The economics of coping strategies and financing adaptation action in India's semi-arid ecosystems

Purpose - The purpose of this paper is to provide a bottom-up perspective about the operational and policy challenges of undertaking adaptive action in water-scarce environments of India. Design/methodology/approach - A cross section of 112 small, medium and big farmers drawn from three semi-arid villages of rural Bangalore District were surveyed to assess their dependence on natural habitats and elicit information on costs and benefits of undertaking adaptation activities. Also explored were the possible impacts of institutional financing systems and publicly funded programs on adaptation action in the study area. Findings - Small farmers in the study zone were conservation oriented and relied on a variety of terrestrial and aquatic habitats for cultivation operations. On the other hand, commercial and semi commercial farmers who practiced resource intensive cultivation systems were not conservation oriented and were reluctant to go beyond "modest" adaptation activities. Similarly loans provided by local financial institutions to support agricultural operations were designed to maximize crop yields than minimize input use. On the other hand, the conservation programs that were undertaken on common property resources though supportive of public adaptation action, had poor spill-over effects on private adaptation. Originality/value - The value of this paper lies in the interesting results it presents about a group of farmers in three semi-arid villages of South India. The originality of the paper lies in the key policy issues it raises on climate financing in the light of ground level evidence. The paper proposes a compensation regime to incentivize adaptation.