Connecting Groundwater, Crop Price, and Crop Production Variability in India

Abstract:

Farmers in India rely on groundwater resources for irrigation and production of staple crops that provide over half of the calories consumed domestically each year. While this has been a productive strategy in increasing agricultural production and maintaining high yields, groundwater resources are depleting at a quicker rate than natural resources can replace. This issue gains relevance as climate variability concurrently adds to yearly fluctuations in farmer demand for irrigation each year, which can create high risk for farmers that depend on consistent yields, but do not have access to dwindling water resources. This study investigates variability in groundwater levels from 2005 to 2013 in relation to crop prices and production by analyzing district-level datasets made available through India’s government. Through this analysis, we show the impact of groundwater variability on price variability, crop yield, and production during these years. By examining this nine-year timescale, we extend our analysis to forthcoming years to demonstrate the increasing importance of groundwater resources in irrigation, and suggest strategies to reduce the impact of groundwater shortages on crop production and prices.