Abstract:  Afforestation is a popular strategy to mitigate climate change. When successful, afforestation programs can produce important co-benefits beyond carbon sequestration, which have significant implications for the net social benefit of carbon abatement through afforestation. In 2003, one of the largest afforestation programs in India was implemented in Rajasthan state. Using a yearly, district-level panel from 1997 to 2017, we estimate the effects of this program on the agricultural sector using two-way fixed effects and synthetic difference-in-differences approaches. Our findings suggest that the afforestation program led to robust, statistically significant increases in rainfall and agricultural production, area, and yield. We discuss the implications of our findings for afforestation as a climate mitigation strategy.

Agricultural marketing in India has been centralized and regulated by state governments. In 2006, the Indian state of Bihar decided to move away from government intervention in the agricultural supply chain, such as through regulated marketplaces, to promote private investment and free trade. The aim was to encourage more competition in the agricultural sector, which would lead to a higher surplus for farmers. Using the two-way fixed-effects estimation model, we found evidence that reform had no significant effect on the area under cultivation; however, the yields increased significantly. The increase in agricultural credit post-reforms indicates that private investments in the marketplace may have accelerated the application of better inputs and increased farm mechanization in the production process. Consequently, the reduction in demand for field labor led to lower wages for field laborers. We discuss policy imperatives in light of new evidence on farmers' response to private investment in the agricultural sector.