This paper provides a quantitative assessment of the likely economy-wide impacts of
agricultural productivity improvements in Sri Lanka. A static multi sector Computable
General Equilibrium (CGE) model of the Sri Lankan economy using the input-output table for
year 2000 is employed highlighting the agricultural sector and its interactions with other
production sectors in the economy. The results indicate that increasing agricultural
productivity leads to positive economic benefits. However, productivity improvements would
lead to reduction in agricultural employment, which in turn may affect the real income of
households in agricultural provinces in the short run.