Tracing the effects of structural break and climatic factors on the production of major commercial crops in India
摘要
Agriculture is the backbone of development in the intricate tapestry of the Indian economy. The vulnerability of Indian agriculture to various threats, most notably changes in climate conditions, is a recurring theme in the literature. Realizing the growing susceptibility of the sector to structural volatility, this study investigates the impact of structural break(s) and climatic factors along with the key control variables such as area under cultivation, net irrigated area, and the use of fertilizer and pesticides on the production of major commercial crops (MCC) in India for a period of 41 years (1981–2021) at an aggregate level. The study uses the Auto Regressive Distributed Lag (ARDL) model, bound testing, and the Error Correction Model (ECM) to analyze short- and long-run impacts on MCC. Results reveal that the structural break year 2011 (D2011) and the net irrigated area have positive and significant effects on the production of MCC in the short and long run. Further, the climatic factors, such as rainfall and temperature, and the non-climatic factors, i.e., use of fertilizer and pesticides, have positive and significant effects on the production of MCC only in the long run. Econometric techniques such as Fully Modified Least Squares (FMOLS) and Canonical Cointegrating Regression (CCR) are applied to corroborate the long-term findings. The study suggests prioritizing commercial crop production by scaling-up irrigation facilities, facilitating crop insurance, and sustainable use of agricultural inputs through effective policy implementation.