Impact of the Facilitated Market Linkage Program on Farmers' Income: Evidence from Wangdue Phodrang district, Bhutan

The facilitated market linkage program in Bhutan was initiated to raise farmers f income by linking them with institutional markets such as schools and training academies for the national service program. While policy reports and media sources have repeatedly documented its positive impact on farmers f income, there is limited empirical evidence. This study hence aims at evaluating the impact of the program on farmers f income by applying the Propensity Score Matching (PSM) with radius matching method. A convenience non-probability sampling technique was used in the field survey to collect the household level data in Wangdue Phodrang district, Bhutan. The determinants of participation in the program are also examined using a logit model. The results indicate a significant impact of the facilitated market linkage program on farmers f income. Participating farmers earn an annual income of about BTN 156,030 more than the non-participating farmers, ceteris paribus. Higher prior income, greater distance to the market, and female-headed households, are positively associated with the program participation. Technology adoption, measured by the use of greenhouses and feeding machines, is negatively associated with the participation. The estimated positive impact of the program on the farmers f income is consistently robust across all alternative model specifications.