Droughts, Distress, and Policies for Prevention, Mitigation and Relief in Bihar

Avinash Kishore, PK Joshi and Divya Pande

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

-30

-20

-10

0

10

20

30

40

50

16.3

-21.6

33.4

-19.8

18.2

-8

37.224247667305

2

-21.925518980501

6

26.883146845080

2

-18.228101277330

8

14.920229028851

-13.534561989067

9

30.562237762237

8

-8.7753877795869

4

22.043212775951

2

-15.379286456529

3

19.911766043571

213.525507301346

59.2312318332164 -

11.580106441548

9

Growth (%) in GSDPA

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130

5000

10000

15000

20000

25000

30000

35000

GSDPA (2004-05 Prices)

The volatility will be even higher in the crop GDP

2009 to 2013 has been the driest 5-year period in Bihar since 1901

2009 2010 2011 2012 2013500

600

700

800

900

1000

1100

Actual rainfall in SW Monsoon Avg. Rainfall (SW Monsoon) Threshold for drought

Rain

fall

(mm

)

Source: India Water Portal 2012

Late onset of monsoon in 2014 (19% deficiency till mid-July). Deficient rains in 22 districts and scanty in 1 in 2015 also.

.

The worst flood affected state has been afflicted more by droughts in last 7 years

***Of the 38 districts in the state, 5 (Khagaria, Pashchim Champararn, Saharsa, Siwan and Seohar) have experienced droughts in all five years from 2009 to 2013; 14 experienced droughts in 4 out of these 5 years; another 14 saw 3 years of drought while the remaining 5 saw two years of drought

2009 2010 2012 2013 2014* 201505

10152025303540

26

38

25

3328

23

# Drought affected districts (2009-2015)

Low rainfall leads to significant reduction in paddy output

Normal rainfall Drought Severe drought 0.00

200.00400.00600.00800.00

1,000.001,200.001,400.001,600.00 1413

1028885

Average paddy yield (kg/ha)

Normal rainfall Drought Severe drought 0

20,000

40,000

60,000

80,000

100,000 94,398 88,864

64,560

Average paddy area per district (ha)

Droughts have had a significant negative effect on area and yield of paddy in the last ten years (2001-2011)**

  (1) (2)

Variables Paddy yield Paddy area     

If drought -318.8*** -7,751***  (71.73) (2,840)

Year -8.414 -1,173***  (7.773) (357.7)

Constant 18,004 2.477e+06***  (15,580) (717,440)     

Observations 374 374R-squared 0.568 0.904

District dummies Yes Yes     

Drought in 2009 had a bigger impact on paddy in Bihar* than in other state of India

State Deviation (%) from normal (June–August)

rainfall1

Change (%) in production from

triennium (2006–08) average

Net irrigated area as % of net sown area, 2009–

10

Andhra Pradesh -35 (Telangana);

-25 (Andhra)-19.82 42

Assam -30.00 26.92 7Bihar -28.00 -28.02 64

Haryana -35.00 5.81 86Jharkhand -23.00 -52.57 8

Punjab -34.00 6.57 98Uttar Pradesh -38 (Eastern U.P.);

-43 (Western U.P.)-9.93 81

India -22.00 -7.59 45

Year GSDP /capita (Rs)*

AgGDP/capita (Rs)*

Average rural MPCE (Rs)*

Rural HCR (%)

2004–05 8,773 2,608 438 55.7

2009–10 11,815 2,501 478 55.3

2011–12 14,634 3,175 624 33.74

• Huge ill-fare from droughts• Drought in 2009 wiped out economic gains of rapid growth of 5-years• >10 million pushed below poverty line

[A1]Please spell out acronym.

* At 2004–05 constant prices

Effective drought proofing is essential to poverty reduction in the state

The poorest suffered the most due to the drought-led shrinking of the agrarian economy

Quintile1 Quintile2 Quintile3 Quintile4 Quintile50100200300400500600700800900

1000

MPCE in Rural Bihar (2004-05 to 2009-10) by Quintiles

61st round 66th round Series3

Drought ReliefDo Social Safety Programs Help in Drought Years?

MGNREGS (2006–13)

Employment demanded (persons) Employment provided Wage disbursed (in ten thousand Rs)0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

78,734 77,726

21,554

93,013 92,898

31,211

Normal Drought affected

Impact of drought on demand and provision of employment and wage distribution under MGNREGS in Bihar

  (1) (2) (3)

Variables Empl. demand Empl. provided Labor expense       

Drought 16,917** 17,494** 886.7**Year -1,355 -1,207 49.01

Constant 72340.37*** 71067.73*** 218.0488**       

Observations 304 304 304R-squared 0.404 0.407 0.265

District dummies Yes Yes Yes

Positive response to drought, but too small (Rs./poor household) to make a real dent

Likelihood of getting rice or wheat from PDS shops was not higher in drought affected districts in 2009-10

Variables If bought grains from PDS   

If drought 0.179Landowned 372.4

Salary 0.574***MPCE URP  -0.000376**If firewood -0.330***If electricity 0.209*

HH type (ag. labor) 0.301***HH type (nonag. labor) 0.402***

HH type (cultivator) -0.758***1. social group (ST) 0.2962. social group (SC) 0.413***

3. social group (OBC) 0.191*Constant -3.280***

Observations 3,292

Drought MitigationDoes Subsidizing Diesel Help?

Diesel subsidy for drought affected blocks is perhaps the largest CCT program for in agriculture in the world

* Allocation in 2014 was enough to subsidize three irrigations (35 hours of pumping) the entire area under paddy in Bihar

2008 2009 2010 2012 2013 2014 Total0

2000400060008000

100001200014000160001800020000

630.6

30001796.89 2142.91 2359.486

7690.6

17620.486

Subsidy Allocation in million Rs (2008-14)

The scheme favors larger farmers

percent aware percent applied percent aware who did not

apply

average subsidy (ten

Rs.)

0

20

40

60

80

100

120

87

27

61

10.1

9785

12

59.4

Marginal Farmers (n = 120) Other Farmers (n = 97)

…and pump owners

%Aware % Applied %Aware who did not apply0

10

20

30

40

50

60

70

80

90

100 94

65

29

90

35

55

Owns Diesel Pump (128) Doesn't Own One (88)

Smallholders under-irrigate paddy even in a drought year

Source: Singh (2013) based on VDSA data in 2012

Sub-acre 1-2.5acre >2.5 acre0

20

40

60

80

100

120

26.9 27.5 13.7

48.428

16.3

15.9

11.6

6.7

6.730.1

56.4

Percentage of Paddy Area Getting Different Number of Waterings

1 irrigation 2 irrigations 3 irrigations 4 irrigations 5 or more irrigations

Agriculturally progressive districts with higher pump density get more diesel subsidy

VARIABLES Subsidy uptake_perha

rainfall_deviation1 -0.189

tubewells_perha2 1,167***

agGDP_perha3 136.6***

avg_landholding_ha4 51.89

year 72.28***

Constant -145,530***

Observations 112

The diesel subsidy scheme does not seem to work

VARIABLES paddy_yield paddy_area

if_drought -446.7** -4,807

if_drought*dieselsubsidyperha 0.267 -29.86

2012.year 1,356*** 13,384

Constant 1,395*** 75,019***

Observations 75 75

Drought ProofingSubsidy on tube-wells & diesel pumps and

construction/restoration of public tube-wells : Do they help?

Subsidy on Shallow Tubewells• Million Shallow Tube-wells Program

• A big success: 4 lakh new STWs @Rs. 3.13 billion • BIGWIS: 0.133 million new STWs since 2009 @ 45% subsidy

• All farmers in Bihar—small and large—have access to irrigation (Thorpe et al, 2007)

• Bihar needs to promote intensification of irrigation, not expansion

• Access to groundwater is already there; affordable access is the problem

• More STWs unlikely to make groundwater access more affordable

Subsidy on diesel pump-sets• Water prices rising with rising diesel

price• More than proportionately

• In spite of increase in pump density

• New pump-sets being purchased while old ones remain severely underutilized

• High variable cost; small fixed costs

• More subsidized pump-sets will not change that• Rents will rise with rise in price of diesel

and rural wage rates

Investment in Public Tube-wells• Long history : Since 1937

• 5311 built by 1983• Rs. 2.77 bn to revive them in 1986• 5556 PTWs built between 1999 & 2007 @

Rs. 5 billion• NABARD financed Rs.3 billion to build

3000 new PTWs; revive 922 old ones in2007

• Perpetual cycle of construction—non-use—revival

• Sheer waste of billions of rupees

• May work if powered by solar energy

Ways Ahead• Affordable irrigation is essential for climate resilient

agriculture in Bihar

• Irrigation can be affordable• If rural areas get reliable power supply : may take years, if

not decades• But it is worth trying

• Solar energy is a possible, climate-friendly solution• But requires sensible subsidy policy

• The current program for solar pumps is very bad• Needs immediate change• Farmers and solar companies need better financing model

Thank You!