Features
SMALL FARMS AND THE ‘ECONOMICALLY VIABLE HOLDING’: IMPLICATIONS FOR POLICY
by Chandra Arulpragasam
Small Farm-Size and Productivity
The theory that the small farm would have higher yields than a larger farm was put forward for the first time by the author in 1961 in Ceylon. This was despite the fact that all economic theories and text books taught the opposite. In the 1980s and 1990s, a number of studies proved this inverse relationship between farm size and productivity to be correct beyond any doubt.1 i.e. the smaller the farm, the higher the yield would be. Not only does the small farm make a better use of its resources, it has total factor productivity and higher yields than larger farms. The economic (theoretical) reasons for this inverse relationship between farm size and productivity are set out in other writings.
Although no systematic studies have been done on yield by farm size in Sri Lanka, available figures show that the small holdings of tea and rubber have higher yields than the larger holdings and the best managed estates in these crops. There is little doubt that studies on paddy and coconut lands would show the same – as shown in other countries.
Although small holdings make the best use of resources (especially of scarce land), it is obvious that a larger farm would bring the farmer greater total production and income. This article merely records the facts. First, small subdivided farms are the reality and growing in number in Sri Lanka and the developing world. Second, small farm yields and productivity are greater than that of larger farms and estates. Third, the small size of small farms prevents them from meeting all the income and food needs of the farm families. It is necessary, however, to clear certain misconceptions that currently confuse any informed discussion of policy on the subject: namely, the desirability and feasibility of an ‘economically viable holding’.
The Concept of an Economically Viable Holding
The above term was introduced in Sri Lanka by Dr. B.H. Farmer in his work ‘Pioneer Peasant Colonization in Ceylon’ (1957). In this he defined an economically viable holding as one which is capable of producing enough food and income for a farm family. The writer has questioned the logic as well as the economic validity of this definition in the past. Historically, it is seen that this concept was introduced from the west where there was a more favourable land:man ratio than in overcrowded Asia. There was more land per farm in Europe and America than in many developing countries, so that these countries could afford a farm size large enough to provide a decent income to a farm family.
It is now accepted that a farm is both economic and economically viable when it maximizes total factor productivity – which the small farm does best in a land-scarce, labour-surplus situation, as in Sri Lanka. Not only does the small farm make the best use of resources, but in practical terms it provides a higher yield per acre than a larger farm. The problem is not that a micro holding is uneconomic per se, but that it is not large enough to meet the full income and nutritional needs of a farm family.
The latter is a most important criterion, but it is a social criterion and not an economic one. Logically, it has nothing to do with the economics and the productivity of a farm. For what if a family doubles in size, or its members eat more? Does the economics of the farm change to become ‘uneconomic’ because they eat more? The economic viability of a farm is determined by the criterion of economic efficiency and not by a social/nutritional criterion – of whether it is capable of feeding a family. An example from the industrial sector would illustrate this point well. Let us say that in an urban industry today, only part-time employment is available to a particular worker. Would we say that the job in the factory is ‘uneconomic’ because the income that the job generates for this worker is not enough to feed his family? Would we go further to say that the whole industry providing that job is not ‘economically viable’ because the part-time wage it pays is not enough to feed his family? In fact, the firm may be economically viable and profitable only because it provides only part-time employment! Hence the whole concept of larger, ‘economically viable holdings’ in Sri Lanka’s circumstances is based on faulty logic and faulty economics.
Nor is this concept even practicable on a national scale in Sri Lanka. The Agricultural Census of 1982 showed that 25 per cent of households in the small holder sector had farms of less than half acre in extent. The Agricultural Census of 2002 showed that the situation had worsened further, leaving 45 per cent of all farms in the smallholder sector with less than one fpurth of an acre. It is true that the farmers’ try to ‘consolidate’ their operational holdings by renting in an adjoining parcel of land. On the other hand, it is known that farmers tend to scatter their holdings by renting or owning a higher piece of land or chena holding to even out their labour availability throughout the year.
According to the Agrarian Research and Training Institute (now re-named the Hector Kobbekaduwa Institute), two acres is the minimum size of an ‘economically viable holding’ in Sri Lanka. Assuming that the land available to the small farm sector is more or less constant, and assuming that each small farmer with only quarter acre would be given an ‘economically viable holding’ of two acres, this could only be achieved by the dispossession of seven other holders of quarter acre each, relegating them to complete landlessness. On a national scale, this would mean the dispossession of at least 50 per cent of our small farmers, especially in the highly populated Wet Zone, in order to provide a so-called ‘economically viable holding’ to a few. First, the question arises of what would we do with this large number of displaced farmers, given the absence of alternative employment? Secondly, such ‘consolidated’ larger farms would result in lower yields per acre than each of the quarter acre holdings cultivated separately.
Hence, such a policy of providing an ‘economically viable holding’ cannot be justified on either economic or social grounds. The yardstick of ‘economic viability’ is based on an impracticable model imported from western countries blessed with more land and capital than ours, and with opposite (different) factor proportions. It is a yardstick that has no basis in logic or in economics. It has served not only to confuse our concepts, economics and terminology, but also to adversely affect our policy response to the problems of the small farm and subdivided holdings.
In fact, in Japan, Korea and Taiwan in the 1960s-1970s, the family holdings were so small that part of the farm family’s income was obtained from rural non-farm employment. As early as 1988/89, the Household Survey of the Agricultural Sector in Sri Lanka showed that micro-holders of less than quarter acre earned only 38 per cent of their income from farming – which implies that 62 per cent of the farmers’ income came from off the farm. The situation is worse today because 45 per cent of our small holdings are less than quarter acre in extent. On the other hand, the frequency and intensity of non-farm work in the rural areas has multiplied through rural towns and market centres. This needs to be recognized by policy makers. Although we would all like all our farmers to have at least two acres each, this is not feasible in our fractured agrarian structure. This does not mean that we do not care about the small farmer, who is being increasingly impoverished by the grinding mill of subdivision. The problem is that our agricultural population on our limited land is increasing and not decreasing, leading to a mounting pressure on the land – and to a greater subdivision of already small holdings. Possible policy options are considered in the discussion that follows1.
We need to recognize the fact that the absolute number of the agricultural population on our limited farm land has increased between the year 1982 and 2009: and this is despite all the land expansion, land reforms and colonization schemes carried out in the 70 years since our independence. So why should we, after 70 years of trying, now come up with the impractical theory in Sri Lanka that a farm should be large enough to support a farm family? This was certainly not the case in Japan, Taiwan or South Korea, which started with similar land scarcity before their transition to full industrialization. So why do we not follow what the small farmers have already demonstrated in Sri Lanka, namely, of obtaining the highest returns from their micro-holdings, while obtaining more than 60 per cent of their income from rural non-farm work? Why keep barking up the wrong tree of an ‘economically viable holding’ which we cannot have anyway, when we should be doubling our efforts to provide non-farm work in the rural areas that would hasten our path to full industrialization?
(The writer was a member of the former Ceylon Civil Service who worked in the provincial administration and Colombo before joining the FAO in Rome where he lived and worked for many years.)
Author
- News Advertiesment
See Kapruka’s top selling online shopping categories such as Toys, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka’s unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.
Author
-
There’s an ill more dangerous and pervasive than the Coronavirus that’s currently sweeping Sri Lanka. That is the fear to express one’s convictions. Across the public sector of the country in particular many persons holding high office are stringently regulating and controlling the voices of their consciences and this bodes ill for all and the country.
The corrupting impact of fear was discussed in this column a couple of weeks ago when dealing with the military coup in Myanmar. It stands to the enduring credit of ousted Myanmarese Head of Government Aung San Suu Kyi that she, perhaps for the first time in the history of modern political thought, singled out fear, and not power, as the principal cause of corruption within the individual; powerful or otherwise.
To be sure, power corrupts but the corrupting impact of fear is graver and more devastating. For instance, the fear in a person holding ministerial office or in a senior public sector official, that he would lose position and power as a result of speaking out his convictions and sincere beliefs on matters of the first importance, would lead to a country’s ills going unaddressed and uncorrected.
Besides, the individual concerned would be devaluing himself in the eyes of all irrevocably and revealing himself to be a person who would be willing to compromise his moral integrity for petty worldly gain or a ‘mess of pottage’. This happens all the while in Lankan public life. Some of those who have wielded and are wielding immense power in Sri Lanka leave very much to be desired from these standards.
It could be said that fear has prevented Sri Lanka from growing in every vital respect over the decades and has earned for itself the notoriety of being a directionless country.
All these ills and more are contained in the current controversy in Sri Lanka over the disposal of the bodies of Covid victims, for example. The Sri Lankan polity has no choice but to abide by scientific advice on this question. Since authorities of the standing of even the WHO have declared that the burial of the bodies of those dying of Covid could not prove to be injurious to the wider public, the Sri Lankan health authorities could go ahead and sanction the burying of the bodies concerned. What’s preventing the local authorities from taking this course since they claim to be on the side of science? Who or what are they fearing? This is the issue that’s crying out to be probed and answered.
Considering the need for absolute truthfulness and honesty on the part of all relevant persons and quarters in matters such as these, the latter have no choice but to resign from their positions if they are prevented from following the dictates of their consciences. If they are firmly convinced that burials could bring no harm, they are obliged to take up the position that burials should be allowed.
If any ‘higher authority’ is preventing them from allowing burials, our ministers and officials are conscience-bound to renounce their positions in protest, rather than behave compromisingly and engage in ‘double think’ and ‘double talk’. By adopting the latter course they are helping none but keeping the country in a state of chronic uncertainty, which is a handy recipe for social instabiliy and division.
In the Sri Lankan context, the failure on the part of the quarters that matter to follow scientific advice on the burials question could result in the aggravation of Islamophobia, or hatred of the practitioners of Islam, in the country. Sri Lanka could do without this latter phobia and hatred on account of its implications for national stability and development. The 30 year war against separatist forces was all about the prevention by military means of ‘nation-breaking’. The disastrous results for Sri Lanka from this war are continuing to weigh it down and are part of the international offensive against Sri Lanka in the UNHCR.
However, Islamophobia is an almost world wide phenomenon. It was greatly strengthened during Donald Trump’s presidential tenure in the US. While in office Trump resorted to the divisive ruling strategy of quite a few populist authoritarian rulers of the South. Essentially, the manoeuvre is to divide and rule by pandering to the racial prejudices of majority communities.
It has happened continually in Sri Lanka. In the initial post-independence years and for several decades after, it was a case of some populist politicians of the South whipping-up anti-Tamil sentiments. Some Tamil politicians did likewise in respect of the majority community. No doubt, both such quarters have done Sri Lanka immeasurable harm. By failing to follow scientific advice on the burial question and by not doing what is right, Sri Lanka’s current authorities are opening themselves to the charge that they are pandering to religious extremists among the majority community.
The murderous, destructive course of action adopted by some extremist sections among Muslim communities world wide, including of course Sri Lanka, has not earned the condemnation it deserves from moderate Muslims who make-up the preponderant majority in the Muslim community. It is up to moderate opinion in the latter collectivity to come out more strongly and persuasively against religious extremists in their midst. It will prove to have a cementing and unifying impact among communities.
It is not sufficiently appreciated by governments in the global South in particular that by voicing for religious and racial unity and by working consistently towards it, they would be strengthening democratic development, which is an essential condition for a country’s growth in all senses.
A ‘divided house’ is doomed to fall; this is the lesson of history. ‘National security’ cannot be had without human security and peaceful living among communities is central to the latter. There cannot be any ‘double talk’ or ‘politically correct’ opinions on this question. Truth and falsehood are the only valid categories of thought and speech.
Those in authority everywhere claiming to be democratic need to adopt a scientific outlook on this issue as well. Studies conducted on plural societies in South Asia, for example, reveal that the promotion of friendly, cordial ties among communities invariably brings about healing among estranged groups and produces social peace. This is the truth that is waiting to be acted upon.
Author
By Sanjeewa Jayaweera
It was on 3rd January 1972 that our family arrived in Karachi from Moscow. Our departure from Moscow had been delayed for a few weeks due to the military confrontation between Pakistan and India. It ended on 16th December 1971. After that, international flights were not permitted for some time.
The contrast between Moscow and Karachi was unbelievable. First and foremost, Moscow’s temperature was near minus 40 degrees centigrade, while in Karachi, it was sunny and a warm 28 degrees centigrade. However, what struck us most was the extreme warmth with which the airport authorities greeted our family. As my father was a diplomat, we were quickly ushered to the airport’s VIP Lounge. We were in transit on our way to Rawalpindi, the airport serving the capital of Islamabad.
We quickly realized that the word “we are from Sri Lanka” opened all doors just as saying “open sesame” gained entry to Aladdin’s cave! The broad smile, extreme courtesy, and genuine warmth we received from the Pakistani people were unbelievable.
This was all to do with Mrs Sirima Bandaranaike’s decision to allow Pakistani aircraft to land in Colombo to refuel on the way to Dhaka in East Pakistan during the military confrontation between Pakistan and India. It was a brave decision by Mrs Bandaranaike (Mrs B), and the successive governments and Sri Lanka people are still enjoying the fruits of it. Pakistan has been a steadfast and loyal supporter of our country. They have come to our assistance time and again in times of great need when many have turned their back on us. They have indeed been an “all-weather” friend of our country.
Getting back to 1972, I was an early beneficiary of Pakistani people’s love for Sri Lankans. I failed the entrance exam to gain entry to the only English medium school in Islamabad! However, when I met the Principal, along with my father, he said, “Sanjeewa, although you failed the entrance exam, I will this time make an exception as Sri Lankans are our dear friends.” After that, the joke around the family dinner table was that I owed my education in Pakistan to Mrs B!
At school, my brother and I were extended a warm welcome and always greeted “our good friends from Sri Lanka.” I felt when playing cricket for our college; our runs were cheered more loudly than of others.
One particular incident that I remember well was when the Embassy received a telex from the Foreign inistry. It requested that our High Commissioner seek an immediate meeting with the Prime Minister of Pakistan, Mr Zulifikar Ali Bhutto (ZB), and convey a message from Mrs B. The message requested that an urgent shipment of rice be dispatched to Sri Lanka as there would be an imminent rice shortage. As the Ambassador was not in the station, the responsibility devolved on my father.
It usually takes about a week or more to get an audience with the Prime Minister (PM) of a foreign country due to their busy schedule. However, given the urgency, my father spoke to the Foreign Ministry’s Permanent Sectary, who fortunately was our neighbour and sought an urgent appointment. My father received a call from the PM’s secretary around 10 P.M asking him to come over to the PM’s residence. My father met ZB around midnight. ZB was about to retire to bed and, as such, was in his pyjamas and gown enjoying a cigar! He had greeted my father and had asked, “Mr Jayaweera, what can we do for great friend Madam Bandaranaike?. My father conveyed the message from Colombo and quietly mentioned that there would be riots in the country if there is no rice!
ZB had immediately got the Food Commissioner of Pakistan on the line and said, “I want a shipload of rice to be in Colombo within the next 72 hours!” The Food Commissioner reverted within a few minutes, saying that nothing was available and the last export shipment had left the port only a few hours ago to another country. ZB had instructed to turn the ship around and send it to Colombo. This despite protests from the Food Commissioner about terms and conditions of the Letter of Credit prohibiting non-delivery. Sri Lanka got its delivery of rice!
The next was the visit of Mrs B to Pakistan. On arrival in Rawalpindi airport, she was given a hero’s welcome, which Pakistan had previously only offered to President Gaddafi of Libya, who financially backed Pakistan with his oil money. That day, I missed school and accompanied my parents to the airport. On our way, we witnessed thousands of people had gathered by the roadside to welcome Mrs B.
When we walked to the airport’s tarmac, thousands of people were standing in temporary stands waving Sri Lanka and Pakistan flags and chanting “Sri Lanka Pakistan Zindabad.” The noise emanating from the crowd was as loud and passionate as the cheering that the Pakistani cricket team received during a test match. It was electric!
I believe she was only the second head of state given the privilege of addressing both assemblies of Parliament. The other being Gaddafi. There was genuine affection from Mrs B amongst the people of Pakistan.
I always remember the indefatigable efforts of Mr Abdul Haffez Kardar, a cabinet minister and the President of the Pakistan Cricket Board. From around 1973 onwards, he passionately championed Sri Lanka’s cause to be admitted as a full member of the International Cricket Council (ICC) and granted test status. Every year, he would propose at the ICC’s annual meeting, but England and Australia’s veto kept us out until 1981.
I always felt that our Cricket Board made a mistake by not inviting Pakistan to play our inaugural test match. We should have appreciated Mr Kardar and Pakistan’s efforts. In 1974 the Pakistan board invited our team for a tour involving three test matches and a few first-class games. Most of those who played in our first test match was part of that tour, and no doubt gained significant exposure playing against a highly talented Pakistani team.
Several Pakistani greats were part of the Pakistan and India team that played a match soon after the Central Bank bomb in Colombo to prove that it was safe to play cricket in Colombo. It was a magnificent gesture by both Pakistan and India. Our greatest cricket triumph was in Pakistan when we won the World Cup in 1996. I am sure the players and those who watched the match on TV will remember the passionate support our team received that night from the Pakistani crowd. It was like playing at home!
I also recall reading about how the Pakistani government air freighted several Multi Barrell artillery guns and ammunition to Sri Lanka when the A rmy camp in Jaffna was under severe threat from the LTTE. This was even more important than the shipload of rice that ZB sent. This was crucial as most other countries refused to sell arms to our country during the war.
Time and again, Pakistan has steadfastly supported our country’s cause at the UNHCR. No doubt this year, too, their diplomats will work tirelessly to assist our country.
We extend a warm welcome to Mr Imran Khan, the Prime Minister of Pakistan. He is a truly inspirational individual who was undoubtedly an excellent cricketer. Since retirement from cricket, he has decided to get involved in politics, and after several years of patiently building up his support base, he won the last parliamentary elections. I hope that just as much as he galvanized Sri Lankan cricketers, his political journey would act as a catalyst for people like Kumar Sangakkara and Mahela Jayawardene to get involved in politics. Cricket has been called a “gentleman’s game.” Whilst politics is far from it!.
Author
Believe me, seeing certain videos, on social media, depicting action, on the dance floor, at some of these entertainment venues, got me wondering whether this Coronavirus pandemic is REAL!
To those having a good time, at these particular venues, and, I guess, the management, as well, what the world is experiencing now doesn’t seem to be their concerned.
Obviously, such irresponsible behaviour could create more problems for those who are battling to halt the spread of Covid-19, and the new viriant of Covid, in our part of the world.
The videos, on display, on social media, show certain venues, packed to capacity – with hardly anyone wearing a mask, and social distancing…only a dream..
How can one think of social distancing while gyrating, on a dance floor, that is over crowded!
If this trend continues, it wouldn’t be a surprise if Coronavirus makes its presence felt…at such venues.
And, then, what happens to the entertainment scene, and those involved in this field, especially the musicians? No work, whatsoever!
Lots of countries have closed nightclubs, and venues, where people gather, in order to curtail the spread of this deadly virus that has already claimed the lives of thousands.
Thailand did it and the country is still having lots of restrictions, where entertainment is concerned, and that is probably the reason why Thailand has been able to control the spread of the Coronavirus.
With a population of over 69 million, they have had (so far), a little over 25,000 cases, and 83 deaths, while we, with a population of around 21 million, have over 80,000 cases, and more than 450 deaths.
I’m not saying we should do away with entertainment – totally – but we need to follow a format, connected with the ‘new normal,’ where masks and social distancing are mandatory requirements at these venues. And, dancing, I believe, should be banned, at least temporarily, as one can’t maintain the required social distance, while on the dance floor, especially after drinks.
Police spokesman DIG Ajith Rohana keeps emphasising, on TV, radio, and in the newspapers, the need to adhere to the health regulations, now in force, and that those who fail to do so would be penalised.
He has also stated that plainclothes officers would move around to apprehend such offenders.
Perhaps, he should instruct his officers to pay surprise visits to some of these entertainment venues.
He would certainly have more than a bus load of offenders to be whisked off for PCR/Rapid Antigen tests!
I need to quote what Dr. H.T. Wickremasinghe said in his article, published in The Island of Tuesday, February 16th, 2021:
“…let me conclude, while emphasising the need to continue our general public health measures, such as wearing masks, social distancing, and avoiding crowded gatherings, to reduce the risk of contact with an infected person.
“There is no science to beat common sense.”
But…do some of our folks have this thing called COMMON SENSE!
