Climate change, agricultural production, and poverty in India

Abstract

The low-income households in the South Asian countries are highly sensitive to climate-intensive sectors like agriculture, mainly due to the negative impact of climate change on the food production system as a whole. Climate-induced supply shortfalls in agriculture, and consequent food price shocks may adversely affect consumption in these households. The tension between economic development, climate change, and agricultural production offers a challenging research question not dealt with in recent studies for India. We explore the effect of climate change on farmland value and use a counterfactual measure of the farm revenue on rural consumption expenditure. We found a discerning impact of the climate change on the net revenue and well-being of the rural people. A theoretical exercise generalizes the empirical findings.