Assessing the Impacts of Climate Change on Land Productivity in Indian Crop Agriculture: An Evidence from Panel Data Analysis

Abstract

The current study assessed the climate change impacts on land productivity of major food and non-food grain crops in India. We compiled panel data for 30 years (1980-2009) using fifteen crops across thirteen agriculture intensive states. The value of production for each crop is estimated by farm harvest price (at constant prices, 1993-1994). Aggregate value of production on per hectare land is regressed with different socio-economic and climatic factors using the Cobb-Douglas (C-D) production function model. Estimates based on Driscoll-Kraay standard errors and linear regression and correlated Panels Corrected Standard Errors (PCSEs) (Prais-Winsten) estimation indicate that land productivity decreases with increase in annual average maximum temperature. The study concludes that Indian policymakers need to increase more irrigation facilities and fertilizers for cultivation. Land productivity is positively associated with irrigation area, number of pump set and application of fertilizers on per hectare land. In brief, more irrigation facilities; recommended use of fertilizer; more investment in infrastructure; participation of more literate population in agricultural activities; government expenditure on agricultural and allied sectors, rural development, irrigation and flood control would be useful to mitigate the negative effect of climate change on agriculture and improve agricultural productivity (land productivity). Finally, our projected results based on simulation technique showed that climate change would cause a decline in land productivity by 48.63 percent by the year 2100 and loss of farmers’ income in India.