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
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August, 1979
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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. Most frequently the imported social system is high capitalism. But it may be socialism or Communism as well, or a blending of them.^
The basic contrast between the two systems is made in terms of such behavioural characteristics as 'profit seeking', 'unlimited needs' and
'entrepreneurial behaviour' which are familiar in the West. In terms of these characteristics the non-capitalist sector of the so-called dual economies is said to exhibit behavioural patterns which are diametrically opposed to those in the capitalist sector. Thus with reference to
'unlimited needs' Boeke writes that,
1 2
...anyone expecting western reactions will meet with frequent surprises. When the price of coconut is high, the chances are that less of the commodities will be offered for sale; when wages are raised the manager of the estate risks that less work will be done; if three acres are enough to supply the needs of the household a cultivator will not till six; when rubber prices fall the owner of a grove may decide to tap more intensively, whereas high prices may mean that he leaves a larger or smaller portion of tapable trees untapped.3
Boeke's assumptions about the eastern society such as the 'aversion to the capital and profit', 'fatalism and resignation' have been challenged 4 by later writers on the subject. Higgins , for example, argues rather convincingly, the eastern society is basically not very different from the western society in its economic behaviour. Nastf' puts forward similar arguments with reference to Burma, supporting that the easterners are no less entrepreneurial than the westerners.
While rejecting Boeke's rather simplistic assumptions of social dualism, some of these writers retain the basic notions of "economic dualism".
Higgins, for example, emphasizes the "technological dualism" of the Eastern economies. Technological dualism is based on the observation that the so- called traditional sector and the modern sector have very different technical coefficients of production: The traditional sector has variable technical coefficients of production i.e. the products can be produced with a wide range of techniques and alternative combinations of labour and capital. In contrast, the modern sector has relatively fixed technical coefficients of production and the production process is relatively capital intensive, compared to the labour intensive traditional sector. The major implications of this analysis are that the modern sector's capacity to absorb the growing and abundant labour in these countries is limited. On the other hand in the traditional sector due to the abundance of labour, 3 there is little incentive towards modernizing techniques of production along capital intensive lines. Instead, the traditional sector absorbs more than the optimum labour that is necessary, leading to declines in the marginal productivity of labour. This process of intensification of labour in traditional agriculture and the resultant complexities in tenurial arrangements Geertz calls "agricultural involution", the result of which is "shared poverty".^
In dealing with these so-called dual societies these theorists were addressing to the question of economic development or modernization. As
Lucien W. Pye notes with reference to Boeke that,
In elaborating the concept of the dual society, J.H. Boeke was following in the grand tradition of social theorists who, from the beginning of the industrial revolution, have sought to specify the critical distinctions between traditional social orders and modern industrial societies. This classical school has included such great seminal thinkers as Sir Henry Maine, Ferdinand Toennies, Emile Durkheim, and, to bring the line down to the contemporary times, Talcot Parsons and Edward Shills. Boeke thus sought to apply to the Asian scene elements of the dichotomous scheme which has been so long used to characterize the differences between what have been variously called traditional and modern, rural and urban, societas and civitas, Gemeinschaft and Gesellchft, communal and associational.7
In so dichotomizing tradition and modernity or development and underdevelopment the dualistic theorists were dealing with "ideal typical constructs", based on some differences in the pattern of economic and social organization, observable within these eastern societies. These ideal types have often been taken as separate entities existing independently of each other, in the sense of Rudyard Kipling's "East is East and West is West 8 and never the twain shall meet" as Higgins notes with reference to Boeke.
Several criticisms could be levelled against this practice of dichotomizing 'tradition' and 'modernity' in particular, and against the 4 dualistic approach in general. Firstly, the dichotomy or dualism does not correspond to reality, because there are great many over-laps and interactions between the 'modern sector' and the 'traditional sector'. In other words, 'tradition' or 'modernity' is a matter of degree and not water-tight compartments or separate entities existing independently of each other. Secondly, the dualistic approach is not dynamic enough to explain the process of economic development or modernization. It is static in that the different sectors or the ideal types are viewed neither as representing particular "stages" in an historic process, nor as constituting parts of a "system". If they are viewed as "stages" it might be possible to show how a particular type could move from one stage to another. But the tendency among the dualistic theorists has been to view the sectors as rigid and inwardly oriented, like in Geertz's "runaway" dualism in Indonesia where the peasant sector is said to be undergoing "involution", which he defines as a process of,
...the overdriving of an established form in such a way that it becomes rigid through an inward over-elaboration of detail.9
If the sectors or ideal types are viewed as constituting parts of a system it might be possible to identify the interactions between and the influence of one type on the other. But the dualistic theorists tend to overlook such interactions. Even when some kind of interaction between the sectors is recognized it is usually confined to the unidirectional flow of one or two factors of production, like in Higgins's model of technological dualism which provides only for the flow of labour from the 'traditional sector' to the 'modern sector'."^ Consequently, the dualistic approach lacks a .holistic structural perspective - a perspective which places the different 5 parts or sectors of a nations economy in their proper relations within the total context. This - the need for a holistic structural perspective is the main thrust of this thesis which presents a criticism of the dualistic model in the context of Sri Lanka.
2. The Dualistic Approach as Applied to Sri Lanka
In the study of the Sri Lankan economy the dualistic model has been applied in different degrees by different writers. Most writers contend that there was a clear-cut dualism during the post-independence period.
Bansil writes,
Prior to independence in 1948, the structure of Ceylon's economy provided a classical example of the dualistic export economy. The export sector which was based on the production of tea, rubber and coconut was a well organized and relatively productive sector which existed and operated in isolation from the rest of the economy which was characterized by low levels of productivity and consequent..poverty. H'
Snodgrass writes in a similar vein that during the pre-World War II period,
In structure, the economy was a veritable model of what might be called a dualistic export economy. There are two identifying features of this kind of economy: 1. close dependence of national income on foreign trade and 2. a split of the economy into two sectors, one modern in organizational structure and technology, producing for the world market, and the other traditional in both these regards, producing for the immediate village market.12
Karunatilake contends that the,
Dualism was not only economic and technological but also social. Social dualism continued and appeared to be even more marked until the free education system, introduced by the government in the 1940s, bore fruit by raising the standard of literacy and bringing the rural people into closer contact with their more socially and culturally advanced brethren.13
There are other writers who have attempted to present a case for dualism in
Sri Lanka even for the post-independence period. Ohrling for example, argues for such dualism in Sri Lanka along the lines of a 'centre-periphery' theory. 6
In applying a dualistic model most writers have tended to view the
so-called modern and traditional sectors as separate wholes and analyse
them accordingly in terms of their own separate dynamics. B. Stein, for example, in an analysis of the development problems of Sri Lanka proceeds,
Ceylon's economy has frequently and validly been characterized as a "dual economy", one sector of which is dependent almost exclusively on the export of its production, the other sector of which is of a subsistence nature with no surplus. Each of these sectors will be considered in terms of its contribution to the instability of the economy as a whole.15
Snodgrass analyses the growth patterns of the 'export agriculture' and
'peasant agriculture' separately with a marginal treatment of interaction 16 between the two sectors. Similarly, Bansil gives a treatment for
'plantation agriculture' and 'peasant agriculture' in separate terms.^
Such treatment by scholars is the result of some observable differences in the organization of the production of agriculture between the plantation
crops and rural agriculture. But it would not be true to say that these
two sectors were two separate entities existing independently of each other, as the works referred to above and others using the dualistic model would
imply. This is because firstly; there are, and have been, a great many over-laps and interactions between the two sectors which renders the sectoral distinction one of doubtful validity, and secondly; the 'modern
sector' or the plantations, as the dominant phenomenon in the economy, have historically had a pervasive influence on all sectors of the economy and
society. A brief look at the organization of production in agriculture in
the country would illustrate the first point. The second point will be pursued in the subsequent chapters.
Of the crops traditionally classified under the 'modern sector' or as
'plantation crops' the important ones in terms of acreage and in terms of 7 the contribution to the national economy are tea, rubber and coconut. These three crops together occupied about 43% of the total land under agriculture as of 1970. The other plantation crops, sometimes referred to as minor plantation crops, include cocoa, cinnamon, coffee, pepper, cardomon, cloves and citronella. These crops together occupy about 95,000 acres. Among the peasant crops paddy is predominant, which occupies about 33% of the land under agriculture. The other peasant crops include kurakkan, maize, manioc and sweet potatoes and the commercial crops such as tobacco, cotton and ground nuts. All these latter crops are generally categorized as cereals, pulses, oil seeds, condiments and species of fiber crops. Table 1 shows the extent of land under the major plantation crops and the major peasant crop,, paddy.
TABLE 1
AREA UNDER MAJOR AGRICULTURAL CROPS , 1970
Extent Crop (000' acres) % Total
Tea 597 10.9
Rubber 590 10.8
Coconut 1153 21.1
Paddy 1792 32.8
Other 1332 24.4
Total 5464 100.0
Source : Sri Lanka, Department of Census and Statistics, adapted from United Nations Economic and Social Commission for Asia and the Pacific, Comparative Study of Population Growth and Agricultural Change (ESCAP Asian Population Studies Series, No. 23 , 1975), pp.62,72. THE FOUR AGRO - ECOLOGICAL ZONES
AND THEIR DENSITY OF POPULATION - 19.71
Source: Department of Census and Statistics, Census of Population 1971,
Sri Lanka: General Report. (Colombo, 1978^ p. 37 9
In the distribution of these crops there is a great deal of variation.
One way of classifying these variations would be in terms of agro-
ecological zones based mainly on rainfall, soil fertility, hydrological
characteristics and land elevation. The Department of Agriculture of Sri
Lanka recognizes 24 such agro-ecological zones. Although data are not
available by these agro-ecological zones, the land use figures reported by
the 22 administrative districts provide an indication of the variations.
In the table below (Table 2) the 22 administrative districts are grouped
under 4 major agro-ecological zones - a simpler classification of zones used 18 by some government agencies.
TABLE 2
DISTRIBUTION OF AGRICULTURAL LAND, 1962
Zone District Plantation Crops Paddy Other Crops
I Colombo 79.4 15.8 4.8 Kalutara 73.9 19.0 7.1 Galle 68.7 22.5 8.8 Matara 56.7 26.7 6.6
II Ratnapura 71.2 11.2 17.6 Kegalle 79.7 9.8 10.5 Kurunegala 67.4 25.1 7.5 Matale 53.2 21.8 25.0 Kandy 69.3 14.1 16.6 Nuwar Eliya 73.5 12.1 14.4 Badulla 59.3 16.6 24.1
III Jaffna 22.3 48.7 29.0 Mannar 8.6 82.2 9.2 Vavuniya 6.9 79.0 14.1 Trincomalee 7.7 75.6 16.7 Batticaloa 16.4 76.1 7.5
IV Hambantota 40.3 33.0 24.0 Mpnaragala 27.8 23.6 48.5 Amparai 7.6 83.4 9.0 Polonnaruwa 9.0 68.5 12.5 Anuradhapura 7.8 75.5 16.7 Puttalam 76.1 15.8 8.1
Source: Agrarian Research and Training Institute, Data Bank, (Colombo: ARTI). 10
As Table 2 indicates, the distribution of crops varies greatly from region to region. In the first two zones, which coincide with the area known as the Wet zone, the plantation crops occupy over 50% of the agricultural land in all districts, whereas in the other two zones, which cover the area known as the Dry zone, the plantation crops occupy much smaller extents. Paddy, which is the most important of peasant crops, occupies areas ranging from less than 10% in Kegalle to over 80% in Amparai and Mannar. Paddy is the largest single crop in all but one of the districts in zone III and IV, viz Dry Zone.
With such variations in land use there are also certain variations in the economic organization of the cultivators. Thus, peasant cultivation is different in the Wet Zone districts from that in the Dry Zone districts.
In the Wet Zone districts a larger portion of the agricultural land is occupied by the plantation crops which leaves relatively little land for peasant cultivation. These are the districts which have a higher density of population (see Map p.8 )• Thus, in those districts in zone II, particularly in the districts of Kandy, Nuwera Eliya, Badulla, Ratnapura and Kegalle, the villages are highly circumscribed by the tea estates and peasant cultivation is confined to small valleys adjoining the village where paddy, which usually occupies the lower parts of the valley and the home- garden crops which occupy the higher slopes are cultivated through a highly labour intensive process.
In contrast, in the Dry Zone districts paddy occupies a central place.
In all these districts, except in Jaffna, population is relatively sparse and land is relatively abundant. But water is a scarce factor and poses constraints to cultivation. Thus, in the cultivation of paddy the two major variations are provided by the type of irrigation available. The variations 11 are the Purana village paddy fields which are irrigated by the small village tank or minor irrigation schemes and the centrally organized cultivation of the major irrigation schemes most of which were developed by the government under the Colonization Scheme in the recent decades.
These variations, however, do not always confirm to the variations identified along sectoral lines. The distinction of a 'modern' and a
'traditional' sector is based on the idea that these two represent contrasting patterns in the organization of production, i.e. in the factor combination and in the distribution or exchange of the product. A plantation is perceived as,
...a highly capitalized, regimented and exploitative form of agricultural organization which is typically a 'foreign enclave' controlled by a city-based managing agency which represents its owners, and operated by a large wage-earning labour force under the direction of a functionally ^ integrated hierarchy of supervisory and technical personnel.
Other general definitions of plantations also usually emphasize the above and other related characteristics. Binns, for example writes,
The general idea of a plantation is a large centrally operated estate, usually growing a crop which is not regarded as an ordinary field crop, with the help of a considerable body of workers often hired under special contract from distant districts and living on the estates.
Similarly, Jones defines a plantation, in the International Encyclopedia of
Social Sciences, as,
An economic unit producing agricultural commodities (field crops and horticultural products but not livestock) for sale and employing a relatively large number of unskilled labourers whose activities are closely supervised. Plantations usually employ a year-round labour crew of some size, and they usually specialize in the production of only one or two marketable products. They differ from other kinds of farms in the way in which the factors of production, primarily management and labour, are combined.21
From these definitions and from the descriptions of duality (quoted in p.5 ), one may arrive at several contrasting characteristics attributed to 12 the plantation or the 'modern' sector and the peasant or the 'traditional' sector. These characteristics relate to the organization of production and the•distribution of the product. Among the characteristics relating to the organization of production which are attributed to the plantations are their large-scale centralized operations which go with highly regimented management and labour crew, relatively modern technology and higher productivity; and foreign ownership. Among the characteristics relating to the distribution of the product which are attributed to the plantations, the important one is the orientation to the external market.
But only a little of what are known as plantations in Sri Lanka would confirm to these characteristics. This may be illustrated by a review of data relating to some of the above characteristics.
In terms of scale the plantation crops are produced in holdings ranging from a fraction of an acre to hundreds of acres. Table 3 gives a breakdown of the size of holdings of the principle crops of the country as estimated for 1972. 13
TABLE 3
SIZE OF HOLDINGS OF PRINCIPAL CROPS, 1972 (percentages)
Size Group Tea Rubber C< conut Paddy (acres) _
0 to 10 18 31 50 80
10 to 25 1 14 T II 23 25 to 100_ 25 *r
over 100 J . 71 46 6 25 71 Source: Data from Census of Agriculture, 1962; adjusted with data on annual changes from Administration Reports of the Tea Controller, Rubber Controller and Land Commissioner; Ceylon Year:Book and the Statistical Abstracts.of Ceylon, in G.H. Peiris, "Land Reform and Agrarian Change in Sri Lanka", Modern Asian .Studies 12:4 (1978): 615.
As the table shows only tea, with 71% of the acreage in holdings of over 100 acres and, to a lesser extent, rubber with 46% of the acreage in holdings of over 100 acres, may be considered as large-scale operations.
But it should be noted that 18% of the tea acreage and 31% of the rubber acreage are in holdings of less than 10 acres. Coconut is primarily a small scale crop, with 50% of the acreage in holdings of less than 10 acres.
It may be noted that small scale operations are also the predominant pattern in the cultivation of the 'minor plantation crops'. As shown in
Table 4, nearly half of the holdings of these crops are in holdings of less than 1 acre and there is very little in the range of over 10 acres. 14
TABLE 4
SIZE OF HOLDINGS OF MINOR PLANTATION CROPS, 1968 (percentage of holdings)
Size Group Cinnamon Cocoa Citronella Cardamon
Less than 1 67 51 35 40
1 to 5 30 41 56 50
5 to 10 2 4 6 5
over 10 1 4 3 5
Source: Sri Lanka, Department of Agriculture, Sample Survey, 1968 (Colombo: Gov't. Press, 1968).
With varying scale the organization of production, i.e., the combination of factors of production - land, labour, capital and management, also varies a great deal. Obviously, large estates of hundreds of acres require a permanent supply of hired labour, considerable outlay of capital and specialized management. This is the case for the majority of tea plantations. But smaller family operations, which are predominant in coconut and to a lesser extent in rubber, could be carried out with little or no hired labour, little capital and with no specialized management.
Another characteristic attributed to the plantation sector in the dualistic model is its "foreign enclave" nature. Here again the Sri Lankan plantations do not present a definite pattern. As of 1972, only in tea and to a lesser extent in rubber was there a significant proportion of foreign ownership. Coconut is almost wholely locally owned. Table 5 shows the pattern of ownership. 15
TABLE 5
OWNERSHIP OF LAND UNDER PRINCIPAL CROPS, 1972 (P ercentages)
Tea Rubber Coconut Paddy
Sterling Companies 24 11 neg.* -
Rupee Companies 25 13 neg. -
Non-Ceylonese Individuals 2 2 - -
Ceylonese Individuals 26 41 49 20
Public Sector Agencies 5 5 neg. neg.
Cooperative Farms neg. neg. neg. neg.
Small holdings owned 18 31 50 80 by Ceylonese
Total 100 100 100 100
*neg. = negligible amounts of less than 1 per cent.
Source: Same as for Table 3
It is true that the share of foreign ownership was much greater during the pre-independence period. The extent held by companies registered in the United Kingdom and by non-Ceylonese individuals fell from 69 to 30 per cent in tea, 38 to 13 per cent in rubber and 11 to 4 per cent in coconut between the years 1948 and 1972. The main reasons for this process of 'Ceylonization', as Peiris points out, are:
The fiscal policies pursued by the government during this period (increasing direct and indirect taxation of the plantation industries, restrictions placed on transfer of profits abroad) and, more generally, the dwindling of profits generated by the plantation industries, reduced attractiveness of this sector of the economy to the foreign investor. Local political conditions, which at various times since independence engendered among foreign owners 16
of plantations a fear that their assets would be nationalized, also contributed to the gradual withdrawal of foreign capital from Sri Lanka's plantations.22
But much more has changed since 1972, consequent to the implementation of a program of land reform. The Land Reform Law of 1972 which brought in a ceiling of 25 acres on paddy lands and 50 acres on other lands resulted in the acquisition by the government of a total of over 560,000 acres of land. The Land Reform (Amendment) Law of 1975 applied to land owned by public companies, which the earlier law left out, and brought in a further
418,000 acres of land under the government control. Table 6 shows the distribution of the land acquired under the two Laws in terms of crops.
TABLE 6
EXTENTS ACQUIRED THROUGH THE LAND REFORM LAW OF 1972 AND THE LAND REFORM LAW OF 1975 (acres)
Law 1972 Law 1975
Tea 139,354 237,592
Rubber 82,563 95,835
Coconut 112,523 6,406
Paddy 18,407 -
Other Crops 30,303 79,124
Uncultivated 180,261 -
Total 563,411 417,975
Source: Sri Lanka, Land Reform Commission, in G.H. Peiris (1978), op.cit., pp.616-17. 17
The total extent of land acquired through the Land Reform Laws amounted to about 1 million acres which is about 22% of the total land under agriculture in the country. It may be noted that a greater part of the land acquired was that under the plantation crops, particularly of tea and rubber. The acquisitions include about 60% of the tea acreage,
30% of the rubber acreage and 10% of the coconut acreage. In contrast only about 2% of the land under paddy was affected by the reform.
The significance of the land reform for the present discussion is that it effected some basic changes in the plantation sector. One of the changes was that it led to the complete elimination of the 'foreign enclave' element. Another was the changes in the tenurial arrangements.
In the redistribution of the government acquired lands, there were a number of tenurial arrangements. These fall under three main types namely, land under public sector agencies, land leased to the government sponsored co-operatives, and the land redistributed to private individuals. Table 7 shows the pattern as of October 1976, which represents about 90% of the acquired land. 18
TABLE 7
PRINCIPAL RECIPIENTS OF LAND UNDER THE LAND REFORM PROGRAM (UP TO OCTOBER, 1976)
Approximate Extents Alienated
PUBLIC SECTOR AGENCIES
State Plantation Corporation 261,500 USAWASAMA (Up-Country Corporative Estates Development Board) 73,100 JANAWASAMA (Peoples' Estate Development Board) 234,100
Tea and Rubber Research Institutes 9,900
COOPERATIVES Janawasa (Land Reform Cooperatives) 48,000 Electoral Cooperatives 175,000 Special Cooperatives and Others 40,000
PEASANT SMALL-HOLDINGS 115,000
OTHERS 88,500
Source: Land Reform Commission, USAWASAMA and State Plantations Corporation, in G.H. Peiris (1978), op.cit., p.619.
As the table indicates, most of the acquired land were put under the management of public sector agencies and co-operative arrangement. As a result the land reforms did not lead to a total 'peasantization' or small-holder agriculture in the plantation sector. However, the new arrangements represent a departure from the previous system of privately or company owned capitalist operations which has been a defining characteristic of the plantations.
Another criterion in the distinction of the duality has been in terms of distribution of the product, or more specifically in terms of the 19
degree of market orientation, where the 'modern sector' is presumed to be
totally market oriented as compared to the greatly consumption oriented
'traditional sector'. Here again the Sri Lankan case presents a mixed
phenomenon. While it is true that the plantation crops generally have
a commercial orientation, not all of them are oriented to the market,
much less exclusively to the external market. In this respect tea and
rubber come close to being the ideal plantation crops, with over 90% of
the products being oriented to the external market. A major part of the
'minor plantation crops' are also exported. But in the case of the
coconut products, as much is consumed locally as that which is exported.
In fact the exported share of the coconut products has tended to decrease
in recent years, one of the reasons for which being the increased local 23
demand. On the other hand, the 'peasant sector', with increasing monetization and commercialization, has moved, in recent decades, further
and further from the presumed subsistence orientation end towards market
orientation. The amount of paddy purchased by the government under the
Guaranteed Price Scheme, which has varied from 27% to nearly 50% of the
total produce between the years 1970-1974, as shown in the table below,
provides an indication as to the commercialization in the peasant sector. 20
TABLE 8
SRI LANKA - PADDY PRODUCTION AND GOVERNMENT PURCHASES UNDER THE GUARANTEED PRICE SCHEME (GPS), 1969/70 - 1973/74
Total Paddy Production GPS Purchases % of Total Year ('000 bushels) ('000 bushels) Production
1969/70 77,447 26,218 34
1970/71 66,895 32,377 48
1971/72 62,720 25,214 40
1972/73 62,900 22,892 36
1973/74 76,798 20,865 27
Source: Central Bank of Ceylon, Annual Report, 1974 (Colombo: Central Bank of Ceylon 1975), p.40.
It should be noted that the actual amount of sales transactions in paddy would be greater than that indicated by the GPS purchases as there were considerable amounts of private purchases in spite of government restrictions on such dealings during these years. As for the other peasant crops, although precise figures are not available, there has been greater production of such subsidiary food crops as chillies, onions, potatoes and pulses, oriented to the local market. This process gained additional impetus as a consequence of import restrictions and price incentives 24 introduced by the government in the late 1960s.
Along with an increasing degree of market orientation there have been other changes in the organization of agricultural production, particularly in the technology and in the use of capital and labour, in the peasant sector. In fact, the emergence of a new form namely, a form of commercialized small-holder production of domestic food crops, will be the subject of a subsequent chapter. 21
The point of the foregoing discussion has been that the 'plantations' or the 'modern sector' does not confirm to the characteristics presumed in the dualistic model. In terms of the scale of operation and the factor combination in the process of production, the plantations range from small- scale family operations which are predominant in coconut and minor export crops to large scale estates which are predominant in tea and to a lesser extent in rubber. In terms of ownership tea and rubber, which were predominantly foreign owned, have moved gradually into Ceylonese hands during post-independence period, with the land reforms of 1975 completely eliminating the foreign enclave element. In terms of the distribution of the product, there has been a wide range from a great degree of home consumption in coconut to a great degree of export orientation in tea and rubber.
Further, the domestic agriculture has been undergoing changes resulting in a movement away from the 'subsistence oriented peasant cultivation' presumed in the dualistic model. (This will be discussed in Chapter 4.)
Consequently, Sri Lanka presents a mixed phenomenon where elements of both 'modernity' and 'traditionality' are found in the 'plantation sector' as well as the 'peasant sector'. Therefore a dualistic model along these sectoral lines holds little validity. While it is true that there has been an increasing tendency for blurring the sectoral boundaries in recent times, the sectoral division was never a complete one. For, there has always been a certain degree of 'peasant' involvement in the production of plantation crops, as direct producers and as suppliers of labour. Further, the effects of the exposure to the world market were felt not only by the
'plantation sector' but by the 'peasant sector' as well. As Samarasinghe writes, during the Great Depression of the 1930s, 22
The collapse of the market for Sri Lanka's exports led to considerable unemployment in the rural areas. It happened both because estates retrenched workers and because small-holders were forced to either curtail or cease production. The price of paddy in the local market declined sharply under the influence of falling world prices and that hurt the peasants badly.25
This brings us to the second criticism noted for the dualistic model namely, the need for a holistic perspective. From a holistic point of view it would become clear that the plantations have had a pervasive influence on the whole of the political economy of the country and therefore a dualistic model with independent sectors could be misleading. The plantations exerted a pervasive influence on all sectors of the economy and society because they became the dominant phenomenon in the country towards the end of the 19th century. To understand this dominant influence a historical review of the rise of plantations would be in order. The following chapter attempts to outline the historical circumstances and the • manner in which the plantations came to prominence in Sri Lanka. 23
CHAPTER I
NOTES AND REFERENCES
1. The concept was first formulated by J.H. Boeke in The Structure of the Netherlands Indian Economy (N.Y.: Institute of Pacific Relations, 1942); and The Evolution of the Netherlands Indies Economy (N.Y.: Institute of Pacific Relations, 1946). Which he restated in his Economics and Economic Policy of Dual Societies (N.Y.: Institute of Pacific Relations, 1953). J.S. Furnivall expanded the concept to "pluralism" in his Netherlands India (Cambridge: Cambridge University Press, 1944). Some notable examples of the use of the concept are: G. Myrdal, Economic Theory and Underdeveloped Regions (London: Gerald Duckworth and Co., 1957); H. Myint, The Economies of the Developing Countries (London: Hutchinson and Co., 1964); C. Geertz, Agricultural Involution (Berkeley: University of California Press, 1963).
2. J.H. Boeke, Economies and Economic, p.4.
3. Ibid. p.40.
4. B. Higgins, "The Dualistic Theory of Underdeveloped Areas," Economic Development and Cultural Change, IV (Jan. 1956), pp.99-115.
5. M. Nash, "Southeast Asian Society: Dual or Multiple?," The Journal of Asian Studies, 23 (May 1964), pp.417-123.
6. Geertz, pp.79-82.
7. L.W. Pye, "Perspective Requires Two Points of Vision," Journal of Asian Studies, 23 (May 1964), pp.429-430.
8. Higgins, p.100.
9. Geertz, p.82.
10. M. Mier, Leading Issues in Economic Development: Studies in International Poverty (Stanford: Oxford University Press, 1970), pp.143-162.
11. P.C. Bansil, Ceylon Agriculture: A Perspective (New Delhi: Oxford and IBH Publishing Co., 1971), p.23.
12. D.R. Snodgrass, Ceylon: An Export Economy in Transition (Homewood: Richard D. Irving, 1966), p.56.
13. H.N.S. Karunatilake, Economic Development in Ceylon (New York: Praeger Publishers, 1971), p.25.
14. S. Ohrling, Rural Change and Spatial Reorganization in Sri Lanka (London: Curson Press Ltd., 1977), p.14. 24
15. B. Stein, "Development Problems of Ceylon" in Economic Development in South Asia, ed. B. Stein (New York: Institute of Pacific Relations, 1954), p.76.
16. Snodgrass, pp.125-180.
17. Bansil, pp.179-320. See also, N. Balakrishnan, "A Review of the Economy" in Modern Sri Lanka: A Society in Transition, ed. T. Fernando and R. Kearney (Syracuse: Syracuse University, 1979), p.101-130.
18. Sri Lanka, Department of Census and Statistics, Census of Population 1971, General Report (Colombo: Department of Census and Statistics, 1978), p.38.
19. G.H. Pieris, "Plantation Agriculture" in Sri Lanka: A Survey, ed. K.M. de Silva (London: C. Hurst and Co., 1977), p.215.
20. B.O. Binns, Plantations and Other Centrally Operated Estates (Rome: FAO, 1955) , p.32.
21. W.O. Jones, "Plantations," The International Encyclopedia of Social Sciences, Vol. 12 (MacMillan, 1968), p.154.
22. G.H. Pieris, "Land Reform and Agrarian Change in Sri Lanka," Modern Asian Studies, Vol. 12, No. 4 (1978), p.613.
23. Central Bank of Ceylon, Annual Reports, Series (Colombo: Central Bank of Ceylon).
24. See, for example, Marga Institute, Welfare and Growth in Sri Lanka (Colombo: Marga Publications, 1974), pp.22-29.
25. S.W.K. de Samarasinghe, ed., Agriculture in the Peasant Sector of Sri Lanka (Peradeniya: Ceylon Studies Seminar, 1977), p.IX. 25
CHAPTER II
THE MAKING OF A PLANTATION ECONOMY
1. The Coffee Era
The history of an export crop economy in Sri Lanka begins in the early decades of the 19th Century. But the export trade was not new to this country. Sri Lanka is known to have engaged in the export of her cinnamon and other spices, gems, elephants and pearls for many centuries prior to the advent of Western powers."'* In fact it was the cinnamon trade that provided one of the major attractions for the Portuguese who ruled the
Maritime Provinces of Sri Lanka from 1505 to 1658. It was the same trade that attracted the Dutch who took over from the Portuguese and ruled the
Maritime Provinces until they lost to the British in 1796. However, neither the Portuguese nor the Dutch made much attempt to produce cinnamon or other trading items on an organized scale. They depended mainly on wild harvests. The Dutch, towards the last decades of their rule, are reported 2 to have hit upon the idea of systematic growing of cinnamon. This, however, was undertaken within the context of the prevailing economic organization and the social relations. It was the British who introduced a new form of economic organization and made changes in the older economic and social relations. Hence the beginning of plantations.
The economic practice of the British in Sri Lanka evolved over a period of time and not until the 1840s did it take the concrete form of large scale and well organized plantation crop production. For the British, the original attraction of the island was not economic but its militarily strategic position, particularly that of the natural harbour of Trincomalee, 3 in the Indian Ocean. But the administrative costs involved in ruling the 26 country necessitated the generation of economic surplus, for the broader policy of the British relating to colonialism during the period was that the cost of administration of colonial territories was to be generated 4 from the colonies themselves.
But Sri Lanka, at the time, did not have the necessary institutional and physical infrastructure or the entrepreneurs to exploit, fully, the economic opportunities and to provide the government with the necessary revenue. Therefore, the goverment itself took the initiative in exploiting such economic opportunities. In fact the colonial government retained a monopoly over trade in the early years, in spite of the fact that such government monopoly runs counter to the avowed policy of laissez faire of the times. This contradiction was solved gradually with the appearance of European trading firms, to be known as "agency houses", in the 1820s.^
These trading firms gained a foot-hold in the export of Sri Lankan coffee to England and thus paved the way for a great coffee era.
The appearance of private enterprise, however, does not mean any slackening of involvement of the colonial government in the country's economy. The government's interests were intrinsically tied to the plantation economy in several ways. Firstly; the colonial government favoured economic development through private enterprise, as a matter of policyo, secondly; the plantations came to provide the largest revenue to the government, about a quarter of the government's revenue was provided by the plantation crops throughout the coffee period^, and thirdly; many government officials themselves had plantation investments. This is particularly true for the initial period of the coffee era where the g Governor himself and the Government Agents acted as pioneers. Though such direct involvement by the government officials was discontinued subsequently,
the plantation interests found ample representation in the government.
From the 1840s to until the rise of a Sri Lankan middle class in political representation in the 20th century the European planters were the major 9
force in the Legislative Council.
Viewed in this context of deep government involvement, it is no surprise
that the plantation enterprise became the 'favourite child' of the colonial government. The government incentives for the development of plantations during the coffee period include the abolition of export duties on coffee, exemption of coffee land from land tax, repeal of import duties on agricultural and manufacturing equipment, exemption from feudal labour dues of those employed in coffee growing, subsidies for the importation of
Indian labour and for the construction of branch roads leading to the plantations from the main trunk roads.Apart from such direct incentives
the government, of course, helped develop the necessary physical and
institutional infrastructure for a plantation economy. It is in this
context of deep government involvement that the development of a plantation
economy and its dominant influence on the whole political economy of the
country should be understood,
a. The Growth of Coffee
By 1820, as noted earlier, some European trading firms had moved into
the export of coffee. However, coffee did not blossom immediately into a prosperous economic enterprise. Coffee was grown, at the time, mostly in
little home gardens with primitive techniques of cultivation. The output
totalled only a few thousand hundred weights per annum."'""'" Further, the
demand for coffee in the European market was low and the British market was 28 dominated by the coffee from the West Indies, which had the advantages of prefential tariff and the low cost of production obtained in the slave 12 worked plantations.
But the latter half of the 1830s saw such changes in the external and internal conditions that the growth of coffee in the 1840s was to be 13 described as the "coffee mania". The external changes include a rapidly growing market for coffee in Europe, the abolition of preferential tariff for the "West Indies in the British market which put the coffee from Sri'
Lanka in a better competitive position, the emancipation of the slaves who worked the West Indies plantations which resulted in a decline in the production and hence in declining competition for Sri Lankan coffee.
Internally the important events were the introduction of advanced methods of coffee cultivation by R.B. Tytler who brought the knowledge from Jamaica 14 and the influx of investors who came mainly from Britain.
Under such changed conditions the great coffee era of the 1840s began.
The mood of the time is conveyed by a contemporary writer, The Governor and the Council, the military, the judges, the clergy, and one half the Civil Servants penetrated the hills and became purchasers of crown lands. The East India Company officers crowded to Ceylon to invest their savings and capitalists from England arrived by every packet.^ The acreage under coffee tripled in the 1840s. In 1847 Sri Lanka's export to the British market was 15,500,000 pounds of coffee as opposed to 16
the 5,300,000 pounds from the West Indies, the former leading exporters.
There was a severe setback for coffee in 1847-49 as a result of falling prices due to a world depression. But the good times were back soon and
the following three decades saw the rule of 'king coffee' in Sri Lanka.
Table 9 shows the pattern of coffee's growth. 29
TABLE 9
THE GROWTH OF COFFEE INDUSTRY (Annual Average s)
Year Acre Planted Export Volume (000 Acres) (000 Cwts)
1840 - 44 23 97
1805 - 49 51 260
1850 - 54 59 344
1855 - 59 138 537
1860 - 64 199 615 .
1865 - 69 243 939
1870 - 74 276 881
1875 - 79 310 795
1880 - 84 259 433
1885 139 316
1886 110 179
Source: Snodgrass, p.20.
It remains to be shown how the various factors of production that made the plantations were brought together and how an infrastructure that facilitated the plantation was developed. The following sections discuss the drawing together of capital/labour and land and the development of institutional and physical infrastructure, b. Investors and Capital
In the rise of the plantations, the investors, or entrepreneurs, and the capital provided the initiative. The entrepreneurship was originally provided by the colonial government itself. As early as 1822 Governor 30
Edward Barns himself established the first coffee plantation of 200 acres.
Several Government,. Agents also followed his example under his encouragement.
But not until 1837 did the enterprise become profitable enough to attract large numbers of investors from Europe. By 1840 coffee had been tried and proven a success and the foreign investors started flowing in. Most of the investors were not large capitalists and therefore had to depend on some institutional financial support to supplement their modest capital."""^
This is where the agency houses proved most useful. The agency houses are firms which performed the 'middleman' function of management, exports and imports related to the plantation industry. As noted earlier, there were already several agency houses in Sri Lanka engaged in the export trade.
With the rise of coffee there was a proliferation of agency houses. In addition to providing credit for the planters, and managing absentee owned estates and handling the export - import trade, many of the agency houses figured prominently as plantation developers and owners themselves. At the height of the coffee era there were some 37 agency houses managing and owning thousands of acres of coffee plantation.
The Ferguson Directory for 1876-78 reports 36 agency houses managing or owning 990 estates covering a total area of 245,065 acres, which was about 90% of all acreage under estates. Those owning/managing over 5000 acres are shown in Table 10. TABLE 10
AGENCY HOUSES AND THEIR INVOLVEMENT IN THE PLANTATIONS, 1878
(THOSE OWNING/MANAGING OVER 5000 ACRES)
Name of Firms No. of Estates Total Acreage
Sabonadiome & Co. 155 40,345
McGregor & Co. 122 27,345
George Stewart & Co. 84 23,214
J.M. Robertson & Co. 86 23,036
George Wall & Co. 92 21,701
Ceylon Co. Ltd. 40 13,406
Alslon Scott & Co. 41 11,003
Carey, Strach & Co. 39 9,533
Mackwood & Co. 47 9,363
Lee, Hedges and Co. 30 8,827
Colombo Commercial Co. Ltd. 21 7,816
Rudd Bros. 35 7,779
H.S. Saunders and Co. 36 7,375
Armitage Bros. 25 6,917
Leachman & Co. 23 5,086
Others (21) 114 21,784
Estates without Agents 367 26,529
Total 1,357 271,594
Source: A.M. and J. Ferguson, The Ceylon Directory; Calendar and Compendium of Useful Information, 1876-78 (Colombo: Ceylon Observer Press, 1878), Introduction. 32
While the agency houses played a crucial role in the development of plantations throughout the plantation history in Sri Lanka, their role in
capital formation was more important for the coffee period, for most of
the coffee plantations were owned mostly by individual proprietors, as
opposed to the predominantly corporate ownership of the tea plantations.
In 1878, for example, out of a total of 1,351 plantations, 800 were owned 18
by individual proprietors.
However, the planters did not have to depend on the agency houses alone
for capital. Before long there came into being several banks, mostly
branches of well established banks overseas, in the country. The banks
were a response not only to the need for capital but also a variety of other
services required by the plantation enterprise: The plantations needed banks in order to remit their capital from abroad, to discount the bills of exchange which they drew against the export of their produce, to pay wages and to sell them sterling drafts when they wished to remit their earnings home. The commercial community which was fast developing alongside the plantation sector needed similar banking services. There arose too, an increased demand for sterling and rupee drafts to pay for the growing volume of imports - manufactured goods from Britain and rice and food stuffs from India.±y
The first bank was opened in 1841 under a Royal Charter from England.
Another bank, the London based Oriental Bank opened a branch in Colombo in
1845. The above two merged in 1851 to form the Oriental Bank Corporation
whose branches were soon opened in Kandy and Galle. This was followed by
the Merchantile Bank of India, London and China in 1854. Other banks that
opened branches before the end of the century were the National Bank of
India, The Hong Kong and Shanghai Banking Corporation and the Bank of Madras. 33 c. Labour
Labour was another crucial factor in plantation production. But the kind of wage labour required for the plantations was an alien idea for the early Sri Lankan society. The only system of rendering labour known to them was a system known as rajakariya. Rajakariya is based on the principle that all land belongs to the king, and the people who live on the land are obliged to reciprocate in offering their labour. So the people offered their labour for such works as were required in the name of the king. This system had come to be abused under the rising commer• cialism during the rule of the Western powers. The Mudaliyars (traditional local officals of high family status) who were entrusted with the function of obtaining this labour are said to have pressed this function to the extent that it became 'forced labour'. This appears to have been done often under pressures from the Government in such activities as collecting 20 cinnamon. The rajakariya was abolished by the British in 1833 as a reform measure. When the plantations cropped up in the latter half of the
1830s it was probably expected that the 'peasants' would offer their labour for wages. But the expected labour was not forthcoming. Either the wages offered by the planters were not attractive enough or, more plausibly, the idea of wage labour was not consistent with the Kandyans' idea of earning' a living. Fortunately for the planters, the South Indian labour provided the answer from the impasse. Cheap labour became available in almost unlimited quantities mainly from the Districts of Madura, Tinnevelly 21 and Tanjore. The impetus to a massive labour migration was provided by the worsening economic conditions in the home districts and the relatively attractive wages offered by the plantations. The trickle of 1839 soon became a flood. Arrivals swelled from about 3,000 in 1839 to 77,000 in 1844 By the 1880s the accumulation of the Indian labourers and their families permanently settled in Ceylon amounted to about 200,000.^2
This labour migration from India continued until legal restrictions were brought in after Independence. In 1946 the number of Indian labourers 23 employed in the estates was 665,853. Table 11 showing the national immigration and emigration figures provides an indication of the pattern of movements of these labourers, for these figures are heavily influenced by them. 35
TABLE 11
IMMIGRATION AND EMIGRATION 1871-1949 (five year Averages in thousands)
Year Immigration Emigration Net Migration
1871 - 74 95 75 20
1875 - 79 119 90 29
1880 - 84 .46 58 -12
1885 - 89 61 52 9
1890 - 94 96 63 33
1895 - 99 122 94 28
1900 - 04 114 80 34
1905 - 09 97 66 , 31
1910 - 14 147 138 9
1915 - 19 152 145 7
1920 - 24 185 145 40
1925 - 29 267 222 45
1930 - 34 192 205 -13
1935 - 39 163 170 - 7
1940 - 44 142 154 -12
1945 - 49 252 204 47
Source: Y. Lim, "Export Industires and Pattern of Economic Growth in Ceylon," Ph.D. Thesis, University of Carolina, 1965, p.202. d. Land
Land as an institution is probably the factor that felt most the impact of a plantation economy. Prior to the arrival of the Western powers 36
the Sinhalese had a rather complicated system of land tenure. The basic
principle with regard to land was that all land belonged to the king. But within this broad principle the right to use land and the obligations
involved in such use varied a great deal. Broadly, three categories of 24 land may be identified: 1. Crown lands which were directly administered by the government and cultivated on its behalf by persons appointed temporarily for the purpose and paid a share of the produce to the Crown.
2. Non-service tenures (paraveni). To this class belong all lands permanently alienated by the government on condition of receiving a share of the produce as tax. These lands were saleable and heritable.
3. Service tenures. To this class belong all lands temporarily alienated by the government on the condition of receiving personal service from the holder. They cannot be transferred or mortgaged.
The Portuguese and the Dutch had made only marginal modifications in
this old system. For one thing, they ruled only the Maritime Provinces
and for another, they were content with having access to land that produced
cinnamon. But the British gained control over the whole island and their
involvement in the economy was greater. Therefore, they attempted to
unravel this complicated land tenure system and in the process,
...they inevitably interpreted land-holding institutions in their own frame of reference. For example, they insisted on a rigid distinction between private and government ownership.25
From the first Governor on, the British favoured private proprietorship
over land on the assumption that the traditional forms of tenure were 26
unfair, uneconomic and discouraged agriculture. This is in keeping with
the broader policy of the British relating to land in the colonies. The
policy, notes Roberts, is a modified version of Wakefield's doctrines: 37
Lands were to be sold and not granted free. There was to be a minimum upset price per acre; and sales were to be by auction while the revenue from land sales would be employed for colonial development. This scheme was intended to regulate alienation so that crown land went to those who could make best use of it - in other words, the men with capital.27
Thus, from 1833 the Colonial government undertook the sale of crown lands to prospective coffee planters. There was no serious problem as long as forest lands not used by the villagers were in abundance. But as the demand for land increased immensely towards the end of the decade and the plantations began penetrating the Kandyan highlands, the new land policy came into conflict with the old pattern of land use. This was particularly marked in the area of chena lands. The chena lands are forest lands adjoining the villages which were cultivated on a seven or more year rotational basis as a supplement to the village paddy lands. Though the villagers did not own the chena lands, under the Kandyan kings, there was the tacit understanding that the villagers had a right to these forest lands. But the colonial government's land sales proceeded on the basis that all land to which the villagers did not have explicit right was crown property and alienable by the crown. But the villagers asserted their claim when the chena forests were encroached by the plantations. This was awkward for the further development of the plantations. This awkward situation was resolved by the Crown Lands Ordinance No. 12 of 1840. As
Roberts points out,
The fundamental and interrelated objectives of this piece of legislation were to provide security of tenure and to protect crown forests from encroachments and claims, and by there- means to establish a suitable foundation for agricultural improvement, so as to attract foreign capital and to permit the crown to sell forest land to prospective planters.28 The Ordinance declared that,
all forest, waste, unoccupied and uncultivated lands shall be presumed to be the property of the crown, until the contrary thereof be proved.29
With such legal enactments which defined land ownership in terms of unqualified possession and transferability, i.e. in a manner that is conducive to the development of capitalist plantation production, and with the necessary legal and administrative apparatus, such as the Surveyor
General's Department and the Registrar General's Department, land sales proceeded at a hectic rate. Though there were some land sales from the early 1830s, the year 1840 marks an all time Crown Land sales record of
78,680 acres, and in just four years from 1840 to 1843, 230,000 acres were sold by the government. Land purchases of this period were as much a result of speculation as they were of the expansion of coffee. Such 'wild speculation' however was arrested towards the end of the 1840s by a set• back faced by coffee in the world market. Land sales continued during the rest of the coffee era at a slower rate. Table 12 gives the government land sales figures for the 19th Century. 39
TABLE 12
LAND SALES BY THE GOVERNMENT, 1835-1894 (five year totals)
Year Acres
1835 - 39 27,987
1840 - 44 237,305
1845 - 49 30,995
1850 - 54 16,158
1855 - 59 77,936
1860 - 64 153,980
1865 - 69 191,030
1870 - 74 128,361
1875 - 79 129,497
1880 - 84 127,925
1885 - 89 97,528
1890 - 94 72,299
Source: Y. Lim, op.cit., Adapted from Appendix Table. e. Supportive Services
Several of the supportive services or the infrastructure required for the plantation economy, such as the agency houses, the banks, legal enactments and institutions relating to land transactions have already
been mentioned. A further , and probably the most important, infrastructural
aspect is transport. As Van den Driesen notes, 40
Since plantation agriculture concerned itself with the market and not with subsistence agriculture, transport immediately became the pivot on which the entire economy turned. Ceylon's system of communication thus came in the course of time, to bear the stamp imposed upon it by the planters.30
The existing roads in the island at the time of British conquest were little more than foot-paths. The Kandyan highlands were almost inaccessible and that is one reason why the Kandyans were able to fend off the earlier foreign powers. The British realized the importance of roads. Governor Edward Barnes, who arrived in 1819 considered that without good roads,
We can never be said to have secure possession of the country, nor can it commercially improve.31
Hence, he set about the task of building roads. For Barnes the expenditure was no great problem. As Mills writes,
The greater part of Barnes's roads were built by exacting a fortnightly compulsory labour from the natives who held their land by service tenure. Had it not been for the existence of Rajakariya the work could not have been accomplished ."52
Barnes's roads of 300 or 400 miles may appear paltry in comparison to developments during the coffee era.
With the expansion of the plantations the development of roads became a primary concern of the government. From 1837 to 1886 the cost on the construction of new roads and the maintenance of old ones was about •£ 5 3/4 million and that of railway wasf 3 3/4. The fact that this was about 24% of the total government revenue of £40 million relating to the same period reveals the importance attached to this activity. At the beginning of the coffee era the government revenue rose mainly due to sale of crown lands and due to the export trade. From 1843 to 1845 the government had an average annual revenue surplus of£44,430. Consequently, between 1843 and 33
1847, 1,247 miles of roads were built or restored. But in the following years the government revenue declined due to the unfavourable conditions faced by coffee in the world market. But the demand for road expansion continued. To counter the situation the old system of service tenure was resorted to, for a while, under the guise of the Road Ordinance of 1848.
The Ordinance required every male inhabitant except Buddhist priests to give six days compulsory labour annually to road construction or repair or else to pay a commutation tax of 3 s.34
The Ordinance made possible the continued construction and maintenance of roads. But coffee's prosperity returned in the 1850s and the government was able to accumulate large surpluses of revenue. As a result, the new
Governor, Sir Henry Ward, who came in 1855, was able to spend over £ 1 million between 1855 - 1860 on road construction so that by 1860 Sri Lanka 35 had about 3,000 miles of roads in good repair. This meant a reasonably well-developed road system in the plantation districts which connected the interior with the two main cities of Colombo and Kandy.
But transportation by means of carts, for which the roads provided, proved not efficient enough for coffee to remain competitive in the world market. Road transportation was not only time consuming and costly but there was also the danger of complete breakdowns in transportation in the event of a prolonged bad monsoon weather. This threat would prevent the
further development of the plantations. Therefore, the planters as well as the government turned their attention to the construction of railways.
Although a Ceylon Railways Company was formed as early as 1847, plans were abandoned due to a financial crisis. But by 1860 the Government 42
revenue situation had improved and it was possible to commence construction of railways. The first line from Colombo to Kandy, 75 miles long, was completed in 1867 at a cost of nearly£2 million. Subsequent extensions in the decade include Kandy-Nuwalapitiya, Kandy-Bandarawela, Kandy-Matale and Kandy-Kurunagela which nearly covered all the plantation regions.
Further extensions along the coast from Colombo to Galle and Colombo to
Puttalam and to the North from Kurunegala to Talaimannar and Jaffna were completed by the turn of the century. By this time Sri Lanka had over 36
700 miles of railways. Most of the railways, as to be expected, were confined to the plantation region. The only exceptions were the lines to the north - to Talaimannar and to Jaffna. The former again was aimed mainly at the South Indian labourers and traders who had to do with the plantations.
It was on the above supportive structure consisting of an elaborate transportation network, a commercial and financial network, and a bureaucratic and administrative apparatus that the coffee industry grew to prominence in Sri Lanka. When coffee fell other plantation crops were built on the existing structure.
The fall of coffee was more rapid than its rise. A leaf fungus
(Hemelia Vastatrix), which appeared on the coffee plants in 1869, continued to grow in the 1870s causing drastic reductions in yields. However the coffee industry continued to prosper under the rising world prices. But the 1880s were not so fortunate years. The world market prices declined and the spread of the leaf fungus was pervasive during this period. As a result most of the plantations were abandoned. From 1880 to 1886 the 37 acreage under coffee fell from 300,000 to 100,000. By the end of the decade the coffee industry had all but disappeared. 43
Although the coffee industry was dead by 1890, a firm base for a plantation economy had, by then, been established in Sri Lanka. There was a well established commercial community and a marketing system; there was a well developed physical infrastructure consisting of roads, rail• ways, port, etc.; there were vast extents of developed land and there was a large army of 'disciplined' labour. Further there was the colonial government and the bureaucracy conditioned to an export economy. There• fore the end of coffee could not mean the end of plantation agriculture in the island. The problem was simply one of finding one or more replacement crops for coffee.
Among the first crops to be tried in plantations was cinchona, a produce used in the making of quinine. Cinchona proved to be a success, though a short lived one. In just three years from 1878 to 1883 the area under this crop increased from 6,000 to 60,000 acres. But the consequent exports, along with those coming from South America, India and Java caused a glut in the world market. Prices fell drastically (quinine falling from
12 s to 1 s an ounce in fourteen years) and this made the crop uneconomic.
Export of cinchona bark fell from 16 million pounds in 1887 to 6 million in 1892.38
Another crop to which attention was diverted after coffee's failure was cocoa. The initial plantings began in 1874 and by 1891 there were about 12,000 acres under this crop. The export of cocoa beans rose from
10 cwt. in 1878 to 20,532 cwt. in 1891. But the crop appears to have reached a plateau at this level. This was probably due to its geographic limitations: cocoa plant requires, 44
a considerable depth of good soil, in a favourable situation, at a medium elevation, with complete shelter from wind.39
These requirements are found only in limited areas and therefore it could never fully replace coffee.
The other commercial crops tried during this period include cardamon, cinnamon and black pepper. These crops provided a temporary alternative to some planters who were effected by coffee's decline. More importantly these crops were attractive to cultivators in the village peasant economy and have remained a part of it to the present. This was mainly because these crops did not call for too sophisticated methods of cultivation or processing and they were suited for small scale cultivation - sometimes as intercrops in the home gardens. But as exports, the demand for these crops in the world market was limited and therefore they never attained the status that coffee attained.
2. Tea
It was tea that provided the ultimate answer to the coffee debacle.
Experiments on tea growing had begun in the Botanical Gardens as early as
1845 but not till the early 1870s was it established that this crop could be successfully grown in the Island. It was still later in the 1880s that it began attracting the attention of the planters. Its slow growth in the early periods were probably due to coffee's popularity, the low level of development of techniques of production and processing and the slow growth of demand in the world market. There was also a scarcity of tea seeds. 45
In the 1880s the conditions were ripe for the full growth of tea: coffee had been wiped out by the blight and the plantation community was desperately searching for new crops. The techniques of production and processing were improving. The popularity of Ceylon tea was rising in the British market. Thus, a contemporary writer notes,
The atmosphere of planting, business and even official circles in Ceylon just now is highly charged with "tea" and the number of Tea Patents (for preparing machines), of Tea publications, Tea Brokers, Tea selling and the Tea planting companies would greatly astonish a Ceylon coffee planter of the "fifties", "sixties" or even "seventies" if he "revisited the glimpses of the moon" in the Central, Uva, Saberagamua. Southern and the Western provinces of the island.
The acreage under tea has grown from a mere 23,000 in 1850 to nearly
200,000 at the close of the decade. Exports of tea had risen from about
1 million to about 20 million lbs. during the same period. But the following years were to witness a phenomenal growth of the crop in Ceylon so that by the middle of the century the acreage under tea was over
550,000 acres and the export volume was over 300 million pounds.
Table 13 shows the growth pattern. TABLE 13
THE TEA INDUSTRY 1875-1951
Year Acreage Export (In thousand acres) (in 000 lbs.)
1875 1
1885 58 4,373
1890 207 45,799
1895 305 98,581
1901 406 144,276
1921 418 161,611
1929 450 251,490
1940 552 290,512
1951 567 305,171
Source: Sri Lanka, Department of Census and Statistics, Census of Agriculture 1952, Part I - Tea Plantations, (Colombo: Department of Census and Statistics, 1965), p.5.
Through the decades of the 20th century tea has been the most important export item of Sri Lanka. By the mid-century tea accounted for 65% of all export earnings of the country and its contribution to
42 the G.N.P. was about 18%. The question arises as to what made tea an outstanding success in Sri Lanka. There are several reasons: First, its perfect adaptability to Sri Lanka's climatic and soil conditions.
Unlike coffee and other crops tea thrived under rainfall varying from 80 to 200 inches and land elevations rising from sea level to anything up to 7,000 feet above sea level. Another factor in the development of tea 47 was the physical and the institutional infrastructure and the experience in plantation industry obtained from coffee. Initial plantings of tea were done more as replacement on abandoned coffee lands though eventually the spread of tea greatly exceeded that of coffee. In the production and processing there was a vast improvement over coffee, assisted by scientific knowledge: There was constant observations and input from the
Botanical Gardens and later from the Department of Agriculture and still later from the Tea Research Institute (TRI). Improved machinery and techniques provided for lower costs, higher productivity and quality of products. A further development was the proliferation of corporate ownership, as opposed to the largely individual proprietorship of the coffee times. In 1950, over 60% of the industry acreage and about 75% of the "estate" acreage was held by corporations. This trend towards grouping together of individual estates was presumably fostered by the economies of scale provided by tea, particularly in processing and the desire to avoid financial disasters of the sort of coffee times.
3. Rubber
Rubber, another of the alternative plantation crops tried after coffee failed, was introduced to Sri Lanka in 1876. But not until the turn of the century did it catch the attention of the planters as a major plantation crop. The changed interest towards rubber was primarily due 43 to poor tea prices prevailing during this period. But this was also the time that rubber had been through the experimental stage and proved its potential. A third factor in the growth of rubber was the growing demand for the product in Europe and particularly in the rapidly industrializing America, and consequently rising prices. In 1900 there were only 1,750 acres under rubber which by the end of the decade had risen to 150,000 acres.
In the following decades rubber's fortunes have fluctuated greatly with changing world demand - due to overproduction, world wars, and depressions. Nevertheless the area under this crop had grown steadily until by the middle of the century it occupied over 600,000 acres.
TABLE 14
THE RUBBER INDUSTRY 1900-1949 (Annual Averag es)
Years Acreage Output (in 000) (million lbs.)
1900 - 04 7
1905 - 09 98
1910 - 14 199
1915 - 19 244 65
1920 - 24 390 90
1925 - 29 494 133
1930 - 34 148
1935 - 39 611 128
1940 - 44 219
1945 - 49 205
Source: Snodgrass, Tables 2-6 and A.52 49
Rubber is more of a small-holder crop compared to tea. In 1946 about
21% of the rubber was in small holdings of 20 acres or less. There are several reasons that account for the factor: The production and pro• cessing of rubber does not call for very sophisticated techniques or machineries. The labour required for maintainence is less than that for 45 tea, which would provide for the competitiveness of the small holder.
Finally the land and climate best suited for rubber is in the intermediate elevations of the Wet zone which intermingles with the villages.
4. Coconut
Coffee, subsequently tea and rubber were largely confined to the
Central Highlands and the intermediate elevations of the Wet zone. Their counterpart in the Maritime Provinces was coconut. The coconut palm is known to have existed in Sri Lanka from about the 12th century, which 46 the peasant cultivators put to numerous uses. But not until the middle of the 18th century did it acquire any commercial value. It was the
Dutch who gave a stimulus to the cultivation of coconut by placing a commercial value on certain coconut products, such as coir, of which as much as 3 million pounds were reported to have been exported at some 47 point during the Dutch period. However the development of coconut as a plantation crop was a phenomenon of the British period.
In the 1840s a considerable number of coconut plantations Were opened up in the districts of Jaffna, Batticaloa, Chillaw and Puttelam, by
European planters. But in the following decade there was a slump in the market, during which many plantations changed hands to the Ceylonese.
This was followed by a decade of great expansion of the coconut industry which, by 1876 covered an estimated acreage of 300,000 acres. The growth since has been fairly steady until in 1946 the acreage under coconut stood at 1,170,000 acres. Table 15 shows the growth pattern.
TABLE 15
ACREAGE UNDER COCONUT 1860-1946
Year Acreage (in thousands)
1860 250
1893 650
1903 650
1921 820
1929 1,076
1946 1,070
Source: Census of Agriculture 1952 Part III Coconut Plantation, op.cit., p.5.
Coconut differs from the other two major plantation crops in several respects. It is widely distributed mostly in the Coastal areas, its origin in the country dates back to a considerably longer time, it represents a smaller scale of operation, the industry has always been more of a Ceylonese enterprise and its share of local consumption is much greater than the other crops.
As for the question as to why coconut is mostly found in the Coastal areas and not in the Central Highlands where the other plantation crops 51 are, the answer is simply that it thrives better on lower land elevations.
The fact that the coconut palm is several centuries old in the island may raise the question as to why it did not come to prominence or turn into a commercial activity until the middle of the 18th century. Here, it appears that the rise of coffee as a plantation crop has been the important factor, in that in addition to having a demonstration affect, the latter also gave rise to a whole infrastructure on which the coconut industry could be built.'
That coconut is a smaller scale operation, that it has always been grown mostly by the Ceylonese, and that it is more oriented to the local market are related factors. Coconut, being a hardy crop, could thrive under less than perfect conditions which meant that it did not require the standard of maintenance and the technical know-how that other crops did. This was an attraction for the non-specializing small holders.
Also the coconut palm had numerous uses for the villagers other than the commercial ones. Other possible factors were that the Sri Lankans of the Coastal areas having been long exposed to the Western influence were able to emulate and compete better with the European planters, the fact that coconut was considered to be less remunerative was probably a 49 disincentive for the European planters. However, it should be noted that during the British period the entire export trade and to a lesser extent the processing of coconut, such as the large oil mills situated in
Colombo, were in European hands and therefore the control of the industry by Ceylonese was far from complete. 52
By the end of the 19th century the economic pattern of the country and the dominance of the plantations within it has been established.
This pattern remained stable through the decades of the 20th century until after certain changes during the post-independence period. At the time of independence in 1948 the country's economy was predominantly agricultural and export oriented. In terms of the G.N.P. the contribu• tion of agriculture was 48%, of which the three major plantation crops accounted for over 65%.^"^ In the total exports of the country in 1948, tea, rubber and coconut represented about 90%."'"'' In terms of the area under cultivation the three major plantation crops accounted for about 52%, and in terms of employment in agriculture they accounted for about 55% at the 52 time of the Agricultural Census in 1946.
The attempt in the preceeding pages has been to show the historical circumstances under which the factors of production and an infrastructure were built up for the production of plantation crops and the manner in which the plantations grew to be the dominant phenomenon in the Sri Lankan economy. It is in this context, i.e. in the context of plantations, supported by a state and an infrastructural apparatus, grown to be a dominant phenomenon that the total influence of the plantations on the nation's economy and society should be understood. The following chapter attempts to indicate the specific nature of this influence. 53
CHAPTER II
NOTES AND REFERENCES
1. J. Ferguson, Ceylon in 1893 (London: John Hudson and Co., 1893), p.l; also J.E. Tennent, Ceylon (London: ?, 1860); H.N. Cordington, A Short History of Ceylon (London: ?, 1926).
2. Ceylon National Archives 7/2357 cited in P. Peebles, "The Transformation of Colonial Elite: The Mudaliyars of Nineteenth Century Ceylon," Ph.D. disseration, University of Chicago, 1973, p.53.
3. L.A. Mills, Ceylon Under British Rule (London: Oxford University Press, 1933), pp.8-15.
4. L.A. Mills, Britain and Ceylon (London: Longmans, Green and Co., 1945), pp.22-25.
5. V. Samaraweera, "Economic and Social Developments Under the British" in History of Ceylon, ed. K.M. de Silva (Peradeniya: University of Ceylon, 1973), p.54.
6. G.C. Mendis, The Colebrooke - Camaron Papers, Vol. II (London: Oxford University Press, 1956).
7. L.A. Mills (1933), p.237.
8. K.M. de Silva "Studies in British Land Policy in Ceylon" Ceylon Journal of Historical and Social Studies (Jan.-June 1964), pp.28-29.
9. G.C. Mendis, Ceylon Under the British (Colombo: The Colombo Apothecaries Co. Ltd. 1944).
10. L.A. Mills (1933), pp.222-250.
11. J.E. Tennent, pp.226-227.
12. I. Van den Driesen, "Some Aspects of the Development of the Coffee Planting Industry in Ceylon," Ph.D. Dissertation, London School of Economics, 1954.
13. L.A. Mills (1933), p.227.
14. Ibid, pp.226-230.
15. J.E. Tennent, p.231.
16. Snodgrass, p.18.
17. I. Van den Driesen, "Some trends in the Economic History of Ceylon in the Modern Period" Ceylon Journal of Historical and Social Studies 3:1 (Jan.-June 1960), p.13. 54
18. Ibid, p.13.
19. H.A.D.S. Gunesekera, From Dependent Currency to Central Banking in Ceylon (London: London School of Economics, 1962), p.24.
20. Peebles, p.87.
21. M. Roberts, "Export Agriculture in the Nineteenth Century" in History of Ceylon Vol. 3, ed. K.M. de Silva, p.99.; I. Van den Driesen (1960), p.7.
22. I. Van den Driesen, as cited in Snodgrass, p.25.
23. Sri Lanka, Department of Census and Statistics, Census of Agriculture of Ceylon 1952 (Colombo, 1956, p.14. Department of Census and Statistics, 1956), p.14.
24. Based on Colvin R. de Silva, Ceylon Under the British Occupation 1795-1883, Vol. 2 (Colombo: The Colombo Apothecaries Co. Ltd. 1962), pp.321-353. These are broad categories, and within each were found several subcategories.
25. Peebles, p.221.
26. Colvin R. de Silva, p.351-52.
27. M. Roberts, "Land Problems and Land Policies, 1832-1900" in History of Ceylon, p.125.
28. Ibid, p.122.
29. Peebles, p.132. This much debated piece of legislation is the forerunner to a series of Ordinances known as Waste Lands Ordinances which include; Crownlands Ordinance No. 9 of 1841, Temple Lands Ordinance No. 10 of 1956, and the Waste Lands Ordinance No. 1 of 1899.
30. Van den Driesen (1960), p.8.
31. Colonial Office 54-74: Nov. 13, 1819, in L.A. Mills (1933), p.224.
32. Mills (1933)- p.224.
33. Ibid, p.234.
34. Ibid, p.239.
35. Ibid, p.239.
36. L.A. Wickramaratne, "The Development of Transportation in Ceylon" in History of Ceylon, op.cit., pp.303-316.
37. Snodgrass, p.20. 55
38. B. Bastiampillai, "From Coffee to Tea in Ceylon," Ceylon Journal of Historical and Social Studies 7:1 (Jan.-June 1964), pp.43-66.
39. J. Ferguson, Ceylon in 1893 (London: John Haddon and Co., 1893), p. 83.
40. Bastiampillai, p.61.
41. J. Ferguson (1893), p.83.
42. Sri Lanka, Department of Census and Statistics, Census of Agriculture 1952, Part I, Tea Plantation, p. 6...
43. Snodgrass, p.38.
44. L.A. Mills (1933), p.254.
45. Snodgrass, p.42.
46. Ferguson Directory 1876-78, op.cit., Introduction; Ceylon, Parliament, Sessional Paper XII of 1949, pp.11-12. "Report of the Coconut Commission," pp.11-12.
47. Ferguson Directory 1876-78, op.cit., Introduction.
48. Ibid, Introduction.
49. Ibid, Introduction.
50. Sri Lanka, Department of Census and Statistics, Statistical Abstracts 1952 (Colombo: Department of Census and Statistics, 1954).
51. Sri Lanka, Customs Returns 1950, in A.P.'A. Fernando, p.3.
52. United Nations, ESCAP, pp.72-73 and 90. 56
CHAPTER III
PLANTATIONS AS THE DOMINANT MODE OF PRODUCTION
It was argued in Chapter 1 that it is misleading to speak of a separate
and independently existing 'modern' sector and a 'traditional' sector in
Sri Lanka firstly, because there are a great many overlaps and interactions between the two sectors and secondly, because from a holistic point of view, the modern sector has had a 'total influence' on the whole political economy of the country. In the second chapter was shown the historical
circumstances and the manner in which the 'modern plantation sector' grew to be the dominant phenomenon in the country. With this background, this
chapter attempts to specify the nature of the dominant influence of the plantations on the total economy and society.
The total influence of the plantations is to.be understood in the context of the plantations as the 'dominant mode of production' in the country. A mode of production may be defined, following Cleaver, as consisting of
...the material forces of production and the social relations which prevail among those involved with production. By forces of production is meant the combination of natural resources, man-made tools, skills, knowledge and labour which are co-ordinated by and through the worker in the process of production...the relations of production refer to the structure of social relations among those connected to production. The mode of production thus has two aspects: relations between men and material upon and with which they work; and the relations between those who are associated with that production.
Or more specifically, for the present purpose, a mode of production may be understood, following Laclua, as referring to
...the logical and mutually coordinated articulation of: 1. a determinate type of ownership of the means of production; 2. a determinate form of appropriation of the economic surplus; 3. a determinate degree of development of the division of labour; 4. a determinate level of development of the productive forces. This is not merely a descriptive enumeration of isolated 'factors', but a totality defined by its mutual interconnections. Within this totality, property in2the means of production constitutes the decisive element. 57
Defined as above, a region, a nation, or the world may be looked upon as an 'economic system' (or a toal "social formation" in Marxian terminology) consisting of several modes of production. Thus in Sri Lanka, taken as an
'economic system', the plantations constituted one of the two or more modes of production.
The plantations represented a form of Capitalist mode of production in that they called for, in the productive process, a Capitalist class who owned the means of production and a proleteriat who sold their labour for a living, not unlike in the development of Capitalism in the Western Europe which took shape from the 'putting-out system'.^ In the distribution of the product again, the plantations were primarily oriented to the market, also like in the Western Capitalism. The plantations, as a mode of production, differed from the traditional mode or modes of production in Sri Lanka in that the latter did not have a clearly defined form of private ownership nor a wage earning class. Further, the production was primarily consumption oriented.
The plantations, towards the end of the 19th century have become the dominant phenomenon in the economy of Sri Lanka: There was a physical infrastructure consisting of roads, railways, ports, and developed lands which was structured around the needs of the plantations; there was an institutional infrastructure, consisting of agency houses, banks, a commercial community and a marketing network, which was geared primarily to the plantations; there was the colonial government and the bureaucracy which were attuned to and had interests in a plantation economy. Further, the plantations had come to be the major earners of foreign exchange, and the largest source of local revenue to the government; the plantation crops occupied the greatest area of land under cultivation, and formed the major avenue of employment. Hence, plantations the 'dominant mode of production'. 58
When the plantations came to be the dominant mode of production, certain of its characteristics pervaded through the 'traditional' mode, or modes, of production. This pervasive influence was felt in the whole of the nation taken as a .'system', and therefore it is difficult and, to some extent, artificial to isolate separate aspects for consideration of the influence of plantations. Nevertheless, a few factors will be singled out, for purposes of elucidation, in the discussion below. The factors are: the spread of a money economy, changes in the concepts relating to land and labour, and certain changes in the traditional social structure, particularly the formation of a new national elite.
But it should be noted that these changes neither began nor end with the plantations for, the process of 'Westernization', which includes a commercial orientation in agriculture, certain changes in land tenure and property relations, has begun as early as the beginning of the 16th century.
Further, some of these changes were accentuated by government measures generally applicable to the country. While it would be true to say that most legal and administrative measures taken by the Colonial government were keeping in step with the new economic order, not all of them were necessarily related to the plantation mode of production.
Also, it should be noted that some of these changes discussed below were more perceptible in certain regions than in others. For example, the commercialization in agriculture appears to have been greater and more rapid in the plantation regions than in the rest of the country; similarly social structural'/changes in the Western Province were greater than in the other Provinces. Variations could be identified also in terms of the type and distribution of the different crops since, as has already been pointed out, the distribution and the organization of production of the different 59 plantation crops varied a great deal within different parts of the country.
Such variations call for specific analysis into each different crop and each different geo-political region. Such detailed analysis, however, is beyond the scope of the present work and the discussion below will be confined to a more general level.
1. Monetization of the Economy
The plantations led to a general monetization and commercialization of the whole economy through direct involvement of Sri Lankans in the estate and in small holder production of the export crops as well as through other monetary flows into the economy that the plantations opened up. The Sri
Lankan ownership in the various plantation crops, discussed below, would provide an indication of this monetary flow.
From the coffee times the Sri Lankan villagers had gradually moved into the production of cash crops. This Involvement was relatively smaller for coffee and tea but was more important in rubber and to a greater extent in coconut. In 1880-81, at the height of coffee, the share of Sri Lankan ownership was over 20,000 acres which amounted to about 8% of the total.
Table 16 shows the pattern of ownership in coffee.
TABLE 16
NON-EUROPEAN AND EUROPEAN OWNERSHIP IN COFFEE, 1880-81
Extent in Acres %
Non-European 20,352 7.9 European 236,148 92.1 Total 256,148 100.0
Source: M. Roberts, in History of Ceylon, op.cit.,p. 97. 60
Coconut occupies the other end of the scale in terms of Ceylonese ownership. Its regional spread was wider, extending from the northern extreme in Jaffna to the Southern extreme in Matara along the coast.
Writing in the early 1890's, Ferguson estimates that there were about
500,000 acres under coconut of which all but 30,000 acres were owned by
Sri Lankans.^ In 1952 the census of Agriculture reports,
Coconut cultivation...is the relatively poor men's investment and is almost exclusively in Ceylonese hands: Estates reporting coconut in 1951 classified according to ownership show only 7.71% owned by persons other than citizens^of Ceylon and by companies incorporated outside Ceylon.
In tea the small-holder proportion and the Ceylonese involvement had been such that at the 1952 agricultural census the acreage under small holdings, classified as those under 20 acres, were about 19.6%. Rubber had a much larger proportion of small holdings and its share of Ceylonese ownership had been about 50%. Table 17 shows the small-holders' share in relation to the estates in tea, rubber and coconut. Although it does not directly reflect the Ceylonese involvement or of the production of those crops by peasants it would be a rough indication. 61
TABLE 17
AREA UNDER ESTATES AND SMALL-HOLDINGS (000 acres)
1901 1946 Estates Smallholdings Estates Smallholdings
Tea 366 41 490 63 Rubber 2 507 152 Coconut 339 508 428 653 Total 707 549 1,426 858
It may be noted that although the total area under smallholdings in tea and rubber are relatively small, the number of people involved would be quite high due to the smaller size of holdings. Also the classification of small holdings as those under 20 acres is arbitrary and under a different classification, the degree of small-holder involvement shown would be greater.
Source: Snodgrass, adapted from Table 2-10, p. 49.
The production of these export crops by the villagers means a basic change in their earlier largely subsistence oriented production. A cash nexus is introduced and the costs and benefits are calculated in terms of rupees and cents. Table 18, showing the receipts from the export of major plantation crops distributed between the "modern sector" and the "traditional sector",provides-an indication of the monetary flow into the villages. 62
TABLE 18
BREAKDOWN OF RECEIPTS FROM DOMESTIC EXPORTS BETWEEN
MODERN AND TRADITIONAL SECTOR, 1929 (Rs. MILLIONS)
Modern Sector Traditional Sector
Tea 202.1 32.7 Rubber 73.4 13.2 Coconut products 25.0 35.6 Total 300.6 81.5 % of total 78.7 21.3
Source: Snodgrass, adapted from Table 3-2, p. 60.
The production of export crops was not the only source which brought in a cash flow into the villages. There were a host of other avenues which opened up with the increasing commercialization and the spread of monetization. The more lucrative servicing and trading functions connected to the plantations in which the Ceylonese were involved, according to Roberts were:
forest clearing contracts; contracts to supply food and labour; the operation of general merchant stores and boutiques in service centres - the "bazaar towns" and villages; trade in coffee; transport contracts; building contracts and allied trades; the supply of furniture; the supply of barrels and timber and the supply of arrack and toddy - both wholesale and retail.
This is, of course, in addition to the wage earning of the villagers working in the plantations which will be discussed in the next section.
Such commercial activities and monetary flow, though more obvious in the plantation regions, were by no means limited to these areas. The improvements in communication, particularly roads and railways, that took place with the development of plantations facilitated the spread of commercialization and the monetization in all regions of the country.
The plantation crops opened up certain opportunities which were not necessarily limited to any region. This was particularly so in the case of coconut. 63
Coconut provided for certain small industries, such as the preparation of copra and coconut oil. The coir industry also appears to have been 9 widespread in the rural areas.
It might be expected that the result of such diversification of activities and the commercialization of agriculture and certain legal and administrative measures necessitated by the plantations was that the traditional factors of production underwent certain changes and acquired new meanings. Those relating to labour and land are discussed below.
2. Labour as Commodity
Labour in the modern sense of wage labour was almost non-existent in the traditional economic and social organization of Sri Lanka. The only system of rendering labour, other than the mutual labour exchanges known as at tan and help rendered on a gratuitous basis known as kaiya, ""^ was rajakariya whereby the subjects performed certain public services in the name of the Crown. But the large capitalist plantations required an army of resident labour which is free from other economic ties. This was obtained, as has been noted already, by mass importations of labour from
South India. Thus a class of landless agricultural labourers was created.
This landless labour class was augmented gradually, by more and more
Sri Lankans entering the ranks. Although the Sri Lankans were reluctant at the initial period the ...less onerous conditions experienced in the cultivation of rubber and other crops and with the entry of Ceylonese capital into the plantation industry, local labour was gradually weaned from its initial unwillingness to work the plantations and has since |^und in their further development useful avenues of employment. 64*
A contributary factor in the augmentation of the wage earning class appears to be the landlessness resulting from the expansion of the plantations. The land consolidation that took place in the Kandyan
Highlands during the rise of the plantations has been compared to the
"enclosure" movement of the 15th and 16th century England - a movement which created a large labour force -
...a labour force without land, without any tools o^ instruments of production, and with only labour power to sell.
In the rush for land that accompanied plantation expansion, it is alleged, that not only government forest land but also vast extents of communal village lands, particularly the chena lands, were bought by 13 planters. In other words there was direct appropriation of peasant land.
In addition to such appropriation it has been alleged that the government land policy led to sale of land by villagers themselves. The Kandyan
Peasantry Commission reports, The presumption in favour of the Crown created by the Ordinance £of 18403 led to a great degree of uncertainty among the peasantry as to the title of their peasant land. As a resulj; the peasantry sold what they regarded as doubtful titles... and Farmer writes,
Some at least of the chenas and other lands which have been sold to the estates were given by the peasant owners because they were unable to take the risk of claiming for title to be settled in their favour when presumption was in favour of the Crown. It seems likely, too that land policy and its effects have contribY^ed to a sense of hopelessness among the Kandyan peasantry.
The outcome of all these is said to be a severe limitation of land available for peasant cultivation. As the Kandyan Peasantry Commission reports, 65
...in practically the whole of the coffee planting areas of the Central and Uva provinces, a century of British administration has left behind hundreds of plantation locked villages rigorously restricted to their paddy lands.
Such land appropriations coupled with the growing population has led to conditions of landlessness and unemployment in the plantation regions.
A survey on landlessness in the Wet-Zone districts reports the following rates, for the year 1946:
TABLE 19
ESTIMATED PERCENTAGE OF WET ZONE AGRICULTURAL FAMILIES
WHO WERE LANDLESS, 1946
District Percentage
Colombo 14.2 Kalutara 22.0 Galle 20.0 Matara 20.2 Chilaw 34.9 Kurtinegala 12.1 Kandy 19.4 Matale 38.3 Nuwera Eliya 41.8 Badulla 8.8 Patnapura 32.2 Kegalle 20.5
Source: Report on Survey of Landlessness, Sessional Paper 13 of 1952. Quoted in B.H. Farmer, Pioneer Peasant Colonization in Ceylon (London: Oxford University Press, 1957);., p. 89.
Such'landlessness and unemployment conditions have provided the impetus for more Sri.Lankans to join the wage labour force in the estates. At the
Agricultural Census of 1952 a total of 613,294 labourers were employed in the estates, of whom 153,063 were of Sri Lankan nationality. 66
The following table shows the distribution of these labourers by nationality and by different crops:
TABLE 20
LABOUR STRENGTH: TEA, RUBBER, COCONUT AND OTHER ESTATES
WHICH EMPLOYED INDIAN LABOUR - 1951
Crop Indians Ceylonese Total
Tea 404,597 97,665 502,262 Rubber 51,784 51,417 103,201 Coconut 1,496 2,259 3,755 others 2,354 1,722 4,076 Total 460,231 153,063 613,294
Source: Census of Agriculture, 1952, Part IV, op.cit. p. 14.
The actual number of Sri Lankans employed as wage labourers in the production of plantation crops would be .much greater than that shown in the table .because there are large numbers of holdings below 20 acres which are not classified as estates and yet employ hired iabour. These labourers are drawn mostly from the surrounding villages. Some of them are part time labourers,who supplement their subsistence cultivation with wage earnings.
Although wage labour began with the cultivation of plantation crops, it did not end there. Gradually, it has become a fairly widespread phenomenon even in the so-called peasant sector, and, as will be shown in the following chapter, forms a constitutive element in the emerging form of small-holder commercial cultivation.
3. Land as Private Property
Land is probably the most important of the means of production and the one that felt most, the impact of the plantation enterprise. Plantations, 67 the way they were established by the British, were but a capitalist mode of production and therefore it was imperative that land, as a means of production, be private property, for there could be no capitalism without the private ownership of the means of production. Private property means,
...an exclusive, alienable, 'absolute' individual or corporate right in things...it is a right to dispose of, or alienate, as to use; and it is a right which is^got conditional on the owner's performance of any social function.
But such was not the concept of land in the traditional Sri Lanka. It is true that land constituted an important form of wealth in the traditional economic and social structure and that there was a higher stratum 19
.of- royal officials known as the radala who controlled vast extents of land.
But they did not own the land as their 'private property' - as a commodity to be purchased and disposed of at free will because, the basic principle relating land was that it belonged to the Crown and the right for the use of which was given to people in return for certain specified services.
Hence, it was necessary to define the ownership over land in terms of private property and Crown property. The Colonial government did this through the various Land Ordinances discussed in the preceding chapter.
This made possible the sale of land as a commodity both by the government and by private individuals. These changes, by no means, were confined to the plantations because the government's legal and administrative measures applied to the whole of the country. These and other changes, such as monetization and commercialization, fostered by the plantation mode of production brought about the concept of private" property as the predominant concept relating to land. Thus, not only in the plantation regions but also in the other areas land has come to be bought and sold as a commodity. 68
The dominance of private property ideals relating to land were such that they pervaded through even those programs, such as the development of land in the Dry Zone, in which it was necessary for the government to take the initiative. In the development of land in the Dry Zone among the dominant themes up to the World War I years, as B.H. Farmer notes, were that the initiative in the alienation of Crown land must come from the individual wanting the land; and the Crown land must be paid for. In the programs of peasant land development through colonization schemes the main consideration, during this period, has been their economic 20 returns rather than peasant welfare.
>Not until the 1930's did any noticeable shift take place in the government policy from these private enterprise ideals. The change in the
1930*s was necessitated by a series of circumstances which include the world economic depression of the 1930's which brought to the fore, the basic weaknesses of a primary export economy and the need for diversification of the economy more along self-reliant lines, particularly through the development of peasant production; the implementation of the
Donoughmore Constitution in 1931 whose political changes, such as the granting of universal franchise and a State Council with Sri Lankans as elected representatives, called for a government which is more responsive to the larger segment of the population; and the need to relieve the population pressure in the Wet Zone. Under such circumstances the government was forced to deviate from the laissez faire ideals and take greater responsibility in land development by providing such facilities as land, irrigation, credit and public services, such as housing, health, . . „ . . 21 electricity and communication. 69
Since independence, the National governments have pursued a policy of 'paternalistic welfarism' towards the poorer segments of the population, while upholding the sanctity of private property. Not until 1972 was there any serious interference with land as private property. Before 1972 the only noteworthy attempts at land reform were the Paddy Lands Act of
1953 and the Paddy Lands Act of 1958, both of which had the limited objectives of the provision of security of tenure for the tenant farmers and the regul• ation of rents. Thus the two major provisions of the Paddy Lands Act of
1953 were an assured minimum period of five years of tenancy and a ceiling of one quarter of the crop as rent. That the Act was conceived in the capitalist liberal tradition is evidenced by its adherence to certain themes in the latter. Those themes of the liberal ideology, as Herring puts it, are:
1. Incrementalism - the states prerogatives are viewed as limited and regulatory rather than interventionist and transformational. The preference is for mitigation rather than for alteration.
2. The vbluntaristic - contractual view of social relations where the tenant-landlord relation is seen as voluntary- contractual rather than coercive. Defects are remediable by changing the terms of the contract.
3. The presumption in favour of property. Serious interference with property relations, a crucial question in land reform, was ruled out not only because the role of the state was non-interventionist and social relations and structures are essentially sound, but also because the right to property is taken as natural and inalienable.
4. A normative preference for social consensus over conflict. Society is at least non-conflictual, if not basically consensual-harmonious. Individuals agree to the social relations they enter into, they do s,^ freely, so that there is no basis for sustained conflict. 70
The Paddy Lands Act of 1958 did not differ substantially from the 1953 one. But it, as conceived originally by the then Minister of Agriculture,
Philip Gunewardena, described as the 'father of Marxism in Ceylon', contained certain provisions, such as that the evicted tenants be restored immediately before procedural inquiries, and a new cooperative structure to provide more credit, which were to remedy the loop-holes in the earlier
Act. Such provisions, however, were considered too interventionist by the majority of the members of the cabinet and other interest groups and consequently the final form in which the Act came out was, in its author's 23 phrase, a "castrated" version of the original draft.
It was the Land Reform Law of 1972 that made a significant departure from the old norms in that, It is the first attempt to alter the existing property structure by the redistribution of sizeable areas of privately owned land, and it does this by^expropriating such land owned above a specified ceiling.
This is in contrast to the policy hitherto, which has been confined to distribution of Crown land under settlement schemes and marginal acquisitions from estates for village expansion. The departure from the old policies was precipitated by changed political and economic circumstances not the least of which was the island-wide youth insurrection of April 1971.
As Sandaratne points out that the 1972 Land Reform,
...can be seen as a response to the need for change, dramatically induced by the insurgency. (In fact, the Minister of Agriculture and Lands, Hector Kobbekaduwa, winding up a debate on the Land Reform Bill for the government, specifically said that the prime reason for it was the revolt. He pointed out that neither the United Front manifesto nor the statement of policy in the Speech from the Throne of 1970 mentioned ceilings on land holdings.) 71
The Land Reform (Amendment) Law of 1975 went a step further from the
1972 Law by extending the ceiling on ownership of land to company owned lands and by nationalizing all foreign owned lands. In the subsequent redistribution of lands acquired through the Land Reform Laws there have been a number of different arrangements. (See Chapter I, pp.17—18).
Those under various cooperative schemes are noteworthy because they embody a new concept of land tenure namely, the collective ownership of land, as opposed to the prevalent, dominant concept of private or individual ownership. Early evaluations of the performance of the cooperat• ive ventures indicate that they are far from satisfactory. Among the reasons cited for low performance are high drop-out rates resulting from 2 6 lack of security and concern for the future, whose roots could be traced to a lack of ideological commitment. The latter, in turn, may be seen as arising from commitment to a different ideology - the ideology of 1 land as property'.
The plantation mode of production, then,-brought in certain basic changes in the traditional economy - changes such as increased monetization and commercialization of agriculture, changes in the concepts relating to labour and land - which have pervaded through the whole economy and persisted to the present day. These changes are not without their implications for the traditional social structure. Some salient changes in the social structure accentuated by the plantation mode of production are discussed below. 72
4. Changes in the Social Structure
The Sinhalese social structure of the pre-British period has been 27 compared to the feudal structure of the pre-Capitalist Britain on the basis that the former had some similarities to the latter, such as a rigidly stratified society, a decentralized political organization, a higher stratum of royal officials with military functions and more important, an interconnected system of land tenure, social status and 28 service obligations. Similarly the impact of the capitalist plantation mode of production on the Sinhalese social structure may be compared to the impact of Capitalism on the British feudal social structure.
Particularly noteworthy in this respect are the creation of a class of owners of the means of production and another class of wage labourers, and the extension of a cash nexus into human relations involved in the process of production and distribution. But Marx would go even further and deplore the stultifying effect of Capitalism on human potential: ...the bourgeoise, wherever it has got the upper hand, has put an end to all feudal patriarchal, idyllic relations. It has pitilessly torn asunder the motely feudal ties that bound man to his "natural superiors", and has left remaining no other nexus between man and man than naked self-interest, than callous "cash payment". It has drowned the most heavenly ecstacies of religious fervour, of chivalrous enthusiasm, of philistine sentimentalism, in the icy water of egoistical calculations. It.has resolved personal worth into exchange value...
While not engaging in a moral critique of Capitalism or in over- idealizing the older forms of social relations, it is possible to point out some salient changes in the traditional social organization which were related to the new plantation mode of production. 73
The changes associated with the plantation mode of production, such as the spread of a market economy, the metamorphosis in the concepts of land and labour, or the general administrative measures of the Colonial government did not destroy completely the older social structure. The
British pursued a policy of ruling through the traditional power hierarchy.
This buttressed rather than undermine the older social structure, except on those not too rare occasions where the evaluation of the British of a
Sri Lankan's wealth, family and social status differed markedly from that of the locals. Similarly the new opportunities associated with the plantation mode of production were not exclusive to any particular local group and therefore it may be expected that the new opportunity structure was not entirely inconsistent with the old one. Yet it cannot be denied that the new changes introduced a certain fluidity in the traditional social structure whereby it was possible for individuals or whole groups to move up or down the social hierarchy. This was the result of the breaking down of certain exclusive privileges in the old system and the creation of new opportunities to wealth, status and power. Those related to land are a case in point:
Peebles, in a study of elite formation in the 19th century Ceylon, suggests that as a consequence of British land administration in the
19th century; firstly, a local market was created that brought a great deal of land under cultivation by Ceylonese land owners; secondly, the distribution of the extent of cultivated land tended towards a greater inequality of land ownership; and thirdly, the acquisistion of land became a channel of upward social mobility for the Ceylonese elite. These 74 changes, as to be expected, were more pronounced in the plantation lands and in plantation regions, but by no means confined to them. One finds today even in the most remote villages, such as those in the Dry Zone, some families which, had better access to land purchasing channels controlling 31 disproportionately large extents of land. Such land acquisitions by hitherto underprivileged families in the villages gave rise to certain changes in the village power structure. It also paved the way for certain individuals to rise up to the level of elites of a regional nature. However those lands related directly to the plantation enterprise are of more conse• quence, in that they gave rise to a new elite of national stature.
The new national elite was largely made up of some prominant Goigama families and a group of Karavas of Moratuva. The.new national elite, as
Peebles points out, acquired ten or more times the amount of land held by 32 any Ceylonese before 1840. During the "coffee mania" of the 1840's over 250,000 acres of lands were alienated most of which was bought by the
British. Only a few Ceylonese entrepreneurs bought land during this period.
But Crown land alienation continued throughout the century and much of these lands were bought by the Ceylonese during this time. According to
Peeble's calculations between 1860 and 1889 about 620,000 acres of Crown lands were sold under the Waste Lands Sales Scheme. Of these, the greatest number of lots sold were small grants to Ceylonese purchasers but the largest grants went to Europeans. Table 21, based on a one percent sample, shows the pattern of distribution of these purchases among Ceylonese and Europeans in relation to size of lots: 75
TABLE 21
SIZE OF CROWN GRANTS TO CEYLONESE AND EUROPEANS
Acreage Ceylonese Europeans Total % %
0.0 - 0.9 37.3 18.2 36.0 1.0 - 4.9 39.4 18.2 38.0 5.0 - 9.9 10.6 A. 5 10.2 10.0 -49.9 10.1 34.1 11.8 50 - over 2.5 25.0 4.0
Source: Peebles, op.cit., Table 14, p. 244.
As the table shows, a large percentage of Ceylonese purchases are in smaller plots of less than 10 acres. Such small purchases are unlikely to provide for large scale plantations. However a substantial number of
Ceylonese have made purchases of large plots which are more likely to have been plantation investments. Using an arbitrary definition of 'large plots' as those sold for Rs. 500 or more, Peebles found that 1/3 of such plots were purchased directly by Ceylonese investors. These purchases constituted
1350 deeds totalling in 83,700 acres of land. Of these lands, over 40% 33 was purchased by a few dozen Karava and Goigama families. Peebles points out that these purchases represent only a fraction of the land acquisition of the families involved because, these families purchased numerous smaller 34 plots and lands other than the Waste Land.
Peebles contends that this new national elite, together with the traditional Goigama elite, the Mudaliyars, emerged as the new land owning national elite towards the end of the 19th century. He estimates that there were about 150 Sinhalese who invested substantially Cover Rs. 5000) in waste lands and he identifies 32 of such in his sample. Of these 32, fourteen were Karava arrack renters from Moratuwa or members of their families and one a Goigama arrack renter. Eight were Mudaliyars,two
them Karavas. The remainder represented a variety of careers, such
Juanis de Silva, secretary of the Provincial Roads Committee of the
Western Province and Tudugalage Don Philip, a prominent Goigama 35
entrepreneur. The most prominent of the investors and their land purchases are shown in Table 22. TABLE 22
LEADING SINHALESE PURCHASERS OF WASTE LAND IN THE NINETEENTH CENTURY
Name Identification Rupees Acres
1'. CH. de Soysa Son of Jeronis de Soysa 270,605 7522
2. Mutantrige Simon Moratuva Karava businessman 113,980 -: 4438 Fernando 3. Richard Stuart Pieris Son of Jeronis Pieris 89,732 3949 4. Warusahennedige Nephew of Jeronis de Soysa 83,543 681 Harmanis de Soysa 5. Susew de Soysa Brother of Jeronis de Soysa 79,056 4696 6. Jeronis Pieris Brother-in-law of Susew de Soysa 78,831 3797 7. V. Johannes de Mel Moratuva Karava arrack renter 48,991 1236 8. Hanwedige Andris Moratuva Karava arrack renter 47,570 2471 Pieris 9. J.P. Obeysekere Lawyer, son-in-law of D.C.H. 33,348 2271 Dias Bandaranaike (and nephew) 10. Muttutantrige Joseph ? 31,988 765 11. V. Jacob de Mel Lawyer, brother of no. 7 30,377 655 12. S.C. Obeysekere Lawyer, brother of no. 9 23,951 1242 son-in-law of James Alwis 13. Solomon Dias Mudaliyar, son of D.C.H. Dias 20,389 1105 Bandaranaike Bandaranaike
Note: Two Karava partnership also purchased over Rs. 20,000 waste land: Lindamulage David and John Clovis de Silva and C.W. de Mel (Rs. 22,899, 1773 acres) and Mahawaduge Nicholas, Andris and Mattes Perera and Liyanage David Perera (Rs. 24,923, 876 acres).
Source: P. Peebles, op.cit., pp. 255-256. 78
Peebles argues that firstly, the group of individuals identified by
Crown land purchases as large land holders is approximately the same group identified by other measures; secondly, within this group the two sets of families, Goigama Mudaliyars of the Western Province and the Karava entre- 36 preneurs of Moratuva predominate. To the question whether there was a unitary Sinhalese elite towards the end of the 19th century; Peebles* answer is "yes". He contends, A high proportion of large land owners, leading families, professionals and appointed Mudaliyars appear to have been recruited from the^same pool of Goigama Mudaliyars and Moratuva Karavas.
Landed property related to the plantation economy provided the most important avenue to national elite status, but it was, by no means, the only one. There were a host of other entrepreneurial avenues to wealth and elite 38 status that opened up in the new capitalist economy. Some of these, such as transport, timber contracting, and arrack and toll renting, were directly related to the plantation enterprise. Some, such as gemming and graphite mining were not.
Of those entrepreneurial avenues which are directly related to the plantation enterprise, arrack renting is particularly important in that it was largely responsible for the dramatic rise of the Moratuva Karava national elite. The plantation enterprise gave the impetus to the arrack distilling industry by providing a wide market through the estate workers 39 and through improved transportation. When the arrack trade became an important industry the Colonial government regulated the production and distribution of arrack by selling exclusive rights to a few entrepreneurs in return for a substantial amount of down payment of "rent". Peebles 79 estimates the toal turnover in arrack trade for the year 1896 - 97 to 40 be about 9 million rupees. This left about five million rupees, after reductions for cost of production (about one million) and rents to the government (about three million), to be shared by the renters and others involved in the trade. The greater share of this sum was shared by about 60 large scale renters, of whome about 50 have been identified as Karavas 41 from Moratuva.
It should be noted that.there were certain entrepreneurial avenues to elite status which were not directly related to the plantation entreprise. Gemming and gem trade, for example, provided the foundations for the rise 42 of a Moor elite. Similarly, the mining and export of graphite provided another avenue for the rise of a few families to elite status. It should also be noted that quite apart from the entrepreneurial avenues there were others connected to the aquirement of education, particularly through the medium of English, which also provided for upward social mobility. Thus, there were a significant portion of the national elite who had made their way up through the administrative service and through the 'liberal' 44 professions. Therefore, in the social structural changes and in the rise of a national elite, the plantation enterprise was only one of the factors although the important one.
However, it may be noted that although there were different avenues to elite status they were eventually intertwined. As Roberts points out, Once achieved; the national elite consolidated their positions by various means. A great many of these successful families took care to spread their "investments". The principle Ceylonese cash crop planters had mixed investments in a number of cash crops as well as urban property. Successful merchants and businessmen as well as those administrator-professional occupations generally purchased plantation property. Marriages linked and buttressed such investments. 80
Consequently,
...different parts of the national elite were linked by important common denominators. They did not query the existence of private property or of private enterprise. Their existence as an elite rested (in part) on these pillars, whatever their origins, once they have consolidated their position as members of the national elite, they became members of the same class - in the Marxian sense of a shared position in the organization of production and cacjhesiveness arising from a consciousness of a shared position.
It was mostly from among this new national elite that the political 46 leaders of independent Sri Lanka were recruited. Consequently, the large majority of the political leaders of independent Sri Lanka had a shared background that was steeped in the capitalist liberal tradition of the West. This shared background of the leaders provided for a certain common orientation towards governing the country. This is inspite of the different political and ideological commitments declared by the different political parties. As Obeyesekera points out, One could view the major political parties sociologically as factions of a ruling elite. Take the major political parties moving from right to left: the United National Party, the Sri Lanka Freedom Party, the Lanka Sama Samaja Party (Trotskyites) and the Communist Party. Party manifestos and ideologies might be radically different from one end of the spectrum to the other but the leadership of all these parties came from elite ranks almost without exception. They came from the same schools, went to the same clubs, spoke English and marriage alliances cut across political differences.
Such an elite background among the political leaders was not without implications for government policy. In the formulation of policy relating the development of land and agriculture, as pointed out earlier (pp. 70-71) the leaders tended to operate within certain parameters set by their capit• alist liberal background. In setting these parameters a dominant plantation mode of production has contributed in no small measure. 81
However, departures have been made from the established norms of government policy. These were, often, necessitated by changing political and economic circumstances. The following chapter discusses the circum• stances and changes in policy as reflected in the development of peasant agriculture. 82
CHAPTER III
NOTES AND REFERENCES
1. H. Cleaver, "The Origins of the Green Revolution", Ph.D. dissertation, Stanford University, 1974, pp. 21-22.
2. E. Laclau, "Feudalism and Capitalism in Latin America", New Left Review 67 (May 1971), p. 33.
3. K. Marx, in Marx on Economics ed. R. Freedman (New York: Harvest Books, 1961), pp. 6-7.
4. See, for example, M.H. Dobb, Studies in the Development of Capitalism (London: Routledge & Kegan Paul, 1946).
5. J. Ferguson (1893), p. 54.
6. Sri Lanka, Department of Census & Statistics, Census of Agriculture 1952, Part III, Coconut Plantations, p. 7.
7. Ibid., Part I, Tea, p. 7.
8. M. Roberts, in History of Ceylon, p. 268.
9. Ibid.., p. 105.
10. See, for example, G. Obeyesekere, Land Tenure in Village Ceylon (Cambridge:. Cambridge University Press, 1967), p. 8; also R. Knox, An Historical Relation of Ceylon (London: Richard Chiswell, 1911), p. 17.
11. Census df Agriculture 1952, part IV, op.cit., p. 14.
12. E.K. Hunt, Property and Prophets: The Evolution of Economic Institutions and Ideologies (New York: Harper and Row, 1972), p. 23; see also The Report of the Kandyan Peasantry Commission, op.cit., p. 73; R. Pieris, Sinhalese Social Organization: The Kandyan Period (Colombo: Ceylon University Press Board, 1956), pp. 82-86.
13. Van Den Driesen, "Land Sales Policy and Some Aspects of the Problem of Tenure 1836-1886", The University of Ceylon Review XV, pp.36-52.
14. Kandyan Peasantry Commission, p. 91.
15. B.H.Farmer, Pioneer Peasant Colonization in Ceylon (London: Oxford University Press, 1957), p. 91.
16. Kandyan Peasantry Commission, p. 71. 83
17. See, for example, M.H. Dobb, Development of Capitalism.
18. C.B. Macpherson, Property (Toronto: University of Toronto Press, 1978), p. 10.
19. Pieris, pp. 169-179.
20. Farmer, pp. 108-115.
21. Ibid., pp. 146-157.
22. R.H. Herring, "The Forgotten 1953 Paddy Lands Act in Ceylon", Modern Ceylon Studies, Vol.3, No.2 (July 1972), p.
23. Ibid., p.
24. N. Sandaratne, "Sri Lanka's New Land Reform", South Asian Review, 6:1 (Oct.1972), p. 7.
25. Ibid., p. 8. See also, Politicus "The April Revolt in Ceylon", Asian Survey, XII:3 (March 1972), pp. 259-274.
26. A. Ellman and D. de S. Ratneweera, New Settlement Schemes in Sri Lanka (Colombo.: Agrarian Research and Training Institute, 1974).
27. See, for example, B. Ryan, Caste in Modern Ceylon (New Brunswick,NJ: Rutgers University Press, 1953), pp. 45-50.
28. Peebles, pp. 26-38.
29. K. Marx and F. Angels, "The Communist Manifesto" in Essential Works of Marxism, ed. A.P. Mandel (New York: Bentham, 1965), p. 15.
30. Peebles, p. 225.
31. For example, E.R. Leach, Pul Eliya - A Village in Ceylon: A Study of Land Tenure and Kinship (Cambridge: Cambridge University Press, 1961); M. Robinson, Political Structure in a Changing Sinhalese Village'. (Cambridge: Cambridge University Press, 1975); Agrarian Research and Training Institute, Peoples Participation and the Role of Groups in Rural Sri Lanka, Three case Studies (Colombo: ARTI, 1977).
32. Peebles, p. 230.
33. Ibid., pp. 245-254.
34. Ibid., p. 245.
35. Ibid., p. 264. 84
36. Ibid., p. 266.
37. Ibid., p. 268.
38. Roberts, in History of Ceylon, pp. 268-271.
39. Ibid., p. 270; Peebles, pp. 164-215.
40. Ibid., p. 195.
41. Ibid., pp. 201-213.
42. Roberts, in History of Ceylon, p. 270.
43. Ibid., p. 271.
44. Ibid., pp. 271-273.
45. Ibid., pp. 274 and 283.
46. See, for example, M. Singer, The Emerging Elite: A Study of Political Leadership in Ceylon (Cambridge: The MIT Press, 1964); T. "Fernando, "Elite Politics in the New States: The Case of Post- Independence Sri Lanka", Pacific Affairs 46:3 (Fall 1973), pp. 361-383.
47. Obeyesekera (1974), p. 380. 85
CHAPTER IV
DEVELOPMENTS IN PEASANT AGRICULTURE
The preceding chapter discussed certain changes in the economic and social organization, brought about by the advent of plantations. It was noted that changes, such as increased monetization and commercialization of agriculture; changes relating to the institutions of land and labour; and changes in the social structure were felt not only in the plantation industry or the planting regions but in the rest of the economy and society as well. This chapter attempts to outline more specifically the impact of the plantations and other developments in peasant (or domestic) agriculture.
In outlining the developments in peasant agriculture one may identify two broad time periods. The first is the British period, or more specifically, from the rise of the plantations to dominance in the 1840's to the rise of political representation of Sri Lankans in the 1930's. The other is the post-independence period. The British period is characterized by a relative neglect of peasant agriculture due to the dominant and favoured position of the plantation industry. In contrast, the post-independence period is marked by an increased concern over peasant agriculture and a gradual decline of the plantation industry from its dominant position.
1. The British Period
The developments in peasant agriculture during the British period is to be viewed in the context of the plantations as the dominant mode of production. The impact of the plantations on peasant agriculture was felt in two ways. One is the direct transformations, such as an increased monetization and market orientation, changes in the institutions relating to land and labour, and changes in the social structure, discussed in the preceding chapter, as well as certain contraints resulting from competing uses of land and other resources. The other is the indirect effect of relative neglect of peasant agriculture, arising from the dominant and favoured position of the plantation industry.
As for the direct impact, certain regional variations have to be recognized. The direct effects were more pronounced in the wet-zone because the plantations were largely a wet-zone phenomenon. However, in the long run, due to increased communication, interregional flows of people and resources, and unifying administrative measures, one may find a greater uniformity in such impact in the whole country.""
In the wet-zone the direct plantation impact includes not only the increased commercialization, and changes relating to factors of production but also limitations on land and income earnings resulting from plantation expansion and appropriation of peasant land. "Farmer, referring to the wet-zone rural sector, writes in 1957 that,
Today the wet-zone has an economy which, while retaining many recognizable features of the old order, has clearly been very much modified; and, above all, from the point of view of this study, a crowded rural population,^tending to suffer from landlessness and economic distress.
The KanHyan Peasantry Commission contends that severe limitations on land available for peasant cultivation were brought in by the plantation expansion and the appropriation of chena lands and as a result,
In practically the whole of the coffee planting areas of the Central and Uva Provinces, a century of British administration has left behind hundreds of plantation locked villages rigorously restricted to their paddy lands. 87
An off-shoot of such peasant land restriction, it has been argued, was 4 the deterioration of the cattle population. Roberts paraphrases the
argument as follows:
The plantations led to limitation in pasture lands and the limitation of pasture land in turn led to the deterioration in the conditions and number of local draught animals. Cattle murrain (rinder pest) added its quota of disaster to the trend. As a result paddy cultivation was seriously affected through loss of manure and animal power. In the meantime population and paddy land continued to increase. The scarcity of draught animals generated by the trends raised hire charges. All these factors created a spiralling tendency for the peasantry to rely on manpower rather than animal power in preparing the field. Technology had taken a large step backward.
Roberts disputes the claim that the cattle were vital to the Kandyan
peasant cultivation and that the spread of plantations led to their
deterioration. However, he concedes that
It could be argued that private alienation of village land to planters and the expansion of highland small-holdings on the one hand combined with the growth of population and such alienation of village land by the crown as occurred on the other hand circumscribed the pasture land available to the village.
Whatever the details may be - whether or not there was direct appropriation of peasant land and any immediate circumscribing of peasant villages and pasture land - one may conclude that the spread of the plantations, at
least in the long run, posed limitations on the land available for peasant cultivation.
Apart from such limitations it is also evident that the careless land- use by the plantations caused certain disturbances in the ecological balance
and that affected peasant cultivation as well. The Agricultural Census of
1962 reports that in the process of mass land clearings that were ushered
in during the plantation expansion the 88
...upper slopes of catchments were deprived of forest cover, river banks were denuded of forest right up to the water edge and steep land left unprotected without any regards to crucial angles of slope. Inefficient drainage was added to the destructive activities and caused unprecedented silting and floods.....Rubber and coconut plantations though confined to the lower hills and coastal plains have themselves contributed to the deterioration and erosion of vast quantities of soil.
The other aspect of the plantation impact, namely the relative neglect
of peasant agriculture was felt more in the Dry Zone. In fact, this neglect pre-dates the plantations or the British period. The thousands of
tanks, reservoirs, and canals, particularly in the Dry-Zone, provide
evidence to a well developed peasant agricultural system in the ancient g
Sri Lanka. Such a system was maintained with the patronage of the
ancient rulers and an elaborate system of institutions of the people.
With the appearance of the Western powers in the 16th century, the state
patronage and the institutional structure had begun to break down. The
Portuguese and the Dutch were busy in commercial pursuits. The British
came to be pre-occupied with the plantation enterprise. By virtue of
the dominant and favoured position of the plantation enterprise, there
was an imbalance in favour of the plantation industry in the allocation of
public resources and in the build-up of institutional and physical
infrastructure.
As for the allocation of government resources, Governor Gregory is
reported to have commented in his report of 1894 on famine conditions in
the North Central Province that, The previous Governors do not seem to have been aware of their duties, for they were not justified in expending large sums for the benefit of the planters in the more prosperous districts while large portions of the island were totally neglected. But even such concerned Governors could not do much for the peasants, for the resources of the government were needed to maintain and expand the plantation enterprise. Precise data are not available as to what portion of the government expenditure went into the plantations and what portion to the other sectors. But it may be noted that Snodgrass, in presenting a functional breakdown of the government expenditure for the year 1928 -
29, adds the remark that,
Aside from the fairly heavy burden of administrative cost and the light defence burden which it bore, the government confined its activities to providing services Y^i°h were of direct and indirect benefit to the estates.
The neglect of the peasant sector may be noticed also in the physical and institutional infrastructure built during the British period. In the development of a communication network, it was noted (Chapter II, pp. 40 -42) the plantations were the main concern. The Kandyan Peasantry Commission, in referring to the communication system, comments,
The alliance between the government and the plantations produced a road system, which entirely ignored the village population. In the planting areas there is a network of ^ roads but this road system literally ends with the plantations.
Similarly, in the development of financial and credit institutions, for example, the plantations appear to have been the exclusive target.
The banking system that developed with the plantation economy was,
...almost exclusively in British hands...and lent almost exclus• ively to the planters and the export import trade.
As for the monetary system in general, that prevailed in the country during this period, Gunesekere, a distinguished Sri Lankan economist has' this to say, 90
The entire monetary system of Ceylon was an adjunct to her export economy. Since banking policy was attuned to the export economy it follows that the monetary arrangements were condusive to its development on the same lines.
The result of such skewed development in financial institutions, it may be surmised, was the absence of institutional credit for the peasant
farmer. The advent of a dominant capitalist plantation economy led to an increase in monetization and commercialization in peasant agriculture, but not to commensurate developments in financial institutions.
Consequently, as the IBRD Commission reports, the peasants' only recourse was,
...the village trader and money lender who advanced funds at exhorbitant rates of interest. With a good crop the peasant would normally pay off his loan at harvest time. But if the crop failed or were poor, he might have to extend the loan and add to it, with the frequent result that he became permanently indebted to the money lender and in the worst circumstances ^ lost his property through inability to meet his obligations.
While it is true that the government services during the British period was skewed in favour of the plantation industry, it would not be true to say that the government did not concern itself at all with peasant agriculture. Some useful work did take place during this period.
Particularly noteworthy is the work done with respect to irrigation.
Farmer notes that between 1870 and 1914 several projects were undertaken by the Government in the restoration and construction of irrigation works. Mostly these were small village tanks but there were also some major reservoirs such as Kalawewa, Kantalai, Minneriya, Giritale and
Parakrama Samudra which were restored from their ancient ruins.^
A more active period of concern in the peasant follows the World War I years. During the war and the following years serious food shortages in the country brought awareness of hardship of peasantry and the lop-
sidedness of the economy which depended heavily on a few primary exports.
Added to the problem was the rapidly increasing population particularly
in the wet zone which accentuated the problem of land fragmentation, 16 landlessness arid unemployment. As a result there was more effort by
the government in the development of peasant agriculture. Increasingly
the communication and irrigation facilities in the Dry Zone have been 17
given some importance.
As a result of such developments, not withstanding a state of relative neglect, the peasant agriculture has experienced some growth. As shown in
Table 23 the acreage under paddy has increased from 544,000 to 913,000
acres from 1871 to 1946. The acreage under other peasant crops has also
increased from 58,000 to 305,000 during the same period. However, these
increases appear to be insignificant compared to the growth recorded by the export crops which was from 766,000 acres to 2,284,000 acres during the
same period. TABLE 23
ACREAGE UNDER PADDY AND OTHER NON-EXPORT CROPS,
1871 - 1946 (in thousand acres)
Year Paddy Other non- Export Export Crops Crops
1871 544 58 766 1881 549 169 823 1891 563 186 1076 1901 670 150 1261 1911 645 199 1672 1921 727 215 1834 1931 811 190 2145 1946 913 305 2284
Source: Snodgrass, op.cit., p. 49. Such growth as took place in peasant agriculture during this period
appears to be primarily due to the increase in peasant population, which
(i.e. rural population) has increased from 1.8 million to 7.3 million 18 between 1871 and 1946. Other contributory factors include the extension of communication and the diffusion of a market economy and the resultant 19
income earning opportunities. The latter gave more people the means to
bring new land under cultivation.
In conclusion it may be noted that growth in the production of peasant
crops during the British period was mainly a result of expansion of the area
under cultivation and not due to increases in productivity. The productivity
in peasant agriculture appears to have remained relatively stagnant during .-i . . . 20 thxs period.
2. The Post-Independence Period
In discussing the developments in peasant agriculture the division of a time period at independence is rather arbitrary. A marked shift in govern• ment policy and serious efforts towards the development of peasant agri•
culture is noticeable as early as the 1930's. This change in attitude and efforts in the 1930's was ushered in by a series of circumstances. The important of them, as pointed out earlier (chap. Ill p.68.'. ), were the world depression of the 1930's which brought to the fore the basic weaknesses of a primary exports economy and the need for diversification of the economy more along self-reliant lines through the development of domestic agriculture! the implementation of the Donoughmore Constitution in 1931 whose political changes, such as granting of universal franchise and a State Council with
Sri Lankans as elected representatives, called for a government which is 93 more responsive to the larger segment of the population; and the need to relieve the growing population pressure in the Wet-Zone.
Under such circumstances the development of peasant agriculture gained increased importance. The main focus of the new effort, championed by
D.S. Senanayake, the then Minister of Agriculture, was the Colonization
Schemes in the Dry Zone. In opening up new land for peasant cultivation the government took greater responsibility by providing land and basic facilities, such as irrigation, communication, housing and credit. Between the years 1931 and 1953, 31 new colonies were established, some of them very large. As a result, the cultivated acreage under major irrigation schemes increased from 162,797 in 1920 to 217,766 in 1951.21
However, a more comprehensive approach and the emergence of the small farmer to prominence in Sri Lanka is a phenomenon of the post-independence period. The new phenomenon was brought in by a series of circumstances among which are: the deteriorating terms of trade and the resultant depletion of external resources; the growing population and the resultant need to provide more food and employment; and the developments in the parliamentary political system which has tended to weight in favour of the rural small-farmer. These factors are discussed below.
During the post-independence period, as Table 24 indicates, the price of Sri Lanka's exports continued to fall in relation to the price of her imports. Further the toal imports, which were heavily consumption orientated, kept rising up with the increasing population. These trends resulted in increasing balance of payments difficulties and the dwindling of external resources, which were very clear by the mid 1960's. 94
TABLE 24
TRADE INDICES SELECTED YEARS
(Price Index: 1967 = 100)
1948 1960 1970
Tea 89 120 110
Rubber 73 169 128
Major Coconut Products 96 102 150
All Exports 85 122 118
All Imports 57 83 140 * 149 148 84 Terms of Trade
* Export Price Index A _L (JU Import Price Index
Source: Central Bank of Ceylon, Annual Reports (Colombo: Central Bank of Ceylon), series.
In the meantime the population of the country has doubled, rising from
6.6 million in 1946 to 12.7 million in 1971. The result has been a greater pressure on land and other available resources. The pressure on land was particularly apparent in the already densely populated Wet^zone. Table 25 shows the growth of population and the increasing density of rural population per acre of agricultural land between 1946 and 1976. 95
TABLE 25
THE GROWTH OF POPULATION AND THE RURAL DENSITY PER ACRE OF AGRICULTURAL LAND
1946 1953 1963 1971
Total Population (millions) 6.6 8.1 10.1 12.7
Rural Population (millions) 5.6 6.9 8.6 9.9
Rural Population Density per acre of Agricultural land:
All Island 8.0 9.5 11.2 12.2
Wet-Zone Districts* 9.7 11.6 13.8 15.2
Other Districts 5.9 7.8 8.6 9.6
Only those districts which are fully within the wet-zone - namely Colombo, Kalutara, Galle, Matara, Kandy, Nuwara Eliya and Kegalle - are included in the category 'wet zone districts'. In the category 'other districts' the remaining districts except Jaffna are included. Jaffna is a special case of densely populated land scare district in the dry-zone.
Source: Sri Lanka, Department of Census & Statistics, Computed from tables in ESCAP, Comparative Study of Population, pp. 75-76.
The political trends resulting from the functioning of a parliamentary democracy in Sri Lanka has been a greater responsiveness towards the needs of the majority of voters. The country being predominantly rural and agricultural, the contending parties have devised their policies and programs more and more to win the rural vote. The successive delimitations of constituences have provided for greater representation for rural areas in general and more specifically in such areas as the Central Province where 22 the small farmers form the bulk of the voting population.
The cumulative effect of all these changes during the post-independence period has been a wide range of public policy programs directed at developing the production and productivity of domestic agriculture. These 96
programs, envisaged in the successive development plans, which include
the Ten Year Plan of 1958; the Agricultural Development Proposals of
1966; the Five Year Plan of 1972, have resulted in the gradual build•
up of a comprehensive institutional infrastructure and advances in the
techniques of production. These in turn have been responsible for
considerable growth in domestic agriculture.
The production of paddy and other food crops has grown considerably.:
Particularly noteworthy is the progress made in the production of subsidiary
food crops which have nearly caught-up with paddy in their contribution to
the G.N.P. by 1975. This was mainly a result of the import substitution policy of the government from the mid 1960's. With the impetus provided by the price incentives and supportive services by the government,
subsequent to import restrictions, the acreage under these crops has grown considerably. As Table 26 indicates, particularly noteworthy is
the progress made in the production of chillies, potatoes, manioc and
sweet potatoes.
TABLE 26
ACREAGE OF PRINCIPAL FOOD CROPS
1965 1970 1976
Paddy 1,323,317 1,775,897 1,788,891
Kurakkan 64,635 52,078 97,630
Maize 29,408 50,730 94,592
Chillies 48,603 58,990 134,873
Red Onions 14,559 16,660 23,892
Potatoes 1,662 8,188 7,693
Manioc 130,492. 147,036 373,575
Sweet Potatoes 34,418 39,150 112,548
Source: Sri Lanka, Department of Census and Statistics , cited in Economic Review 3:10 (Jan 1978), p. 14. 97
However paddy remains the single most important crop in Sri Lankan agriculture in terms of the area under cultivation, employment capacity and its contribution to the national income. Therefore the developments in the production of paddy merits closer attention.
The production, acreage and average yield per acre of paddy relating to the period 1951/52 to 1975/76 are shown in Table 27. The general trend during the period has been towards a steady increase on all these indicators, except for the first half of the 1970s which recorded declines in acreage 23 and productivity, which are attributable to poor weather conditions.
TABLE 27
PRODUCTION, AREA AND YIELD OF PADDY
Year Production Net Harvested Average Yield million bushels acreage in '000 per acre
1951/52 28.90 936.62 30.80
1956/57 31.28 967.56 32.35
1961/62 48.00 1,268.46 37.90
1966/67 54.90 1,331.95 41.27
1971/72 62.90 1,342.07 46.32
1975/76 60.05 1,360.82 44.13
Source: Sri Lanka, Department of Census and Statistics, in Economic Review 3:10 (Jan. 1978), p. 6.
Contributing to the progress in the production and productivity of paddy are a fairly comprehensive supportive services structure and advances made in the cultural practices. The supportive services structure include research and extension; agricultural credit, crop insurance and price incentives; 98
a network of input supply stations and farmer organizations; and tenurial
reforms. Important among the changes in cultural practices are the use of high yielding seed varieties; the use of fertilizer, pesticides and weedcides; and mechanized draught power. Each of these factors are dis•
cussed briefly in the following paragraphs.
As for research and extension, vast strides have been made in the
recent times. Although a Department of Agriculture was established as early as 1921, it appears to have remained, largely, a preserve of the planting community for a long time. But, with the political changes follow•
ing independence and the growing need to produce more food, the Department has come to pay more and more attention to the development of peasant
agriculture. A number of research stations have been established in the
different agro-ecological zones, to carry out research on paddy and other
subsidiary food crops. Particularly noteworthy are the achievements made
in the hybridization of paddy. The H4 variety, known as the old improved variety, released in 1958, and the BG lines, known as the new improved
variety released in 1968, have helped boost paddy yields considerably in
recent times. As Table 28 shows, these high yielding varieties were fairly widespread in the country by the early 1970s.,
TABLE 28
ADOPTION RATES OF IMPROVED VARIETIES OF SEED PADDY - MAHA 1973/74
% of Farmers
Newly Improved 42.0
Old Improved 33.3
Traditional 24.7
Source: Crop Cutting Survey, cited in Economic Review, 3:10 (Jan 1978), p. 9. 99
Along with the development of research efforts was the development, in the more recent times, of a network of local level farmer institutions which were meant to facilitate extension as well as development planning at the 'grass-roots' level. Important in this respect are the island- wide establishment of the Agricultural Productivity Committees with the 24 function of "promotion coordination and development of agriculture", and their village level.branches known as the Cultivation Committees.
Although the performance of these and other similar village level organ- 25 izations have left much to be desired, these institutions mark efforts in the right direction of building up a comprehensive organizational net• work which could facilitate the 'two-way' flow of ideas, goods and services.
Also as a part of the supportive structure are the agricultural credit, marketing, and the crop insurance schemes. Although some government credit schemes have been in existence from as far back as 1947 their contribution in meeting the credit needs of the small farmer has been minimal. A major development in this area was the launching of the New Agricultural
Credit Scheme in 1967, under which the Peoples Bank channelled credit to the farmers through the island-wide network of Multi-Purpose Cooperative
Societies. A more comprehensive credit scheme, through the Cooperative
Rural Banks and the Bank of Ceylon branches housed in Agricultural Service
Centres, was introduced in 1973. As Table 29 shows, substantial amounts of credit have been disbursed through these schemes. However, high default rates and the consequent non-eligibility have posed limitations on the effectiveness of these schemes. Consequently, the non-institutional channels 26 of credit still remain an important phenomenon in peasant agriculture. iOO
TABLE 29
PADDY LOANS AND RECOVERIES
(Rs. Million)
Total loans Total % of Granted Repayment Repayment
1967/68 - 1969/70 180.09 127.96 71.0
1970/71 - 1976/77 444.18 223.20 50.2
Source: Peoples Bank, Economic Review 3:10 (Jan. 1978),p. 11.
A crop insurance scheme, aimed at counteracting the risk and uncertainty involved in the adoption of new methods of cultivation, has been in existence since 1958. The scope of this scheme was further broadened by the Agricultural Insurance Law of 1973, which introduced compulsory insurence for paddy. However, the effectiveness of the scheme has been 27
found to be less than satisfactory.
The price incentives are another important component of the supportive structure for domestic agriculture. The Guaranteed Price Scheme for paddy introduced in 1948 envisaged not only a guaranteed minimum price for the product but also a network of purchasing outlets through the cooperative societies. The objectives of the scheme include the market stimulus for production and the elimination of the middleman as a purchasing agent. The price stimulus effect has undoubtedly contributed to the increase in 28 production. The guaranteed price for paddy which stagnated at Rs. 12 per bushel has been revised from 1966 in stages to reach Rs. 40 in 1978.
Therefore the price incentive effect is likely to be greater in the recent years. As for purchasing, the middleman's role has certainly declined \ although he has not been eliminated totally. It is significant that, on the average, about 37% of the paddy produced in the country in the recent years has been purchased by the Paddy Marketing Board (see chapter I, p. 19 for details).
Another area influencing the production and productivity in agriculture is the tenurial arrangements. Important in this respect are the size of operational holdings and the various tenancy or share cropping arrangements.
In terms of size of holdings, the domestic agricultural sector is character• ized by the predominance of small holdings. As shown in Table 30, about
38% of the paddy holdings are in sizes of 1 acre or less. Another 50% of the holdings range between 1 and 5 acres. Only 2% of the holdings are in sizes of 10 acres or more.
TABLE 30
THE DISTRIBUTION OF PADDY LAND BY SIZE OF HOLDINGS, 1962
Size Group Number of Percentage (acres) Holdings of Holdings
Under h 30,983 5
\-\ 72,968 13
\ - 1 128,941 23
1 - 2h 189,540 33
2*s- 5 95,619 17
5-10 38,089 7
above 10 11,513 2
TOTAL 567,653 100%
Source: Sri Lanka, Department of Census & Statistics, Census of Agriculture 1962, Vol. Ill, (Colombo: Department of Census & Statistics, 1965), Table IV. 102
The size distribution varies considerably among the different agro- ecological zones. Generally in the Wet-zone, due to the greater pressure 29 of population on land, the holdings are smaller. Although the optimum size of a family farm is an unsettled issue, there is general agreement that holdings below one acre do not provide sufficient income for the 30 average family. In this sense, a large proportion of agricultural holdings in the Wet-Zone would be below the optimum size. In the Dry-
Zone the holdings are considerably larger. With respect to those lands developed under government programs, certain provisions have been made to prevent the sub-division of holdings beyond economic sizes.
Tenurial arrangements are considered as an important factor in the productivity of agriculture. According to the Agricultural Census of 1946 about 45% of the paddy holdings in Sri Lanka were under different forms of tenancy arrangements. Of this, ande - traditionally a 50-50 arrangement - 31 was the dominant system. Table 31, obtained from a recent sample survey, presents the tenurial categories in the cultivation of paddy relating to five major paddy producing districts. 103
TABLE 31
SYSTEM OF TENURE IN PADDY IN FIVE SELECTED DISTRICTS (per centages)
Owner- Tenant- District Owners Tenants Tenants Owners Others Total
Polonnaruwa 68.2 - 10.4 3.2 18.2 100
Hambantota 20.5 49.4 10.3 14.1 5.8 100
Anuradhapura 54.2 4.5 8.0 5.0 28.4 100
Kandy 38.0 30.4 9.5 22.2 - 100
Colombo 43.7 27.1 - 12.5 16.7 100
Source: Agrarian Research & Training Institute, Agrarian Situation Relating to Paddy Cultivation in Five selected districts of Sri Lanka, Part 6 - Comparative Analysis (Colombo: ARTI, 1975), p. 14.
The disincentives to productivity, posed by unfair tenancy arrangements have long been recognized by the government. Accordingly,.the Paddy Lands
Act of 1953 envisaged the security of tenure and the regulation of rent as the major objectives. However, the Act was confined to two districts,
Batticaloa and Hambantota, where the tenurial conditions were considered 32 to be most onerous. The Paddy Lands Act of 1958 was more comprehensive in that its scope was island-wide and its provisions covered the loop• holes in the earlier Act. However in the implementation and in their effec- 33 tiveness both these Acts left much to be desired. These Acts were superseded by the Agricultural Lands Law of 1973 which extended the tenurial provisions to all share cropped land in the country. This Act, coupled with the Agricultural Productivity Law of 1972, which provided for the establishment of Agricultural Productivity Committees vested with wide ranging powers to ensure the optimal use of agricultural lands, provides scope for considerable institutional reforms in tenurial relations. The other area of developments in peasant agriculture during the
post-independence period relates to changes in the techniques of
production. Important in this respect are the use of improved varieties
of seed; fertilizer application; the methods of pest, disease and
weed control; and the use of mechanized draught power.
The use of improved varieties of seed is widespread in the country.
As has already been discussed (p. 98), about 75% of the paddy acreage
is now under some improved variety. Important for the use of new seed
varieties is the use of fertilizer. Until 1964 the supply of chemical
fertilizer was dependent on imports by the private sector. But, with
the establishment of the Ceylon Fertilizer Co-operation in 1964, the
government took over the import of fertilizer. Since then, as shown
in Table 32, the import of fertilizer has increased substantially,
which was made available to the farmer through the co-operative net• work. However, from 1974, due to the increase in the price of petroleum
products in the world market and the resultant shortages, there has
been a decline in the imports and consequently in its availability to
the farmer. TABLE 32
FERTILIZER ISSUES FOR PADDY
(000' tons)
Year Fertilizer Issued
1961 29.0
1963 47. 1
1965 42.0
1967 73.2
1969 83.5
1971 95.4
1973 125.5
1975 48.7
Source: Central Bank of Ceylon, Annual Report (Colombo: Central Bank of Ceylon), Series.
To obtain the benefits of improved varieties of seed it is necessary to use not only fertilizer but also a variety of pest, disease and weed control methods. The available data- on these aspects are incomplete.
However, as Table 33 shows, there has been a great increase in weed contro TABLE 33
PADDY AREA UNDER PEST, DISEASE AND WEED CONTROL
(per centage. of area shown)
1952 1962 1968
Pesticides - n.a. 16 n.a.
Fungicides - n.a. 3 n.a.
Weed Control - 13 27 42
Source: A.P.A. Fernando, p. 138.
The mechanization of agriculture is another important development the post-independence period. Important in this respect is the use o tractors in ploughing. As shown in Table 34, the use of tractors in ploughing has increased from an insignificant 0.5 to 47% of the area under paddy, between the years 1946 and 1968. However, the growing foreign exchange shortages and the increasing cost of machinery has impeded the further spread of mechanization in the recent years.
TABLE 34
PADDY AREA TRACTOR PLOUGHED
Year Acres As per centage of area sown
1946 4,196 0.5
1962 566,421 38
1968 823,664 47
Source: Census of Agriculture 1946 and 1962; Director of Agriculture, Administration Report 1967/68. 107
In conclusion, it may be noted that the developments in domestic agriculture during the post-independence period include, changes in the techniques of production (which constitute the enigmatic "Green
Revolution"); substantial institutional reforms; and a gradual build• up of a comprehensive supportive infrastructure. These developments have two important implications from the point of view of the present study. One is that the new developments represent a marked shift from the traditional subsistence oriented peasant agriculture described in the 'dualistic' model. The other, related to the former, is that the new developments signify the emergence of a new mode of production to prominance in the country.
The shift from the traditional pattern is evident in the process of pi-oduction and in the distribution of the product. In the process of production there is the increased use of capital in the form of inputs, which was necessitated by the use of new seed varieties, fertilizer, agro-chemicals, and the changed cultural practices. There is also in• creased use of hired labour (according to a sample survey in Maha 1972/73 the ratio of hired labour to toal labour input in the production of paddy 34 ranged from 56 to 78% in selected districts ). In the distribution of the product there is increasing market orientation. As shown earlier, in the recent years about 40% of the paddy produced has been sold to the
Paddy Marketing Board. This is in addition to sales to private traders.
There is also a greater degree of market orientation in sibsidiary food crops like chillies, onions and potatoes and other cash crops like tobacco and cotton. These changes in the process of production and distribution relate to characteristics attributed to the 'moder sector' in the dualistic model. In other words the 'traditional' sector has become increasingly a
'modern' sector. The other implication, namely the emergence of a new mode of production to prominance is evidenced by several developments discussed in the pre• ceding pages. Firstly, there are the government policies and programs more and more oriented to the needs of the small-farmer; secondly, arising out of the first, there is a comprehensive supportive structure consisting of research and extension, a series of schemes and a network of institutions for credit and other inputs, crop insurance, marketing, and local level planning and participation; thirdly, there was a series of tenurial and land reforms aimed at benefitting the small-farmer; and fourthly, the physical growth of domestic agriculture itself.
The growth of domestic agriculture in the recent years has been such that it is in the process of replacing the plantations as the dominant phenomenon in the Sri Lankan economy. This shift from the dominance of the plantations towards a dominance of a commercialized small-holder form of agriculture may be illustrated with data relating to the G.N.P., acreage under crops, and employment in agriculture:
As for the contribution to the G.N.P., the share of domestic agri• culture has more than doubled within a period of 15 years, whereas that of export crops has recorded only marginal increases during the same period.
In terms of per centages, the contribution of domestic agriculture to the
G.N.P. has risen from 19% in 1960 to 28% in 1975. whereas that of the export crops has declined from 55% to 42% during the same period. Table
35 shows the changing pattern within agriculture in relation to the G.N.P. TABLE 35
G.N.P. AND THE AGRICULTURAL SECTOR
(1959 constant prices) 3 year moving averages (Rs. mn)
1960 1965 1970 1975
1. Paddy 350.0 377.4 597.1 549.6
•2. Subsidiary food crops 105.1 116.5 240.8 501.3
3. Major export crops 1,337.0 1,547.4 1,524.7 1,449.1
4. Minor export crops 21.3 22.0 24.9 59.4
Total Agriculture
and Fishing 2,450.5 2,846.6 3,332.8 3,576.2
Total G.N.P. 6,202.2 7,577.4 9,570.8 11,096.0
Source: Central Bank of Ceylon, Annual Reports, cited in Economic Review 3:10 (Jan. 1978), p. 4.
In terms of the area under cultivation, the growth in paddy has far outstripped all other plantation crops. As Table 36 shows, the area under paddy has doubled between the years 1946 and 1970. Whereas the area under tea and coconut recorded only marginal increases during the period, and that of rubber has, in fact, declined in absolute terms. 110
TABLE 36
CHANGE IN AREA UNDER CULTIVATION, PADDY AND MAJOR PLANTATION CROPS
(000' hectare)
1946 1952 1962 1970
Total Under Agriculture - 1,727 1,789 1,888 1,993 of which:
Tea 224 230 239 242
Rubber 257 265 226 239
Coconut 373 446 466 467
Paddy 370 424 632 726
Source: Department of Census & Statistics, in ESCAP, Comparative Study of Population, pp. 72 - 73.
In terms of employment, as shown in Table 37, the share of the major plantation crops, as a per centage of all employment in agriculture, has declined from 55% in 1946 to 40% in 1971. In contrast, the employment share of paddy and other agriculture, as a per centage of total employ• ment in agriculture, has increased from 45% to 60% during the same period. Ill
TABLE 37
THE CHANGE IN EMPLOYMENT IN AGRICULTURE -
PLANTATION CROPS AND OTHER CROPS (per centages)
1946 1953 1963 1971
Tea, Rubber, and Coconut 55.2 54.0 46.8 39.9
Paddy 21.1 23.9 37.1 43.1
Other Agriculture 23.7 22. 1 16.1 17.0
Total Agriculture 100.0 100-.0 100.0 100.0
Total Number 1,343,438 1,584,141 1, 681,937 1,823,952
Source: ESCAP, Comparative Study of Population, p . 90.
The implications of these changes namely, the 'modernization' of domestic agriculture and the emergence of a commercialized small-holder form of agriculture to prominance, are that the development policy in Sri Lanka will be guided not by a dualistic model based on a 'modern sector' and a
'traditional sector' for, there is no 'traditional sector'. Nor by a model based on the strength and predominance of a plantation sector for, the plantation sector is losing its dominant position. Rather, the model will be one where there is a form of highly capitalized and commercialized form of agriculture which ranges from small-holder food crop production to large scale export crop production. 112
CHAPTER IV
NOTES AND REFERENCES
1. See, for example, I.H. Van den Driensen, "Some Trends in the Economic History of Ceylon in the Modern Period" Ceylon Journal of Historical and Social Studies 3:1 (Jan-Jun 1960), pp. 1-17; Snodgrass, pp. 59-71.
2. Farmer, pp. 80-81.
3. Kandyan Peasantry Commission, p. 71.
4. B. Hewavitarana, "Factors in the Planning and Execution of the Economic Development of Ceylon", Ph.D. Thesis, London University 1964; S.B.D. de Silva, "Investment and Economic Growth in Ceylon", Ph.D. Thesis, University of—
5. M. Roberts, "The Impact of the Waste Lands Legislation and the Growth of the Plantations on the Technique of Paddy Cultivation in the British Ceylon - A Critique" Modern Ceylon Studies, Vol.3, No.21, 1970, p. 181.
6. Ibid., p. 181.
7. Sri Lanka, Ceylon Census of Agriculture 1962, Vol II. (Colombo: Department of Census and Statistics, 1966), p. 28.
8. See, for example, E.F.C. Ludowyk, The Modern History of Ceylon (New York: Praeger Publishers, 1966), pp. 77-78; Farmer, pp. 14-18.
9. Ludowyk, pp. 77-78.
10. Snodgrass, p. 63.
11. Kandyan Peasantry Commission, p.
12. Snodgrass, p.
13. Gunesekere, p. 229.
14. IBRD, The Economic Development of Ceylon (London: The John Hopkins Press, 1956), p. 198.
15. Farmer, pp. 101-115.
16. Ibid., pp. 117-119.
17. Ibid., pp. 128-139. 113
18. Snodgrass, p. 48.
19. M. Roberts, in History of Ceylon, p..156.
20. Ibid., p. 156; Snodgrass, p. 64-71.
21. Farmer, pp. 146-157.
22. B.M. Morrison, paper presented at the Seminar on South Asia at U.C.L.A. 1979; see also N.W. Morris, "Patterns of Electoral Politics in Ceylon", Ph.D. dissertation, University of Illinois, 1971.
23. Central Bank of Ceylon, Annual Report 1974, pp. 37-40.
24. Government of Sri Lanka, Agricultural Productivity Law, no. 2,1972, (Colombo: Government Printing, 1972), p. 11.
25. See, for example, Agrarian Research and Training Institute. The Role of Rural Organizations in Rural Development in Sri Lanka, Part I and II (Colombo: ARTI, 1977).
26. Peoples Bank, Economic Review 3:10 (Jan 1978), p. 11; A.A. Kahn, Small Farmer Credit (Colombo: ARTI, 1974), p. 2; see also Central Bank of Ceylon, Survey of Rural Credit and Indebtedness 1969 (Colombo: Central Bank of Ceylon, 1969).
27. Ibid., p. 11; N. Sandaratne, "Agricultural Insurence in Peasant Agriculture", Ceylon Studies Seminar (1974).
28. Bansil, pp. 82-97; Economic Review 3:10 (Jan 1978), p. 13.
29. Ceylon Census of Agriculture 1962, vol. Ill, table 2.
30. Economic Review, 3:10 (Jan 1978), p. 10.
31. Sri Lanka, Department of Census and Statistics, Census of Agriculture 1946, Vol 1, part II (Colombo: Department of Census and Statistics, 1946), Table 69.
32. Herring, p. liO.
33. Ibid., p. 116; ARTI (1975).
34. ARTI, Agrarian Situation Part 6, p. 18. 114
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