In India, agriculture accounts for about sixty percent of employment. How would climate change, that is expected to hit agriculture in poorer countries very hard, affect India’s agriculture? We study the impact of climate change on the mean and variance of yields of three
food grains – rice (India’s major crop), sorghum and pearl millet – at the district level using a large panel dataset for 1966-2011. An agricultural production function is estimated with exogenous climate variables – precipitation and temperature – controlling for other non climate inputs. We hypothesise that climate variability increases production risk. To capture the impact of climate extremes, climate variables are modelled as anomalies. The results show that climate change adversely affects mean and variance of crop yields. Crop yields are found to be sensitive to rainfall extremes, with rice being most sensitive of the three crops, and extremely high temperatures increase pearl millet yield variability. (Joint with Shreekant Gupta and Saumya Verma)