Impacts of Climate Change on Agricultural Yield: Evidence from Odisha, India

Abstract

This paper explores the impact of climate variables such as temperature and rainfall on yields of seven selected crops such as rice, maize, groundnuts, rapeseed & mustard, chickpea, Pigeonpea and sesame during the period 1970-2014. We used panel data for 45 years to assess the impact of climate change on agriculture yield. In the presence of auto-correlation and Heteroscedasticity we estimate the panel corrected standard error with a fixed effect panel regression. The regression results reinforce that crop yields of the selected crops are susceptible to climate change. The relative magnitude of rainfall and temperature changes appears to play a pivotal role in determining the direction of change in the yield. It is also observed that the rainfall has significant positive effects on the yields of all the selected crops under study. In case of temperature, we observed mix results for the selected crops under study. However, the extent of increase in the temperature appears to be more harmful for the crop yields. Further, the non-climatic factors like irrigation and fertilizers were found to be very instrumental in increasing the yields of the selected crops. In the light of negative effects of climate change, appropriate mitigation and adaptation strategies are required to delve with the deteriorative effects of climate change.

Keywords: Climate Change, Crop Yield, Agriculture

JEL Classification: Q18, Q51, Q54