Climate Shocks and Kitchen Staples

Climate change is intensifying extreme weather events, disrupting food systems, and threatening price stability—especially in India's vegetable markets.

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With 65 per cent of cropped land unirrigated and agriculture dependent on the southwest monsoon for over 75 per cent of annual rainfall, the sector is highly vulnerable to erratic rains, rising temperatures, and climate shocks like cyclones and hailstorms. Research by the Reserve Bank of India indicates that short duration crops like vegetables, being perishable and highly sensitive to sudden weather shocks, exhibit sharp price volatility and are major drivers of food and headline inflation. The second largest producer of vegetables and fruits in the world, the maximum supply of vegetables in India comes from small and marginal farmers with very little or no safeguards against such disturbances. Farmers generally base their agricultural decisions on normal weather conditions as well as prevailing market prices, while deviations from these normal conditions can affect crop production, leading to price fluctuations. The temporary disruption in the supply chain and the physical losses accrued from erratic weather patterns can create short and medium term shortages of goods, subsequently raising prices. As climate volatility intensifies, the connection between extreme weather and inflation is becoming increasingly direct and concerning. A study by the Reserve Bank of India suggests that, on average, rainfall changes raise vegetable inflation by about 1.24 per cent points, while temperature changes increase it by around 1.30 points. Temperature shifts tend to affect prices more quickly than rainfall changes.

Tomato Onion Potato (TOP) vegetables: A major contributor to food inflation in India