Comparative analysis of rice marketing system in Srilanka pre and post liberalization period

Abstract

This study examined the structural changes in rice marketing after economic newlineliberalization in 1977 to compare the performance between pre and post liberalization period. newlineSince marketing links with the production, efficiency in rice cultivation and profitability via newlinecompeting crops were also studied during post liberalization era. Major policy changes on newlinemarketing during post liberalization period were closing down of Paddy Marketing Board newlinealong with guaranteed price scheme, replacement of rice rationing scheme into the food newlinestamp scheme, liberalization of rice imports, price stabilization through variable tariff and newlineestablishment of a food supply monitoring system. The growth analysis showed that area newlineunder rice showed a positive growth before liberalization and no growth after liberalization. newlineNevertheless, yield registered a positive growth in both periods but the growth rate lowered in newlinethe post liberalization period. Production function analysis depicted that rice faming was newlinetechnically and allocatively inefficient in post period; labour and fertilizer were over used and newlineseed was under used. The B-C ratios were less than one for rice in all the districts studied newlineindicating un-profitability in production but over unity for all alternative crops studied. Producer newlineand retail price of rice increased in real terms during pre liberalization era and declined in post newlineliberalization period. Seasonal price fluctuation reduced during post liberalization regime over newlinepre liberalization regime due to deregulation of rice trade. Rice wholesale markets were well newlineintegrated during the post liberalization period indicating a positive role played by market newlineliberalization policies. The value of Nominal Protection coefficient suggests that Sri Lankan newlinerice is uncompetitive in the international trade. The study stressed the need for a paradise newlineshift towards increasing farm income rather than increasing production to sustain rice farming newlinein the open economy. The policies governing rice economy should focus on developing newlineforward and ba