Trade Competitiveness of Agroforestry Crop Sector in Sri Lanka

Abstract

A significant change in the composition of agricultural exports from major plantation crops to non-traditional tree crops such as spices, fruits, and timber which mainly originated from small holder agroforestry systems is evident during the last few decades in Sri Lanka. Development of supply chain for products that are competitive in the world market will enable small holder farmers to reap the economic benefits from agroforestry systems and will make such systems economically viable. The objective of this work was to analyze the trade competitiveness of agroforestry crop sector in the country. Revealed Comparative Export Advantage (RXA), Relative Trade Advantage (RTA) and Revealed Comparative Advantage (RCA) indices were computed for 580 agroforestry products using data extracted from the trade map at the HS level 6. The 580 products were grouped into 82 categories based on the crop origin. The analysis revealed that on average, 58 products had both relative export advantage and revealed comparative advantage and 124 products had relative trade advantage at HS 6 level during 2001-2008. Among the non-traditional exports, fruit crops (avocado, papaya, citrus, pineapple, cashew, lemon and lime, guava, mango, mangosteen and durian), root crops (manioc and arrowroot), medicinal plants (ginger and turmeric), cardamom, coffee, mushroom, bamboo, vanilla, cocoa and beans were found to be competitive in the world market according to relative trade advantage index. Cinnamon fetched the highest RXA, RTA and RCA values, followed by tea, cloves, coconut and nutmeg. The United Arab Emirates, France and Germany were found to be the major export destinations for the products that are highly competitive.