PRODUCTION INTERRELATIONSHIPS IN SRI LANKAN PEASANT AGRICULTURE

Abstract

Technical change and the extent to which commodity supplies and input demands are interrelated in Sri Lankan peasant agriculture are explored in this paper. Using a multiple‐product dual model, a seemingly unrelated system of product supply and input demand equations is estimated for four crops and four variable inputs. Restrictions based on competitive behaviour and a twice continuously‐differentiable production function are maintained in the non‐linear least squares estimation. A number of important interrelationships in individual product supplies and input demands are identified, further documenting the need to account for intercommodity production relationships in econometric and simulation studies and in policy formulation. Non‐joint production and Hicksneutral technical change are both rejected.

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