The Development-Conservation Trade-off Facing Indian Agriculture: Carbon Costs of Punjab Agriculture

Abstract

Developing nations pursuing the dual goals of development and conservation face high social and political costs in adopting pro-conservation policies. Such costs often hinder in embodying environmental valuation of natural resources into the market prices. This study has dealt with this macro issue by understanding the case-specific implications of intensive agricultural practices on the environment in the state of Punjab. The study is based on the primary data from 80 farmers of Punjab following the paddy-wheat rotation. The input use data of the crops have been used to compute the monetary cost of cultivation and the corresponding environmental cost has been expressed as carbon equivalents (CE). The analysis of variance has been carried out to address the issue of differing efficiencies of production across different landholding categories. The study has revealed that paddy crop is more expensive than wheat crop in both monetary and environmental terms and small farmers demonstrate larger inefficiencies in production as compared to medium and large farmers. Electricity has been found to be the major component for environmental cost for paddy while diesel and fertilizer occupied significant shares for both crops. Moreover, electricity for agricultural purposes being completely subsidized in Punjab, has not been reflected in the monetary cost, thus destroying an important incentive for rational use of resources.