By Piyush Gandhi (UC Santa Cruz)
Every winter, a thick layer of smog blankets North India. Schools close, construction halts, flights are delayed, and hospital admissions spike. A major contributor to this seasonal air pollution is crop residue burning in Punjab and neighboring states, where farmers set fire to leftover rice straw after harvest to prepare their fields for wheat.
At peak levels, farm fires account for more than 40 percent of particulate pollution in the region. The consequences are severe: respiratory illness rises sharply, productivity falls, and tens of thousands of premature deaths are linked to seasonal exposure each year. The climate costs are also substantial, with millions of tons of carbon dioxide and other greenhouse gases released annually.
Despite substantial attention from policymakers, the practice persists. Farmers face a narrow window of two to three weeks to manage residue between the rice and wheat seasons. Farmers transplant rice in the summer and harvest it in October. Wheat must then be sown quickly to avoidintersection of development and environmental sustainability in developing countries yield losses. These challenges are compounded by limited access to and low awareness about sustainable alternatives. Managing rice residue without burning—whether through mulching, incorporation, baling, or specialized machinery—takes time and coordination. Machinery markets are often thin. Whether policies designed to alleviate these constraints can meaningfully reduce burning, and which combinations of interventions are most effective, remain open questions.
In my job market paper, I address this challenge through a large-scale, pre-registered field experiment involving 1,000 farmers in Punjab. The study targets both the temporal and informational barriers that lead to crop burning. The approach was straightforward: provide subsidies for "early-maturity variety" (EMV) rice seeds that mature 20-25 days sooner than conventional varieties. These compact plants also generate less crop residue, simplifying non-burning management options. Since farmers confront dual constraints of limited time and inadequate knowledge, a randomly selected subset also participated in practical training on sustainable residue management, enabling me to assess whether combining financial assistance with targeted education could amplify reductions in burning.
Experiment Design
Farmers were randomly assigned to one of three groups:
- Seed Subsidy Only: Farmers received a 50% subsidy (₹225 or about $2.60 per acre) for EMV rice seeds, up to 10 acres. The subsidy was conditional on verified adoption.
- Seed Subsidy and Training: In addition to the subsidy, farmers received two rounds of in-person training (before and after harvest) on sustainable residue management techniques such as mulching, composting, and baling. Pre-harvest session focused on best practices for EMV cultivation, cost and time comparisons of alternative residue management methods, and local options for residue management machinery. Post-harvest session addressed issues such as weeds and pests that arise under no-burn conditions.
- Control Group: No intervention.
Field enumerators made unannounced visits to each GPS-marked plot every 2-3 days throughout the harvest season (October-November), documenting observable burning incidents to ensure comprehensive coverage. Beyond capturing whether burning occurred (the extensive margin), enumerators classified burning intensity (the intensive margin), distinguishing between partial burning, in which only the upper residue was burned, and full burning, in which both the upper residue and basal stalk were burned.. This differentiation matters: transitioning from full to partial burning can markedly lower emissions even without complete elimination.
Figure 1: Burning of Crop Residue Compared to No-Burning
The Results: Substantial Reductions in Burning
Both intervention groups—seed subsidy alone and seed subsidy combined with training—decreased residue burning, with the training component producing more pronounced effects. Across both treatments, reductions stemmed primarily from diminished full burning rather than decreased partial burning.
Control group farmers partially burned approximately 3 acres on average. While both treatments lowered partial burning, these impacts were modest and statistically imprecise: a 0.1-acre decline in the Seed Subsidy Only cohort and a 0.7-acre decline in the Seed Subsidy and Training cohort. Conversely, reductions in full burning were more substantial. Against a control mean of 3.13 acres, the Seed Subsidy Only group cut full burning by roughly 1 acre, while the Seed Subsidy and Training arm reduced it by approximately 1.5 acres. Though these estimates are statistically similar, they consistently suggest that training enhances subsidy effectiveness.
Figure 2: Treatment Effects on Adoption of EMV Seeds and Crop Residue Burning
Potential Channels: Time, Volume, and Knowledge
The interventions operated through three mutually reinforcing mechanisms. First, EMV seeds reach maturity faster, extending the window between harvest and subsequent planting by 3-4 weeks. Relative to a control mean of 3.1 acres under EMV cultivation, the Seed Subsidy Only treatment expanded EMV acreage by 2.6 acres, while the Seed Subsidy and Training treatment increased it by 3.6 acres—a significantly larger gain. Correspondingly, treated farmers were 8-10 percentage points less likely to cite time constraints compared to control farmers.
Second, EMV varieties are shorter-statured and yield less residue per acre, making non-burning alternatives (such as soil incorporation, baling, or mulching) more practical. Treated farmers substantially increased their adoption of these sustainable methods.
Third, training diminished equipment access barriers: farmers in the Seed Subsidy and Training group were 12 percentage points less likely to experience delays when renting residue management machinery, whereas the Seed Subsidy Only group showed no improvement relative to controls. Notably, all treated farmers—including those receiving only subsidies—reported meaningful gains in their knowledge and competence in sustainable residue management, indicating that EMV adoption itself serves as a catalyst for learning.
The Bottom Line: Substantial Benefits at Low Cost
The interventions demonstrated exceptional cost-effectiveness in curtailing burning and emissions:
- Every dollar invested yielded $32.28 in social benefits (from averted greenhouse gas damages) under the Seed Subsidy Only approach and $28.35 under the Seed Subsidy and Training approach.
- The health advantages from preventing one acre of burning exceed the intervention cost by approximately 400-460 times.
I compare these findings to a Payments for Ecosystem Services (PES) initiative assessed by by Jack et al. (2025) in the same region, which provided conditional cash transfers for verified non-burning. My analysis reveals that relative to PES, the interventions tested here achieve each additional unburned acre at 53-60% lower cost.
Policy Implications: A Path Forward
In 2024, Punjab cultivated roughly 8 million acres of paddy, with burning occurring on approximately 5 million acres. State-wide implementation of the Seed Subsidy Only program could prevent about 0.73 million acres of burning, while the Seed Subsidy + Training approach could avert 1.27 million acres, reducing emissions by 3.5-6 million tons of CO₂—all for an annual expenditure of $13-23 million, representing under 2% of Punjab's agricultural budget.
The Punjab government has initiated efforts to promote EMV seeds, yet widespread adoption remains elusive. My findings indicate that modest, strategically targeted subsidies paired with hands-on training could substantially accelerate uptake. Furthermore, since cost-effectiveness would likely improve with scaled implementation (through economies of scale and reduced per-unit research expenditures), there exists a compelling rationale for extending these programs throughout India's rice-wheat belt. Enabling farmers to manage residue sustainably not only improves air quality—it paves the way toward a cleaner, healthier, and more resilient agricultural economy.
About the Author
Piyush Gandhi is a Ph.D. candidate in Economics at UC Santa Cruz.
His research is at the intersection of development and environmental sustainability in developing countries. To learn more about his work, visit his website: https://piyushgandhi1210.github.io/
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