Abstract
“Kethata Aruna”, is the existing fertilizer subsidy programme for paddy sector, which was implemented in 2005 in Sri Lanka. Under this subsidy programme, the three major fertilizers, i.e. Urea, Triple Super Phosphate (TSP) and Muriate of Potash (MOP), have been heavily subsidized for paddy farmers with the intention of promoting the use of fertilizer to increase national paddy production. This paper investigates the impact of the price of paddy fertilizer on the level of fertilizer application and national level paddy production for the period 1981 to 2009. Secondary data obtained from the relevant government institutions were graphically and statistically analyzed to determine the trends and relationships of different parameters on national paddy production. The results revealed that the subsidized fertilizer prices promoted the use of recommended rates of fertilizer by farmers in their paddy crops. It also revealed that the “Kethata Aruna” fertilizer subsidy programme has triggered the paddy farmers to use more fertilizers per unit area than what they used previously. However, the imbalanced fertilizer use in the past, particularly the overuse of urea compared to TSP and MOP, was controlled by the present subsidy programme by making TSP and MOP available at the same price as of urea. About 88% of the variation of the national paddy production is explained by combined effect of total fertilizer, sown extent and the technological improvement. Results showed that a 1% increase of the input of total fertilizer has resulted in a 0.109% increase in the total national paddy production, while an increase in 1% of sown extent resulted in a 0.85% increase in the national paddy production. Tropical Agricultural Research Vol. 25 (1): 14-26 (2013)
Highlights
A fertilizer subsidy programme was first implemented in Sri Lanka in 1962
The results indicate that 88% of the variation of the national paddy production is explained by combined effect of total fertilizer, sown extent and the technological improvement
Based on the results of the study, it can be suggested that the fertilizer application in the paddy sector of Sri Lanka is dependent on the fertilizer price
Summary
A fertilizer subsidy programme was first implemented in Sri Lanka in 1962. This initiation was coincided with the onset of Green Revolution and the main intension of the provision of fertilizer subsidy was to encourage farmers to switch to new high yielding varieties which are highly responsive to chemical fertilizers (Weerahewa et al, 2010 and Kikuchi & Aluwihare, 1990). One of the main intensions of the existing fertilizer subsidy programme is to increase the rice crop productivity (as per the “Mahinda Chinthana”) to attain self sufficiency in terms of rice (MADAS, 2007). It is targeted to reduce the cost of food importation, help farmers to reduce the cost of production and channel this benefit to the consumer through reduced cost of rice. Under this subsidy programme, the three major paddy fertilizers namely, Urea, Triple Superphosphate (TSP) and Muriate of Potash (MOP) are given at a price of Rs. 350 per 50 kg, subsidizing approximately 91.5% of the total cost of fertilizer (Ministry of Finance & Planning, 2008 & 2009)
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