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Two
main objectives of government intervention in agricultural
marketing are to stabilize food prices and to ensure that
farmers receive remunerative prices for their produce. Since
early 1970s, successive governments in Sri Lanka have intervened
in agricultural marketing by offering guaranteed prices
to farmers for selected food crops. Although the guaranteed
price scheme has been in operation for over three decades,
it has failed to produce expected results for various reasons.
As a market-based alternative to government intervention
in agricultural marketing, the Central Bank of Sri Lanka
introduced forward contracts under the Govi Sahanaya
scheme in 1999. This paper examines the forward contract
scheme and reviews its performance. Although it is still
in its infancy, the Govi Sahanaya scheme has generated
encouraging results. The paper recommends that this program
be taken seriously by policy makers and be given state patronage
to increase farmer participation.
Table of Contents
- Abstract
- Introduction
- Community Price Risk Management
- Government Intervention in Agriculture Marketing in
Sri Lanka
- Forward Contract Schemes in Sri Lanka
- Role of Institutions
- Summary and Concluding Remarks
- Appendix 1
- Appendix 2
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