IDEAS home Printed from https://ideas.repec.org/a/spr/masfgc/v29y2024i5d10.1007_s11027-024-10127-3.html
   My bibliography  Save this article

Financing Climate-Smart Agriculture: a case study from the Indo-Gangetic Plains

Author

Listed:
  • Roberto Villalba

    (Technical University of Munich)

  • Garima Joshi

    (Technical University of Munich
    University of Hohenheim)

  • Thomas Daum

    (University of Hohenheim
    University of Gothenburg)

  • Terese E. Venus

    (University of Passau)

Abstract

The Indo-Gangetic Plains represents one of South Asia’s most productive agricultural regions, yet it is highly vulnerable to climate change and requires the widespread adoption of Climate-Smart Agriculture. Although farmers understand the benefits of such technologies, financial constraints often undermine adoption. Using a case study from Haryana, we assess the opportunities and challenges aligned with the different pathways available for farmers to adopt and finance two capital-intensive technologies: laser land levelers and happy seeders. Our analysis uses unique data from Karnal, where stakeholders have partnered in Climate-Smart-Villages, and combines a household survey from 120 farmers, interviews, and focus group discussions with banks and cooperatives. Our results indicate adoption rates of 77% for laser land levelers and 52% for happy seeders, with only 7% and 21% of farmers owning the technologies, respectively. Hiring is highly preferred over purchase, mainly due to the flourishing of Custom-Hiring Centers, which are vital in driving large-scale implementation. We find that farmers prefer funding from family, savings, and moneylenders (indirect pathways) rather than from commercial banks (direct pathways) to get immediate access to credit and avoid bureaucratic procedures. Our study offers broader insights into the state of agricultural finance in India and adaptation to climate change and reveals that institutional innovations can enhance the financing of CSA technologies for smallholder farmers. Our findings have important implications for decision-makers seeking to streamline credit access for CSA machinery rental. Future research should focus on the efficacy of different finance channels and their causal impact on pathways for technology adoption.

Suggested Citation

  • Roberto Villalba & Garima Joshi & Thomas Daum & Terese E. Venus, 2024. "Financing Climate-Smart Agriculture: a case study from the Indo-Gangetic Plains," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 29(5), pages 1-25, June.
    • Handle: RePEc:spr:masfgc:v:29:y:2024:i:5:d:10.1007_s11027-024-10127-3
    DOI: 10.1007/s11027-024-10127-3
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11027-024-10127-3
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s11027-024-10127-3?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Aryal, Jeetendra Prakash & Rahut, Dil Bahadur & Maharjan, Sofina & Erenstein, Olaf, 2019. "Understanding factors associated with agricultural mechanization: A Bangladesh case," World Development Perspectives, Elsevier, vol. 13(C), pages 1-9.
    2. Jeetendra Prakash Aryal & Dil Bahadur Rahut & Sofina Maharjan & Olaf Erenstein, 2018. "Factors affecting the adoption of multiple climate‐smart agricultural practices in the Indo‐Gangetic Plains of India," Natural Resources Forum, Blackwell Publishing, vol. 42(3), pages 141-158, August.
    3. David B. Lobell & Nelson B. Villoria, 2023. "Reduced benefits of climate-smart agricultural policies from land-use spillovers," Nature Sustainability, Nature, vol. 6(8), pages 941-948, August.
    4. Villalba, Roberto & Venus, Terese E. & Sauer, Johannes, 2023. "The ecosystem approach to agricultural value chain finance: A framework for rural credit," World Development, Elsevier, vol. 164(C).
    5. Khatri-Chhetri, Arun & Aggarwal, P.K. & Joshi, P.K. & Vyas, S., 2017. "Farmers' prioritization of climate-smart agriculture (CSA) technologies," Agricultural Systems, Elsevier, vol. 151(C), pages 184-191.
    6. Md Nazirul Islam Sarker & Min Wu & G.M. Monirul Alam & Md Saiful Islam, 2019. "Role of climate smart agriculture in promoting sustainable agriculture: a systematic literature review," International Journal of Agricultural Resources, Governance and Ecology, Inderscience Enterprises Ltd, vol. 15(4), pages 323-337.
    7. Birthal, P.S. & Khan, T.M. & Negi, D.S. & Agarwal, S., 2014. "Impact of Climate Change on Yields of Major Food Crops in India: Implications for Food Security," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 27(2).
    8. Singh, Sukhpal, 2017. "How Inclusive and Effective are Farm Machinery Rental Services in India? Case Studies from Punjab," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 72(3), September.
    9. Nancy McCarthy & Leslie Lipper & David Zilberman, 2018. "Economics of Climate Smart Agriculture: An Overview," Natural Resource Management and Policy, in: Leslie Lipper & Nancy McCarthy & David Zilberman & Solomon Asfaw & Giacomo Branca (ed.), Climate Smart Agriculture, pages 31-47, Springer.
    10. Islam, Mohammad Mohidul, 2020. "Agricultural Credit and Agricultural Productivity in Bangladesh: An Econometric Approach," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 8(3), July.
    11. Pratap S. Birthal & Ramesh Chand & P. K. Joshi & Raka Saxena & Pallavi Rajkhowa & Md. Tajuddin Khan & Mohd. Arshad Khan & Khyali R. Chaudhary, 2017. "Formal Versus Informal: Efficiency, Inclusiveness and Financing of Dairy Value Chains in Indian Punjab," India Studies in Business and Economics, in: Gyanendra Mani & P.K. Joshi & M.V. Ashok (ed.), Financing Agriculture Value Chains in India, pages 57-87, Springer.
    12. Madhusudan Ghosh, 2019. "Climate-smart Agriculture, Productivity and Food Security in India," Journal of Development Policy and Practice, , vol. 4(2), pages 166-187, July.
    13. Bitsch, Vera, 2005. "Qualitative Research: A Grounded Theory Example and Evaluation Criteria," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 23(1), pages 1-17.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Madhusudan Ghosh, 2019. "Climate-smart Agriculture, Productivity and Food Security in India," Journal of Development Policy and Practice, , vol. 4(2), pages 166-187, July.
    2. Das, Usha & Ansari, M.A. & Ghosh, Souvik, 2022. "Effectiveness and upscaling potential of climate smart agriculture interventions: Farmers' participatory prioritization and livelihood indicators as its determinants," Agricultural Systems, Elsevier, vol. 203(C).
    3. Rodríguez-Barillas, María & Klerkx, Laurens & Poortvliet, P. Marijn, 2024. "What determines the acceptance of Climate Smart Technologies? The influence of farmers' behavioral drivers in connection with the policy environment," Agricultural Systems, Elsevier, vol. 213(C).
    4. Hussain, Md. Aktar & Guha, Pradyut, 2023. "Climate Resilient Farming and Food Security of Farmers: A Study of Different Flood Hazard Zones of Assam," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 0(Number 3), September.
    5. Thornton, Philip K. & Whitbread, Anthony & Baedeker, Tobias & Cairns, Jill & Claessens, Lieven & Baethgen, Walter & Bunn, Christian & Friedmann, Michael & Giller, Ken E. & Herrero, Mario & Howden, Mar, 2018. "A framework for priority-setting in climate smart agriculture research," Agricultural Systems, Elsevier, vol. 167(C), pages 161-175.
    6. Anjani Kumar & Ashok K. Mishra & Sunil Saroj & Vinay K. Sonkar & Ganesh Thapa & Pramod K. Joshi, 2020. "Food safety measures and food security of smallholder dairy farmers: Empirical evidence from Bihar, India," Agribusiness, John Wiley & Sons, Ltd., vol. 36(3), pages 363-384, June.
    7. Jeetendra Prakash Aryal & Cathy R. Farnworth & Ritika Khurana & Srabashi Ray & Tek B. Sapkota & Dil Bahadur Rahut, 2020. "Does women’s participation in agricultural technology adoption decisions affect the adoption of climate‐smart agriculture? Insights from Indo‐Gangetic Plains of India," Review of Development Economics, Wiley Blackwell, vol. 24(3), pages 973-990, August.
    8. Thu-Huong Nguyen & Oz Sahin & Michael Howes, 2021. "Climate Change Adaptation Influences and Barriers Impacting the Asian Agricultural Industry," Sustainability, MDPI, vol. 13(13), pages 1-17, June.
    9. Arun Khatri-Chhetri & Punya Prasad Regmi & Nitya Chanana & Pramod K. Aggarwal, 2020. "Potential of climate-smart agriculture in reducing women farmers’ drudgery in high climatic risk areas," Climatic Change, Springer, vol. 158(1), pages 29-42, January.
    10. Berhanu, Yonas & Angassa, Ayana & Aune, Jens B., 2021. "A system analysis to assess the effect of low-cost agricultural technologies on productivity, income and GHG emissions in mixed farming systems in southern Ethiopia," Agricultural Systems, Elsevier, vol. 187(C).
    11. Naveen P. Singh & Bhawna Anand & S. K. Srivastava & N. R. Kumar & Shirish Sharma & S. K. Bal & K. V. Rao & M. Prabhakar, 2022. "Risk, perception and adaptation to climate change: evidence from arid region, India," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 112(2), pages 1015-1037, June.
    12. Md. Toaha & Laboni Mondal, 2023. "Agriculture Credit and Economic Growth in Bangladesh: A Time Series Analysis," Papers 2309.04118, arXiv.org.
    13. Barooah, Prapti & Alvi, Muzna & Ringler, Claudia & Pathak, Vishal, 2023. "Gender, agriculture policies, and climate-smart agriculture in India," Agricultural Systems, Elsevier, vol. 212(C).
    14. Aryal, Jeetendra Prakash & Rahut, Dil Bahadur & Thapa, Ganesh & Simtowe, Franklin, 2021. "Mechanisation of small-scale farms in South Asia: Empirical evidence derived from farm households survey," Technology in Society, Elsevier, vol. 65(C).
    15. Daniel Kangogo & Domenico Dentoni & Jos Bijman, 2020. "Determinants of Farm Resilience to Climate Change: The Role of Farmer Entrepreneurship and Value Chain Collaborations," Sustainability, MDPI, vol. 12(3), pages 1-15, January.
    16. Nuthalapati, Chandra S.R. & Srinivas, K. & Pandey, Neha & Sharma, Rajeev, 2020. "Startups with Open Innovation: Accelerating Technological Change and Food Value Chain Flows in India," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 0(Number 4), December.
    17. Collins-Sowah, Peron A., 2018. "Theoretical conception of climate-smart agriculture," Working Papers of Agricultural Policy WP2018-02, University of Kiel, Department of Agricultural Economics, Chair of Agricultural Policy.
    18. Abbas Ali Chandio & Fayyaz Ahmad & Ghulam Raza Sargani & Asad Amin & Martinson Ankrah Twumasi, 2022. "Analyzing the effective role of formal credit and technological development for rice cultivation," Asia-Pacific Journal of Regional Science, Springer, vol. 6(2), pages 683-711, June.
    19. Martey, Edward & Etwire, Prince M. & Adombilla, Ramson & Abebrese, Samuel O., 2023. "Information constraint and farmers’ willingness to pay for an irrigation scheduling tool," Agricultural Water Management, Elsevier, vol. 276(C).
    20. Eva O. Arceo-Gómez & Danae Hernández-Cortés & Alejandro López-Feldman, 2020. "Droughts and rural households’ wellbeing: evidence from Mexico," Climatic Change, Springer, vol. 162(3), pages 1197-1212, October.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:masfgc:v:29:y:2024:i:5:d:10.1007_s11027-024-10127-3. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.