Effect of Agricultural Subsidy on Farm Income of Commercial Vegetable Farmers of Makwanpur and Dhading Districts, Nepal

Abstract

Recent agricultural policies of Nepal prioritize subsidy programs. However, there has always been concern about the realistic assessment of the economic implications of subsidy programs. This study was carried out to assess the effect of agricultural subsidy on farm income in the Makwanpur and Dhading districts of Nepal. Altogether 120 households from Thaha-2 of Makwanpur and Benighat Rorang-7 of Dhading were selected using a multi-stage sampling technique. Descriptive statistical tools, correlation analysis, independent sample t-test, and multiple linear regression were used to analyse the data. Among the total sampled households, 54.17% had access to at least one agricultural subsidy program. The result revealed that farm income was the primary source of household income, contributing 64.17% to total household income. Pearson product correlation shows positive and statistically significant relation between subsidy and technology adoption, technology adoption and annual farm income, subsidy and annual farm income. The estimates of multiple regression coefficients show that subsidy had a significant (p< 0.01) and positive effect on the annual farm income of commercial vegetable farmers. Also, the area under cultivation was a highly significant (p<0.01) factor influencing the farm income. From the independent t-test, the annual farm income of subsidy recipients and non-recipients was found significantly different (p<0.01). So, this study suggests the concerned stakeholders to identify the most needed and best-suited technologies and implement the subsidy program accordingly to boost the annual farm income of commercial vegetable farmers. Keywords: Effect, Farm income, Regression, Subsidy