The Paddy Farmers’ Channel Choice and Links to the Public and Private Marketing Channels in Sri Lanka
Wijesooriya, W. A. N., Champika, P. A. J., and Kuruppu, I. V.
ABSTRACT
A better understanding of the paddy marketing channels paves the way to explore the dynamics of the rice economy in mixed marketing conditions. Thus, paddy/rice industry in Sri Lanka has now become a serious concern with all its multi-faceted implications. This study examines the influencing factors for the choice of marketing channels by the paddy farmers as well as the links to the public and private marketing channels in Sri Lanka. A sample of 345 farmers were selected using multi-stage random sampling from DS divisions in Ampara, Anuradhapura, Polonnaruwa and Batticaloa districts. A pre-tested structured questionnaire and focus group discussions were conducted to collect primary data. Binary logistic regression was deployed for the data analysis. Results revealed that the average paddy land cultivated in the Maha season in Anuradhapura, Ampara, Polonnaruwa and Batticaloa was 3.41 ac., 3.50 ac., 3.09 ac., and 4.80 ac. respectively. Nearly 52% of the farmers sold their paddy to the Paddy Marketing Board (PMB) showing the popularity of the Government Paddy Purchasing Programme (GPPP) in major producing areas. Analysis further indicated that, low land extent (p<0.1), availability of paddy storage facility (p<0.1), distance to PMB centers (p<0.1), distance to private collectors (p<0.05) and quantity of wet paddy sold (p<0.1) were the criteria which had significant impact over choice of paddy marketing channels. Positive significant coefficient of ‘Distance to PMB center’ reflects that, even if a selected farmer is residing far from the PMB center, he or she is more inclined to select GPPP. PMB centers offer more price premium than in the open market and in some cases, this was more than Rs.10.00/kg. “Quantity of wet paddy sold” is the variable which indicates a negative and significant impact on selecting GPPP. If a particular farmer tends to sell higher quantity of paddy as ‘wet paddy’, he or she is less likely to select GPPP. Farmers who, did not possess safe storage facilities, had difficulties in finding a suitable place to dry paddy, had high labour requirement to reach 14% moisture content in the final produce and the farmers who faced immediate cash needs were more inclined towards private buyers. There are more opportunities for small-scale farmers who produce limited surplus of paddy in government paddy purchasing channel. More time and cost involved, ineffective buying process, strict quality checks, lack of sufficient storage facilities, delaying of the commencement of purchasing and lack of drying facilities are the major problems faced by the farmers when selling paddy to the PMB centers. The major problem highlighted by the farmers regarding selling paddy to private sector is inability to receive a fair price. KEYWORDS: Channel Choice, Paddy Marketing, Public, and Private Market Channels