Role of Food and Agriculture Sector in Economic Development of Sri Lanka: Do We Stand Right in the Process of Structural Transformation?

Abstract

This paper examines empirically the economic problem of whether the food and agricultural sector in Sri Lanka is capable of playing its intended role proposed by Myint over the last few decades. The Myint hypotheses suggest that, as a country undergoes a process of structural transformation, there are four different roles to be played by the food and agriculture sector. These include: (1) food security - associated with annual per capita production of food (rice and other field crops); (2) labor mobility - releasing of agricultural labour force to other sectors (manufacturing and services); (3) capital formation - through domestic savings from this sector, and (4) agricultural trade - earning of foreign exchange by exporting agricultural products (tea, rubber, coconut). Both descriptive and Multiple Regression Analysis were carried out to analyze the secondary data covering the period of 1970 to 2004. The results suggest that this particular sector performs satisfactory with respect to many of these areas, especially earning of foreign exchange, food security and capital formation; however, there are prospects for enhancing these performances. Yet, it was not capable of releasing the excessive labor it possesses to work in other sectors as specialized workers. The study, as a whole, highlights the importance of safeguarding the food and agriculture sector in Sri Lanka, because not only it acts as the mainstay of livelihood for vast majority of people, but also it has come up to a position where it can stand right with a little help and a right policy framework. Key words: Agricultural policy Agricultural trade; Economic development; Food & Agriculture sector in Sri Lanka; Food security; Structural transformation DOI: 10.4038/jfa.v1i1.1834 Journal of Food and Agriculture Vol.1(1) 2008 pp.1-12