Impact of export agriculture crops in rural economic development: A comparative analysis of cinnamon and pepper cultivation in Rathnapura District.

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.