Role of market participation on smallholder vegetable farmers' wellbeing: Evidence from matching approach in Eastern India

Abstract The study identifies determinants of vegetable farmers' market participation and evaluates their impact on households' welfare. In this study, we collected 175 cross‐sectional household data and employed a probit regression model to identify the determinants of vegetable farmers' market participation. The study estimates the impact of market participation on households' income and per capita consumption using the propensity score matching approach (PSM). Subsequently, the study used the endogenous switch regression (ESR) model to control sample selection bias and unobserved heterogeneity. ESR also evaluates the robustness of PSM outcomes. Results from PSM and ESR approaches suggest that vegetable market participation positively and significantly impacts smallholders' income and consumption expenditure. The study rejects the null hypothesis that vegetable market participation does not significantly impact farmers' welfare. Results show that vegetable market participation increases the farmers' monthly income and annual per capita consumption expenditure on average by Indian rupee (INR) 8360 and INR 26,410, respectively. Findings also indicate that household size, distance to market, off‐farm income, access to training, price information, vehicle ownership, and storage systems are critical determinants of vegetable farmers' market participation. Identified determinants may support policymakers in designing suitable agricultural marketing policies to reduce market entry barriers and motivate farmers for market participation. [EconLit Citations: Q13, D60].