Abstract:
Growing and processing of Export Agriculture Crops (EAC) provides cash income to the
wide range of rural sector in Sri Lanka particularly small holders. These small holder
crops significantly contribute to rural development and livelihood security of rural
community. Among EACs cinnamon and pepper are the most important products in the
export market in Sri Lanka. Therefore, potential impact of cinnamon and pepper to the
rural economic development would be high. According to the statistics, production and
export earning of these crops has increased during last few years. For example the share of
cinnamon to the total agriculture export from 2004 to 2005 has increased 0.86% to 0.96%.
This has exceeded the share of rubber in 2005 which is (0.7 %) considered as one of the
major export crop.
The main objective of this study is to analyze the potential impact of cinnamon and
pepper on the rural economic development. Specific objectives are to compare the benefits
and costs of both of these economic activities and to identify location specific problems
associated with cinnamon and pepper cultivation. Further, this study presents policy
measures to provide favorable environment for these economic activities in order to secure
rural livelihoods. Primary data collection was done using a questionnaire survey conducted
for farmers who are engaged in cinnamon and pepper cultivation as an economic activity
in Buthkanda DS division in Rathnapura District. Data analysis was done using benefit
cost analysis and basic statistical tools.
-The study revealed that cultivation of cinnamon and pepper are major economic
activities of around 60% farmers in the Buthkanda DS division. It shows higher
dependency,s of those communities on EAC. There is an increasing trend of productivity
(kg/ha) both in cinnamon and pepper during last 10 years. According to the cost benefit
analysis, the net return from cinnamon is higher than that of pepper. Price analysis shows
that the export price of cinnamon is higher than pepper for many years. However, local
production of cinnamon is lower than pepper. Appropriate policy strategies are suggested
by this study to overcome some problems facing the EAC sector in order to secure these
livelihoods and to promote more profitable cinnamon cultivation.
