Sequential land-use decisions under climate and market risks: evidence from groundnut farming in Odisha

Groundnut cultivation in Odisha has steadily declined, challenging rural livelihoods and oilseed sustainability. This study explores how farmers make sequential acreage decisions—first whether to grow groundnut, then how much land to allocate—under uncertainty shaped by climate variability, seed market failures, and price instability. Using survey data from 906 households across inland and coastal districts, a double-hurdle model separates participation drivers from acreage intensity factors. Irrigation access, improved seed availability, and household labour significantly raise the probability of allocating at least 10% of cropped area to groundnut, while high seed prices and poor-quality supply deter experienced inland farmers. Soil suitability strongly influences coastal participation. To capture macro-level dynamics, ARMAX models using 2000–2022 data assess rainfall effects on state-level groundnut area. Rainfall consistently shows a positive and significant impact, though high persistence and structural rigidities indicate systemic constraints beyond climate. By integrating household and time-series evidence, the study demonstrates how climate, seed systems, and market conditions jointly shape acreage decisions and identifies region-specific interventions to stabilise groundnut cultivation in Odisha.