Analysis of The Paddy Production in Kanthale Area in Order to Determine

the Effectiveness of Paddy Farming

(Based on the Cobb - Douglas Production Function)

K.C.Harishchandra
University of Colombo
chandimaharishchandra@gmail.com
As an analysis of Sri Lankan agricultural industry, the viability of the paddy production has
been in a certain dark area due to weaker performance since the last few decades and also it has
collaborated with many reasons such as unfavourable government policies, inefficient
execution and narrow political agendas. However, it has been well noted that the attitudes of the
Sri Lankan youngsters have been diverging from the paddy cultivation since the mid of the 1970s
with the sectoral changes and insufficient government allocation on research and
development, lack of enhancement of programs and lower motivation for the sector
participation followed by the poor education system of the country. However, it has become a
part-time employment for many of the participants in Kantale area where a larger area of paddy
marketing has been characterised by small-scale farmers, mostly elderly. Additionally, the
government of Sri Lanka has not been progressively supporting the agricultural industry,
maybe by providing subsidies for fertiliser. This has been converted much to a politically
sensitive issue due to the expected amount of benefits to both farmer and the economy which
also becomes a questionable issue when the policy instruments and the macroeconomic
objectives of the government are not linear with each other. Based on the objectives of the
research, the capital cost and labour cost are some of the unbearable factors in medium and
large - scale farming due to investment risks comparative to the rate of interest on lending as
well as the return to scale which keep increasing at a decreasing level. But, farming may be
effective at small scale like self - employment where the participants are unable to trade - off
their opportunity cost. Today, local paddy market is fluctuating very rapidly with the
interference of the intermediaries who act as price makers in the industry above the government due
to weaker price sealing methods and fewer common policies. In spite of all the mentioned above,
the decline in competitive advantage is one of the standing out issues for the future of the Sri
Lankan paddy cultivation regardless of the size and the segment. Lower levels of budget allocation
for research and development and capital accumulation for technology are some of the
significant elements where the government has been showing less concern to in terms of the
industrial development rather than understanding its significance. Because this may be a major
source of employment with more than 1.8 million people engaged in the industry while causing
a threat to the security of food and nutrition in the nation. Conclusively, it is well evident that
presently the paddy cultivation has not been much favorable to the paddy farmers in Kantale
area with regards to the Cobb Douglas production function.
Keywords: Cobb Douglas production function, Kantale area (Sri Lanka)
Acknowledgments: Courtesy of Department of Economics, University of Colombo, Sri Lanka.