Efficiency of Marketing Channels of Small Scale Rubber Producers in Kalutara District

Abstract

Smallholders contribute significantly to natural rubber production in Sri Lanka. However, at present, they do not get optimum benefits from their holdings. Inefficiency of marketing channels and consequent less income is one of the main reasons for not reaping potential benefits. Hence, this study conducted to examine the efficiency of different rubber marketing channels of smallholders in Kalutara district, one of the major rubber growing areas in Sri Lanka. The results showed that the average profit efficiency in smallholder rubber farmers was 64% implying that around 36% improvement in efficiency could be achieved without increasing the cost. The farmers who sell latex showed comparatively higher level of efficiency (73% ) than the RSS (Ribbed Smoke Sheet) producers (62% ) and USS (Un Smoke Sheet) producers (54% ). Further, the farmers who sell their latex to the mobile collectors (82% ) and company agents (84.5% ) showed the highest efficiency among all marketing channels observed. The major determinants of efficiency of marketing were the holding size, experience of farmers, type of labor used for tapping and money transaction of marketing channels. Age of cultivation, distance to market, non- agricultural share of income, farmer's education, type of output, accessibility of marketing channel and input given by marketing channel were found non-significant determinants of the efficiency although these determinants received expected signs.