Impact of Government Policies and Subsidies on Litchi Productivity in Selected Districts of Assam: An Econometric Analysis

Introduction

Litchi farming has become a major horticultural exercise in Assam and it is important in improving the livelihood of farmers and creating jobs. It thrives in the state's agro-climatic regions, such as Sonitpur, Jorhat and Tinsukia districts, which provide an ideal combination of temperature, soil and rainfall (Bora, A., 2024) [8] . Over the years, the Government has implemented a range of policy reforms and subsidy programs to boost horticultural productivity, such as subsidies on fertilizers, water supply, quality planting materials and capacity building of farmers. These measures aim to lower the cost of production, promote the use of modern farming techniques, and improve productivity. Moreover, the importance of extension and technical assistance has been encouraged to improve farmers' understanding and productivity. Despite these measures, the impact of such policies vary between regions (Singh, V., 2025) [9] . Differences in infrastructure, access to subsidies, farmer awareness and efficiency of the administration system often result in variation in productivity (Das, M., 2022) [7] . In this context, this study aims to investigate the impact of government policies and subsidies on litchi productivity in districts in Assam (Government of Assam, 2021). Through district-wise comparisons, this study seeks to offer insights into the comparative effectiveness of policy interventions in agriculture. This is crucial for understanding the shortcomings in policy implementation and proposing ways to enhance equitable and effective policy measures (Kumar, R., 2019) [6] .

The research noted that subsidies in the form of input support, particularly fertilizers and irrigation, boost production. Through regression analysis, the author demonstrated a positive relationship between the level of subsidies and productivity. But it also highlighted regional imbalances caused by unequal distribution and a lack of awareness among farmers. The study concludes that although subsidies are effective, access and implementation at the grassroots level, especially in rural and backward areas, are important to maximise benefits. Das (2022) [7] examined the issue of horticulture development in Assam with a special emphasis on fruit crops. The study noted litchi cultivation is increasingly important because of the favourable climate and growing market demand. There was a positive impact of government measures like training and financial assistance on farmers' practices. But the study found infrastructural deficiencies and lack of extension services in some districts. The study concluded that institutional services and policy dissemination can play a crucial role in improving productivity and sustainability of the horticulture industry in Assam. Kumar (2023) [6] used multiple regression models to perform an econometric analysis of agricultural productivity. The research highlighted the role of irrigation, fertilisers and subsidy in crop productivity. The findings showed that subsidies have a statistically significant effect on productivity, but that their impact is tempered by other factors such as education and resource allocation. The research recommended that policy interventions need to be complemented with education programs. It also emphasised the need for district-specific analysis for targeted policy development. Bora (2024) [8] examined the effects of government policies on fruit production in the northeast of India, with a focus on Assam. The analysis revealed districts with effective subsidy policies and infrastructure support had higher productivity. It also highlighted the impact of irrigation and the use of technology on productivity. But the study identified that bureaucratic inefficiency and lag in subsidy deliveries diminish effectiveness. The researcher suggested enhancing monitoring and timely distribution of subsidies to farmers should be used for sustainable growth in agriculture. Singh (2025) [9] analysed the impact of agricultural policies on crop productivity using recent data and econometric techniques. This study reaffirmed the positive impact of government policy interventions such as subsidies and farmer training on productivity. The research also noted that geographical variations in agro-climatic factors and implementation of policies have different effects. The author emphasised the need for place-specific policies and effective implementation plans. This research found that financial aid, infrastructure building and farmer training is vital to boost horticultural productivity in areas, such as Assam.

Methodology

This study has employed a quantitative and analytical research design to analyse the effect of government policies and subsidies on litchi production. Econometric analysis has been employed to draw relationships between dependent and independent variables.

The study is comparative in nature, with differences observed at the district level (Sonitpur, Jorhat, and Tinsukia).

Type and Source of Data

This study uses secondary data from reputable sources, including  Government agricultural reports  Directorate of Horticulture, Assam  National Horticulture Mission (NHM) data  Research papers and statistical data  District panel data 2015-2023

Study Area Profile

The current study is based on the three major litchi-growing districts of Assam -Sonitpur, Jorhat, and Tinsukia. These have been chosen because of their different agro-climatic zones, infrastructure and the different implementation of government policy and subsidy programs.

Sonitpur

The district of Sonitpur has a favourable climate for litchi cultivation. This area receives sufficient rainfall, has fertile soil and a suitable temperature range, contributing to higher crop yields. The district's farmers are also more actively engaged in various government programs such as subsidies for fertilizers and plantation assistance. Furthermore, irrigation infrastructure is relatively well developed, enabling farmers to control water needs. This ensures steady and relatively high litchi yields in Sonitpur.

Jorhat

Jorhat is well known for its fertile land and research and extension services for farmers. Jorhat has stronger institutional support, enabling the transfer of new technologies and practices in agriculture. Jorhat farmers are well informed about government policies and undertake training. This awareness, coupled with effective subsidy roll-out, leads to better productivity and resource management.

Tinsukia

Tinsukia district has diverse agro-climatic zones, resulting in variability in productivity. Access to government subsidies and service delivery is uneven in some parts, affecting the uptake of new technologies. Limited infrastructure, such as irrigation and transport, also hampers productivity. As a result, litchi production in Tinsukia has relatively low and variable yields, underscoring the need for better policy and infrastructure development. Figure 2 shows the relative ranking of the selected districts in terms of certain agricultural indicators, including irrigation, subsidies and infrastructural support. From the chart, it is evident that Jorhat has achieved better results in most indicators, whereas Tinsukia has lagged behind because of poor infrastructure. This difference confirms the hypothesis of differential policy impact across regions.

Sampling Design

The sampling design is purposive, with three litchi-growing districts included. Data is collected at the district level, rather than for farms.  R² (goodness of fit) have been applied for the analysis of the results.

Variables of the Study

Model Specification

The functional form is given by: 𝑌 = 𝑓(𝑆, 𝐼, 𝐹, 𝑇)

When subsidies, water, fertiliser and training are key to productivity.

Hypothesis of the Study

 H0: Litchi productivity is not affected by subsidies  H1: Government subsidies have significant impact on litchi productivity

Econometric Model

This current investigation uses a multiple linear regression model to investigate the effect of government policies and subsidies on litchi productivity in the study districts of Sonitpur, Jorhat and Tinsukia.

Explanation of the Model

Litchi productivity is postulated as a function of important policy and input variables. The βs represent the change in productivity with a unit change in the independent variable, all else held constant. For example, β₁ represents the change in productivity with a one-unit change in subsidy. A positive value means a direct effect and a negative value means an indirect effect. This econometric model allows us to assess the impact of government policies and the factors that play a significant role in productivity variations between districts. The regression is multiple linear regression because dependent variable is continuous and there is a linear relationship between the inputs and productivity.

Regression Analysis

Interpretation of Results

The regression suggests that all the independent variables used are positively associated with litchi productivity. The subsidy coefficient (0.85) is the largest, indicating that financial assistance by the government has the greatest impact on productivity. The irrigation coefficient (0.60) and training coefficient (0.70) also have strong and significant effects, suggesting that irrigation and training play important roles in increasing productivity (Gupta, S., 2020). The use of fertilisers (0.45) is also positively associated, but with moderate significance, suggesting it requires efficient use and other supporting factors. The R² coefficient (0.78) is high, indicating the model is well-fitted and the selected variables have a strong explanatory power over productivity. The estimated regression coefficient of all the explanatory variables for litchi productivity is shown in Figure 3. The coefficient of subsidy is positive and highest, followed by training and irrigation. The coefficient of fertilizer is smaller, indicating a less significant impact on litchi productivity.

Discussion of Results

The results of the regression analysis suggest that government policy and inputs play an important role in litchi productivity in the districts of Sonitpur, Jorhat and Tinsukia (Rao, T., 2021) [11] . Subsidy (0.85) has the highest positive coefficient on productivity. This suggests that higher subsidies allow farmers to obtain superior quality inputs, adopt superior quality practices, and ease the cost burden to improve productivity. Irrigation (0.60) also has a significant impact, especially during dry seasons, as it provides reliable water source and supports crop development. The coefficient for fertilizers (0.45) has a positive but lower value, indicating that fertilizers play a role in productivity, but their impact is dependent on the right usage. Excessive or improper usage may not be effective. However, the coefficient for training and extension (0.70) suggests that knowledge plays a critical role in improving the use of new technology, and in the effective use of other resources (Patel, K., 2022) [12] .

District-wise Comparison

Comparative results show that Jorhat is the most efficient, mainly because of institutional support, access to training and good policy implementation. Sonitpur also ranks high due to its suitability to the local climate and relatively higher rate of adoption of policies. On the other hand, Tinsukia has lower efficiency because of its poor infrastructure, lack of subsidies in some places, and irregular policy implementation. In conclusion, the discussion shows that the policies are effective, but their effectiveness is dependent on regional accessibility, infrastructure and awareness. The econometric findings confirm that the government interventions have a significant impact on litchi productivity, with subsidy being the most important. Yet, the elasticity of litchi productivity with respect to irrigation and training shows that non-monetary factors are also important. The model suggests that the effectiveness of policy is dependent on the level of district preparedness in terms of infrastructure and capacity (World Bank, 2020).

Findings

These results on litchi productivity for Sonitpur, Jorhat and Tinsukia districts reveal some interesting insights. The findings clearly suggest that subsidies from the government have a noticeable impact on increasing productivity by facilitating the use of superior inputs, and helping farmers adopt new techniques. It is also found that irrigation and training play a vital role by providing efficient use of resources and awareness of latest technologies. The research also points to the existence of spatial differences in the impact of policy implementation, with some areas benefiting more due to favourable infrastructure and institutional arrangements (Directorate of Economics and Statistics, 2022). The study also reveals that farmer awareness and access to government programs play a significant role in the success of the programs. Regions with greater awareness and access to subsidies tend to have higher productivity. In summary, the study concludes that policies are important but must be implemented correctly and be regionally inclusive.

Policy Implications

From the study conducted in Sonitpur, Jorhat and Tinsukia, some of the policy implications to improve litchi production and promote inclusive growth are as follows: First, the government should make the subsidy system more efficient, timely, transparent and accessible. Simplifying procedures can help expedite distribution and ensure timely access to benefits. The second recommendation is to boost investments in irrigation in areas where water is scarce. Access to reliable irrigation systems can help smooth production and minimise the reliance on rainfall. Thirdly, it is important to provide farmer training and extension. This will help farmers to adopt improved production practices, efficient use of resources and enhance productivity.

Finally, it is important to prioritise relatively lagging districts such as Tinsukia where infrastructural bottlenecks and poor access to schemes plague agricultural development. This requires specific initiatives and districtspecific plans to address these gaps and improve livelihoods.

Conclusion

The research finds that government policies and subsidies significantly contribute to improving litchi productivity in the study districts of Assam (Sonitpur, Jorhat and Tinsukia).

The econometric results show that subsidies, irrigation and training play a vital role in enhancing the yield. In particular, subsidies and training play a significant role in increasing productivity (Food and Agriculture Organization. (2021). But the analysis also reveals that the impact of these policies varies across districts. The factors of infrastructure, institutional support and awareness vary across districts, result in varied outcomes. Although Jorhat and Sonitpur perform better, Tinsukia still lags behind due to infrastructure and connectivity issues. So, policy execution, resource allocation and rural infrastructure are the key factors to promote inclusive agricultural growth. A more region-and sector-specific approach can also improve litchi productivity and lead to sustainable development of the horticulture industry in Assam.

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