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Impact of Farm Electricity Supply Management on Farm Households - Evidence from a Natural Experiment in India

March 1, 2018

World Bank Malaysia Office, Level 3, Sasana Kijang, No. 2, Jalan Dato’ Onn

  • Managing agricultural and non-agricultural grid electricity supply through feeder segregation is being highlighted as an innovative reform to address India’s electricity supply issues. While this has a direct implication on the availability of grid electricity for farm operations, there is no rigorous empirical evidence available on the effects of feeder segregation on farm households. This paper exploits exogenous variation in quantity and quality of farm electricity supply resulting from Gujarat’s feeder segregation program, “Jyotigram Yojana” (JGY), and examines its impact on farm households. Using the 2004- 05 and 2011-12 India Human Development Survey (IHDS) data and applying a difference-in-differences framework, we analyse the impact of rationed but high-quality farm electricity supply on investments in fixed and variable farm inputs and net farm income per acre. We find that, on average, JGY does not lead to an increase in ownership of electric pumps. However, it decreases ownership of diesel pumps. On average, farmers own more tubewells as exposure to JGY increases. In particular, it is the medium-to-large farmers who significantly increase ownership of tubewells. There is a corresponding statistically significant increase in the likelihood of irrigating with a tubewell for farmers across all land sizes. This is accompanied by an increase in per acre cost of purchased water for irrigation for farmers across land sizes. The consequent effect on net farm income per acre on average is a statistically significant decrease, which is more pronounced for medium-to-large farmers. This seems to be driven mainly by an increase in cost of purchased water for irrigation as we do not observe an increase in labor cost or increase in investments in other farm inputs including fertilizers, pesticides, and tractors. Using supplementary analysis we also rule out lower crop yields as the mechanism underlying decreased net farm income.

  • Dr. Namrata Chindarkar

    Dr. Namrata Chindarkar is an Assistant Professor at the Lee Kuan Yew School of Public Policy, National University of Singapore (NUS) and a faculty associate at the Institute of Water Policy, NUS. She received her Ph.D. from the School of Public Policy, University of Maryland concentrating in international development policy. She holds a M.A. in Development Studies from the University of Manchester, U.K., and a M.Phil. in Social Sciences from the Tata Institute of Social Sciences, Mumbai. She has previously worked at McKinsey & Company, Asian Development Bank, and the Global Development Network. Her research interests are in development and social policy with a focus on access to infrastructure (energy, water, and sanitation); poverty and inequality; food security; gender; and policy analysis and evaluation. Her methodological approach is applied econometrics using primary, secondary, and administrative policy data.

    Dr. Yvonne Jie Chen

    Dr. Yvonne Jie Chen’s research interest lies in development economics, health economics and applied econometrics. Her past research primarily focuses on applying econometric tools in analyzing various policy issues in developing countries. Yvonne holds an undergraduate degree in Computer Science and Economics from Washington University in St. Louis. She received her master and doctoral degree in economics from Yale University. In addition to her academic career, she worked as a senior associate at a Philadelphia based health care consulting firm, offering strategic advice for pharmaceutical companies around the world. She also interned at the World Bank’s Development Research Group.

EVENT DETAILS

  • when: Thursday, March 1, 2018; 12:30-2:00PM
  • where: World Bank Malaysia Office, Level 3, Sasana Kijang, No. 2, Jalan Dato’ Onn
  • RSVP: Kindly RSVP by Wednesday, February 28, 2018
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