Agricultural Outcomes Under Monsoon Uncertainty: The Adapting Role of Crop Diversification in the Agrarian State of India

This article uses district-level panel data for the state of Punjab to investigate the impacts of delay in monsoon arrival on agricultural productivity. Additionally, we have looked at the role of crop diversification as an adaptation strategy to reduce crop losses accruing due to delayed monsoon arrival. Using panel fixed-effects regression analysis, we find that a substantial delay in monsoon arrival reduces agricultural productivity across different regions in the state. Additionally, we find that crop losses accruing due to delayed monsoon arrival are lower in those regions where farmers employ crop diversification strategies. These findings highlight the need to prioritise region-specific implications and strengthen early warning systems. Promoting sustainable agricultural practices and enhancing the overall resilience power of the regions might help in increasing the welfare of the agricultural households while protecting against crop losses accruing due to weather shocks. JEL: Q12, Q15, Q19