Received: 3 April 2019 Accepted: 24 April 2019

DOI: 10.1002/pa.1972

ACADEMIC PAPER

Climate Change and its impacts on Indian agriculture: An

Econometric analysis

Bushra Praveen | Pritee Sharma

School of Humanities and Social Science,

Indian Institute of Technology Indore, Simrol, This study assessed the climate change impacts on land productivity for major food and
India
nonfood grain crops in India. We compiled data for 50 years (1967–2016) using 15 crops
Correspondence across India to estimate the variation of agriculture production for each crop by different
Bushra Praveen, School of Humanities and
variables such as temperature and rainfall estimation. Our results indicate that land
Social Science, Indian Institute of Technology
Indore, Simrol, 453552, India. productivity decreases with an increase in annual average temperature in most of the
Email: [email protected]
crops. The adverse impact of climate change on agricultural production indicates food
security threat to small and marginal farming households and adversely affected due
to climatic fluctuations. Results show that a rise in temperature would reduce agricultural
productivity and assessed sensitivity of Indian agriculture to climate change.

1 | I N T RO D U CT I O N 1.1 | Impact of climate change

Climate change is not a new phenomenon in the world (Kumar & Climate and its variability impact all sectors of the economy in several
Gautam, 2014; Kumar & Sharma, 2013). The rise in temperature of ways like an abnormality in rainfall results in severity and frequency of
the earth surface and in atmosphere, variation in rainfall, declining floods. Any increment in maximum temperature may increase mean
groundwater, flooding due to high rainfall, drought, soil erosion, heavy sea levels, and it would affect large populations in peninsular and
wind, rising sea level due to melting of glacier, cyclone, wind speed, coastal areas. It may increase 15% to 40% rainfall there and raise the
hail storm, fog, earthquake and landslide etc. are all the clear evidence annual mean temperature by 3° to 6°. Climate change adversely affects
of climate change phenomenon. Although it is a natural process in the food security in all countries through agriculture production.
some cases, human activities are also responsible for this. There are It affects food security is in four dimensions, food availability, food
many examples across countries where an increase in the possibilities accessibility, food utilization, and food system stability. It will also have
of climate change due to growing population, rapid urbanization, an impact on human health, livelihood assets, and food production
higher industrialization, use of modern technology, innovation, higher and distribution channels (FAO, 2008).
economic development, transport, building construction, reduction in
forest area etc. is observed (Ahmad, Dastgir, & Haseen, 2011). High 1.2 | Empirical review
latitude and higher‐income countries climate change have a positive
impact on agricultural production or crop yield, and on the other hand, In India, many studies have given empirical evidence that
lower‐latitude and lower‐income countries experience a negative climate change has caused a decline in the agricultural productivity.
effect on agricultural production. Conversely, developing countries Numerous studies examined the economic impact of climate change
are most vulnerable compared with developed countries. There are on agriculture, and few studies included food security with agriculture
reasons for developing countries which make them vulnerable such productivity. Kumar and Parikh (2001a) shown for rice and wheat crop
as lack of technologyical development and resourses to mitigate the that projected large‐scale changes in the climate would lead to
adverse effect of climate change on agriculture, and due to their significant reductions in their crop yields, which in turn would
greater dependence on agriculture for the livelihood of large adversely affect agricultural production by 2060 and may affect the
populations (Nath & Behera, 2011), this would increase the severity food security of more than one billion people in India.
of disparities in cereal yields between developed and developing In brief, wheat, barley, sorghum, arhar, and maize food grain crops
countries (Fischer, Shah, Tubiello, & Velhuizen, 2005). get negatively affected due to climate sensitivity, these all are the

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https://doi.org/10.1002/pa.1972
2 of 6 PRAVEEN AND SHARMA

major food grain crops of India. Hence, we can conclude that warming and shift in rainfall may decrease crop yields by 30% by the
agricultural productivity in India is climate sensitive, and the mid of 21st century; due to this reason, there may be a reduction in
fluctuations in temperatures and rainfall pattern adversely affect the arable land resulting into pressures on agriculture production (Kapur,
food grain crops productivity, and thus it may threaten food security Khosla, & Mehta, 2009).
in India. On the basis of our empirical findings, we can provide a policy Above review of the literature shows that climate change
implication that irrigation is an important factor that may mitigate negatively affects the food grain productivity in India. Most studies
the adverse effect of climate sensitivity of rice, wheat, sorghum, arhar, empirically investigate the impact of climate change on agricultural
and bajra productivity (Kar & Kar, 2008; Ranuzzi & Srivastava, 2012; productivity based on single crop or two to three crops and restrained
Singh, 2012). to one state or region. But the assessment of the overall effect of
Empirical result for nonfood grain (commercial) crops shows climate change on major food grain crops is an important empirical
that any increments in maximum temperature have a negative and question because food security is not a function of food grain crop
statistically significant impact on sugarcane, cotton, and Sesamum only. There are many additional factors, which may affect the level
crops. Any variation in minimum temperature from normal has of food security including production of commercial crops, income of
a negative and statistically significant impact on and linseed the people, geographical region, availability of drinking water,
productivity. Any fluctuation in rainfall from average has negatively education level, level of employment, decline in cultivated land, higher
affected the sugarcane productivity. On the basis of empirical population growth, rapid urbanization, lack of food grain market, and
findings, we can predict that climatic factors negatively affect the cash number of cattle etc. Thus climate change, agriculture productivity,
crop production. (Singh, 2012). food security, and poverty; and these all are directly linked to each
Kumar et al. (2011) mentioned that decline in the irrigated area for other (Hollaender, 2010).
maize, wheat, and mustard in northeastern and coastal regions and for
rice, sorghum, and maize in Western Ghats of India may cause loss of 1.3 | Objectives and organization of paper
production due to climate change. Hundal and Prabhjyot‐Kaur (2007)
Based on the research gap identified in the previous section, following
concluded that an increase in minimum temperature up to 1.0°C to
specific objectives is aimed for the present analysis. To analyze the
3.0°C above normal has led to declining in productivity of rice and
impact of climate sensitivity on crop wise production for major food
wheat by 3% and 10%, respectively, in Punjab. Kaul and Ram (2009)
grain and nonfood grain crops. Here, we would be able to estimate
found that excessive rains and extreme variation in temperature have
which crop is more vulnerable due to any variation in climatic factors
adversely affected the productivity of Jowar crop, thereby this has
such as temperature and rainfall. Second, this study contributes the
affected the incomes as well as food security of farming families in
existing literature by applying the structural break unit root as largely
Karnataka (India).
ignored in the previous studies There might exist break points in our
Geethalakshmi et al. (2011) concluded that productivity of rice
data because we are dealing larger dataset. As conventional unit root
crop has declined up to 41% with a 40°C increase in temperature in
tests (Augmented Dickey–Fuller test (ADF)) does not capture the
Tamil Nadu. Saseendran, Singh, Rathore, Singh, and Sinha (2000)
break periods which might lead to the spurious results, therefore, we
analyzed the projected results for duration 1980–2049 and found that
use Popp (Narayan & Popp, 2013) test that will help to account for
increment in temperature up to 50°C can lead to a continuous decline
the break periods.
in the yield of rice and every one‐degree increment of temperature
This paper is divided into five sections. The first section introduces
will lead up to 6% decline in yield in Kerala (India). Srivastava, Kumar,
climate change, and its impact on agriculture, and the interlinkages
and Aggarwal (2010) found that climate change will reduce monsoon
between climate changes, agricultural productivity. The second
sorghum productivity up to 14% in the central zone and up to 2% in
section presents the research gap based on literature review and
the south central zone by 2020.
objectives of the study. The third section describes detailed data
Empirical result finding in others studies for agriculture crop
description. This section also provides the descriptive method with a
production are somehow similar, but in this result negative impacts
and comprehensive, overview of econometric models about the
are showing on food grain crops such as rice, maize, bajra, jowar,
impact of climatic variables on crop wise productivity, In the fourth
sorghum and barley due to temperature increments (Geethalakshmi
section, descriptive and empirical findings of regression models are
et al., 2011; Kalra et al., 2008). Gram and ragi productivity also get
given. Conclusions and policy implications are drawn in the fifth
negatively affected due to increase in maximum temperature, whereas
section
arhar and wheat productivity is positively affected due to increase
in maximum temperature. (Kumar & Parikh, 2001a, b; Hundal &
Prabhjyot‐kaur, 2007). 2 | METHOD AND DATA DESCRIPTION
Climate change has shifted and shortened crop the ration in
major crops the ice and sugarcane, and it has significantly affected
2.1 | Method of estimation
cane productivity in Uttar Pradesh and Uttarakhand (Boopen &
Vinesh, 2011). The impact of rainfall is not significant for sugarcane There are three main methods to estimate the impacts of climate
crop in Andhra Pradesh (Ramulu, 1996). In India, projected surface change on agriculture. These are (a) production function approach,
PRAVEEN AND SHARMA 3 of 6

which is also known as a crop modeling approach (biophysical), The general form of multiple linear regression equation is as
(b) Hedonic approach or Ricardian, and (c) panel data approach. follows:
Many studies have employed either the crop modeling approach
(Adams, Hurd, Lenhart, & Leary, 1998; Kane, Reilly, & Tobey, 1992;
b is the
Y
Kaiser, Riha, Wilks, Rossiter, & Sampath, 1993; Reilly, Hohmann, &
Kane, 1994; Rosenzweig & Iglesias, 1994; Aggarwal & Sinha, 1993; predicted or expected value of the dependent variable, X1
Rao & Sinha, 1994; Lal, 1998; Mathauda, Mavi, Bhangoo, & Dhaliwal, through XP are p distinct independent, b0 is the value of Y when all
2000; Aggarwal, 2009) or the Ricardian approach (Sanghi, of the independent variables are equal to zero, and b1 through bp
Mendelsohn, & Dinar, 1998; Mendelsohn, Nordhaus, & Shaw, 1994; are the estimated regression coefficients.
Kumar & Parikh, 2001a, b; Sanghi & Mendelsohn, 2008; Deschenes
and Greenstone (2007).

3.1 | Assumptions of multiple regression analysis

2.2 | Data description
1. Normality
To evaluate the impact of climate change on agriculture crops in India, Check descriptive statistics and as a generally skewness and
16 major food grain and nonfood grain crops were taken. We have kurtosis should be between −1 and +1 and also check the
selected food‐grains and non food‐grain crops such as rice, wheat histograms with a normal curve. Under normality assumption of
jowar, bajra, maize, ragi, arhar, barley, mustard and gram and non‐food multiple regression analysis, distributions of the residuals should
grain crops such as tea, sugarcane, cotton, groundnut, rapesees, be normal.
linseed and till. All these crops cover more than 75% of the total 2. Homoscedasticity
agricultural cropped area. To evaluate the impact of climate change
on crop wise production per unit, land was taken as dependent This assumption means a variance of error terms should be
variable utilizing panel for the time period, 1967 to 2016. We did similar across the values of the independent variables and which can
regression using all these crops data to find out impacts of climatic be detected by A plot of standardized residuals versus predicted
factors on crop production. values, which shows whether points are equally distributed across all
values of the independent variables. There will be no perfect pattern
in distribution if data is showing cone shaped hetroscedastic. So if
2.3 | Econometric model for crop wise productivity
data are heteroscedastic, then nonlinear data transformation can be
used to solve the heteroscedastic problem.
To evaluate the impact of climate change on agriculture crops
productivity in India, 16 major food grain and nonfood grain crops
3. Linearity
were taken. Food grain crops such as rice, wheat, jowar, bajra, maize,
ragi, potatoes, arhar, barely, and gram and nonfood grain crops such
There must be a linear relationship between the dependent vari-
as sugarcane, cotton, soybeans, groundnut, till and linseed were
able and the independent variables. It is important to check each
included. All these crops cover more than 75% of the total agricultural
scatterplot exhibiting a linear relationship between variables.
cropped area. To evaluate the impact of climate change on crop wise
Scatterplots can show whether there is a linear or curvilinear relation-
production per unit, land was taken as dependent variable utilizing
ship. It also assumes that the residuals are normally distributed.
for the time period (1967 to 2016).

4. Multicollinearity

3 | METHODOLOGY
This assumption states that independent variables are not highly

Multiple regression analysis is one of the most common forms of correlated with each other, and this assumption is tested using the

linear regression analysis. As a predictive analysis, it has been used variance inflation factor and correlation matrix. So if variance inflation

to predict the value of a dependent variable using more than one factor values are higher than 10, which indicates that multicollinearity

independent variable. So, multiple linear regression can be thought is a problem while computing a correlation matrix, magnitude of all

of as an extension of simple linear regression. We used simple independent variables should be less than .80.

linear regression where chooses one dependent and independent

variable. Each and every value of the independent variable is
related with a value of the dependent variable. There are some of 3.2 | The benefit of multiple regression analysis
the assumption that multiple regression analysis needs to follow
like assumptions of normality, homoscedasticity, linearity, and the • Multiple regression analysis allows managers to predict the
reliability of measurement. dependent variable with the help of an independent variable.
4 of 6 PRAVEEN AND SHARMA

TABLE 1 Result of model

Rainfall (mm) Temperature

Crop Coef p value Significance R2 Coef p value Significance

Tea 0.134 .047 Yes .745 174.745 .000 Yes

Cotton 0.111 .076 No .379 48.392 .124 No
Rapeseed and mustard −0.010 .809 No .699 −125.736 .000 Yes
Linseed 0.486 .543 No .045 126.788 .752 No
Maize 1.225 .177 No .409 995.276 .032 Yes
Arhar 2.208 .191 No .122 203.670 .809 No
Sesamum (Til) 1.267 .355 No .176 −1,748.728 .014 Yes
Jowar 7.999 .305 No .671 19,406.028 .000 Yes
Groundnut 0.486 .543 No .045 126.788 .752 No
Sugarcane 32.670 .247 No .631 61,458.948 .000 Yes
Bajra −0.925 .253 No .579 −1,542.522 .000 Yes
GRAM yield 2.156 .000 Yes .535 77.000 .769 No
Barley 0.371 .131 No .387 −530.054 .000 Yes
Ragi 6.851 .000 Yes .840 2,959.812 .000 Yes
Wheat 7.999 .300 No .67 19,406.028 .000 No

• Multiple regression analysis also allows more sophisticated Multiple regression models find to what extent climatic changes have
research hypotheses as compared with other regression analysis. affected different crops production.
• Managers can find meaningful insights with the help of a few statistics, Table 1 shows the results of multiple regressions between rainfall,

such as the R square, adjusted R square, and t value statistics. temperature, and agricultural production from the year 1967–2016. It
has been observed that crop like cotton, linseed, groundnut, arhar, and
wheat do not have significant impact of rainfall and temperature on
production as p value is less than alpha (.05) even R‐squared value is

3.3 | Model development also quite low. Therefore, there are some other factors rather than
rainfall and temperature, which affects in production of cotton,
Initially, two independent variables and one dependent variable have linseed, groundnut, arhar, and wheat. It is assumed that the climate
been selected to the developed prediction model. We have drawn variation measure in terms of deviation in rainfall and temperature
the box plot of each variable to identify outlier in the dataset. After has an impact on different crops production over the period of time.
checking boxplot, we found correlation matrix to check strength and Table 1 also revealed that crops like tea and ragi have significantly
direction of the relationship between two variables. Then, we have positive relationship with production as sign of coefficient is positive,
drawn scatter plot with each dependent variable with independent and p value is also less than alpha (.05).
variables to check normality assumption whether both the variables
are normally distributed or not. After scatter plot, we find simple linear
regression to check significance, and finally, we run multiple regression 5 | CO NC LUSIO N
with both independent variables with one dependent variable.
ðProductionÞ ¼ α0 þ α1 ðRainfall ðmmÞÞ þ α2 ðMean TempratureÞ þ ϵ1; This study concludes that climate variables have differential
impacts on the yield growth of different crops. In this paper, we have
where, αn = parameters (where n = 0, 1, 2) and ϵ1 = error term. examined the climate sensitivity of Indian agriculture using India level
panel data for the period 1967–2016 with the help of multiple
regression. Production of crops was regressed based on temperature
4 | RESULT and rainfall. Marginal effects show that rise in temperature in tea,
maize, jowar, sugarcane, ragi, and wheat have a harmful effect on
The earlier sections have shown that the temperature and rainfall agricultural productivity. Higher rainfall, unless it is in excess, has a
have changed during past few decades. The deviation in maximum beneficial effect, but the effect is too small to offset the negative
and minimum temperature has increased, and the number of rainy effect of temperature. This study will help government, farmers, and
days has also decreased. Agriculture is the only sector, which is small medium agriculture enterprise to take further decision related
extremely influenced by the fluctuating climatic circumstances. to production of crops. Further research can be done using different
PRAVEEN AND SHARMA 5 of 6

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Singh, A. (2012). Impact of sustainable agriculture on food production and Dr. Pritee Sharma is an Associate Professor at the discipline of
challenges for food security in India. Indian Streams Research Journal, Economics, Indian Institute of Technology Indore. She has
1(5), 1–4.
obtained her PhD degree from Indian Institute of Technology
Srivastava, A., Kumar, S. N., & Aggarwal, P. K. (2010). Assessment on
Bombay. Her research experience is largely related to the
vulnerability of sorghum to climate change in India. Agriculture,
Ecosystems & Environment, 138(3‐4); 160–169. analytical problem of allocation and access of natural resources
particularly land and water. She also works in the area of climate
change and agriculture sciences and rural poverty in India.
AU THOR BIOG RAPH IES
Bushra Praveen is currently doing PhD in Humanities And Social
Sciences Department Indian Institute of Technology Indore. Her How to cite this article: Praveen B, Sharma P. Climate Change
interest area in research is climate change and agriculture studies, and its impacts on Indian agriculture: An Econometric analysis.
land use land cover changes, remote sensing, and GIS in climatic J Public Affairs. 2019;e1972. https://doi.org/10.1002/pa.1972
and agriculture studies.