Climate change and economic changes in India: The impacts on agriculture

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1 Climate change and economic changes in India: The impacts on agriculture Partners: CICERO, IISD, TERI, RUTGERS Supported by Canadian International Development Agency and Government of Norway

2 Agricultural Commodities The estimated 2.5 billion people in the developing world depend upon agricultural production for their livelihoods The export of agricultural commodities such as cotton, coffee and cocoa: Often provides rural households with the only source of cash income needed for school fees, health care and re-investment in seeds, fertilizers and equipment. Provides critical income to national governments through tariffs and taxes More than 50 developing countries derive between 20 and 90 per cent of their foreign exchange earnings from the export of no more than three agricultural commodities (FAO 2004).

3 Trade and Climate Exposures Significant changes in international commodity markets since the 1980s have led to increased price volatility and a steady decline in real prices. The number of price shocks experienced across a range of commodities since the 1970s has been equivalent to the number experienced in the preceding 75 years (Bourguignon et al. 2004) The impacts of climate change are increasingly being felt. Will increasingly affect the productivity of agricultural commodities Benefits: e.g.) Tanzania coffee and cotton production may increase Losses: e.g.) Uganda the area suitable for growing Robusta coffee is expected to be reduced to less than one-tenth of its current distribution if average temperatures increase by 2 o C

4 Main objectives of Double Exposure Project in India Identify highly vulnerable areas and social groups Identify key economic factors influencing vulnerability Assess how domestic policies enhance or constrain farmers ability to adapt to climate change in the context of economic change Suggest measures to reduce vulnerability of farmers

5 The Double Exposure Premise: climate change and globalization have uneven impacts. Indian agriculture will be confronted by both processes, leading to changing patterns of vulnerability. Trade Globalization Vulnerability Climate Change Vulnerability Double Exposed regions require policy and intervention strategies for adaptation and mitigating vulnerabilities Ie. critical downside risk and policy research question - is agricultural trade liberalization intensifying climate change vulnerability by marginalizing production conditions?

6 Identifying Double Exposure Vulnerability Characterization Indicators: Soil Degradation Severity Soil Depth Flood threatened Groundwater extraction Biophysical Indicators: % illiterate % low caste (SC and ST) % agricultural labourers gender inequity Infrastructure development Social 2/3 of total rural population are net food consumers; peasant labourers, artisans, those whose livelihoods depend on forestry and livestock Base Vulnerability

7 Premise: base vulnerability (biophysical and social) is exacerbated by trade globalization and climate change Base Vulnerability Trade sensitivity index (port distance, export-import Crop dependance Climate sensitivity index: Precip. variability and dryness Globalization Vulnerability Climate Change Vulnerability Doubly Exposed Regions require policy and intervention strategies for adaptation and mitigating vulnerabilities

8 Climate change vulnerability map Data not available High vulnerability Low vulnerability

9 Globalization vulnerability map Data not available Low vulnerability High vulnerability

10 Village-level case studies Jhalawar district, Rajasthan Data not available High vulnerability Low vulnerability Four case studies will be analysed using PRA to: Confirm the double exposure hypothesis assess key factors which enhance or constrain farmers ability to adapt Pilot study completed in Jhalawar district, Rajasthan semi-arid 84% rural population 30-40% below poverty line 50-70% land under cultivation 21% area irrigated

11 Case study approach Questionnaire-based survey Economic status Agricultural practices Coping mechanisms Access to facilities (electricity, irrigation, health, education, loans, etc) Participatory rural appraisals Focused group discussions with small and marginal farmers One-to-one meetings with village heads and district administrative officers

12 PRA findings The selected district was identified as highly vulnerable (doubly exposed) However, the north and south parts of the district have very different vulnerability profiles: North: irrigated, diesel, better roads, high forest cover South: little irrigation, low electrification rates, poor road, low forest cover

13 Irrigation inputs: North: good irrigation coverage - limited energy for pumping - mostly diesel South: one check dam constructed (with local NGO support) - very limited energy for lifting irrigation water to fields (non-electrified, diesel difficult to transport

14 The Results: Contrasting cropping patterns Mixed cropping in north possible due to irrigation - relatively high forest cover Rainfed cultivation in south - low forest cover

15 Access to markets Poor road connectivity and transport facilities farmers in north sell produce directly in main district market farmers in south sell produce to middlemen (8 km away) - cannot avail of higher prices in main market (~30 km away)

16 Hypothesised Landscape Response: North (relatively less vulnerable) Irrigation and Energy Inputs interface stabilized Adequate community forest protection and management Cropland Grazing Land Forest Land Surplus marketed Crop Residue - Feed

17 Hypothesised Landscape Response: South (more vulnerable) Low or zero Irrigation and Energy Inputs Marginal Croplands: Low productivity - High susceptibility to Floods/drought/erosion Overgrazed Grazing Land and Degraded Forest Land Little surplus Croplands Little Residue Wastelands Creation: Key physical manifestation of vulnerability Interface unstable: pressure on forests high, inadequate protection

18 Government of India policy (official) Programs for: CBNRM, esp. watershed/wastelands development Rural infrastructure Subsidized rural power Credit to small farmers Fertilizer

19 Government of India policies (actual) Canal irrigation highly subsidized leading to over-extraction Rural energy supply inadequate Limited success of credit schemes, loans, insurance schemes due to lack of collateral (Higher interest rate loans taken from middlemen against sale of produce)

20 Next Steps Participatory Rural Appraisal of 3 more doubly exposed vulnerability hotspots Policy Analysis: How can we leverage existing programs and policies to maximize mitigation and adaptation benefits to those most vulnerable - particularly those relating to CBNRM What are the policy bottlenecks to vulnerability mitigation? Future Work: Refine the double exposure methodology for NAPA-level policy priority setting Research on vulnerability mitigation through an integrated Adaptation/Mitigation approach based on CBNRM (ie forest sequestration/rural energy/watershed mgmt)

21 Building Adaptive Capacity: Opportunities in the Agricultural Sector Product upgrading producing new or improved forms of existing commodities, developing more valuable product varieties or capturing higher margins for existing commodities Process upgrading transforming inputs to outputs more efficiently by reorganising the production system or introducing superior technology Functional upgrading repositioning a firm at a higher level on the value chain

22 Building Adaptive Capacity: (Continued) Institutional Upgrading strengthening institutions that provide extension, credit and marketing services or otherwise create an enabling environment for product, process and functional upgrading Livelihoods Upgrading diversification of agricultural production and livelihood activities to enhance income, increase food security and spread risks. Sustainable Trading Practices such as contracts and financing agreements like those related to minimum price and long-term contracts that are intended to enhance the economic stability of producers Social and Environmental Interventions these include strengthening of self-help groups, producer associations, rural banking systems, access to extension services, and land access and land tenure