Welfare impact of market participation: The case of rice farmers from wetland ecosystem in Bangladesh

Abstract

Haor ecosystem of Bangladesh plays dual roles: local economic development through agricultural income-earning activities and preserve the environment. Smallholder haor farmers face a variety of challenges that confined their access to the market. This study was undertaken to examine the determinants of smallholder's market access that plays an important role in improving their welfare. Primary data were collected from 300 haor households from three districts, taking 100 from each district by applying a multistage random sampling technique. Heckman's two-stage model with exclusion restriction was used for reaching the objectives. The first-stage probit model indicated that members of an organization, extension contact, access to market information, access to credit, home to market distance, home to haor distance, road connectivity, irrigation facilities, duration of the waterlogged, and output price significantly influenced the market participation of the farmers. The OLS regression results revealed that family size, dependency ratio, farm size, access to credit, and off-farm income significantly influenced the household's per capita consumption expenditure as a result of market participation. The policy should be triggered on investing more in haor areas for improving rural physical infrastructure, which ensured year-round road connectivity and established links with markets. Furthermore, an increase in extension contact, market information systems, agricultural-related training, and promotion of farmer organization should be emphasized.

Keywords

• Rice farmers
• Market participation
• Household welfare
• Wetland ecosystem
• Heckman model with exclusion restriction
• Bangladesh