Agriculture in Sri Lanka - Report Example

Agriculture in Sri Lanka Name: Student no: Institution of Learning: Name of Instructor: City or state of Residence Background Agriculture is the main economic activity in Sri Lanka and accounts for 70% of employment opportunities in the country and people in rural areas are dependent on agriculture as their source of livelihood. The policy of sect oral liberalization in Agriculture in Sri Lanka is important because it is a policy which will ensure few restrictions are available to farmers on trade of their far produce both locally and internationally (Anderson & Martin, 2009). It is a policy that will contribute to removal of tariffs and freezing of tariffs with regards to agricultural products and maintenance of consistency in para-tarriff in any products produced by farmers in Sri-Lanka. This will ensure any unrest as a result of possible tariffs on agricultural products is controlled. The policy will also contribute towards enhancement of agricultural activities in Sri Lanka and competition from imported agricultural products is minimized. This will ensure farmers in the country are able to compete among themselves thus promoting quality agricultural production activities (Balassa, 1964). When liberalization in agriculture is implemented in Sri Lanka, there will be an increase in wages and product prices and productivity will improve. The process of liberalization will also contribute to an open market for products such as tea, rubber and coconut that currently operate under rigid markets. It will be possible to form labor unions thus empowering farmers to negotiate for fair prices in the sales of agricultural products. This is because; currently there are restrictions to formation of labor unions which greatly affect the state of Agricultural activities in Sri Lanka. The design of liberalized agricultural policy in trade of agricultural products in Sri Lanka will give the farmers the rights to sell, distribute and exchange agricultural products in any part of the country. This will promote the exchange of ideas and farmers will benefit from better farming ideas in other locations so that their farming techniques are improved (Central bank of Sri Lanka, 2003). In addition, the liberalization policy will result into removal of restrictions to the use of technology in farming activities so that Sri Lankan farmers will be free to purchase and use latest technology such as farming machinery and imports to improve the quality of their agricultural produce. For instance, the use of modern means of transport will be achieved by allowing farmers use motor vehicles to transport their products from farms to processing centers (Chowdhury & Mahmud, 2008). This will result into reduced losses as a result of spoilage of perishable agricultural produce. In addition, liberalization of agricultural activities in Sri Lanka will enable farmers import farming inputs at with least restrictions because thus, promoting the use of latest facilities and farm inputs in agriculture which will result into an improvement in the quality of agricultural production in the islands. Aims and objectives This paper tries to ensure policies in the areas of restrictions on movement of agricultural activities within the country are reduced and farmers are allowed to use the latest technology in production of agricultural products as well as during transport activities. It is also aimed at allowing famers use the present farming methods to produce their agricultural products so that maximum output is achieved. Other aims and objectives of this paper is to increase domestic agricultural production so that the country has sufficient food that can ensure the population is fed adequately, enhance agricultural productivity so that sustainable growth is achieved, increase benefits and reduce adverse impacts on export agriculture and the use of agro-technologies so that unit cost of production is reduced and profits increased. Implications beyond the Policy area There are various implications of this policy. The most implicated by this policy are the farmers because it will ensure they are able to use the latest farming techniques and technologies which will result into high agricultural output. As a result, they will be able to sell the produce to consumers in the country and benefit from high profits obtained from agricultural activities. This will result into an improvement in their standards of living (Department of Agriculture, 2000). In addition, the use of latest technology in agricultural production will ensure little effort is spent in agricultural activities while output from the use of these technologies is high. For instance, the use of latest transport technologies will ensure wastage as a result of rotting of farm produce is reduced because they will be able to reach processing areas within the shortest time possible. Another group impacted by the policy is the nation’s consumers who will be able to get high quality agricultural products at reduced price (Federal Reserve Bank of Dallas, 1994). This will result into improvement of their standards of living while making the costs of living low. Poverty levels will reduce and the country will attain self-sufficiency in production of agricultural products for consumption. In addition, the government of Sri Lanka will be implicated by the policy because the burden on the government to provide aid in areas affected by famine will be low due to affordability and availability of foods as a result of liberalized agricultural policies (Ingco & Winters, 2000). There will also be increased export of agricultural produce as a result of few restrictions on exportation of these produce, thus resulting into increased domestic income which raises the economy of the country. In addition, retailers involved in the sale and distribution of agricultural produce in Sri Lanka will be beneficial because the policies will ensure there is reduced among of imports that compete for local market for agricultural produce. Accountability The accountability to the development and implementation of agricultural liberalization policy is placed on the role of the government, farmers’ organization and consumer organizations in ensuring these policies are operational. For instance, the government is responsible for ensuring laws that limit the use of current technologies in agricultural production are abolished so that farmers are allowed to purchase sand use the latest technologies which allow agricultural production (Jayatissa & Thenuwara, 2000). In addition, the government of Sri Lanka is responsible for ensuring taxes on exports of agricultural outputs are reduced so that farmers are able to export the produce with little restrictions. The government of Sri Lanka is also responsible for improving infrastructure such as roads so that farmers can transport their produce easily from farms to processing plants (Kelegama & Corea, 2004). The government of Sri Lanka is also accountable for ensuring imports from other countries that compete for local markets with farm produce in Sri Lanka are minimized so that farmers in Sri Lanka can get access to market for their farm produce. In addition, farmers’ organizations in Sri Lanka have to lobby for abolishment of laws restricting agricultural activities in the country such as laws restricting the use of technologies in production and laws restricting the use of latest farm inputs such as fertilizers in agricultural activities (Lakshman & Tisdell, 2000). They also need to lobby for abolishment of high taxes imposed on agricultural produce such as exports and elimination of restrictions during exportation of agricultural products. They will also evaluate the extent to which these policies are implemented so that if there is a sign of dissatisfaction, the representatives of these organizations can negotiate with the government for their implementation. Consumer’s organizations will also be accountable for ensuring the implementation of these policies by seeking the laws allowing imports of agricultural produce is abolished while lobbying reduced prices of agricultural produce are reduced so that they can afford them. In addition, they will lobby for a improvement in transport services such as improved roads so that they can access farm produce from farmers (Norton, 2004). They will also provide an evaluation of the manner in which agricultural liberalization policies are implemented so that areas where there is dissatisfaction can be communicated to the government for improvement. Communications There is little knowledge among the public with regards to these policies with the greatest lack of knowledge among farmers in rural areas. This is because most farmers are not aware of the imposition of tariffs that result into high costs of agricultural exports that result into minimum profits for the farmers (Quah, 1997). In addition, most farmers’ organizations are not aware of the little restrictions for imports from other countries. Consequently, they have been involved in unnecessary competition for local market in Sri Lanka with importers of agricultural products with farmers from other countries. This has greatly affected their involvement in commercial agriculture (Samuelson, 1964). Another area where lack of knowledge has been observed is the lack of knowledge concerning the effectiveness of the latest technologies in improvement of agricultural production among farmers. This has put most farmers in situation where they rely on traditional methods of farming, thus resulting into high labor and reduced output from their farming activities. Outcomes Following the implementation of the policy, it has been observed that there are particular areas of improvement in the state of agricultural activities in Sri Lanka. For instance, it has been observed that currently, farmers are able to export their products at reduced tax rates and it has been possible to use the latest technology in agricultural production (Chowdhury & Mahmud, 2008). Policies have also been adopted that allow farmers access wider markets and regional infrastructure such as roads has been improved considerably to enhance transportation of agricultural produce to warehouses. For instance, most farmers currently use tractors to plough their fields and poverty has reduced in the country since the country produces sufficient food to cater for their living. Land use has also improved and farmers are currently allowed to use farm inputs such as fertilizers in their farms and modern farming practices that result into improved farms yields have been used. References Anderson, K., & Martin, W. (2009). Distortions to agricultural incentives in Asia. Washington, D.C: World Bank. Balassa, Bela, (1964) The Purchasing Power Parity Doctrine: A Reappraisal, Journal of Political Economy, 72, pp 585-596. Central bank of Sri Lanka (2003). Annual Reports 1980-2003. Colombo, Central Bank of Sri Lanka, Sri Lanka. Chowdhury, A., & Mahmud, W. (2008). Handbook on the South Asian economies. Cheltenham, UK: Edward Elgar. Department of Agriculture. (2000). At the Turn of the Century, Department of Agriculture, Paradeniya, Sri Lanka. Federal Reserve Bank of Dallas, (1994), The Service Sector; Give It Some Respect, Annual Report, Dallas. Ingco, M. D., & Winters, L. A. (2000). Agricultural trade liberalization in a new trade round: Perspectives of developing countries and transition economies. Washington, D.C: World Bank. Jayatissa R. A., & Thenuwara, H. N., (2000), An Evaluation of the Impact of Indo-Lanka Free Trade Agreement on Sri Lanka’s Trade and Industry, Staff Studies, Vol. 25-26, Nos. 1 and 2, 1995-96, Published 2000, Central Bank of Sri Lanka. Kelegama, S., & Corea, G. (2004). Economic policy in Sri Lanka: Issues and debates. Thousand Oaks, Calif. [u.a.: Sage. Lakshman, W. D., & Tisdell, C. A. (2000). Sri Lanka's development since independence: Socio- economic perspectives and analyses. Huntington, NY: Nova Science Publ. Norton, R. D. (2004). Agricultural development policy: Concepts and experiences. Chichester: John Wiley & sons. Quah D., (1997), Increasingly Weightless Economies, Bank of England Quarterly , Vol. 37, No. 1. Samuelson, P., (1964), Theoretical Notes on Trade Problems, Reviews of Economics and Statistics, 46, pp145-154. Solow, Robert, (1956), “A Contribution to the Theory of Economic Growth”, Quarterly Journal of Economics, 32, 65-94. World Bank, (2000), Global Commodity Markets, Number 1, The World Bank. Read More