Commercialization of Horticulture and Its Impact on Farm Households’ Welfare: Evidence from Assam, India
| dc.contributor.author | Das, Hemanta | |
| dc.date.accessioned | 2026-10-13T06:02:34Z | |
| dc.date.available | 2026-10-13T06:02:34Z | |
| dc.date.issued | 2026-02-20 | |
| dc.description.abstract | Agriculture remains a cornerstone of economic development, livelihood security, and poverty reduction for rural communities, especially in developing countries. Despite its crucial role, the economic condition of farmers in agrarian countries, including India, remains deplorable. Against this backdrop, agricultural commercialization, i.e., transitioning from subsistence farming to market-oriented production, has gained increasing attention as a strategy to enhance farmers' welfare and stimulate rural development. While many studies underscore the potential benefits of commercialization, empirical findings remain mixed, with some indicating improved welfare outcomes and others cautioning against adverse effects. In India, the commercialization of agriculture, particularly through crop diversification towards high-value horticultural crops, has been central to agricultural policy since 2016, especially after the Government’s announcement to double farmers' incomes by 2022. However, despite policy-level emphasis, little empirical evidence exists on how commercial farming influences farm household welfare in the Indian context. This study addresses this gap by evaluating the adoption, marketing, and welfare impacts of commercial horticulture farming in Assam, a state actively promoting horticultural commercialization. Specifically, the study examines the extent and determinants of commercial horticulture adoption, efficiency of marketing channels, determinants of marketing channel choice, and the welfare outcomes of commercialization in terms of farm productivity, income, and employment among farm households. The study utilized both secondary and primary data. Secondary data were sourced from official statistics of government to provide a macro-level overview of Assam’s agricultural performance, including trends in landholding, cropping patterns, and agro infrastructure development. To achieve the main objectives of the study, primary data were collected from 540 farm households across six districts, viz. Kamrup, Barpeta, Dima Hasao, Cachar, Golaghat, and Sonitpur, using a multi-stage sampling technique. vii From secondary data, it is found that Assam’s agriculture is undergoing structural changes, marked by a declining share in GSDP and a shift toward non-crop sectors, i.e., livestock and fisheries. A notable shift in cropping patterns is also seen, with farmers diversifying from traditional cereals to high-value crops such as maize, oilseeds, vegetables, and fruits. Horticulture is seen to contribute the most to agricultural gross value added, indicating its role in income growth and rural development. However, low fertilizer use, poor mechanization, limited irrigation, and weak storage and market infrastructure continue to hinder agricultural development in Assam. To assess commercialization, a composite Farm Commercialization Index (FCI) was constructed, and the Independent Double-Hurdle (IDH) model was used to identify the determinants of both adoption and intensity of commercial horticulture farming. Results indicate that although a significant proportion (69.81 percent) of farmers have adopted commercial horticulture, the intensity remains low (average commercialization at 40.01 percent). Key determinants influencing both adoption and intensity of commercialization include education, risk attitude, off-farm income, access to credit, membership in farmer groups, training, extension services, and market access. Younger farmers are more inclined towards adoption, while female participation remains limited. Interestingly, factors such as irrigation and farm size have differential impacts—while irrigation supports higher commercialization intensity, it does not influence adoption. Conversely, larger farm size encourages adoption but reduces intensity due to possible scale management challenges. Marketing efficiency and determinants of farmers’ channel choices were analyzed using the Acharya and Agarwal method and the Multinomial Logit (MNL) model. It is found that farmers used five main marketing channels, with the direct (Farmer–Consumer) channel emerging as the most efficient in terms of producer share and consumer affordability. However, indirect channels dominated due to challenges in direct marketing. Determinants influencing channel choice include socio-demographic characteristics (gender, age, education, family size), farm attributes (farm size, produce volume), and access to infrastructure (smartphones, vehicles, market yards). Farmers with better connectivity and smaller volumes preferred direct sales, while those with larger farm areas, higher off-farm income, and access to credit favored indirect channels. The study emphasizes that marketing efficiency declines due to intermediary layers, increased wastage, and higher transport costs, highlighting the need for infrastructural and institutional support for direct marketing. Subsequently, the impact of commercialization on farm households’ welfare examined using the Endogenous Switching Regression (ESR) model. This model controlled for selection bias and estimated welfare outcomes under both actual and counterfactual scenarios. The results demonstrate significant positive effects of commercial horticulture adoption on productivity, income, and employment. Specifically, adopters achieved a productivity level of ₹167.714 thousand/ha compared to a counterfactual of ₹59.491 thousand/ha, an increase of ₹108.223 thousand/ha. Similarly, income gains for adopters amounted to ₹42.626 thousand/ha. Non-adopters could potentially increase their productivity and income by ₹121.642 and ₹54.141 thousand/ha, respectively, if they chose to adopt commercial horticulture. Employment effects were also notable, with adopters generating 40.701 more labor days per hectare than if they had not adopted, and non-adopters having a potential gain of 20.359 labor days. These findings confirm the substantial welfare benefits of commercialization for farm households. The study’s policy implications are multi-faceted. First, it underscores the importance of targeting youth and women through training and financial support to increase their participation in commercial farming. Second, strengthening extension services is critical for disseminating knowledge and linking farmers to markets. Third, credit systems need to be tailored to ensure productive use in farm investments. Infrastructure development, such as irrigation systems, cold storage, local markets, and transportation networks, must be prioritized to reduce post-harvest losses and marketing inefficiencies. Additionally, digital tools and mobile platforms can transform farm marketing, offering price transparency, real time market information, and customer engagement. From a farmer’s perspective, the study highlights the importance of forming farmers groups, enhancing collective bargaining, and engaging in continuous learning to improve farming efficiency and market competitiveness. Efficient land and water use, along with diversification and precision farming, can further optimize farm productivity and sustainability. Farmers should leverage mobile technology and digital platforms for marketing and logistical planning, invest in transportable vehicles for improved market access, and engage in value addition to increase product shelf life and revenue. | |
| dc.identifier.uri | http://nits.ndl.gov.in/handle/123456789/230 | |
| dc.language.iso | en | |
| dc.publisher | Department of Humanities and Social Science, NITS | |
| dc.relation.ispartofseries | TH801 | |
| dc.title | Commercialization of Horticulture and Its Impact on Farm Households’ Welfare: Evidence from Assam, India |