Impact of Government Agricultural Input Subsidy Card on Rice Productivity in Rajbari District of Bangladesh: Application of Endogenous Switching Regression Model

P K Sarma,M M Rahman

doi:10.13189/ujar.2020.080501

Abstract

This paper aims to use a novel version of an endogenous switching regression model to examine the impact of agricultural input subsidy assistance card on-farm productivity in Bangladesh. A multistage random sampling technique was employed to select a total of 400 farm households including 181 (45.25%) adaptors and 219 (54.75%) non-adaptors and interviewed by using pre-canvassing structured survey questionnaires. Also, FGDs and KIIs have been conducted to get qualitative information. The descriptive statistics, probit regression-double hurdle model, endogenous switching regression (ESR) technique, and propensity score matching approach were used to analyze the collected data. The ESR model supported by binary and PSM was used to empirically assess the impact of subsidy card adaptors on outcome variables. The results revealed significant production enhancing effects of agricultural input subsidy on-farm production and farm income in Bangladesh only under the assistance of input subsidy card. The findings also showed higher production and incomes for those participating in the program. However, a comprehensive input subsidy assistance card package is certainly a requirement for increasing production and income. As the adoption of input subsidy assistance card seems to enhance farm productivity, the study recommends increased coverage of the subsidy program, extension advocacy and opening up to ensure agricultural productivity and increased farm incomes. This study illustrates how agricultural input subsidy assistance cards can improve farm production and income in Bangladesh.

Highlights

Agriculture sector in Bangladesh contributes around 16% of the country’s GDP and employs 45% labour force
We present the econometric results on the role of improved 181 government input subsidy assistance card at the household farm production
The goal of this study was to assess the impact of inputs on rice production and farm incomes in the district of Rajbari under seven million programmes

Summary

Introduction

Agriculture sector in Bangladesh contributes around 16% of the country’s GDP and employs 45% labour force. It has a pressure of feeding 156.6 million populations. Around 45% households are poor and 53% are landless who depend on agriculture for employment. It plays an important role in economic growth, enhancing food security and poverty reduction in most developing countries like Bangladesh (Dalango et al, 2019). Agriculture contributes a significant portion of most developing countries gross domestic product, informal employment, food and farm incomes for more than half of the rural population (Dorward et al.,2010).it is Impact of Government Agricultural Input Subsidy Card on Rice Productivity in Rajbari

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