Climate Change and Sugarcane Productivity in India: An Econometric Analysis

Abstract

This study provides an understanding for the relationship between climatic factors and sugarcane productivity in India. The main objective of this paper is to estimates the impact of climatic and non-climatic factors on sugarcane productivity. To check the consistency of empirical results, simple linear regression model, Ricardian productivity regression (non-linear) model and Cobb-Douglas production function models are employed. The data set incorporates 390 observations corresponding to thirteen states with panel data for 30 years during 1980 to 2009. These all models include sugarcane productivity as dependent variable. Irrigated area, agriculture labour, consumption of fertilizers, literacy rate, tractors and farm harvest price (at constant level) are considered as explanatory variables. Average rainfall, average maximum and average minimum temperature include as climatic factors to capture the effect of climatic conditions on cane productivity. These climatic factors are incorporate for three weather seasons such as rainy, winter and summer. Empirical results based on Prais Winsten models with panels corrected standard errors (PCSEs) estimation shows that climatic factors i.e. actual rainfall, average maximum and average minimum temperature have a statistically significant impact on sugarcane productivity. The climatic effect for various factors on cane productivity are varies within different seasons. Average maximum temperature in summer and average minimum temperature in rainy season have a negative and statistically significant effect on sugarcane productivity. While, sugarcane productivity positively get affect with increasing average maximum temperature in rainy season and winter seasons. The study concluded that there is non-linear relationship between climatic factors and sugarcane productivity in India.