WATER P-NOTES ISSUE 42 AprIl 2010 55272 Overcoming Drought in India: Adaptation Strategies for the State of Andhra Pradesh C limate change and drought are both an envi- million people, account for about 70 percent of the ronment and a development issue. Nowhere is state's drought-related crop production loss, and this more critical than in India, where the poor include some of the poorest areas and communities are the most at risk from the increased variability in the state. and volatility in weather patterns. One of the key climate-related vulnerabilities of India's economy is its heavy dependence on the monsoons. Monsoon Study Objectives analysis reveals that some part or the other of the The study objectives were designed to enhance Indian subcontinent has been hit by drought almost the state's capacity to assess long-term effects of every two years. drought and increase resilience to drought risks at Despite programs that were designed to miti- state, district, and community levels. The process for gate the impact of drought that have been in place development of study objectives featured extensive since the 1950s, drought remains prevalent in India. consultation with affected sectors, and with state The disastrous effect of feeble or failed monsoons has been particularly acute in the state of Andhra Figure 1. Rainfall and Economic Pradesh (see Figure1), where more than 70 percent Performance in Andhra Pradesh of the people depend on agriculture for their liveli- hood. The human and social costs of these droughts 40 are devastating and wide-ranging, resulting in 35 Percentage of Deviation Growth 30 crop-yield failure, unemployment, erosion of assets, 25 decrease in income, reduction in living conditions, 20 15 impoverished nutrition and health, and increased 10 vulnerability to other shocks. 5 0 ­5 ­10 ­15 Developing a strategy for sustainable ­20 ­25 practices ­30 ­35 ­40 The Government of Andhra Pradesh (GoAP) recog- 01 02 98 96 97 93 94 00 99 95 20 20 nized the need to support a gradual shift to more 19 19 19 19 19 20 19 19 sustainable agricultural and economic practices. % Development of % Growth of % Growth of It supported the development of a study focused Rainfall from Normal AGDP GSDP on eight (out of a total of twenty-three) districts in , Source: AGDP Agricultural Gross Domestic Product; Andhra Pradesh that together are home to about 30 GSDP Gross State Domestic Product This note reports key messages from Overcoming Drought, Adaptation Strategies for Andhra Pradesh, India, a Directions in Development/Environment and Sustainable Development publication, the World Bank 2006. Readers may download the complete document from www.worldbank.org/water. WATER P-NOTES and national programs that aim to address the In addition to the macroeconomic and drought effects of drought. The study aimed to: management scenarios, the development of the modeling framework aimed to account for the pos- · Develop a framework for simulating long-term sible increase in frequency and severity of droughts impacts of drought in drought-prone areas and that may occur owing to human-induced climate at state levels; change. In this context, the study is linked to a · Conduct risk assessments of the impacts under larger program of work by the World Bank in a new different scenarios; and strategic area on adaptation to climate variability and longer-term changes. · Assist the GoAP in development of a strategy for adapting to frequent drought and water deficits. Key Findings Methodology Key findings of the study provide insight into the During the study, a model was developed as a human and social costs of drought, how drought powerful tool for thorough drought risk assessments impact varies depending on location, the coping and for investigation of risk coping strategies and strategies of farmers, the impact on the agriculture climate scenarios on crop yield and production. sector and on households and the macroeconomic The model was calibrated using local farming prac- impact on the state. tices and crop selection (that is, rice, maize, jowar (sorghum), sunflower, and groundnut, see Figure 2) in the eight selected districts. The report presents Human and social costs results at the district level. Challenges in determin- ing the economic impacts included: the slow onset The human and social costs of drought have been of droughts that spread over long periods and large and remain devastating for the millions of people in areas; the significant indirect losses; the need to Andhra Pradesh. link local impact analysis with statewide analysis; · Even though a variety of anti-drought pro- and the linkages between the different sectors and grams are in place, the agricultural sector subsectors of the economy, the flow of goods and faces loss in value of crop production for the services and employment. five major crops combined under drought sce- narios. · Individual farmers may suffer greater losses, Figure 2. Crop Area in the Eight and small and marginal farmers, faced with Selected Districts of Andhra Pradesh a loss in output value of 10 or 5 percentage points, fall below the poverty line. 1,200 · New approaches and tools are needed to 1,00 help these people adapt to frequent droughts; Acres ('1000 ha) 800 economic and social development of 600 drought-prone areas is necessary, with atten- tion to support for sustainable and resilient 400 approaches to water scarce conditions in the 200 long term. 0 a r ah m ur l r i itto oo dd ga nd location differences asa tap ap rn are na Ch lgo dd an k Ku ub Pra ng Na Cu An hb Impacts of droughts vary greatly across locations Ra Ma District Name and crops depending on drought severity. Rice Jowar Maize Groundnut · Different crops can be particularly vulnerable in Sunflower Other Crops different districts. 2 ISSUE 42 · APRIL 2010 Coping strategies of farmers · Moderating loss of employment during drought remains a key challenge; this is important, as In a major drought, farmers often ration the use of the agricultural sector is the major employment available water, and shift from rice, which is water- generator for the state. To mitigate impact on intensive, to less water-intensive crops. employment and income in the short to medium · Shifting farming practices can decrease losses term, opportunities could be fostered in the borne by farmers, reduce water demand, and trade and transport sectors (except railways) increase production. construction and related industries, mining and quarrying sectors and the poultry sector. · The impacts of measures that can be adopted by farmers are highly location-specific; there is significant scope for increasing the effective- Impact on Households ness of advice to farmers about undertaking location-specific drought coping measures. Responses to drought depend on the situation of a particular household. · Global climate change is likely to further increase the benefits of shifting from rice to less · Household responses to drought are varied; tai- water-intensive crops; the study reinforces the lored assistance is required for those in need. need for shifting to less water-intensive activities in drought-prone districts. Macroeconomic impact on the state Although farmers and communities in drought- Impact on Agriculture sector prone areas experience significant losses, the state- There is a significant negative impact of drought on wide macroeconomic impact is rather modest (see the agricultural sector, with a more limited impact Figure 3). on livestock and manufacturing and a lag before a · The macroeconomic impact of drought is positive impact on the service sector. decreasing further as the Andhra Pradesh · Droughts continue to have a negative impact on economy shifts from agriculture to other sectors; the performance of the agriculture sector and manufacturing (secondary) and service (tertiary) on the lives of those dependent on that sector sectors are increasing their gross value added for livelihood, income and employment; strate- (GVA) contributions to the economy; since this gies must specifically target those affected by trend will most likely continue, the macroeco- drought in the most vulnerable areas. nomic impact of drought will further decrease. · Accelerating the shift from agriculture to manufacturing and service sectors could be a powerful macroeconomic drought adapta- Figure 3. Conditional Average Loss in tion strategy; if the shift to other sectors could GVA, by Sector and Drought Category roughly approximate the economy of Brazil, the macroeconomic loss due to drought in Andhra 8 Pradesh could be significantly decreased. Percentage of Sectional GVA Loss 7 6 · The findings of a relatively small and declining 5 macroeconomic impact of drought are consistent 4 with other evidence for developing countries; 3 2 1 0 Areas for Future Action ­1 The analysis revealed that an effective strategy must ­2 Agriculture Livestock Secondary Tertiary Total combine statewide economic and sectoral policies with intensified, well-targeted efforts at the com- Minor Moderate Severe munity level. The study demonstrated that drought 3 WATER P-NOTES manifests itself at different geographic levels, on it is particularly important to address the chal- different economic indicators, on different crops lenge of reaching out to the poorest and most and sectors, on different population groups, and vulnerable.; on different measures of human well-being. Often, · Create a supportive institutional and policy there are stark contrasts in drought impact, such as framework with the involvement of all levels of when the impact on farmers and communities in a Government. Technical assistance and support drought-prone area devastates the local economy, mechanisms need to be developed to assist while at the state level, the impact of drought on farmers and communities in drought adapta- the state-wide economy is slight. tion planning and action. To mitigate the risks As a result of the study findings, recommenda- and startup costs of transition to different crops, tions for future action include: technologies, and economic activities, a wide range of actions must be delivered to support · Continue and accelerate the ongoing changes institutional arrangements in communities, in the economic structure at the macro level. strengthen policies and incentives for adapta- This should facilitate growth of other industries, tion to a diversified rural economy, water con- support development of the livestock sector, and servation, aggressive awareness campaigns, encourage the shift from rice to less water-inten- capacity building for stakeholders, and innova- sive crops to decrease vulnerability to drought; tive financing schemes; · Encourage investments in sectors with significant · Explore and introduce innovative micro financ- employment potential for labor displaced from ing and insurance schemes for farmers that pro- the agriculture sector, such as trade and trans- mote a shift to more sustainable practices. New port, construction, and mining and quarrying financing products should provide incentives to subsectors; switch to more sustainable agricultural and eco- · Initiate the development and implementation of nomic practices. Possible innovative financing drought adaptation plans for the most affected products include drought adaptation insurance areas to deliver better targeted, coordinated, to cover risks in transition to new business, and and packaged assistance to those in need. The drought adaptation credit to assist in the transi- initiative should use a participatory approach tion to long-term viable business; and build on successful experiences in Andhra · Develop a Decision Support Toolkit to provide Pradesh with community-based watershed man- a good scientific basis for supporting drought agement and other relevant schemes; management and adaptation planning at dif- · Consider special support programs for mar- ferent levels. The Toolkit, based on the model- ginal farmers and the landless and poorest ing framework developed for the study, can populations. Since the poorer farmers and strengthen drought risk analysis in states in landless laborers are least resilient to shocks, India and other drought-prone countries. The Water Sector Board Practitioner Notes (P-Notes) series is published by the Water Sector Board of the Sustainable Development Network of the Water World Bank Group. P-Notes are available online at www.worldbank. Sector org/water. P-Notes are a synopsis of larger World Bank documents in Board the water sector. 4 THE WORLD BANK | 1818 H Street, NW | Washington, DC 20433 www.worldbank.org/water | whelpdesk@worldbank.org