Financial Viability of Advancing Payments for Contract Growers of Ground Nut Seeds

Delays in payment adversely affect the contract seed production program for other field crops (OFC) conducted by the Department of Agriculture (DOA) Sri Lanka. This study focuses on assessing the financial viability of advancing payments for contract farmers who produces groundnut (Arachis hypogaea L.) seeds. The average price payable to contract growers for the Seed and Planting Material Development Centre(SPMDC), to be break even between the current practices of paying after the processing is over and advancing payment, was estimated using an Expected Value Model (EVM). Proportions of grade I and grade II seed and the price payable for each seed lot were estimated incorporating parameter estimates of “A” reports in a regression model. The average price payable was estimated as Rs. 119.16/kg using EVM. The percentage of ungerminated seeds, and seeds with insect and mechanical damage were significantly related (p