Sustainability of Resources: Dairy Sector Dual Circulation System Under Market Liberalization—A Case Study of the Dairy Sector in the Kurunegala District, Sri Lanka

Abstract

The import liberalization of milk and milk products has adversely affected the dairy sector of Sri Lanka. It has put the livelihood of 2.5 million people at risk and aggravated the burden on the country`s food import bill. This study presents a case of the Resources Dual Circulation System of the dairy sector to support the contention that this system contributes to the sustainability of dairy farming in the era of trade liberalization. The results indicate the potential of the system with regard to the efficiency in farm-level integrated resource use techniques; the contribution to smallholder dairy farmers in terms of improving milk income and productivity; the provision of a competitive supply chain system with better raw milk prices and environmental friendliness with respect to organic manure usage and biogas production. The study concludes that strategies designed to develop the dairy sector and improve the welfare of dairy farmers in Sri Lanka during the economic liberalization period should take into account the characteristics of the dairy sector's dual circulation system.