Small and Medium Scale Agricultural Exporters Perception towards Export Barriers in Sri Lanka

Abstract

Though agriculture is one of the dominating sectors in Sri Lanka its contribution to GDP is declining regularly and the industrial sector is grabbing the place day by day. Therefore, agriculture export is a key strategy in developing and promoting agriculture sector. But agricultural products exporters usually face numerous and increasing trading requirements and limitations on agricultural products. Therefore, most of the SMEs are reluctant to initiate agriculture exports. Generally (small and medium scale exporters) SMEs contribute to at least 85% of total enterprises and constitute more than 90% of all non-agricultural private enterprises. In this context, it is important to identify export barriers involved in export agriculture in the process of developing the sector. Structured questionnaire was used as data collection instrument and direct interviews, mail questionnaire and telephone interviews were conducted to collect primary data. One hundred and five small and medium scale agricultural firms; were selected as the sample by simple random sampling technique. Most of the firms used to sell their products through intermediates rather than directly selling to end users. Some of SMEs were unaware on government assistance programs and they do not take the advantage of government assistance in implementing and planning strategies. According to the factor analysis, barriers to export agricultural commodities were identified as finance and certification barriers, competition, barriers for marketing, cost and regulations, political barriers, barriers to skill and export knowledge, information and tariff barriers and subsidy barriers. The findings of the study would be helpful to exporters, policy makers and all the stakeholders in future decision making, regarding agricultural exports.