Abstract:
Sri Lanka provides an interesting example of a country with a long-standing, national self-sufficiency
policy that has generally been aimed at improving all food crops and particularly for rice production.
Although the country is currently able to meet domestic demand for rice, there is a considerable
importation that has been highly volatilizing during the past years due to some uncertain reasons. It is
unclear whether the country can further rely on domestic production due to projected population
growth and change in preferences. On the other hand, current rice yields are also approaching the
highest crop yield that a farmer can attain in each climate using conventional technologies. Therefore,
it is important for the country to take stock of what the projected demand may be and whether rice
production can respond to meet this demand. The aim of this study is to assess the future of the rice
industry through production, consumption, export, and import during the last two decades to evaluate
the challenges, opportunities, and implications in policy changes and development of the rice industry
in Sri Lanka. Data were collected through three secondary sources: the U.S. Department of
Agriculture, the International Rice Research Institute, and the Food and Agriculture Organization of
the United Nations. The relationship of rice production and total consumption with the time was
analyzed by using the goodness of fit for both the long and short run. A polynomial quadratic
equation was used to analyze the trends in production, consumption, export, and imports. Based on
the results, rice production is decreasing while the long-run consumption is increasing. Subsequently,
the forecasted values for imports were increasing too. This is a kind of vicious cycle to be broken
through the high production of demanded rice varieties. A major reason for the rice importation is not
just the low production, but the lack of production of high demanded rice varieties which are not
much produced in Sri Lanka. Therefore, identifying demanded varieties, favourable conditions,
imposing import barriers, and shifting consumer preferences towards domestic varieties through
marketing strategies are also crucial decisions to be taken.
Keywords: Forecasting; Rice import and export; Rice production and consumption;
Rice self-sufficiency
