Short-lived climate pollutants-SLCPs have had significant impact on crop yields in India in recent decades. UP, the main wheat-producing state has been hit especially hard while rice-producing states in the heavily polluted northern Indo Gangetic Plains have also been significantly negatively affected
Tropospheric ozone and black carbon (BC), the two potent short-lived climate pollutants (SLCPs), have severely affected wheat and rice production in India over the past three decades. According to a study, averaged over India, yields in 2010 were up to 36% lower for wheat than they otherwise would have been, absent climate and pollutant emissions trends, with some densely populated states experiencing 50% relative yield losses.
The study by Jennifer Burneya and V Ramanathanb is published in PNAS journal
It says, between 1980 and 2010, emissions of black carbon and ozone precursors have risen dramatically in India that has directly affected agriculture production. The main sources of BC in India are domestic biofuels—wood, dung, and crop residues for cooking—and fossil fuels.
It says, "Yields for wheat and rice in India have recently begun to level off or even drop in some states. This trend, particularly for wheat, counters decades of increasing yields driven by technological innovation. At the same time, growing season temperature trends have been positive for major wheat and rice- producing Indian states. Studies have shown that these climate trends have had a negative impact on Indian agriculture, reducing relative yields by several percent. However, although temperature and precipitation changes have and will continue to impact future yields, these two variables alone do not tell the entire story of India’s changing crop yields."
There is substantial variation in relative impacts of climate and SLCPs across states. Some of the most dramatic impacts for both wheat and rice have occurred in Uttar Pradesh and Uttaranchal (UP). UP, India’s most populous state is the largest producer of both wheat and rice in the country, providing over one-third of India’s wheat and 14% of India’s rice. In particular, wheat yields for UP are about 50% lower than they otherwise would have been absent climate and pollution trends, and over two-thirds of that relative yield change (RYC) is attributable to SLCP emissions trends.
Rajasthan, although producing a lower percentage of India’s wheat, shows the greatest overall wheat RYC of more than 50%. The relatively large climate affects wheat in both UP and Rajasthan, which are driven by temperature, as the two states have had the largest increases in growing season temperature since 1980, 0.87° for Rajasthan and 0.52° for UP.
Four of the main wheat-producing states—UP, Rajasthan, Madhya Pradesh and Chhattisgarh, and Bihar and Jharkhand—have large negative SLCP impacts, whereas Punjab and Haryana show little to no impact of either SLCPs or climate not statistically significant at 90%.
Moreover, the uncertainties in Punjab and Haryana are greater than for other states, and across alternative models specifications. Two factors likely explain these differences. First, Punjab and Haryana are the most technologically advanced wheat-producing states in India, with the highest yields and the greatest yield gains over the period; they also feature some of the lowest estimated crop yield gaps in India and the world, meaning they have been closest to achieving biological potential despite climate and emissions changes. However, in addition, the intricacies of ozone production likely explain the SLCP impact differences.
For rice, the overall climate and pollution impacts are lower, and the state-by-state variation is less than for wheat. Most notably, the south-eastern states of Tamil Nadu and Andhra Pradesh show higher relative climate impacts; these are two of the least-polluted states in the study region; they have also featured significant growing season temperature increases.
The states of the heavily polluted northern and eastern Indo Gangetic Plains (UP, Bihar and Jharkhand, West Bengal) all exhibit SLCP RYC of about 5% or more. Haryana and Punjab, the two states with the smallest SLCP impacts in wheat, do not diverge from the other states in rice impacts. The difference in SLCP impacts between the two crops for Punjab and Haryana is likely dominated by differences in rates of ozone formation in the two states between the two seasons.
"Our results nevertheless indicate that SLCPs have had significant impact on crop yields in India in recent decades. The main wheat-producing state (UP) has been hit especially hard; rice-producing states in the heavily polluted northern Indo-Gangetic Plains have also been significantly negatively affected. For context, the yield loss for wheat attributable to SLCPs alone in 2010 (-18.9%) corresponds to over 24 million tons of wheat: around four times India’s wheat imports before the 2007–2008 food price crisis and a value of about $5 billion. Mitigation of SLCP emissions in India could thus have important food security impacts both domestically and internationally," the study concludes.
According to NCAER, while inflation has weakened significantly and sentiments have improved, the fundamentals of the Indian economy continue to be weak
National Council of Applied Economic Research (NCAER) has lowered India's GDP growth forecast to 5% for FY2015 on weak economic fundamentals and uncertainties in growth prospects.
According to NCAER, the only redeeming feature in the Indian economy is the weakening of inflation and foreign direct investment (FDI) inflows. Further, NCAER feels that growth prospects will depend on a number of factors including revival of the external economy and the extent of damage on agriculture due to deficit rainfall.
NCAER adds that the business confidence index is showing rise in sentiments on the back of a stable political regime with the new government.
While inflation has weakened significantly and sentiments have improved, the fundamentals of the economy continue to be weak, NCAER added.
Nomura said it believes that the soft patch of data in passenger vehicles and two-wheelers should be seen as a consolidation phase before the next upmove. It remains upbeat on strong volume growth recovery across industry segments in FY16
Auto volumes during October 2014 remained soft with both car and two-wheeler sales declining. However, medium and heavy commercial vehicles (MCHVs) volumes picked up quite strongly in October, which according to Nomura was a positive surprise.
"Overall, MHCV industry volumes picked up quite strongly in October – industry volumes were up 27% compared to our estimate of 14% growth. After a few months of consolidation, the upmove in SAAR is clearly visible and now points to a 14% y-y growth in FY15F. This implies about 30% growth in second half of FY15F in comparison to 1% volume decline in first half," Nomura said in a note.
All original equipment manufacturers (OEMs) reported stronger than-expected volume growth during October 2014. Tata Motors' domestic HMCV volumes increased by 30%), Ashok Leyland’s volumes were up 43% and Eicher’s CV volumes were down 5% while seasonally adjusted annualized rate (SAAR) was indicating around 10% decline. Nomura said, "With improvement in economic growth, we expect MHCV industry volumes to see further improvements in the coming months."
Volumes in other auto segments were soft in this month – car industry volumes declined by 4% and two-wheeler industry volumes were down 4%. Nomura said, "We believe that the soft patch of data in passenger vehicles (PVs) and 2Ws should also be seen as a consolidation phase before the next up move. Overall, we remain upbeat on strong volume growth recovery across industry segments in FY16F."
Maruti Suzuki India Ltd (MSIL) domestic car volumes increased by 1% in October. As per the company, production was impacted due to higher number of holidays – there were only 19 working days in October 2014 compared with 24 days same month last year. Further, complete product ramp-up of new Alto K10 has not yet happened. Retail sales for MSIL were strong at 1.08 lakh units, up 10% with inventory levels below four weeks currently.
Among unlisted OEMs, Hyundai and Honda reported decent numbers with volume growth of 6% and 19% y-y,respectively, while other OEMs such as Ford, GM continue to see steep declines.
Most of the two-wheeler OEMs reported weaker-than-expected volumes. Hero MotoCorp (HMCL)’s volumes declined by 8%. Honda Motorcycles and Scooters India Ltd (HMSI)’s volumes were flattish as bike volumes declined by 6% while scooter volumes were up 6%. Bajaj Auto’s domestic bike volumes were down 13%. TVS had a strong month with domestic two-wheeler volumes up 18% led by strong scooter volumes.