Poverty alleviation through improvement in technical efficiency in the smallholder rubber sector: case study from Kegalle District of Sri Lanka

Abstract

Growth and development of the agriculture sector play an important role in the alleviation of poverty. There is a long-lasting debate on whether improvement in efficiency levels leads to eradicate poverty. Further, some studies unveiled that farm and farmer characteristics have a significant influence on poverty. Hence, this study attempts to examine the relationship between technical efficiency and poverty and the effect of farmer's characteristics on poverty levels among the smallholder rubber farmers in Kegalle District. Data were collected from 195 smallholder rubber farms in Kegalle district through a questionnaire survey. Cobb-Douglas Stochastic Frontier Analysis (SFA) was employed to determine the Technical Efficiency (TE) of the farmers and Poverty Gap Index (PGI) was calculated to measure the depth of poverty in the sample. Correlation analyses were conducted to analyze the relationship between poverty and technical efficiency. Generalized Linear Model (GLM) was employed to determine the farm and farmer characteristics affecting poverty. The estimated mean technical efficiency of smallholder rubber farmers in Kegalle district was 63%, implying that the natural rubber production could be increased further by 37% through better use of existing resources and technology. Correlation analysis indicated that TE has a significant negative correlation (r=-0.147, P=0.04) with poverty, indicating that improving TE will help to alleviate poverty. Results of GLM model indicated that years of education of the farmer and the farm size have a strong negative influence on poverty while family size and age of the farmer have a positive association with poverty. Hence, policymakers should give more consideration to these factors in poverty alleviation programmes.

Rubber Plantations in Sri Lanka: An Examination of Historical and Current Grievances in the Pahala Karannagoda Grama Niladari Division

“…Iluppalla et al (2020) studied the possibility of replacing a part of the 60 pph of commonly used silica filler imported from Well ink Chemical Co., India used in rubber composite for the manufacture of low-speed castor wheel rubber tread formulations. Ishani and et al (2019) studied the relationship between technical efficiency and poverty and the effect of farmer characteristics on poverty levels among the smallholder rubber farmers in Kegalle District. Even though there is a certain number of studies based on the Sri Lankan rubber industry, various rare studies have been found to observe the Sri Lankan rubber industry depending on the historical angle or grievance approach...…”

“…In their study, Nayanakantha et al (2019) observed the adverse effects of drought and high temperatures on the income generated by the rubber industry in the dry zone. Ishani et al (2019) emphasized the potential of poverty alleviation through enhancements in technical efficiency within the smallholder rubber sector in the Kegalle district. Focusing on leaf fall disease, Fernando et al (2019) conducted an extensive investigation in a rubber plantation located in Padiyathalawa.…”