Missing Water: Agricultural Stress and Adaptation Strategies in Response to Groundwater Depletion in India

Groundwater depletion is becoming a serious policy concern in many developing countries but little is known about the costs of groundwater depletion. I use annual deviations of depth to groundwater from 1999 to 2003 from the 1985-1995 decadal means for Indian districts, to investigate how production and sown area respond to groundwater uctuations. I nd that a 1 meter decline in groundwater in a year reduces food-grain production by 8 percent, water intensive crop production by 9 percent and cash crops by 5 percent. I also use year-to-year transitions of groundwater around a cuto value, at which cost of technology required to access groundwater exogenously increases due to physical constraints, to examine coping mechanisms. I nd that for short run shocks around this cuto , sown area for food-grains and water intensive crops falls by 7 to 8 percent, whereas there is no change for cash crops. I evaluate the e ect of the transition of 10 year means of groundwater around this cuto on exit from farming. I do not nd evidence of exit of marginal or small farmers from agriculture. mitigating e ect.