Abstract:
Persistent rural poverty in Sri Lanka is recognized as a critical issue, with severe
economic hardships being faced by many farmers. Therefore, the relationship
between farmer entrepreneurship and poverty alleviation in the rural areas of
Anuradhapura, Sri Lanka, was examined. The capability approach served as the
foundation for this research, focusing on how economic, educational, and socio cultural capabilities influence both quantitative and qualitative growth of farmer
entrepreneurship. The contribution of these growth dimensions to poverty reduction
was also analyzed. The snowball sampling method was employed to gather data from
154 farmer entrepreneurs across Anuradhapura, and a structured questionnaire was
utilized for this purpose. Structural equation modeling (SEM) was applied to the data
using AMOS 26.0, and SPSS 22.0 was used to test the hypothesized relationships. An
acceptable fit was indicated by key model fit indices (CFI=0.918). It was revealed by
the findings that socio-cultural capability was a significant driver of both quantitative
(β=0.71, p<0.05) and qualitative (β=0.76, p<0.05) entrepreneurial growth. A
stronger positive impact on poverty alleviation was shown by qualitative growth
(β=0.86, p<0.05) than by quantitative growth (β=-0.32, p<0.05). The results
suggested that improving the quality of farmer entrepreneurship, (such as actively
supporting community development projects and contributing income to improve
villagers’ welfare) can be more effective for reducing poverty than quantitative
growth of farmer entrepreneurship (increasing number of entrepreneurs, increasing
number of enterprises). The study highlighted the importance of implementing
targeted policies to strengthen capabilities and support quality-driven entrepreneurial
activities, community development, and income distribution to improve village
welfare in rural areas. This research contributes to the literature on rural
entrepreneurship and poverty alleviation by contextualizing the role of farmer
entrepreneurship in emerging economies like Sri Lanka.
