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Land Reform and Agrarian Change in Sri Lanka

Published online by Cambridge University Press:  28 November 2008

G. H. Peiris
Affiliation:
University of Sri Lanka, Peradeniya

Extract

In 1972 a land reform programme based on the objectives of maximizing agricultural production and employment and reducing inequalities in wealth and income was initiated in Sri Lanka. It commenced with the enactment of the Land Reform Law, No. 1 of 1972 which imposed ceilings on private ownership of land and provided for the setting up of a Land Reform Commission (hereafter, LRC) vested with powers to acquire privately held land in excess of the ceilings. Three years later, the scope of the reform was extended through the Land Reform (Amendment) Law, No. 39 of 1975 under the provisions of which land held by public companies was nationalized. Both these laws provided for the payment of compensation to dispossessed owners.

Type
Articles
Copyright
Copyright © Cambridge University Press 1978

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References

1 For agrarian policy statements of the government at the time, see The Common Programme, Sri Lanka Freedom Party, Lanka Sama Samaja Party and the Ceylon Communist Party (Colombo, 1969), p. 2;Google ScholarJoint Election Manifesto of the United Front (Colombo, 1970), pp. 34;Google ScholarPerera, N. M., Budget Speech 1970–71 (Colombo, 1970), p. 5;Google Scholar Ministry of Planning and Employment, Five Year Plan (Colombo, 1971);Google Scholar Prime Minister, ‘Statement of Government Policy’ (English text), Hansard, I:4, 23 06 1972, Cols 245–60.Google Scholar

2 For details, see Sanderatne, Nimal, ‘Sri Lanka's New Land Reform’, South Asian Review, VI:1 (10 1972), pp. 719;Google ScholarPeiris, G. H., ‘Current Land Reforms and Peasant Agriculture in Sri Lanka’, South Asia, V (1975), pp. 7889. The ceilings were 25 acres for paddy land and 50 acres for other categories of land.CrossRefGoogle Scholar

3 On 22 May 1972, the country adopted a republican constitution and its official name was changed from Ceylon to Sri Lanka. Legislation enacted prior to this date is referred to as Act while that enacted after is referred to as Law.Google Scholar

4 Census of Ceylon—1946, Department of Census and Statistics (Colombo, 1949).Google Scholar

5 Data from Census of Agriculture—1962, II, Department of Census and Statistics (Colombo, 1965), p. 25, adjusted with data on annual changes up to 1972 obtained from Administration Reports of the Tea Controller, Rubber Controller and Land Commissioner; Ceylon Year Book (series) and The Statistical Abstract of Ceylon/Sri Lanka (series).Google Scholar

6 Sources quoted in fn. 5.

7 At various times since independence (1956–58, 1964–65 and 1970 onwards) within the ranks of government there were political groups which were ideologically committed to nationalizing foreign-owned plantations in Sri Lanka. There have also been writings that explicitly or implicitly advocated this measure. See, for example, Agricultural Plan, Ministry of Agriculture and Food (Colombo, 1958), pp. 179–86;Google ScholarJeyapalan, N. and Jayawardena, A. S., ‘Some aspects of the Tea Industry—IV’, Central Bank of Ceylon: Bulletin (03 1968), pp. 2369;Google Scholar ‘Report of the Commission of Inquiry on Agency Houses and Brokering Firms’, Sessional Paper XII–1974, Colombo. As far back as 1959, Robinson, Joan (‘Economic Possibilities of Ceylon’, Papers by Visiting Economists, Planning Secretariat, Colombo, 1959, p. 70)Google Scholar wrote: ‘The strongest argument in favour of nationalization [of foreign-owned plantations] at the present time is simply the fact that it is expected’. In 1972, the Minister of Agriculture and Land pledged to bring land owned by public companies within the ambit of the reform programme (Hansard, I:16, 18 08 1972, Col. 2053).Google Scholar

8 State Plantation Corporations Act, No. 4 of 1958, Parliament of Ceylon, Second Session, 19571958 (Government Press: Colombo);Google ScholarCeylon Year Book 1971 (Government Press: Colombo, 1972), pp. 60–1;Google ScholarAnnual Report of the Central Bank of Ceylon, 1972 (Colombo, 1973), p. 98.Google Scholar

9 Division of Regional Development, Ministry of Planning and Employment, ‘Quarterly Progress Report, Jan.-Mar., 1973’ (mimeographed); See also Peiris, G. H., ‘Agricultural Growth through Decentralization and Popular Participation’, Modern Ceylon Studies, III:1 (1972), pp. 6094.Google Scholar

10 Administration Reports, Tea Controller and Rubber Controller (series) (Government Press: Colombo).Google Scholar

11 Data obtained from the State Plantation Corporation.

12 For zonal land-use data, see ‘Report of the Land Utilization Committee—August, 1967’, Sessional Paper, No. XI–1968 (Government Press: Colombo), p. 10.Google Scholar

13 News Release by the LRC, broadcast on 2 November, 1976.Google Scholar

14 Hansard, XVIII:17, 4 May 1976, Cols 2163–94.Google Scholar

15 Ibid., Col. 2166.

16 This figure includes the estimated cost of purchase of plantations between 1972 and 1975 under the Land Acquisition Act, but excludes administrative expenses of land acquisition.

17 Annual Report of the Central Bank of Ceylon, 1975 (Colombo, 1976), p. 108.Google Scholar

18 The Janawasa Bill which was passed by the National State Assembly on 15 October 1976 provides for the management of each Janawasa by an elected council and the formation of an all-island federation of Janawasa Councils. The overall control of the Janawasas is vested in a Commission which consists of 4 members appointed by the Cabinet and 3 elected by the Janawasa Federation.Google Scholar

19 According to data supplied by the LRC, loans issued to the Janawasas in 1975 and 1976 amounted to Rs 22,495,000.

20 Press Statement by the Chairman, LRC, Ceylon Daily News, 16 November 1976, p. 6.Google Scholar

22 The Commission of Inquiry into the Rubber Industry of Ceylon (Sessional Paper, XVIII–1947 (Government Press: Colombo), p. 35) recommended that the acquisition of estates for re-distribution among peasants should be deferred in view of its adverse effects on productivity.Google Scholar A similar recommendation was made by the IBRD Mission to Sri Lanka in 1952 (Report…, Part I (Government Press: Colombo, 1952), p. 35),Google Scholar which claimed that ‘losses of 25% in output (when fragmentation of estates occurs) are not exceptional’. The six-year programme of Investment (Planning Secretariat: Colombo, 1955, p. 182)Google Scholar reported that ‘estates… when acquired by the government and divided up among peasants in smallholdings resulted in rapid deterioration of agricultural conditions’. The Land Commission (‘Report…,’ Sessional Paper, X1958, Government Press: Colombo, 1958, p. 162)Google Scholar which based its views on this issue on the findings of a Cabinet sub-committee asserted that ‘the economic unit for tea and rubber estates is in the region of 500 acres, but the agricultural conditions of even a 100-acre estate could deteriorate if sub-divided’. Farmer, B. H. (‘Memorandum of Dissent’, Report of the Land Commission, Sessional Paper, X1958, pp. 177–9)Google Scholar wrote: ‘Fragmentation is undoubtedly an unmitigated evil in the case of estates and other units of land in which a considerable area under one management is essential’. He reiterated this view in a later paper (Farmer, B. H., ‘Peasant and Plantation in Ceylon’, Pacfic Viewpoint, IV:1 (03 1963), pp. 916)Google Scholar where he postulated that ‘at least in tea and rubber there are significant economies of scale’. Kaldor, Nicholas (Papers by Visiting Economists (Planning Secretariat: Colombo, 1958), p. 26)Google Scholar said: ‘The superiority of plantation agriculture in Ceylon is in fact only partly to be accounted for by the climate and soil conditions; in part it is the consequence of large-scale production and management’. The Land Utilization Committee of 1968 (Sessional Paper, No. XI–1968, Government Press: Colombo, p. 35)Google Scholar reported that ‘valuable agricultural land has been lost to the country’ as a result of past acquisition and redistribution of estates. The ILO Mission to Sri Lanka (Matching Employment Opportunities and Expectations, Report (Geneva, 1970), p. 96) contended that ‘for holdings above 50 acres, the techno-economic case for a distributive reform is weak [since] it is the bigger, not the smaller units that are higher yielding, more intensive and better managed’.Google Scholar

23 For a summary of these experiences, see, Peiris, G. H., in South Asia, V (1975), pp. 82–9.Google Scholar

24 The Land Reform Law of 1972 permits each child of over 18 years of age in a land owning family to retain extents of land within the specified ceilings (ie. 25 acres of paddy or 50 acres of other land). Hence, under exceptional situations, post-reform operational holdings in private hands could be as large as 300 acres or more.

25 Under the Rubber Replanting Subsidy Scheme, an annual rate of replanting (of old low-yielding trees with high-yielding cultivars) of 3 to 4 per cent of the total rubber acreage in the country was maintained throughout the 1960s. An increase in output could have been anticipated as this replanted rubber came into bearing in the 1970s.

26 See, for example, A Note on Land Reform in Sri Lanka, 1976 (mimeographed document published by the Land Reform Commission) pp. 6–7;Google ScholarPress Statement by the Chairman, LRC, Ceylon Daily News, 16 October 1976, p. 6; USAWASAMA, ‘Notes on Usawasama Projects’, Ceylon Daily News, 22 January 1977, p. 7.Google Scholar

27 A Note on Land Reform in Sri Lanka, 1976, p. 7.Google Scholar

28 Land Reform Law, No. I of 1972, Part II, Section 25.Google Scholar

29 Peiris, , in South Asia, V (1975), pp. 87–9.Google Scholar

30 Many specific allegations of corruption and mismanagement were made during the debate on the Janawasa Bill in the National State Assembly against the cooperative farms established under the land reform programme (Hansard, XIX:17, XIX:18 and XIX:19).Google Scholar The Minister of Agriculture and Land himself admitted that such problems exist in the Electoral Cooperatives (Hansard, XIX:21, Cols 2824–5).Google Scholar

31 In a statement of achievements of the Janawasa, the Minister of Agriculture and Land said (Hansard, XIX:17, Col. 2323) that 186 Janawasa which had been established by September 1976 have provided employment for over 20,000, realized a total profit of Rs 2·9 million during 974 and 1975, re-cultivated about 2,000 acres of abandoned paddy land and brought 2,500 acres of land under ‘subsidiary crops’, and that animal husbandry has been developed in 47 Janawasa.Google Scholar

32 According to audit accounts on the State Plantation Corporation available for the period 1963/64 to 1971/72, it had: (a) for the 9-year period, a cumulative net profit (before tax) of Rs 1,180,000 and (b) an average extent of planted land per annum of 8,943 acres. Thus its average annual net profit per acre during this period was about Rs 23.

33 See works cited in fn. 22, especially, Land Commission, ‘Report…’, Sessional Paper, X1958, and ILO Mission to Sri Lanka, Matching Employment Opportunities and Expectations.Google Scholar

34 The ILO Mission to Sri Lanka (Matching Employment Opportunities and Expectations, p. 94) which argued out a strong ‘employment case’ for lower ceilings on coconut and paddy land contended that ‘a reform based on ceilings above 10 acres of paddy and 25 of coconut would hardly be worth the inevitable administrative and political cost, effort and disruption’ (italics added).Google Scholar