Shresth Garg Seminar

Department of Resource Economics Fall 2026 Seminar Series

Shresth Garg, University of Pennsylvania

Title: Adaptation For Hire

Abstract: Rainfall shocks are an important source of risk in agriculture. Groundwater irrigation can substitute for missing rainfall, but it requires investment in irrigation infrastructure. In the rice- growing districts of Uttar Pradesh and Bihar, India, we find that rice yields fall substantially more during rainfall shortfalls in districts with limited well access. However, owning this infrastructure is difficult for small farmers to justify because the investment is indivisible. In our data, ownership rises from 35 percent among marginal farmers to 67 percent among large farmers. Small farmers instead rely on rental markets for water. Rental expands access but raises the cost of irrigation. In a dry year, renters’ irrigation spending rises by Rs 1,030 per hectare, twice the increase for owners. We develop a model of ground water markets and use it to study the impact of a subsidy for well ownership. We find that the subsidy is poorly targeted because most recipients already access groundwater through rental markets. For these farmers, the subsidy replaces rented irrigation services with owned infrastructure rather than expanding access.