Start Submission Become a Reviewer

Reading: Greening the Sri Lankan Trade: Tariff Policy Liberalisation in Non-Plantation Agriculture an...

Download

A- A+
dyslexia friendly

Articles

Greening the Sri Lankan Trade: Tariff Policy Liberalisation in Non-Plantation Agriculture and the Environment

Author:

WG Somaratne

Hector Kobbekaduwa Agrarian Research and Training Institute, LK
X close

Abstract

Sri Lanka has implemented major trade policy reform measures to create an internationally competitive environment for the Sri Lankan agricultural and manufacturing products, during the last two decades. However, the policy analysts have not paid due attention to the likely economic and environmental impacts of trade policy liberalisation, including reforms to be undertaken within the framework of the GATT/Uruguay Round Agreement on Agriculture (GURAA), the South Asian Preferential Trading Arrangement (SAPTA), and the South Asian Free Trade Area (SAFTA).

This paper analyses the likely macro and meso economic effects and agro-environmental effects of tariff policy liberalisation as a ‘green’ policy device within the policy framework of GURAA, SAPTA and SAFTA, using an appropriately modified computable general equilibrium (CGE) model of the Sri Lankan economy. The general equilibrium approach is chosen because many of the policy changes have economywide ramifications.

The focus of the paper is mainly on the tariff liberalisation, nonplantation agriculture and land degradation-induced environmental management in the hilly regions of Sri Lanka. Proper management of land in the non-plantation agriculture sector is particularly of importance as policyinduced changes in land use patterns in the hilly region impact directly on downstream-irrigated agriculture, and hydropower generation. This model extends previous CGE models of the Sri Lankan economy by further desegregating the agricultural sector by regional land types and crops, and explicit incorporation of on-site and off-site impacts of land degradation. The analyses show that trade policy liberalisation, within the policy framework of GURAA, SAPTA and SAFTA have benign macro, meso economic and 95 environmental impacts. Hence, tariff policy liberalisation can be categorised as a ‘green’ policy device. However, inspection of their quantitative effects on environmental variables indicates that there is a potential for additional and complementary economic and environmental policy options to combat micro level agro-economic issues and land degradation.

DOI: http://dx.doi.org/10.4038/sjae.v3i0.3492

SJAE 2000; 3(1): 93-122

DOI: http://doi.org/10.4038/sjae.v3i0.3492
How to Cite: Somaratne, W., (2011). Greening the Sri Lankan Trade: Tariff Policy Liberalisation in Non-Plantation Agriculture and the Environment. Sri Lankan Journal of Agricultural Economics. 3, pp.93–122. DOI: http://doi.org/10.4038/sjae.v3i0.3492
911
Views
639
Downloads
Published on 26 Aug 2011.
Peer Reviewed

Downloads

  • PDF (EN)

    comments powered by Disqus