What is the Cost of a Bowl of Rice? : The Impact of Sri Lanka's Current Trade and Price Policies on the Incentive Framework for Agriculture

World Bank

What is the Cost of a Bowl of Rice? : The Impact of Sri Lanka's Current Trade and Price Policies on the Incentive Framework for Agriculture

2013

World Bank

Since 2004, Sri Lanka has pursued inward looking policies that have encouraged import substitution, especially with respect to agricultural commodities. This report provides empirical evidence to inform the policy dialogue over the impact of current trade and price policies on the incentive framework for agriculture in Sri Lanka. This analysis provides a quantitative assessments of: (1) the level of support to farmers producing import-competing products; (2) the degree to which final consumers are indirectly taxed by those policies; (3) the extent to which agricultural exports are taxed; (4) the contribution of trade policy to government revenue through tariffs on imports and taxes on exports; (5) an evaluation of the cost-effectiveness of the current fertilizer subsidy scheme; and (6) a better understanding of the web of income transfers between producers, consumers, and government accounts. The report is structured as follows: section one gives introduction. Section two gives overview of the current (2009-11) import and export policy framework and a brief analysis of government revenues and expenditures for agriculture. Section three reviews the data sources and methods used in calculating the degree of protection, and summary statistics on the degree of protection for 10 agricultural commodities. Section four looks closely at the cost-effectiveness of fertilizer subsidies, which represent a large share of the government agriculture budget. Section five focuses on how agricultural trade policies influence income distribution, particularly among different groups of rice producers. The last section recapitulates the main findings and highlights their implications, with an emphasis on the often implicit and unintended income transfers among producers, consumers, and the government.

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AGROVOC Keywords

accounting agricultural commodities agricultural products agriculture commodities consumers equipment exchange rate expenditure exports gross domestic product household income import quotas income income tax insurance international bank international trade levies levy liquidity marginal costs market prices natural resources new products private investment product markets property rights public investment repayment social costs taxation trade liberalization trade policies transaction costs value added value added tax welfare economics working capital world markets world trade organization wto

Bibliographic information

Publisher

Washington, DC

Other Subjects

Fertilizer subsidy; Government funds; Taxpayers; Tax concessions; Adverse impact; World market; National security; World trade; Trade taxes; Tax base; Price increases; Export processing zones; Tariff revenue; Security concerns; Gdp; Opportunity cost; Fertilizer subsidies; Government accounts; Comparative advantage; Foreign markets; National development; Manufacturing industries; Market constraints; Llc; Trade reforms; New markets; Government revenue; Social responsibility; Direct income transfer; Expected returns; Transaction; Tax structure; Environmental externalities; Central bank; Deposits; Undervaluation; Consumer goods; Positive externalities; Farming households; Domestic market; Economic cooperation; Infrastructure development; Tax administration; Export subsidy; Export taxes; Revolving fund; Level playing field; Corporate tax; Inflationary pressures; Border tax; Government budget; Policy response; Deregulation; Government policies; Uruguay round; Epz; Holding; Tax regime; Liquidity constraint; Tax system; Trading; Commercial bank; Government revenues; Externalities; International development; Personal income; Income taxes; Total revenue; Export tax; Single tax; Concessionary tax; Excise tax; Agricultural commodity; Trade policy; Domestic price; Balance sheet; Dollar values; Trade regime; Border taxes; Competitiveness; Government interventions; Treasury; Government expenditures; Marginal benefits; Marginal tax rates; Transparency; Trade regimes; Tax revenues; Economic efficiency; Open economy; Domestic prices; Remittance; Personal income tax; Tax bases; Income effect; Incomes; Tax revenue; Excise taxes; Tax rate; Export market; Commodity; Credit facilities; Credit market; International markets; Commodity export; Land holdings; Middle-income countries; Tax; Price fluctuations; Judgment; Stamp duties; Royalty; Implicit tax; Tax rates; Real income; Banking system; Domestic economy; Net exports; Exporter; Public investments; Reputation; Exporters; Trade deficit; Tax enforcement; Bond; Tax collection; Output; Deposit; Corporate tax rate; Tax incentives; Cost structure

License

Agriculture and environmental services discussion paper;no. 2http://creativecommons.org/licenses/by/3.0/igo/CC BY 3.0 IGO

Source

Agriculture and environmental services discussion paper;no. 2

In AGRIS since: 2014-09-15

Format: AGRIS AP

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This bibliographic record has been provided by World Bank

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Links

http://hdl.handle.net/10986/18698

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