Rural entrepreneurism and developmental outcomes under climate change threats

Ram Ranjan*

*Corresponding author for this work

    Research output: Contribution to journalArticle

    6 Citations (Scopus)

    Abstract

    Rural entrepreneurship is often promoted as an effective tool with which to confront developmental challenges in rural communities. An important question that has not been considered thus far is how climate change-induced water scarcity in agriculture may promote or hinder rural entrepreneurship. In this paper, a model is developed to explore the conditions under which rural enterprise may or may not be undertaken by farmers struggling to adapt to climate change-related water scarcity. The results derived here highlight the potential inter-generational trade-offs climate change could create in the pathways towards promoting developmental goals through rural enterprise. When farmers take on entrepreneurial activity, it also affects the human capital accumulation capability of their future generations through affecting their educational efforts. The risk of future reduction in rainfall availability makes the decision over whether or not to avail of the entrepreneurial opportunity challenging. Such risks may force less efficient farmers into taking to enterprise early on, thereby leading to suboptimal outcomes. However, several situations emerge under which, despite the lure of higher expected profits, farmers may not avail of an entrepreneurial opportunity or may delay it.

    Original languageEnglish
    Pages (from-to)353-366
    Number of pages14
    JournalClimate and Development
    Volume7
    Issue number4
    DOIs
    Publication statusPublished - 8 Aug 2015

    Keywords

    • agriculture
    • climate change
    • droughts
    • entrepreneurial activity
    • farm exit
    • human capital
    • microfinance
    • rural enterprise
    • water scarcity

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