The Impact of Climate Change on India’s

Agricultural Economy

Workshop on Food Security in India (FOODSEC project)

NASC complex, Pusa, New Delhi

11 March 2014

Siwa Msangi & colleagues

(Environ. & Prodn Tech division, IFPRI)

In this presentation

I will:

Discuss some of the key drivers of change in Indian

agriculture to 2030 and beyond

Describe the impacts of climate change on India’s

agriculture looking at important food sectors

Discuss some implications for livestock productivity

Discuss the relevant “shock absorbers” for Indian agriculture

Describe some possible avenues for adaptation and some

policy conclusions

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Climate change is part of overall global

socio-economic & environmental change

Human and natural systems are closely linked

Much of the environmental change seen in the last few centuries is due to human activity

Therefore the key to modifying the rate of environmental change is to modify human behavior

This is difficult – requires coordination and policy interventions

Climate change has the potential to affect (mostly negatively) human welfare & well-being

Therefore mitigation of future climate change and adaptation to ongoing changes are both

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Climate outcomes are linked to

well-being outcomes

The climate outcomes than affect economic activities and

human welfare & well-being

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Climate change poses a challenge to India’s

agricultural sector both now and in future

Agriculture is already facing climate stresses (from

drought & floods) – even without longer-term changes

Many regions will continue to rely on rainfed

agriculture as irrigation expansion is very limited

For some regions – some crops may no longer be

possible; while others may become possible

The stresses from climate go beyond the farm-field

Has implications for the entire post-harvest chain

Infrastructure also needs to be upgraded to

withstand future stresses from floods and heat

Agriculture’s Role in the Economy

Per Capita GDP is increasing, but agriculture’s share

of the overall economy has been falling

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Climate Change Impacts in India

(AR4-based results)

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Uncertainties in climate outcomes

Even for the same socio-economic projection, there

are differences in how different climate models will

project future changes in climate conditions

Many of the differences come from the way in which

models handle important air-land-water interactions

and how heat is transferred across these

boundaries

The earth system is complex – therefore we expect

that there are multiple ways in which the same

driver of change will result in future changes

Average temperatures could increase substantially

Source: Figure 10.4 in Meehl, et al. (2007)

SRES scenario

differences small

until after 2050

(but GCM

differences big!)

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The socio-economic scenario ‘family’

underlying climate outcomes

Source: IPCC

Changes in annual precipitation between 2000-

2050Change in precip (mm)

CNRM-CM3 GCM CSIRO-MK3 GCM

ECHAM5 GCM MIROC3.2

Changes in maximum temperature 2000-50Change in annual

maximum temperature

CNRM-CM3 GCM CSIRO-MK3 GCM

ECHAM5 GCM MIROC3.2

Grouping of spatial units within India

North West

North

North East

East

South

Central

Production losses/gains for rice

Production losses/gains for wheat

Production losses/gains for maize

Production losses/gains for potato

Production losses/gains for pulses

pigeonpea

chickpea

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Capturing the effects on livestock

A lot of attention has been given to crop impacts, but not as much on livestock

There are many crop agronomic models (DSSAT, DNDC, APSIM,CropSyst,EPIC,LPJmL,etc) – but very few biophysical models of livestock productivity (RUMINANT is one example we use)

Need to engage more with animal scientists – need to capture impacts of CC on grassland productivity

Need to capture the differences across livestock production systems (extensive, intensive, mixed)

In the past, we haven’t captured the effects of climate on

livestock very well – a problem common across studies

Breakdown of livestock production across

system classifications

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Share of production across systems in India (% of total prodn)

beef pork lamb poultry eggs milk

Extensive 6% 0% 8% 0% 0% 1%

Mixed crop-

livestock 67% 0% 69% 0% 0% 87%

intensive 16% 18% 4% 9% 25% 3%

other 11% 82% 18% 91% 75% 8%

Productivity impacts for bovines in mixed

crop-livestock systems

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loss in liveweight gain due to feed losses distributed across categories

Productivity impacts for bovines in mixed

crop-livestock systems

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loss in milk production due to feed losses distributed across categories

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What are the “shock absorbers” of

India’s agricultural economy?

So far we have shown the impacts on productivity –but there are some was in which such shocks can be buffered

Storage and ‘banking’ – this can apply to both natural and financial resources

• Physical storage can only go one way in time (store now to use later) – but financial banking can go both ways (save for later or borrow against the future)

Exchange mechanisms – especially trade

• This can happen in terms of goods or the resources that produce them (i.e. water) – helps to mitigate scarcity over space and improve welfare

Both of these mechanisms need working institutions

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Illustrating the importance of

groundwater

In this experiment, we use the IMPACT model simulate what would happen if the groundwater availability in northern India (Gujarat, Rajasthan, Haryana, Uttar Pradesh, Madhya Pradesh, Bihar) were to decrease dramatically over 2010-2020

Essentially halving the water available for irrigation (since GW supplies ~50% irrigated area)

Simulated over the corresponding IMPACT basins (Indus, Ganges, Mahi-Tapti & Luni basins)

Observe the impact on food production, prices, consumption and malnutrition in India & the world

Ganges

Mahi-Tapti

Luni

Indus

Key Indian basins targeted in scenario

Global cereal production changes

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Shifts in global cereal net trade to compensate

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Increases in global cereal prices

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Looking at the demand for water in agriculture

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Derived per-hectare demand for Water in the Kharif and Rabi Seasons for Hivre Bazaar

(Rs per unit water per hectare)

We fully expect that

the demand for

water is higher in the

drier Rabi season,

compared to the

Kharif when rainfall

is more abundant

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Water demands in two Maharashtra villages

Derived per-hectare demand for Water in the Kharif Season for Hivre Bazaar and

Shivni villages

(Rs per unit water per hectare)Demand for water is

higher in Hivre Bazaar

compared to Shivni

village, in the Kharif

season – largely due to the

higher value of

agricultural production in

Hivre Bazaar

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Water demands in two Maharashtra villages

Derived per-hectare demand for Water in the Rabi Season for Hivre Bazaar and Shivni

villages

(Rs per unit water per hectare)Water demand is higher during

the Rabi season for both Hivre

Bazaar and Shivni villages.

Demand in Hivre Bazaar is still

higher thougth difference with

Shivni is smaller

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Illustrating the gains from trade

Where transfers are possible – there could be mutual gains for trade b/w

farms or regions

Equilibrium w/o TCs

Initial point w/o tradeEquilibrium with TCs

Need to think about new institutions (e.g.

markets) to deal with climate pressures

As is happening in other climate-stressed parts of the world (California, Australia) – need to set up new and innovative arrangements to deal with periodic scarcities

California has set up a ‘drought water bank’ in the past

Australia has had markets for water in Murray-Darling

Dealing with large farms is easier than smaller ones – in the latter case, the govt or village authorities need to help

Need to enable existing institutions to function better

Groundwater is an important buffer – but suffers from open access problems (could community-based GWM work?)

Feed markets for livestock are key (esp high-quality fodder)

Grain storage needs to be handled better (reduce losses)

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A range of adaptation strategies

At crop-production level:

• Change varieties or crop species and planting dates

• Improve water-use efficiency

For livestock:

• Preserve diversity in animal genetic resources

• Improve crop residue management (for soil moisture as well as for feeds)

• Help farmers to rebuild their stocks quickly after shocks

At resource level

• Enhance recharge where possible

• Encourage collective action to reduce GW overdraft

Conclusions

Climate change will present a challenge to food security in India through 2050 – despite uncertainty, we know that the results are significant

Climate change will reduce yields in many regions by 5-25% -- although there are gains in some

Need to look at livestock impacts in a better way

Also need to characterize variability – which can be even more challenging to deal with

Besides technological options for climate change adaptation – also need to look at institutional innovations needed to strengthen the “shock absorbers” of India’s agriculture

THANK YOU!

See: http://www.ifpri.org/

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Extra slides

Production losses/gains for coarse grains

Sorghum

Millet

Production losses/gains for cotton