Climate change is making weather more variable, with rainfall patterns becoming less predictable and extreme temperatures occurring more frequently. Agriculture is particularly sensitive to these changing conditions, jeopardizing the livelihoods of the majority of the world’s poor who depend on agriculture for survival. Highly variable weather makes it challenging for farmers to prepare for the coming season because they don’t know if this year will be like the last. But accurate long-range weather forecasts have the potential to help farmers decide how much to plant, what to plant, or whether to plant at all.
EPIC Scholars Fiona Burlig and Amir Jina, along with their colleagues Erin Kelley, Gregory Lane and Harshil Sahai from the University of Chicago, study what happens when farmers in India are given a forecast of when the monsoon will begin. An earlier monsoon typically means a longer growing season, suited to cash crops like cotton. Later monsoons are generally worse, forcing farmers to grow lower-value subsistence crops like paddy. On a pre-season visit to the farmers, the researchers found that farmers’ predictions about when the monsoon would arrive varied widely. Then, the researchers gave the farmers an accurate forecast of when the monsoon rain would begin in the coming year. The new information changed the farmers’ minds and their farming behaviors—and they were better off as a result.
Overly optimistic farmers, for whom the forecast brought “bad news” of a shorter-than-expected growing season, took steps to cut down on their investments—such as by cultivating 22 percent less land and growing fewer cash crops. They also reduced their expenditures on inputs (like fertilizer) by 10 percent. While their agricultural output, crop sales, and farming profits took a hit because they engaged in less farming overall, these farmers also tended to find other ways to make money, such as working in non-agricultural businesses. Overall, the forecast enabled these farmers to increase their net savings by 10 percent of their annual income, cutting their debt in half.
On the other hand, overly pessimistic farmers, for whom the forecast brought “good news” that the growing season would be longer than they expected, increased their investments—cultivating 15 percent more land and growing 31 percent more cash crops. They also spent 34 percent more on expenditures. These farmers also saw positive net savings. Given the safety net of the insurance, farmers increased their spending on agriculture substantially—cultivating 12 percent more land, adding 9 percent more cash crops, and spending 12 percent more in expenditures than those who did not have the forecast information or insurance. At the outset, their spending may or may not have been justified—they had no way of knowing until it was too late.
The study was funded by the Becker Friedman Institute for Economics at the University of Chicago, The International Growth Center (IGC), J-PAL’s Agricultural Technology Adoption Initiative and King Climate Action Initiative, and the World Bank.
In The News
Access to accurate climate trends helps farmers make better investment decisions
