148 第44巻 第1号(通 巻128号)

報告論文

Factors InfluencingCropDiversification in

MohamedEsham*, HajimeKobayashi**, Koichi Usami*** and IchizenMatsumura** (*The United Graduate School of Agricultural Sciences, Tottori University, **Tottori University, ***Yamaguchi University)

I Introduction

Agriculturalsector in Sri Lanka has been characterized as dualisticcomprising plantation and non-plantationagriculture. The plantation agriculture is export oriented and is mainly involved in the production of , rubber and , while the non-plantationagriculture is concerned with the production of food crops such as cereals, pulses, condiments, vegetables and fruits, mainly for domestic consumption. The non-plantation agriculture is the backbone of the rural economy as it provides livelihood for over 60% of the population and occupies about 58% of the total farmland in the country (Gunawardenaand Somaratne, 2000). Especially, paddy production occupiesthe largest area of land under agriculture. For example, in 2003, paddy production occupied about 45% of the total farmland or about 82% of farmland under non- plantation agriculture. However, the profitability of paddy production has declined significantly during the past decade as the real cost of production per hectare of paddy has increased by 17% and the real income from a hectare of paddy has declined by 19% between 1990 and 2000 (Epaarachchiet al., 2002). Despite the low return, majority of farmers still continue to cultivate paddy. The commercial production of non-traditional crops for export and domestic markets has not progressed as expected. Furthermore,the recent attempts to diversify agriculture have not helped to achieve the expectedincrease in non- plantation agriculture growth, or decrease in rural poverty (Dunham 1992). In the above context, this paper aims at examining the factors influencing crop diversification,that is, facilitators and constraints,so that policies can be formulated to improve the conditions of small farmers in the non-plantationagriculture.

II Methodology

This study is based on data from the Sri Lanka Integrated Survey (SLIS) canied out by the Sri Lanka Business Development Centre (SLBDC). SLIS is a national survey that was canied out across all provinces of the country from October 1999 to September 2000. This survey is based on a multistage stratified random sampling. For this study a sample of 1,650 fanners cultivating non-plantation crops were selected from among 2,197 sample farmers. Taking into account such factors as household characteristics, resource endowments and constraints to crop diversification comparatively important determinants of crop diversification were examined by a binomial logistic regression analysis. The equation was PFaZi+ui , where Pi is a dummy variable indicating whether the farmer participates in crop diversification or does not participate in crop diversification (participate 1, does not participate 0), 14 are factors thought to be influencing crop diversification while ui is a random error term to take account of unobserved factors. The question pertaining to constraints to crop diversification used in the questionnaire was worded as follows: "Do you think any of the following factors (constraints) have discouraged you from diversifying crops in the land you cultivate?" The constraints to crop diversification can be described as limitations in the following factors to cultivate high value crops such as vegetables, condiments and fruits. Credit constraint means lack of capital, lack of water means enough water is not available, poor quality of land means that the soil and topography is not suitable, lack of extension services means lack of technical 報告論文 149

assistance, lack of inputs means unavailability of appropriate inputs, lack of market means lack of market channels to market high value crops, poor road access means poor accessibility to the market center (input and output) from the farm .

III Characteristics of non-plantation agriculture

1 Farm household Table 1 presents some characteristics of farm households in the non-plantation agriculture. The average farmer in the non-plantation agriculture is around 50 years old and about 70% of farmers are between the age group of 30 and 60 years. Regarding the literacy, about 90% of the farm household heads are literate, which is slightly lower than the nationalliteracy rate of 91.9%. Average farm family size is about 4.7 persons but the labor available for farming is relatively low, that is only 1.27persons per household. The average landholding of farm household is relatively small (0.87ha). Besides, about 78% of the farm households operate farmland below 1.2ha. Similarly, regarding the ownership of farmland, 82% of the farm households own less than 1.2ha of farmland. A significant portion of farmland (88%) is allocated for cereal (paddy) production, while only a small portion of farmland is allocated for production of high value crops, namely 5% and 2% for vegetables and condiments, respectively.

Table 1 Characteristics of farm households in the non-plantation agriculture

Source: Sri Lanka integrated survey data (1999/2000). Notes: 1) Condiments include chilies and onions.

2) Figures in parentheses are the number of farmers.

2 Net profits of major crops In order to compare the returns from major crops cultivated in the non-plantationagriculture, the net profits of major crops cultivated are examined. The net profit analysis presented in Table 2 reveals that vegetables and condiments earn a return twice that of paddy and other cereals commonly grown in non-plantation agriculture. However, the capital requirement for the cultivation of vegetables and condiments are two folds and three folds higher than paddy and other cereals respectively. This could be one possible reason that the majority of farmers cultivate paddy and other cereals despite

Table 2 Net profits of major crops (per hectare)

Source: Sri Lanka integrated survey data (1999/2000). Note) Value of : 1 US dollar = Rs. 76 (2000). 150 第44巻 第1号(通 巻128号) the low net profits from these crops. The net profit analysis further reveals that in terms of profitability,vegetables and fruits have higher ratios of revenue to cost and net profit to revenue than paddy, other cereals and pulses. However, due to high input cost, the ratios of revenue to cost and net profit to revenue of condiments are lower than paddy and other cereals.

IV Crop diversification in the non-plantation agriculture

It is important to clarify the factors influencing crop diversificationtoward the poverty alleviation in the non-plantation agriculture. Crop diversificationcan be described as movement of resources from single low value crop to multiple crops including high value crops (Delgado and Siamwalla, 1997). In this paper, crop diversificationin non-plantationagriculture is considered as a shift from the predominantlypaddy cropping pattern to a high value cropping pattern with crops such as vegetables,condiments and fruits. The growth in production of high value crops, such as vegetables,condiments and fruits, has been very slow due to a variety of constraints. Constraintsto crop diversificationin Sri Lanka can be broadly grouped into social and attitudinal, technical and economic constraints. Social and attitudinalconstraints arise because Sri Lankan fanners prefer paddy cultivation due to cultural reasons and to ensure household food security. Technical constraints arise due to soil suitability,irrigation and water control, and poor technical knowledge. Most of the non-paddy crops cannot tolerate excess soil moisture and prefer well-drained soils. However, most of the soils in the major and minor irrigation schemes are poorly drained and so it makes it difficult to grow crops like vegetables and condiments. Year round water availabilityis another major constraint, even in the major irrigation schemes it is not possible to provide year round on demand water supplies due to technical constraints in the irrigation systems. There is lack of technical know-how among fanners to cultivate high value crops. The public extension system in Sri Lanka has so far failed to address the diversificationneeds of small farmers because it is characterized as an inefficient supply driven system biased towards paddy farming. According to SLIS data, it is reported that only 13% of agriculturalhouseholds have received technical assistance from official extension workers during one-year period. Hence, when it comes to crop diversification,farmers get information about crops, fertilizer and agrochemicals to be used from input suppliers, market intermediariesand other farmers rather than from the official extension workers. Economic constraints arise because of high input requirements, poor availabilityof appropriateinputs in the local markets, seasonality and the perishable nature of high value crops. In this paper, we empirically examine the above constraints to crop diversification. For this study, those who cultivate vegetables, condiments and fruits are considered as farmers who have diversified. Hereinafter, we compare the characteristicsof farm households who participate in crop diversification(participants) with those who do not participatein crop diversification(non-participants) and identify the factors influencing crop diversification.

1 Characteristics of participants and non-participants in crop diversification As shown in Table 3, there is no significantdifference between the two groups with respect to age and education level, while family labor availability and area cultivated are significantly different between the two groups. Those farm households involved in crop diversificationpossesses more family labor per unit of land area than the farm householdsnot

Table 3 Household characteristics of participants and non-participants in crop diversification

Source: Sri Lanka integrated survey data (1999/2000).

Note) ***: significant at 1% level. 報告論文 151 participating in crop diversification. This could be due to the high labor-intensive nature of the crops cultivated by households involved in crop diversification. It is interesting to note that the non-participant farmers have cultivated significantly larger areas of farmland than the participant farmers. This could be a result of low returns from traditional crops (paddy, other cereals and pulses), such that the non-participant farm households are forced to cultivate larger areas of farmland to earn an income sufficient to sustain their livelihood.

2 Determinants of crop diversification in the non-plantation agriculture The analysis of the constraints to crop diversification presented in Fig. 1 reveals that credit constraint, lack of water, extension services and inputs are reported by more than 40% of both participant and non-participant farmers. However, a significantly higher percentage of participant farmers than non-participant farmers report lack of extension services and inputs as constraints perhaps because the severities of these two constraints are apparent only after crop diversification.

Fig. 1 Constraints to crop diversification reported by participant and non-participant farmers

The results of the binomial logistic analysis presented in Table 4 indicate that variables such as family labor availability, area of land cultivated, credit constraint, lack of water, poor land quality, lack of extension services and inputs are statistically significant. The reasons for significance in family labor availability and land cultivated have been discussed above.

Table 4 Determinants of crop diversification

Source: Sri Lanka integrated survey data (1999/2000). Notes: 1) *: significant at the 10% level, **: significant at 5% level, ***: significantat the 1% level. 2) +: due to missing data total sample size of 1,650 was reduced to 1,143(effectivesample size) 152 第44巻 第1号(通 巻128号)

Among the other variables credit constraint, lack of water and poor land quality are negatively associated with crop diversification. Credit becomes important because vegetables and condiments require higher capital than the other traditionalcrops (Table 2). Lack of water and poor land quality are two land related constraints. High value crops such as vegetables and condiments cannot be cultivatedin poorly drained soils (rice fields) in major and minor irrigation schemes as most of the soils in the major irrigationand minor irrigation schemes in Sri Lanka are poorly drained.Therefore, these crops need to be cultivated in highlands where irrigation is problematic because majority of farmers do not have the capital to invest in irrigation. Lack of extension services and inputs are positively associated with crop diversificationthis is because as discussed above a higher percentage of participant than non-participantfarmers reported lack of extension services and inputs as constraints to crop diversification. Among the factors influencing crop diversification family labor, credit constraint, lack of water and poor land quality can be considered as factors impeding crop diversificationbecause these- factors prevent non-participant fanners from practicing crop diversification,while lack of extension services and inputs can be considered as factors decelerating crop diversification because these two factors discourage participant farmers from intensifyingcrop diversification.

V Conclusion

The average farmer in non-plantationagriculture is literate and about 78% of them cultivate less than 1.2ha of farmland. Despite the low returns from paddy and other cereal crops about 88% of farmland area is allocated for cereal production. Factors such as family labour, credit constraint, lack of water, poor land quality, lack of extension services and inputs are significant factors affecting crop diversification. Furthermore, it was clear that factors such as family labour, credit constraint, lack of water and poor land quality have impeded crop diversification while factors such as lack of extension services and inputs have deceleratedcrop diversification. In order to accelerate crop diversification in non-plantation agriculture in Sri Lanka it is necessary to formulate strategies to overcome the identified constraints particularly credit, lack of extension services and inputs. Programs are needed to facilitate the shift from paddy to high value crops through reorganization of the present paddy biased extension and training services to increase the skill levels of farmers in high value crop production. The credit constraint can be overcome by promoting micro-credit programs to increase small farmer access to credit. This can be achieved through close cooperation between the institutional lenders and community based organizations such as NGOs and fanner organizations/groups.

References

[1] Delgado,C. L. and Siamwalla,A. (1997):Rural Economy and FarmIncome Diversification in DevelopingCountries. Discussion paperNo 20. InternationalFood Policy Research Institute, Washington, D.C. [2] Dunham,D. (1992):Increased Productivity and Commercializationof Non-EstateAgriculture, IPS Agricultural Policy Series No. 2, Instituteof PolicyStudies, Colombo, Sri Lanka. [3] Epaarchchi,R, Jayanetti,S. and Weliwita,A. (2002):Policies and theirImplications for the DomesticAgricultural Sector of Sri Lanka:1995-2000 Institute of PolicyStudies Colombo, Sri Lanka. [4] Gunawardena,P. J. and Somartne,W. G. (2000):Non-Plantation Agricultural :Trends, Issues and Prospects,Sri LankaJournal of AgriculturalEconomics, Vol.3, No 1, pp. 15-45. [5] Sri LankaIntegrated Survey (SLIS) Data 1999/2000,available at http://www.erd.gov.lk/publicweb/ERDDOCS.html.