions drawn by the Economic Survey are not new and are in line with scientific evidence, it is noteworthy that one of the most important economic documents of the Indian government has taken note of the importance of accounting for climate change while formulating policy, particularly in the area of food production. Almost half of India’s working population depends on agriculture for a living.
“Minimising susceptibility to climate change requires drastically extending irrigation via efficient drip and sprinkler technologies (realising ‘more crop for every drop’), and replacing untargeted subsidies in power and fertiliser by direct income support,” the survey suggested. “More broadly, the cereal-centricity of policy needs to be reviewed.”