Does Agricultural Credit Mitigate the Effect of Climate Change on Sugarcane Production? Evidence from Uttar Pradesh, India

Abstract

This paper examines agricultural financing and technological advances (fertilizer and irrigation) to mitigate the effect of climate change (temperature and rainfall) on Uttar Pradesh. Augmented Dickey–Fuller and P.P. test was used to identify variable unit roots test. Autoregressive distributed lag (ARDL) and Error correction model (E.C.M.) estimated long and short-run parameters for selected variables in Uttar Pradesh from 1990-91 to 2020-21. ARDL bounds testing indicated long-term co-integration between variables. This study revealed that In Uttar Pradesh, rainfall increased sugarcane output Increased, but temperature decreased. Long-term agricultural credit enhanced sugarcane output. The policy implication/recommendation or suggestion that it is used to invest in modern technology to production was maximum. The fertilizer improved and then increased sugarcane yield, showing that technology is crucial. This report recommends more comprehensive agricultural policies to suit the sector's financial demands and boost production technologies.