Information Societies to Interactive Societies: ICT Adoptions in the Agriculture Sector in Sri Lanka

Agriculture Information Society

Agriculture plays an important role in the Sri Lankan economy. Agriculture provides a direct source of income for around 31% of the population (Central Bank of Sri Lanka, 2013b). The rural population in Sri Lanka is around 85% (World Bank, 2014), and agriculture is both a direct and indirect source of living for about 65% of the population who live in these rural areas. The contribution of agriculture to the country’s gross domestic production is about 10.8% (Central Bank of Sri Lanka, 2013a).

Right information delivered at the right time is vital for successful farming. Farmers need information regarding crop growth, pest and disease problems, and marketing. A study conducted by De Silva and Ratnadiwakara (2008) reports that information search cost accounts for 11% of the total cost, and nearly 70% of the transaction cost. Information search costs arises from the need to obtain information related to decisions such as the crops to plant, agronomic practices, pest and disease identification and management, harvesting, storage and post-harvest practices. Information systems which provide the required information are described in Table 1. Transaction costs are incurred in transactions related to the purchase of inputs such as seed, fertilizer, and pesticides, and also in the sale of produce. Additional transaction costs are seen when farmers deal with external agents indirectly through Farmer Organizations. In such instances transaction costs arise between farmers and the Farmer Organizations, and also between the Farmer Organizations and the external agencies such as input suppliers or buyers. Appropriate information systems can reduce the transaction costs incurred in such situations.