Economic Survey: Climate Change May Cost Farmers Quarter Of Their Income
Climate change could reduce farm incomes by 25 percent in the medium term.
As India battles a rural distress, the Economic Survey warned that rising temperatures and poor rains threaten to hurt farmers’ incomes.
The green fields of India, glorified in Indian cinema, face a rising threat from climate change, Chief Economic Adviser Arvind Subramanian wrote. He estimates a one-degree celsius rise in temperature in a year could lower farmer incomes by about 6 percent in the kharif and rabi seasons in unirrigated districts. The survey found that in a year when rainfall is 100 millimetres lower than the average, the incomes fall by 15 percent during the kharif and 7 percent in the rabi season.
The most glaring forecast: in the medium term, farmers in unirrigated areas could lose as much as 25 percent of their annual income.
India's agricultural sector has had a rough year. According to data from the government’s statistical arm, the agriculture sector, in nominal terms, is expected to grow at 2.8 percent in 2017-18 compared to 9 percent in the previous year. The forecast, which builds in the impact of lower farm prices, partly explains distress in the rural economy reported in the last 12 months.
Signs of distress began emerging soon after demonetisation and have since persisted. The note ban led to a sharp fall in prices of perishables which hurt incomes. That was followed by a good monsoon, but prices rose moderately as reflected in low food inflation during the early part of 2017. Output, too, has been lower than last year due to the uneven spread of rainfall.
It’s Getting Hotter
Climate change has brought a number of seasonal anomalies, but the ones that truly have an effect are extreme rise in temperatures and slumps in rainfall, the Economic Survey said. These changes affect unirrigated areas much more than irrigated parts.
Temperature, on an average between 1970s and 2010, is increasing at 0.45 degrees in the kharif season and 0.63 degrees in the rabi season. Annual average rainfall for this period has on average declined by about 86 millimetres.
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Irrigated agricultural land has risen to more than 40 percent from 20 percent in 1960s, the survey said. While the Indo-Gangetic plain and parts of Gujarat and Madhya Pradesh are well irrigated, parts of Karnataka, Maharashtra, Madhya Pradesh, Rajasthan, Chhattisgarh and Jharkhand are still extremely vulnerable to climate change. And that impacts the yields.
- Revenue from an average kharif crops falls 4 percent due to one-degree rise in temperature and nearly 13 percent due to 100 millimetres decline in rainfall, the survey said.
- Yields from unirrigated kharif crops fall 7 percent due to higher temperature and decline nearly 15 percent due to rainfall shock.
- Revenue from unirrigated rabi crops falls nearly 6 percent due to extreme temperature shocks and 6.6 percent due to extreme rainfall shocks.
Policy Suggestions
The Economic Survey suggested a two-pronged approach to tackle climate change and its effect on Indian farm incomes.
- Increase the percentage of irrigated area amid rising water scarcity and depleting groundwater resources.
- Embrace agricultural science and technology with a “renewed ardour”.
The survey acknowledged the challenges. “It is easy to say what needs to be done. How this will happen given that agriculture is a state subject is an open political economy question.”