Major Determinants of Paddy Production and Effectiveness of Fertilizer Subsidies in Sri Lanka: A study in Kurunegala District

Abstract

The main objectives of this study were to identify the major determinants of paddy production and to examine how far fertilizer subsidy affects the paddy production. Based on primary and secondary data, Multi Stage Stratified Sample Technique was employed to examine the power of fertilizer as a major input to increase the paddy production. Ordinary Least Square [OLS] method was used to identify the major determinants of paddy production in the area. Analysis revealed that the fertilizer subsidy programme has positive effect to increase the paddy production but not the productivity. Extending cultivated land and man-days had the greater possibility to increase the paddy production while seed paddy and fertilizer were the other factors which had considerable impact on the paddy production. The study revealed that Paddy production increased by 24.6% in response to 59.1% increase of fertilizer application. It indicated that the productivity level was far behind the expected level. Hence farmers should be made aware about as to how the subsidized fertilizer be utilized more effectively to increase the paddy production while minimizing environmental cost.