ECONOMIC CONSEQUENCES OF NEW FERTILIZER POLICY IN SRI LANKA

Abstract

Agriculture is one of the main sources of income in Asian countries, of which agriculture in Sri Lanka is the main source of food. There is widespread concern among the Sri Lankan farming community, industry associations,professionals and agronomists that the Sri Lankan government is restricting and banning the import of fertilizers and agrochemicals as part of a newly announced fertilizer policy. The research hopes to reveal the impact of the new fertilizer policy proposal on famers' economy and paddy production with special reference to 145 rice farmers in Rathnapura district. The usage of organic and chemical fertilizers are major independent variables that affect the production of paddy. Furthermore, the log equation identified after the derived Cobb Douglas production function, depicts that all the variables except the cost of the agricultural machinery used by the farmer have a positive correlation with the farmer's paddy production. The most important finding is that overall paddy production was declined due to the new fertilizer policy.When chemical and organic fertilizers are increased by one unit the yield of the paddy was increased by 0.95 kg and 0.895 kg respectively. The final suggestion of this research is that organic manure should be given to the farmer along with chemical fertilizers until the paddy cultivation is accustomed to organic fertilizer.