Information on an accurate monsoon onset date (four to six weeks ahead of time) can help farmers in India prevent losses and cut debt, according to a new research paper by Energy Policy Institute at the University of Chicago.

Researchers studied 250 villages in Telangana where more than half the working population is engaged in farming. They found that the forecast went beyond changing beliefs and had large impacts on the farmers’ investment behaviour.

The study found that overly optimistic farmers, for whom the official forecast information was not very positive—of a shorter-than-expected growing season—took steps to cut down on investments by reducing the amount of land they cultivated by 22% and were 32% less likely to add a new crop. They also reduced their expenditure by 10%, largely by cutting the amount of fertilizer they bought by 30%.

On the other hand, overly pessimistic farmers, for whom the forecast was good news and indicated the growing season would be longer than expected, increased investments. They increased the land they cultivated by 15%, were 14% more likely to add a new crop and 16% more likely to plant cash crops.

Agricultural investments informed by accurate monsoon forecasts lead to changes in agricultural outcomes and well-being, the study found. Overly optimistic farmers who reduced their farming investments saw their agricultural output and sales decline by 27% and 20%, respectively. Their agricultural profits also declined. But, these farmers also found other ways to make money and cut their debt in half, leading to an increase in net savings of more than $560 per farmer—more than 10% of total income, the paper found.

The forecast caused overly pessimistic farmers to do more farming. This led to 22% increase in agricultural production but did not qualitatively impact profits on average. The forecasts also appear to have benefited the poor the most.

Farmers who received only insurance increased the land they cultivated and the amount they spent on upfront investments like seeds and fertilizer by 12% compared to those who did not receive any forecast information. This was driven by overly-optimistic farmers, who believed it would be a better-than average year.

Given the safety net the insurance provided, they responded with a large increase in investments—even though the forecast, if provided, would have caused them to instead reduce investments.

“Farmers tailor their planting decisions based on what they think the weather—and in many parts of the world, the monsoon—will be like, but climate change is making the monsoon and other weather patterns increasingly difficult to predict. Our study, from an Indian state where agricultural productivity per worker is generally low, found that new forecasts are able to deliver accurate monsoon predictions even in a changing climate. Farmers listen to these forecasts and are able to change their planting decisions accordingly, making them an important climate adaptation tool for the agricultural sector,” said Fiona Burlig, assistant professor at the Harris School of Public Policy and deputy faculty director of the Energy Policy Institute at the University of Chicago’s India office.

The paper also found that farmers valued forecast information. They were willing to pay as much for the forecast as for an insurance product that pays out approximately 20% of average crop revenue under a late monsoon.

The findings are significant also because the Centre has decided to discontinue the services of all 199 district agro-met units that provide crucial and detailed weather-related advisories to millions of farmers at the block level, last month.

Climate change is making weather more variable, with rainfall patterns becoming less predictable and extreme temperatures occurring more frequently. Agriculture is particularly sensitive to these changing conditions, jeopardizing the livelihoods of 67% population who depend on agriculture for survival, the paper said adding that “effectively coping with this variability will be essential as the world continues to warm: Highly variable weather makes it challenging for farmers to tailor their planting decisions to the coming season, leading them to underinvest in things that could increase their profits like high-yielding crops, fertilizer, labor, and more.”

Source - https://www.hindustantimes.com