IMPACT OF CLIMATE CHANGE ON THE INDIAN ECONOMY: EVIDENCE FROM FOODGRAIN YIELDS

This paper estimates the impact of climate change on food grain yields in India, namely rice and millets. We estimate a crop-specific agricultural production function with exogenous climate variables, namely, precipitation and temperature and control for key inputs such as irrigation, fertilizer and labour. Our analysis is at the district level using a panel data set for physical yield (output per hectare – gross cropped area) for the period 1966-99. Thus, we eschew crop simulation approaches that rely on experimental data. We do not also estimate reduced form relationships between economic variables such as profits or the monetary value of yield and weather measures. Consistent with other studies at the district and state level we find significant impacts of climate change (temperature and precipitation) on Indian agriculture. The implication of our results for inter-state disparities and corrective measures is elaborated.