An analysis of long-term and short-term impact of climate change on rice production in India

Purpose - Climate change-related weather events significantly affect rice production. In this paper, we investigate the impact of and interrelationships between agriculture inputs, climate change factors and financial variables on rice production in India from 1970–2021. Design/methodology/approach - This study is based on the time series analysis; the unit root test has been employed to unveil the integration order. Further, the study used various econometric techniques, including vector autoregression estimates (VAR), cointegration test, autoregressive distributed lag (ARDL) model and diagnostic test for ARDL, fully modified least squares (FMOLS), canonical cointegrating regression (CCR), impulse response functions (IRF) and the variance decomposition method (VDM) to validate the long- and short-term impacts of climate change on rice production in India of the scrutinized variables. Findings - The study's findings revealed that the rice area, precipitation and maximum temperature have a significant and positive impact on rice production in the short run. In the long run, rice area (ß = 1.162), pesticide consumption (ß = 0.089) and domestic credit to private sector (ß = 0.068) have a positive and significant impact on rice production. The results show that minimum temperature and direct institutional credit for agriculture have a significant but negative impact on rice production in the short run. Minimum temperature, pesticide consumption, domestic credit to the private sector and direct institutional credit for agriculture have a negative and significant impact on rice production in the long run. Originality/value - The present study makes valuable and original contributions to the literature by examining the short- and long-term impacts of climate change on rice production in India over 1970–2021. To the best of the authors’ knowledge, The majority of the studies examined the impact of climate change on rice production with the consideration of only “mean temperature” as one of the climatic variables, while in the present study, the authors have considered both minimum as well as maximum temperature. Furthermore, the authors also considered the financial variables in the model.