ECONOMIC VIABILITY OF “SRI” AND POLICY IMPLICATIONS

A.P.S. FernandoFaculty of Agriculture

Rajarata University of Sri Lanka

An overview

Scope and limitations of the studySocio-economic background of farmersLand tenure and useFarm mechanization and labour useProductivity and outputCost benefit and profitabilityConclusions and policy implecations

Table 1:Engagement in economic activity by sample paddy farmers

Main economic activity Non-SRI SRI

Farming (FA) 47.5 44.4

Casual Labour (CL) 18.6 16.8

Skilled Labour 5.9 8.1

Government sector (GE) 5.3 4.7

Private sector (PV) 12.4 10.5

Self Employment (SE) 4.8 12.6

Small Business (SB) 2.8 1.3

Other (OT) 2.7 1.6

Total 100 100

Figures are in percentages

1. Social and economic background of sample paddy farmers

Economic activities of sample paddy farmers

Figure 1: Average monthly income by employments of SRI participants

0

5000

10000

15000

20000

Wagelabour

Skilledlabour

Govt.emp.

Self emp. Privateemp.

(Rs/

mon

th)

Figure 2: Average monthly income by employments of Non-SRI participants

0

5000

10000

15000

20000

25000

Wagelabour

Skilledlabour

Govt.emp.

Self emp. Privateemp.

(Rs/

mon

th)

Wage labour

Skilled labour

Govt. emp.

Self emp.

Private emp.

Contribution of income from off-farm employment sources

Engagement in off-farm employment and income of SRI farmers

40%

15%10%

30%

5%18%

13%

28%

15%

26%Wage labour

Skilled labour

Govt.employmentSelfemploymentPrivteemployment

Figure 3.a Engagement in off-farm employment by SRI farmers

Figure 3.b Composition of off-farm income of SRI farmers

Table 2: Tenure status of lowlands of SRI participants Region Deeds Grants Permits Leased Rent in Encroach SharedHambantota 58.8 7.1 3.5 7.1 18.7 2.4 2.4Nawagatt. 66.7 n.a. n.a. n.a. 33.3 n.a. n.a.Rambukka. 66.7 n.a. n.a. 5.6 22.2 n.a. 5.6Thambutt. 61.0 4.9 n.a. 4.9 22.0 2.4 4.8Wanatawill. 68.4 10.5 n.a. n.a. 21.1 n.a. n.a.Warakapola 82.6 n.a. n.a. n.a. 8.7 n.a. 8.7n.a.-not available and figures given in the table are percentages

Table 3: Lowland endowment and tenure status of low lands of Non-SRI participants Deeds Grants Permits Leased Rent in Encroach Shared

Hambantota 57.1 2.4 4.8 2.4 23.7 4.8 4.8Nawagatt. 50 NA 12.5 NA 37.5 NA NARambukka. 66.7 NA NA NA 22.2 NA 11.1Thambutt. 50 3.1 NA 6.3 12.5 NA NAWanatawill. 57.2 14.3 NA 4.1 24.4 NA NAWarakapola 57.1 NA NA 14.3 28.6 NA NAn.a.-not available and figures given in the table are percentages except land endowment

2. Land tenure and land use

Table 4: Allocation of lowlands by SRI participants

Location Average lowland endowment (ac)

SRI Non-SRIYala Maha Yala Maha

Hambantota 2.07 (85) 0.53 0.49 1.55 1.58Nawagattegama 3.60 (12) NA 0.92 2.3 3.5Rambukkana 0.94 (18) 0.64 0.64 0.47 0.47Thambuttegama 2.12 (41) 0.25 0.63 1.7 1.7Wanatawilluwa 3.61 (19) 0.67 0.78 2.67 2.88Warakapola 0.56 (25) 0.34 0.34 0.39 0.39Average 2.58 (200) 0.49 0.63 1.51 1.75Cases reported are given in parentheses

Table 5: Allocation of lowlands by different SRI adopter categories Adopter category

Average low land endowment

(ac)

Allocation under SRI

Allocation under Non-SRI

1 1.80 0.40 (22.2) 1.40 (77.8)2 2.65 0.60 (22.6) 2.05 (77.4)3 1.99 0.48 (24.1) 1.51 (75.9)4 3.00 0.75 (25.0) 2.25 (75.0)

Figures given in parentheses are in percentages

Table 6: Land use under different varieties by SRI participants 2011/2012 Maha 2011 Yala 2010/2011 Maha 2010 Yala

SRI with improved varieties (ac)

0.46 (47) 0.46 (38) 0.54 (46) 0.48 (31)

SRI with traditional varieties (ac)

0.68 (35) 0.56 (29) 0.61 (30) 0.60 (16)

Non – SRI improved (ac) 2.22 (127) 2.04 (126) 2.22 (120) 2.23 (108)Cases reported are given in parentheses

Table 7: Ownership of machinery by participant groupType of machine SRI (%) Non-SRI (%) Four-wheel tractor 1.3 0.4Two-wheel tractor 19.2 15.8Weeder 10.8 3.8Seeder/transplanter 2.1 0.0Combine harvester 2.5 0.4Water pump 0.4 0.8Threshing machine 0.4 0.4

3. Farm mechanization and labour use

Activities demanding high labour are:Leveling and transplantingHarvestingThreshing and winnowing

Figure 4: Labour demand by activity

0 2 4 6 8 10 12 14 16

Ploughing

Bund clearing and plastering

Leveling and transplanting

Water managment

Fertilizer application

Application of org./in org. chemicals

Visits and observations

Harvesting

Threshing and winnowing

Transportation

Mandays / acre

SRI

Non-SRI

Figure 5: Labour use per ac of padddy by region

010203040506070

Hamba. Nawag. Rambu. Thamb. Wanat. Waraka. All

Man

days

/ac

Non- SRI

SRI

0% 20% 40% 60% 80% 100%

SRI

Non-SRI Family male

Family female

Hired male

Hired female

Figure 6: Labour participation by gender, origin and region

Table 8: Average land productivity under different production systems (kg/ac)

Production system Ham. Nawa. Ram. Tha. Wan. Wara. All

SRI with traditional varieties

1,217 NA 1,250 1,356 1,516 1,155 1,299

SRI with improved varieties

1,895 2,366 2,105 2,047 1,250 1,840 1,994

Non – SRI 2,423 1,013 1,645 1,834 1,478 1,383 1,629

4. Productivity and output

1. Land productivity is high under SRI with improved varieties followed by non-SRI, and SRI with traditional varieties

2. Therefore, SRI with improved varieties would enhance the average labour productivity as well (kg/man-day)

Figure 7: Average labour productivity

0

20

40

60

80

100

SRI with improvedvarieties

SRI withtraditional varieties

Non-SRI

Kg/

man

day

5. Costs, benefit and profitability

Figure 9: Cost of labour (Rs/ac)

0

10,000

20,000

30,000

40,000

50,000

Hamba. Nawag. Rambu. Thamb. Wanat. Waraka. All

Rs.

/ ac

Non- SRI

SRI

Figure 8: Cost of Material and farm power (Rs/ac)

0

5,000

10,000

15,000

20,000

25,000

Hamba. Nawag. Rambu. Thamb. Wanat. Waraka. All

Rs/

ac

Non- SRI

SRI

* Rise of total cost of production owing to labour increases* If the labour is not paid (family labour), it is the flip side of the coin*In this analysis, however, environmental costs (particularly water and chemical pollution) have not been taken into account.

Figure 10: Total cost of production with labor (Rs/ac)

010,00020,00030,00040,00050,00060,00070,000

Hamba. Nawag. Rambu. Thamb. Wanat. Waraka. All

Rs/

ac

Non- SRI

SRI

Table 9: Average prices of paddy

Product Wet basis(Rs./Kg.)

Dry basis(Rs./Kg.)

Seed paddy

(Rs./Kg.)SRI Traditional 40.5 45.2 47.0

Improved 27.3 29.4 48.3

Non-SRI 27.5 28.4 NA

* Highest profit is from SRI with improved varieties * Reasons are three-fold:

a. High price of seed paddyb. High land productivity of SRI with improved varietiesc. Existence of established market (regular) for seed paddy

Table 10: Average profit under different scenarios (Rs/season/ac)

Wet basis(Rs./season/ac)

Dry basis(Rs./season/ac)

Seed paddy(Rs./season/ac)

SRI Traditional varieties 2,934.40 9,039.70 11,377.90

Improved varieties 4,761.10 8,948.50 46,635.10

Non-SRI Improved varieties 14,210.85 15,676.95 NA

Conclusions

• Participants belong to different tenure groups and farmer classes• None of the farmers fully allocate their lowland endowment under

“SRI”• Only a very few own very basic farm equipment needed for “SRI”• “SRI” is labour-intensive (leveling + transplanting and harvesting)

and involves more family labour• Non-SRI is intensive of non-labour material inputs• “SRI” is more land productive but less productive in labour • Cost of production of SRI is high owing to labour• Production of seed paddy under SRI is more profitable than other

systems

Policy implications

• More appropriate to smallholders with low-income opportunities, but not for large-scale operators

• Development of labour-saving techniques, particularly for 1. transplanting 2. weeding

• SRI could be worthwhile to use in seed paddy production • Establishment of markets or farmer cooperatives, if traditional

varieties are to be practiced, is more challenging

Thank you