PRODUCTION TECHNOLOGY AND INPUT ALLOCATIONS IN SRI-LANKAN MULTICROP FARMING

A primal production analysis is conducted of 182 farm households producing multiple outputs in the Sri Lankan dry zone. The approach involves systems estimation of the production functions with first‐order equations for variable inputs and permits recovery of the production technology for each crop. Land and family labour are regarded as constraining inputs. Shadow prices are computed for the constraining inputs and yield important implications for increasing household profits. Evidence of global homotheticity in a subset of three inputs is found for three of the crops. Weak separability is rejected in all tested subsets except for fertiliser and chemicals used in the production of vegetables. Input demand elasticities are computed for allocations satisfying necessary and sufficient conditions for profit maximisation. Highly elastic conditional input demands and output supplies are implied. Copyright © 1990, Wiley Blackwell. All rights reserved