Sustaining agricultural production in South Asia in the face of climate change: A panel data study

Abstract

Global warming is a primary cause of climate change which affects agricultural production and food availability. Densely populated South Asia with high proportions of poor especially in rural areas is extremely vulnerable to climate change. In this context, the study discusses the climate change trends (as captured by precipitation and temperature over the period 1901 to 2014) and its impact on the region's agricultural production over the period 1989 to 2014. An important methodological contribution of the paper has been estimating the deviations in rainfall and temperature from their respective pre-structural break averages, using Bai-Perron tests. Thereafter, the non-linear impact of deviations of climate variables is examined using panel data regression for five South Asian countries, viz. Bangladesh, India, Nepal, Pakistan and Sri Lanka. The empirical investigation using three year moving averages indicates that climate variables, especially deviations in average maximum temperatures, adversely impact agricultural production. The estimates also indicate that larger the deviation of maximum temperature from the trend, the higher is the adverse impact, indicating non-linearity in the relationship between temperature deviation and agricultural production. Our results also indicate that the effect of precipitation deviation, where significant, is adverse. Interestingly, our findings indicate that a rise in deviation of average minimum temperature impacts both agriculture and cereal production favourably. This is reflective of climate change having a non-homogenous impact. The paper concludes by recommending policies such as adoption of appropriate climate mitigation and adaptation in agriculture, along with enhanced regional cooperation to counter the common climate change threats that the region faces.