Climate adaptation

India must invest in agricultural research

Among the nine priorities highlighted in the Union Budget last week was the need to transform agriculture research with a focus on raising productivity and developing climate-resilient crop varieties. To support the initiative, compared to last year’s Revised Estimates, the Budget allocated an 8 per cent increase in funding for agriculture and allied activities to Rs 1.52 trillion. Within this, the Ministry of Agriculture and Farmer Welfare received an increased allocation of 4.5 per cent, compared to last year’s Revised Estimates. However, despite these increases, which are lower than expected nominal economic growth, funding for autonomous research bodies under the ministry was cut by 2 per cent. This reflects a contradiction between the stated priority and the actions taken to achieve the objective of enhancing agricultural research.

The agriculture sector is the most vulnerable to the effects of climate change and can raise food-security issues. In 2023-24, for instance, while real gross domestic product (GDP) expanded 8.2 per cent according to the provisional estimates, agriculture GDP expanded merely by 1.4 per cent, representing a significant decline from 4.7 per cent growth observed in the previous financial year (2022-23). Food production as a result was impacted, which can be attributed to adverse monsoon conditions emanating from the El Nino effect. What is worrying is that the impact of climate change is expected to intensify in the coming years, manifesting through uneven monsoon distribution, flood, cyclones, drought, and heatwaves. The latest Economic Survey underscored that climate change could reduce wheat yields by 19.3 per cent by 2050 and 40 per cent by 2080. This could pose significant challenges because the population and consumption of food would continue to rise, potentially exacerbating food insecurity and driving food inflation.

The Survey also noted that extreme weather conditions were the primary factor driving food inflation last financial year. Factors such as irregular monsoons, supply-chain disruption caused by heavy rain, delays in sowing, and prolonged dry spells have all contributed to elevated food inflation. All this highlights the need for investment in agricultural research and development (R&D) to mitigate the climate impact to the extent possible. In this context, a recent research paper by the Indian Council for Research on International Economic Relations (ICRIER) noted agricultural research intensity (ARI) measured by agriculture R&D expenditure (ARDE) as a percentage of agricultural GDP peaked at 0.75 per cent in 2008-09 and has since fallen to 0.4 per cent.

This is significantly lower than the ARI in countries such as Brazil, where it stands at 1.8 per cent, and in China, where it is 0.6 per cent. The paper further emphasised every rupee invested in agricultural R&D yields a return of 11.2 times, substantially higher than the returns on investment in fertiliser subsidies (0.88) and power subsidies (0.79). This stark difference underscores the potential benefits of reallocating funds from fertiliser and power subsidies to agricultural R&D. By prioritising investment in agricultural research, India can better prepare its agricultural sector to adapt to and mitigate the impacts of climate variability, ensuring a more resilient and sustainable food-supply system over the medium to long run.