Economic analysis of winter chili subsidy program in Bhutan: A case study of Dagana and Sarpang Districts
Choney Zangmo, Kentaro Kawasaki and Takeshi Sato
https://doi.org/10.55925/btagr.26.9108
ABSTRACT
Chili plays a significant role in Bhutanese cuisine and is the most commonly consumed vegetable. While Bhutan produces an excess of chilies from April to November, production declines during the colder months from December to March (off-season). Previously, until 2016, the country relied on importing fresh chilies from India. However, due to concerns about chemical residue, the government imposed a ban on chili imports and introduced the winter chili subsidy program in 2017. This program aimed to promote self-sufficiency in chili production during the off-season and was implemented in the southern districts of Bhutan, situated between 200 and 1200 meters above sea level. By providing free inputs such as hybrid seeds, mulching plastic, greenhouses, water storage and conveyance equipment, the program successfully stimulated the domestic production of hybrid chili, which was previously non-existent. However, no studies have been conducted thus far to assess the effectiveness of the program. Therefore, the focus is on evaluating the program’s impact at the household level, utilizing both descriptive and econometric methods with data from the Dagana and Sarpang districts. The findings indicate a positive trend in the quantity of subsidized inputs and an increase in the number of chili growers. Nonetheless, it is important to note that farmers do not receive sufficient quantities of these inputs. Statistical analysis using t-test reveals that male-headed households receive significantly higher quantities of certain inputs compared to their female counterparts. Furthermore, the regression analyses suggest that the program contributed to increased chili productivity, especially when farms receive enough quantity of seeds and mulching plastic, yields increased by 36-49% and 30-90%, respectively. Additionally, farmers reported that the subsidy program played an important part in expanding their cultivated areas.
Keywords: Winter Chili; Subsidy; Inputs; Productivity; Area; Gender