The objective of this study was to examine empirically the relationship between productivity and size of coconut lands in Sri Lanka. The primary data collected by means of a field survey conducted by the Coconut Research Institute of Sri Lanka from 69 coconut cultivations located in the Kurunegala, Puttalam and Gampaha districts in 2004/05 were used. These cultivations were categorized into three groups depend on their size, namely: (1) Home gardens [< 2 ac]; (2) Smallholdings [2-20 ac], and (3) Estate sector [> 20 ac]. The empirical model explaining the relationship between productivity and land size and several other variables that can have an impact on productivity (e.g. land suitability class, age of the plantation, number of bearing palms/ac, agro-ecological region, availability of labor and management practices adopted by growers such as fertilizer application, soil and moisture conservation and pest & disease control etc.) was tested. The results of analysis show that there exists a significant negative relationship between land size and productivity of coconut lands in Sri Lanka for home gardens and smallholders. The minimum productive land size was 21 ac, where the estimated productivity was 1 052nuts/ac/year. On the other hand, the productivity of estates increases as the land size increases from 21 ac onwards up to 40 ac. Only the availability of labor was significantly affected on productivity, while the impact of other factors was insignificant in this respect. The results imply that policymakers and regulatory agencies responsible for coconut industry in Sri Lanka must take efforts to secure large estates from unnecessary fragmentation, and fragmentation of smallholding may be allowed if the separated lands are remained predominantly with coconut.

Weather variability presents an external impediment that increases the uncertainty in crop production potential specially for perennial crops under rain-fed cultivation. In particular, increasing rainfall variability that has accompany climate change in the tropics is increasing production uncertainty exposing farmers to a range of risks. Producer behavior under uncertainty is theoretically advanced in Chambers and Quiggin (2000) with the development of the state-contingent approach. This theory advocates farmers manage uncertainty by allocating inputs into different states of nature. This will enhance farmers' capacity to choose variable production technologies to manage uncertainty associated with unexpected events as state-contingent production technologies are naturally more flexible. This thesis examines the application of a state-contingent model for coconut production to assess the impact of a changing climate on coconut production with a view to assess adaptation options for a production system involving long-lived crops. The analysis of production of perennial crops encounters the treatment of long gestation periods, gradual increase in yield over an extended maturation period and yield stabilization following maturity. In considering optimal resource allocation from an agricultural production system perspective, a) the nature of resource constraints, b) the appropriateness of production technology and c) decision makers managerial behaviour needs to be considered together. The analysis in this thesis integrates these three aspects, with a special focus on managing uncertainty in coconut production in Sri Lanka. Climate is a primary determinant of crop choice and weather variability is the major factor influencing agricultural productivity and uncertainty in production outcomes. To examine the impact of changes in climatological variables, rainfall and temperature, on coconut production, a production time series over 1950-2014 was used to identify variations and trends over time and their statistical significance. The graphical and statistical analyses undertaken proved useful in gaining a more complete understanding of how the production environment is changing in the short run as well as over the long run. It offered a sound basis to further consider effective adaptation options in agricultural production, especially long-lived assets such as coconuts, in response to changing states of climate, representing the natural environment in which production takes place. It was revealed that while climate change impacts are observable over longer time horizons, understanding the nature of such changes may allow farmers to adapt to more observable variations in weather over narrow time periods.

Fresh coconut is the main raw material for the production of coconut oil and desiccated coconut. A close examination of the import policy of the Sri Lankan government on edible oils indicates that import tariffs on edible oil are lowered when the supply of fresh coconut in the domestic market is limited. It has been claimed that the desiccated coconut producers lobby for lower import tariffs on edible oil so as to raise fresh coconut availability when the demand for desiccated coconut is higher. The objective of the study is to determine whether there is a relationship between import tariff on edible oil and export price of desiccated coconut. A partial equilibrium model was specified for the coconut market, estimated using a seemingly unrelated regression method and simulated for changes in export prices of desiccated coconut. Monthly data for the period 1990-2009 gathered from published sources were used for the analysis. The findings revealed that the import tariffs are endogenously determined and export price of desiccated coconut has a statistically significant negative effect on the tariff level. The cross price demand elasticity of coconut oil with respect to palm oil price is positive and statistically significant indicating a strong link between the two markets.

The temporal variations in rainfall, temperature and the associated extreme events were examined with the objective to ascertain their potential effects on coconut production in Ratnapura district of Sri Lanka. Temporal variations were measured using Mann-Kendal test and extreme events were examined using climate indices related to daily rainfall and daily temperature. Daily rainfall and minimum and maximum temperature data of Ratnapura representing Agro Ecological Region, WL1a obtained from the Department of Meteorology of Sri Lanka for the period of 1961 to 2015, were used for the analysis. The base period was considered as 1961 to 1990 as recommended by the World Meteorological Organization. According to the results of the Mann-Kendall tests, minimum temperature had a positive trend and maximum temperature had a negative trend. Among sector-specific climate indices, Standardized Precipitation Evapotranspiration Index in the long-time scale and minimum temperature showed a significant positive trend and the value of the 95 th percentile of maximum temperature showed a significant negative trend. The other indices related to drought, extreme rainfall, extreme warm days and maximum annual number of consecutive dry days did not show significant trends during the period 1991 to 2015. Despite the latter, the former indicates an occurrence of drought like situations in the future. Adoption of both short and long-term drought control measures in coconut cultivations if they are to be promoted in Agro Ecological Region of WL1a are recommended as prolonged droughts and high temperatures adversely affect production of coconuts.

The Tea, Rubber and Coconut Estates (Control of Fragmentation) Board was set up under the Act No: 20 of 2005 (An amendment of Act No: 2 of 1958) to control transferring of the ownership of coconut lands of more than four hectares as a single unit or sub divisions. The owner of a coconut land who wants to fragment her block is, thus, required to undergo a formal procedure to get approval to which the first step was the submission of a duly filled application explaining the characteristics of, and management practices used in, the coconut land to be fragmented. The specific objective of this study was to examine whether this process is associated with moral hazard and/or adverse selection behavior of owners, because any applicant may tend to manage her coconut land incongruously to gain advantage in the selection process. The outcome of analysis, which used first hand information from 50 applications submitted to the regional offices of the Coconut Cultivation Board from July 2005 to January 2008, showed that nearly 22% owners did not maintain their plantation up to their capacity, although their lands belonging to the best and moderate suitable soil classes with high productivity. This implies the need for evidence-based assessment criteria in the process of selection of coconut land for fragmentation to avoid potential failures in the process, and in turn, the Act. COCOS Vol. 20: 39-48 (2013)