A Study on Market Window and Economic Efficiency in Assessing Profitability of Selected Upcountry Vegetables in Sri Lanka

Abstract

Purpose : Vegetable subsector being a foremost source of income and employments, plays an outstanding role in Sri Lankan economy. However, profits from vegetable farming have become low due to low prices and frequent price fluctuations. Thus, this study identifies the existence of profitable markets, profitability, economic efficiency and price fluctuations of selected upcountry vegetables; bean, tomato, potato, cabbage and knol-khol in Bandarawela Divisional Secretariat Division, Badulla district. The aim of the study is to address the key issues in Sri Lankan upcountry vegetable sector. Research Method : Stratified random sampling was applied to draw a sample of 150 vegetable growers to collect primary data. Market window analysis was done to identify profitable markets for each crop. Profit function, economic efficiencies, seasonal price indexes, coefficients of variation of prices and Garret’s ranking technique were employed to examine profitability, price fluctuations and factors that have contributed to above situations from farmers’ point of view. Findings : The results indicated that, market windows were existed during the year 2016 for all crops considered. When compared profits, tomato and bean have produced high profits in Yala; the shorter rainy season (4910.35 US$ ac-1) and Maha; the longer rainy season (2301.35 US$ ac-1) respectively. Moreover, the production of cabbage (Yala2.75) and bean (Maha 1.14) was economically more efficient compared to the other crops considered. The seasonal price index disclosed that, prices of vegetables tend upward during the festival seasons, especially during the months of March and April. The coefficient of variation of price fluctuations over the years and seasonal variation and variability of prices observed were mainly due to seasonality in production, oversupply of production and low level of shelf life of vegetables. As per the constraint analysis, the price fluctuations were the highest perceived obstacles followed by unreasonable price for the fresh produce. Limitations : Limited availability of historical data was a constraint during the study and that was avoided using data for a base year. Value : It is better to conduct a study on market window analysis and profitability evaluation for upcountry vegetables in order to find out profitable market existence for each vegetable because, these evidences are useful to the farmer, trader and planners.