Weather shocks, agricultural productivity and farmer suicides in India
There are several reasons for farmer depression leading sometimes to the extreme measure of committing suicide. Globalization , commercialization , modernisation, erratic climatic conditions, individual expectations, contagion and government policies are some of the reasons attributed to farmer‘s suicides . This study examines linkages between weather shock induced changes in agricultural productivity and farmer‘s suicides in India using fixed effects panel data model with 25 Indian states and 14 years (1996 - 2009). Estimates from single equation model show no direct effect of weather shocks on farmer suicides while a two - equation specification – one for count of farmer suicides with endogenous agricultural variable and an agricultural equation with weather shocks – yields useful insights. The results from first stage estimation as expected suggest that (low ) rain fall shock and high temperature shock adversely affect crop yield per hectare, while regions with higher share of irrigated area are able to counter to some extent the adverse effects of weather shocks. The negative binomial regression model for farmer suicide includes predicted yield along with one - period lag of farmer suicides and state‘s suicide rates to capture the contagion effect. The results show that contagion effects are strong on farmer‘s suicides while predicted crop yield has negative and significant influence indicating that farmer suicides are in directly associated with weather shocks via the changes in agricultural productivity.