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Plantations in the Development of the Sri Lankan Economy

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Plantations in the Development of the Sri Lankan Economy PLANTATIONS IN THE DEVELOPMENT OF THE SRI LANKAN ECONOMY AN EVALUATION OF THE DUAL ECONOMY APPROACH by M.U. I Ishak Lebbe A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS in THE FACULTY OF GRADUATE STUDIES (Department of Anthropology and Sociology) We accept this thesis as conforming to the required standard THE UNIVERSITY OF BRITISH COLUMBIA August, 1979 © M.U. Ishak Lebbe, 1979 In presenting this thesis in partial fulfilment of the requirements for an advanced degree at the University of British Columbia, I agree that the Library shall make it freely available for reference and study. I further agree that permission for extensive copying of this thesis for scholarly purposes may be granted by the Head of my Department or by his representatives. It is understood that copying or publication of this thesis for financial gain shall not be allowed without my written permission. Department The University of British Columbia 2075 Wesbrook Place Vancouver, Canada V6T 1W5 E-6 BP 75-5 1 1 E i ABSTRACT A heavy dependence on primary exports is an important colonial legacy of many underdeveloped countries of the world today. In the study of these primary export economies two sectors have generally been identified - one, referred to as the 'modern' sector, producing for the world market such crops as coffee, sugar, tea, rubber, coconut, palm-oil etc. and extracting non-renewable resources such as petroleum, tin, timber etc. and the other, referred to as the 'traditional' sector, producing food crops for home consumption or the local market. The practice of distinguishing two analytical categories along the above sectoral lines is knoxra as the 'dualistic' approach. The present work is an attempt at an evaluation of the dualistic approach in the context of Sri Lanka. The main contention of the thesis Is- that the dualistic approach has little explanatory power with regards to developments in the country's economy during the British period and even less in the post-independence period. The above contention is based on two major criticisms of the dualistic approach. One is directed at the tendency among those using:the dualistic approach to view the Sri Lankan economy as having two distinct sectors - one 'modern' consisting of the plantations and the other 'traditional' consisting of peasant agriculture - existing independently of each other. This is criticised on the basis that it neglects the overlaps and the interactions between sectors. The other criticism is that the dualistic approach, lacks a holistic and histori• cal perspective. It is contended that, viewed from aholistic and historical point of view the 'modern sector' has had a pervasive influence on the whole of the economy and society of the country. This contention is based on the observation that the 'modern sector' or the plantations, from the time of its rise in the 1840s until recent times, prevailed as the dominant mode of production in the country. In other words, the country's political economy which included the state, bureaucratic, and legal apparatus^ and other institutional infrastructure on the one hand and material resources, and physical infrastructure on the other - was dominated by the modern sector. In view of this dominant influence it is misleading to identify a 'peasant sector'- as: having existed free of influence from the 'modern sector'. The time period covered hy- the. thesjLSj. ranges,, from the 1840s>, i.e. the time of the advent of the plantations, to the present. The sources of data are the published primary and secondary materials. The chapters are arranged as follows: Chapter 1 is divided into two sections. The first section introduces the dualistic approach, as developed by- J.H. Boeke and others with, reference to the economies of South. Asia. The second section presents an overview of the applications of the dualistic model to S'ri": Lanlca,anda criticism- of it, through- an analysis- of the organization of agriculture In the country. The criticism in this section focuses on one of the two shortcomings of the dualistic model noted earlier, namely the neglect of the overlaps and inter• actions between sectors. The other criticsm of the dualistic model, namely the need for a holistic and historical perspective, is the subject of the remaining three chapters. Chapter 2 discusses the historical circumstances and the manner in which the factors of production - investors and capital, labour, and land - were brought together, and the rate and extent of growth of coffee, tea, rubber, and coconut, the major plantation crops, which went to form the plant• ations as the dominant phenomenon in the country during the British period. With this historical background, Chapter 3 attempts to specify the nature of the influence of plantations during the British period. The plantations are viewed as the dominant mode of production in the country during this period. Their dominant influence is discussed in the way it effected the productive pro• cess in agriculture - specifically the monetization and commercial ization of agriculture, changes relating to the institutions of labour and land -, and the social structure. Chapter 4 takes a closer look at the state of 'peasant' (or domestic) agriculture during the British period as well as in the post-independence period. In the first section, which relates to the British period, the main theme is that peasant agriculture was in a state of relative neglect due to the dominant and favoure position of the plantations, and hence experienced little growth. The theme of the second section, which relates to the post- independence period, is that, under changed political and economic circumstances, peasant agriculture has undergone rapid change and growth. The nature of this change is such that the 'peasant sector' is coming to resemble, more and more, a 'modern sector'. The nature of the growth is such that a small-farmer domestic agriculture is emerging as the major componant of the Sri Lankan enonomy. TABLE OF CONTENTS ABSTRACT ± TABLE OF CONTENTS v LIST OF TABLES vi CHAPTER I THE DUALISTIC APPROACH IN THE CONTEXT OF SRI LANKA 1 1. The Dualistic Approach 1 2. The Dualistic Approach as Applied to Sri Lanka 5 CHAPTER II THE MAKING OF A PLANTATION ECONOMY 25 1. The Coffee Era 27 a. The Growth of Coffee 27 b. Investors and Capital 29 c. Labour 33 d. Land 35 e. Supportive Services 39 2. Tea 44 3. Rubber 47 4. Coconut 49 CHAPTER III PLANTATIONS AS THE DOMINANT MODE OF PRODUCTION 56 1. Monetization of the Economy 59 2. Labour as Commodity 63 3. Land as Private Property 66 4. Changes in the Social Structure 72 CHAPTER IV DEVELOPMENTS IN THE PEASANT SECTOR 85 1. The British Period 85 2. The Post-Independence Period 92 SELECTED BIBLIOGRAPHY 114 vi LIST OF TABLES TABLE PAGE 1 Area Under Major Agricultural Crops... 7 2 Distribution ofAgricultural Land... 9 3 Size of Holdings of Principal Crops... 13 4 Size of Holdings of Minor Plantation Crops... 14 5 Ownership of Land Under Principal Crops... 15 6 Extents Aquired Through the Land Reform Laws... 16 7 Principal Recipients of Land Reform Lands... 18 8 Paddy Production and Govt. Purchasesl969/70-1973/74 ... 20 9 Growth of Coffee Industry... 29 10 Agency Houses and Their Involvement in the Plantations... 31 11 Immigration and Emigration... 35 12 Land Sales by the Govt., 1835-1894... 39 13 The Tea Industry, 1875-1951... 46 14 The Rubber Industry, 1900-1949... 48 15 Acreage Under Coconut, 1860-1946... 50 16 Ownership in Coffee,1880-81 59 17 Area Under Estates and Small-Holdings... 61 18 Reciepts From Domestic Exports... 62 19 Landless Agricultural Families in the Wet-Zone... 65 20 Labour Srength in the Estates.... 66 21 Size of Crown Grants to Ceylonese and Europeans... 75 22 Singhalese Purchasers of Waste Land in the 19th c. ... 77 23 Acreage Hnder Paddy and Other Non-exports... 91 24 Trade Indices Selected Years— 94 vii 25 Growth of Population and the Rural Density... 95 26 Acreage Under Principal Food Crmps ... 96 27 Production , Area and Yield in Paddy... 97 28 Adoption Rates of Improved Varieties of Paddy... 98 29 Paddy Loans and Recoveries... 100 30 Distribution of Paddy Lands by Size of Holding... 101 31 System of Tenure in Paddy , Selected Districts... 103 32 Fertilizer Issues for Paddy... 104 33 Paddy Area Under Pest Control 105 34 Paddy Area Tractor Ploughed... 105 35 G.N.P. and the Agricultural Sector.... 108 36 Change in Area Under Cultivation... 109 37 Change in Employment in Agriculture... 110 CHAPTER I THE DUALISTIC APPROACH IN THE CONTEXT OF SRI LANKA 1. The Dualistic Approach A Primary export economy is one of the most important colonial legacies of many underdeveloped countries of the world today. In the study of such economies two sectors have generally been identified - one, referred to as the "modern" sector, producting for the world market such crops as coffee, sugar, tea, rubber, coconut, palm-oil etc. and extracting non-renewable resources such as petroleum, tin, timber etc. and the other, referred to as the "traditional" sector producing food crops mainly for home consumption or the local market. To describe this phenomenon of two different patterns of economic organization the concept "dualism" has been used by many social scientists.^ This dualism has been defined in various terms as: capitalist vs. subsistence, monetised vs. non-monetised, export vs. domestic, a positive vs. a zero marginal labour systems etc. Perhaps the best known version of dualism is that of J.H. Boeke. For Boeke dualism is primarily a social phenomenon which he defines as, ...the clashing of an imported social system with an indigenous social system of another style.
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