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Theme: Economically viable approaches for advancement in agriculture.Sub-theme: Environment sustainability, agricultural growth and food security.

A STUDY ON CO2 EMISSION IN RELATION TO AGRICULTURAL GROWTH AND FOOD

SECURITY IN INDIAG.S. Mahadevaiah1, Gunjan Bhandari2

and Gourav Kumar Vani 3 1. Assoc. Prof., 2. & 3. M.Sc. Students.

gunjanbhandari5@gmail.comDept. of Agricultural Economics, UAS, Bangalore,

(Karnataka)

ABSTRACTThe ongoing development process is continuously adding to the pool of carbon dioxide in the atmosphere. Increasing CO2

level has been viewed as a mixed blessing for agriculture. Although, it’s exact impact is not known but through global warming it can have a direct bearing on food production. ICAR report said that net agriculture revenue would decline by 12.3 percent if temperature increases by 2 degree Celsius and rainfall decreases by just 7 percent. Keeping this in view, the present study attempts to find out the contribution of the growth in three sectors of Indian economy viz., agriculture, manufacturing and service sectors to increased CO2 emission and study its relation to agricultural GDP and poverty(as a measure of food security). Secondary data for fifty years and simple regression and tabular analysis have been used for this purpose. The findings of the study indicate that the CO2 emissions due to growth in agriculture are not significant but increased CO2 emissions have resulted in increased temperature. In the short run, agricultural production seems to vary directly with CO2 emissions while poverty decreases with increase in agricultural GDP and in CO2 emissions. Key words: CO2, Agriculture, Poverty and Food Security

Introduction

With a population of 1.2 billion growing at a rate of 1.76 percent, food security will continue to remain a major concern for Indian economy. Ensuring food security requires continuous agricultural growth. This is only possible under favourable climatic conditions. It is proven fact worldwide that increase in green house gas emission lead to increase in temperature. Net agriculture revenue would decline by 12.3 percent if temperature changes by 2 degree Celsius and rainfall by just 7 percent according to ICAR report6 (2012). This decline in revenue from agriculture will have cascading effect on 52.8 percent of Indian population which directly and indirectly depend on agriculture as source of livelihood. This will impact the purchasing power and in turn food security status.

In this context a study was planned with the following objectives:

1. To study the short term relationship between agriculture and climate change in India

2. To analyze the impact of climate change on food security

Methodology

Present study is based on time series data obtained from World Bank Development Indicators web site5, RBI Hand Book of Indian Economy 20121, Data Portal of Govt. of India4. In order to carry out the study, carbon emission, poverty rate and agricultural GDP were used as proxy for climate change, food security and agriculture respectively. Data was collected on contribution of different sectors in GDP, CO2 emission from India, Poverty status in India, mean annual temperature and population of India for a period of 50 years spanning from 1960-61 to 2010-11. Data on Poverty status (at national poverty line) was only available for the years 1993-94, 2004-05 and 2009-10. Tools used in the analysis are compound annual growth rate (CAGR) 2, percentage, regression analysis3. Regression analysis was performed for following regression equations 1. CO2=b0+b1*AgGDP+b2*ManufGDP+b3*ServiceGDP+ e1

2. AgGDP=b0+b1*C O2+e2

3. Temp= b0+b1*CO2+e3

Co2^: Carbon Emission from India per capita;

AgGDP#: Agricultural GDP per capita of India;ManufGDP#: Manufacturing GDP per capita of India; ServiceGDP#: Service Sector GDP per capita of India;Temp: Mean Annual Temperature of India (degree Celsius).

Since, population has effect on all variables in present study and therefore to remove the effect of increase in population it is imperative to take the variables per capita.

Compound Annual Growth Rates were calculated for Poverty, Co2 emission and share of Agriculture in GDP.

Formula to calculate CAGR is CAGR= ([V n

V 0 ]1/n

−1)∗100

Where Vn: Value in nth year, V0: Value in initial year, n: no. of years from initial to final value.

To calculate percentage points change in X per unit percentage change in Y formula used is =

percent point change∈X during given periodpercent change∈Y values during given period

ResultsTable No. 1 shows the data on poverty, carbon emission, share of Agriculture in GDP and Agricultural GDP. From CAGR it can be observed that during 16 year period (1993-94 to 2009-10) poverty and share of agriculture in GDP registered negative growth of 2.58 and 2.79 percent per annum. While

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carbon emission and value of agricultural GDP increased at a rate of 5.41 and 2.72 percent per annum.

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Table No. 1: Compound Annual Growth Rates Years Poverty

rate@ Carbon Emission ^

Share of Agriculture In GDP@

Ag GDP#

93-94 45.3 864.93 28.27 429.98

04 to 05 37.2 1411.13 18.81 565.423

09 to 10 29.8 2008.82 17.98 660.99

CAGR -2.58 5.41 -2.78 2.72

#(Rs.000’ crore at 2004-05 constant prices)^ (000’ kt)@(%)If poverty and share of agriculture continues to decline at their negative CAGR then their values will reduce to half in 27 and 25 years respectively. Carbon emission and agricultural GDP will double in 13 and 26 years if they continue to increase at their CAGR. One percent increase in Carbon emission will reduce poverty rate by 0.1172 percent points. One percent increase in agricultural GDP will reduce poverty rate by 0.2885 percent points.

Table No. 2: Results of Regression Analysis

CO2 AgGDP Temp.

Intercept -527.39*(250.74)

371.46***(6.11)

24.05***(0.05)

CO2 - 0.12***(0.007)

5.07e-07***(6.04e-08)

AgGDP 1.32(0.66)

- -

ManufGDP 4.41***(1.16)

- -

ServiceGDP -0.57(0.29)

- -

R2 Adjusted 0.949 0.86 0.5864

F statistic 309.128*** 310.4*** 70.48***

Significance Codes: 0 ‘***’ 0.001 ‘**’ 0.01 ‘*’ Figures in parenthesis indicate standard error.

Results of regression are provided in Table No. 2. In first regression we can find that carbon emission per capita is significantly affected by manufacturing sector GDP per capita while agriculture and service sector does not contribute significantly to carbon emission in India. From second regression it can be observed that carbon emission had positive impact on agriculture in India in past 50 years. But it does not mean in future carbon emission will not hurt agriculture sector. It is also clear from third regression that carbon emission per capita has significant impact on temperature increase.

Cent percent increase in carbon emission from 2009-10 level will reduce poverty by 11.72 percent points. This implies that increased carbon emission will lead to an increase of approximately 2 degree Celsius in mean annual temperature making it to reach a level of 26.1 degree Celsius. This will reduce net agricultural revenue by 12.3 percent.

Conclusion

From the foregoing analysis, it is evident that though in the short run agriculture sector does not seem to be harmed by increase in Carbon emission but in long run it will lead to decline in food security status by reducing affordability of poor to purchase food items.

References:

1. ANONYMOUS, 2011-12, Hand book of Indian Economy, published by RBI.

2. CHANDRA PRASANNA, 2009, Projects, Tata McGraw-Hill, New Delhi: chapter. 7.20.

3. PORTER. D. C., GUNASEKAR S., GUJARATI D.

N., 2011, Basic Econometrics, Tata McGraw-Hill, New Delhi.

4. data.gov.in

5. data.worldbank.org/indicator

6. http://archive.indianexpress.com/news/alarm-bells-at- crop-summit--acute-food-scarcity-in-india-by-2020-/737239/