The Impact of Policy Shift from In-kind Transfers to Direct Cash Transfers on Paddy Production: Evidence from Mahaweli H System in Sri Lanka

South Asia Economic Journal Pub Date : 2021-03-01 DOI:10.1177/13915614211004821

S. Perera, A. Rathnayake, Janaka Fernando, T. Navaratne, D. Rajapakshe

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Abstract

In 2016, the Sri Lankan government introduced a policy change related to fertilizer subsidy by converting the in-kind transfer into a direct cash transfer. This research article analyses the consequences of this policy change on the paddy production from economics perspective. The analysis uses national-level data from 1961 to 2013 and farm-level data collected in 2016. Macro-level findings manifest that the use of fertilizer significantly increases the paddy production in Sri Lanka. It was also identified that the cash amount granted under the direct cash transfer policy is not equivalent to the in-kind transfer programme. As a result, paddy production is expected to decline under the direct cash transfer programme when compared to the material subsidy scheme. However, this is against the preference of economists on direct cash transfers over in-kind transfers. The findings reveal that direct cash transfers increase the paddy production under two conditions: (a) when rational farmers effectively utilize the cash grants to optimize their production inputs; and (b) an equivalent amount of in-kind transfer is provided as direct cash transfer. Hence, direct cash transfers are not always better than in-kind transfers; it is better when in-kind transfer is compensated with an equivalent amount of cash transfer. JEL: A1, B1, B2, C1, C5, D6, N5

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从实物转移到直接现金转移的政策转变对水稻生产的影响:来自斯里兰卡Mahaweli H系统的证据

2016年，斯里兰卡政府出台了一项与化肥补贴相关的政策变化，将实物转移转化为直接现金转移。本文从经济学的角度分析了这一政策变化对水稻生产的影响。该分析使用了1961年至2013年的国家级数据和2016年收集的农场级数据。宏观层面的研究结果表明，化肥的使用显著提高了斯里兰卡的水稻产量。还查明，根据直接现金转移政策提供的现金数额不等于实物转移方案。因此，与物质补贴计划相比，直接现金转移方案下的水稻产量预计会下降。然而，这违背了经济学家对直接现金转移的偏好，而不是实物转移。研究结果表明，现金直接补助在两种情况下提高了水稻产量:理性农户有效利用现金补助优化生产投入;(b)提供等额的实物转移作为直接现金转移。因此，直接现金转移并不总是比实物转移好;最好是用等值的现金转移来补偿实物转移。Jel: a1 b1 b2 c1 c5 d6 n5

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来源期刊

South Asia Economic Journal Economics, Econometrics and Finance-Economics, Econometrics and Finance (all)

CiteScore

1.10

自引率

0.00%

发文量

期刊介绍： The South Asian nations have progressively liberalized their economies in recent years in an effort to integrate with the world economy. They have also taken steps to enhance multilateral and regional economic integration. Even though the South Asian economies have grown at an average rate of more than 5 per cent over the last few years, roughly 40 per cent of their people still live below the poverty line. Hence, the South Asian region continues to face many challenges of economic and social development. The South Asia Economic Journal (SAEJ) is designed as a forum for informed debate on these issues, which are of vital importance to the people of the region who comprise one-sixth of the world’s population. The peer-reviewed journal is devoted to economic analysis and policy options aimed at promoting cooperation among the countries comprising South Asia. It also discusses South Asia’s position on global economic issues, its relations with other regional groupings and its response to global developments. We also welcome contributions to inter-disciplinary analysis on South Asia. As a refereed journal, SAEJ carries articles by scholars, economic commentators,policy-makers and officials, from both the private and public sectors. Our aim is to create a vibrant research space to explore the multidimensional economic issues of concern to scholars working on South Asia. Among the issues debated in relation to South Asia are: - the implications of global economic trends; - the issues and challenges by WTO; - approaches to industrialization and development; - the role of regional institutions such as the SAARC; - the relationship between SAARC and other regional economic groupings such as ASEAN; - the implications of economic liberalization for trade and investment in the region; - new initiatives that can be launched to enhance economic cooperation among the South Asian countries both on a bilateral and a regional basis.