Assessing economic crisis impacts on Sri Lanka's banana sector.

Jayamini Champika, Pasdunkorale Arachchige (2024) Assessing economic crisis impacts on Sri Lanka's banana sector. Journal Of Agribusiness Marketing (Malaysia), 13 (2). pp. 1-15. ISSN 2289-5671

The economic crisis in Sri Lanka since the first quarter of 2022 has significantly impacted the banana (Musa sp.) sector, which is vital in terms of both consumption, and exports. This study aims to assess the potential impacts on the sector and suggest mitigation strategies. Market margins, price variation (CV), difference in mean retail and farmgate prices and vertical integration between farmgate and retail prices were analyzed for pre-and post-crisis scenarios. The main banana variety, ambul, witnessed a 45% decrease in cultivated acreage, leading to a shift from hired to family labour. There has been a transition from high-input responsive, high-risk varieties (such as kolikuttu) to low-input responsive, resilient varieties like seeni kesel as a measure of avoiding high fertilizer cost. Meanwhile, crisis induced low fertilizer application resulted in 45% decrease in bunch weight. While the main marketing channels remained unchanged, sales volume and vendors involvement has decreased by 40%. Post-crisis, farmers' and retailers' margins dropped by 9.7% and 19.5%, respectively, while wholesalers' margins witnessed an increase of 29.4%. Furthermore, CV has increased by 11.4% and 14% for retail and farmgate prices during the crisis. Though the retail prices were significantly higher than precrisis levels, farmgate prices did not see a significant increase. Thus, farmers suffered the most negative impact due to the economic crisis. In conclusion, the economic crisis severely impacted the banana sector, with reduced acreage, labour shifts, decreased sales, and altered market margins.

Full text available from: Official URL: https://www.fama.gov.my/documents/20143/786669/8+R...

Abstract

The economic crisis in Sri Lanka since the first quarter of 2022 has significantly impacted the banana (Musa sp.) sector, which is vital in terms of both consumption, and exports. This study aims to assess the potential impacts on the sector and suggest mitigation strategies. Market margins, price variation (CV), difference in mean retail and farmgate prices and vertical integration between farmgate and retail prices were analyzed for pre-and post-crisis scenarios. The main banana variety, ambul, witnessed a 45% decrease in cultivated acreage, leading to a shift from hired to family labour. There has been a transition from high-input responsive, high-risk varieties (such as kolikuttu) to low-input responsive, resilient varieties like seeni kesel as a measure of avoiding high fertilizer cost. Meanwhile, crisis induced low fertilizer application resulted in 45% decrease in bunch weight. While the main marketing channels remained unchanged, sales volume and vendors involvement has decreased by 40%. Post-crisis, farmers' and retailers' margins dropped by 9.7% and 19.5%, respectively, while wholesalers' margins witnessed an increase of 29.4%. Furthermore, CV has increased by 11.4% and 14% for retail and farmgate prices during the crisis. Though the retail prices were significantly higher than precrisis levels, farmgate prices did not see a significant increase. Thus, farmers suffered the most negative impact due to the economic crisis. In conclusion, the economic crisis severely impacted the banana sector, with reduced acreage, labour shifts, decreased sales, and altered market margins.

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Item Type:	Article
AGROVOC Term:	bananas
AGROVOC Term:	Musa
AGROVOC Term:	cultivation
AGROVOC Term:	fertilizers
AGROVOC Term:	labour
AGROVOC Term:	retail prices
AGROVOC Term:	vertical integration
Geographical Term:	Sri Lanka
Depositing User:	Nor Hasnita Abdul Samat
Date Deposited:	16 Mar 2026 06:41
Last Modified:	16 Mar 2026 06:41
URI:	http://webagris.upm.edu.my/id/eprint/25133

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