Threshold effects of extreme weather events on cereal yields in India

Climate change is driving a rise in the intensity and frequency of extreme weather events. Such events are characterised as thresholds beyond which cereal yields significantly change. We apply a threshold model to district-level data collected in India over 1966–2011 and objectively identify thresholds, measured by the Standardised Precipitation-Evapotranspiration Index, before estimating their yield effects, for rice, wheat, maize, millet, sorghum and barley. Heterogeneous, crop-specific thresholds are identified for all crops except wheat. Thresholds are identified at normal climatic conditions but have smaller negative marginal effects than those of thresholds identified at dry conditions. The extent to which agro-ecological conditions and irrigation influence the location of thresholds and the size of their marginal effects varies by crop. Thresholds identified at dry climatic conditions severely reduce yield yet are rarely crossed; those at normal conditions moderately affect yield but are frequently crossed. A threshold’s total impact on production is found to be inverse to the severity of its marginal effect. Severe-effect thresholds have been crossed with increasing frequency over time, contributing to growth in the size of total impacts. Our results have welfare implications and have the potential to inform predictions about the impacts of extreme weather events.