Efficiency of rice production and issues relating to cost of production in the districts of anuradhapura and polonnaruwa

Abstract

Sri Lanka maintains a high level of self-sufficiency in rice at a cost to the economy. There is an issue of how to produce low cost rice and at the same time maintain comparative advantage in rice production of Sri Lanka. Hence, this study is focussed on the efficiency issues relating to productivity and the potential to reduce cost of production in paddy in the Anuradhapura and the Polonnaruwa districts. The analysis of secondary data revealed that there was an increment in the production and productivity of rice from 1995 to 2000 in the two districts. However, the nominal cost of production was increasing over time. The primary data (2001/2002) analysis indicates that more than half the farmers had less than the average yield level (5 mt /ha.). About 16% and 21% of the farmers were performing well in the districts of Anuradhapura and Polonnaruwa respectively, with a productivity efficiency of over 90%. There was a significant variation in cost of production between the districts, and within the districts. This indicates there are management problems and hence the need for training. Size of farm in relation to production efficiency indicates the need for larger holdings (> 1 ha) for efficient use of resources, as reflected in Polonnaruwa. Small land holdings, high post harvest losses, low output quality and high cost of production and poor participation in farmer organization activities had a significant influence on the productivity efficiency among the low performing farmers in both districts.