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Abstract
This paper empirically evaluates the performance of the Sri Lanka’s agricultural
sector under policy reforms with respect to the exchange rate implications. Under
the policy reforms, the exchange rate reforms made considerable impact on the
agriculture exports, input and food imports and economic development. In our
analysis which used general equilibrium growth accounting approach, the real
contributions of agricultural exports, food imports and fertilizer price reveals that
without the exchange rate reform the contributions would have been really
detrimental to the agricultural production and economy of Sri Lanka. Therefore,
policy reform had a positive effect on Sri Lanka Economy through the exchange rate
reform, though it had negative impact on domestic food production sector and related
small farmers.