S. PriyatharsinyS. Vijesandiran2025-09-292025-09-292025-09-24Peradeniya University Research Session (PERS) -2016, University of Peradeniya, P 27 - 34https://ir.lib.pdn.ac.lk/handle/20.500.14444/5205Introduction Economic liberalization creates higher demand for electricity through industrial expansion, urbanization and improved life style of people. Increased demand over electricity could not only fulfill by renewable resources (such as water, solar radiation, biomass, wind and waves) based power generation, instead many countries established fossil fuel power plants where generally coal, gasoline, diesel, crude oil, nuclear and natural gases have been highly used to generate power which emit harmful emissions like chemicals, oil to the environment and create various negative impacts on nature, society and economy. According to Shamshad et al. (2012) and Kumar et al. (2013) such power plants have serious negative impact on land, soil, air, water and on human health as well as leads to various social consequences. Emission of oil and crease wastes into the water sources by fossil fuel power stations is one of the major environmental and economic issue, which leads to water and land pollution that results in loss of biodiversity, increasing human health hazards, decreasing agricultural cultivation and deprivation of livelihood avenues of poor families and also caused to indirect impacts on income, unemployment and poverty. A study by the World Bank (2007) estimated that water pollution caused by power stations leads to loss of 12 percent yield reduction in agriculture. Khai & Yabe (2012) analyzed the impact of industrial water pollution on rice production in Vietnam and identified yield loss in rice production, and which is about 0.67 tons/hectare/crop and the profit loss is about 26 percent. Khait et al. (2014) analyzed quality of surface and ground water around the thermal power plants and found that the people living in surrounding villages have impact on their health and local biota. With the end of civil war in 2009 in Sri Lanka, resettlement process and rehabilitation of economic activities in the Northern and Eastern provinces induced higher industrial and domestic demand for electricity which leads to expansion of fossil fuel power stations in the region. Over one third of the families living in Jaffna district (about 63,280 families) have been depended on agriculture for their livelihood and income. Hence, establishment of the fossil fuel power plants closer to the agricultural firms in the Jaffna district has been experiencing heavy emissions of oil and crease wastes into the inland water source which create water and land pollution finally have negative impacts on agricultural cultivation, human health and biodiversity Central Environmental Authority (2014). While there has been many studies such as Effects of thermal power plant on Environmental Pokala (2011), Environmental Impact of Thermal Power Plant for Sustainable Development Kumar et al (2013) and Quality Assessment of Surface and Ground Water around Thermal Power Plants Khati et al (2014) conducted to estimate statistically the impact of power station caused water pollution on agricultural in many countries, such effort is lacking in Sri Lanka and the researchers, government policy makers still pay less attention in this area. Especially, the economic aspects on impact of fossil fuel power station caused water pollution on agricultural cultivation in the Jaffna district is not yet adequately explored.en-USFossil fuelWater pollutionAgricultural productivityProduction and Profit functionsArticle