Economic Viability of Climate Adaptation Strategies in Agriculture: Evidence from Vellore District, Tamil Nadu

Abstract

This study assesses the economic feasibility of climate adaptation strategies at the farm level in Vellore district, Tamil Nadu. We integrate meteorological data from 2001 to 2019 with a 2023–2024 survey of 200 farming households across 20 villages to evaluate the adoption, costs, and returns of adaptation strategies. A Climate Change Adaptation Index (CCAI) is developed, and the factors influencing adoption are analysed using multinomial logistic regression. Economic outcomes are assessed through panel regressions (fixed and random effects) on income and yield, and benefit–cost ratios (BCR’s) for key adaptation strategies are calculated. Our main findings include: (i) investments in water management and climate-resilient crop varieties lead to significant income increases; (ii) climate-resilient varieties have the highest benefit–cost ratio (≈2.2), while water management provides the greatest marginal income benefit; (iii) farm size and credit access are strong predictors of adoption, raising concerns about equity for smallholders. The study provides evidence for targeting subsidies toward smallholders to enhance equitable adaptation. We conclude with policy recommendations to lower adoption costs for resource-limited farmers and emphasize public investments that enhance the net social benefits of adaptation strategies.