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SMALL FARMS AND THE ‘ECONOMICALLY VIABLE HOLDING’: IMPLICATIONS FOR POLICY

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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.)



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Strong on vocals

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The group Mirage is very much alive, and kicking, as one would say!

Their lineup did undergo a few changes and now they have decided to present themselves as an all male group – operating without a female vocalist.

At the helm is Donald Pieries (drums and vocals), Trevin Joseph (percussion and vocals), Dilipa Deshan (bass and vocals), Toosha Rajarathna (keyboards and vocals), and Sudam Nanayakkara (lead guitar and vocals).

The plus factor, where the new lineup is concerned, is that all five members sing.

However, leader Donald did mention that if it’s a function, where a female vocalist is required, they would then feature a guest performer.

Mirage is a very experience outfit and they now do the Friday night scene at the Irish Pub, in Colombo, as well as private gigs.

 

 

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Dichotomy of an urban-suburban New Year

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Ushered in by the ‘coo-ee’ of the Koel and the swaying of Erabadu bunches, the Sinhala and Tamil New Year will dawn in the wee hours of April 14. With houses to clean, preparation of sweetmeats and last-minute shopping, times are hectic…. and the streets congested.

It is believed that New Year traditions predated the advent of Buddhism in the 3rd century BC. But Buddhism resulted in a re-interpretation of the existing New Year activities in a Buddhist light. Hinduism has co-existed with Buddhism over millennia and no serious contradiction in New Year rituals are observed among Buddhists and Hindus.

The local New Year is a complex mix of Indigenous, Astrological, Hindu, and Buddhist traditions. Hindu literature provides the New Year with its mythological backdrop. The Prince of Peace called Indradeva is said to descend upon the earth to ensure peace and happiness, in a white carriage wearing on his head a white floral crown seven cubits high. He first plunges, into a sea of milk, breaking earth’s gravity.

The timing of the Sinhala New Year coincides with the New Year celebrations of many traditional calendars of South and Southeast Asia. Astrologically, the New Year begins when the sun moves from the House of Pisces (Meena Rashiya) to the House of Aries (Mesha Rashiya) in the celestial sphere.

The New Year marks the end of the harvest season and spring. Consequently, for farming communities, the traditional New Year doubles as a harvest as well. It also coincides with one of two instances when the sun is directly above Sri Lanka. The month of Bak, which coincides with April, according to the Gregorian calendar, represents prosperity. Astrologers decide the modern day rituals based on auspicious times, which coincides with the transit of the Sun between ‘House of Pisces’ and ‘House of Aries’.

Consequently, the ending of the old year, and the beginning of the new year occur several hours apart, during the time of transit. This period is considered Nonegathe, which roughly translates to ‘neutral period’ or a period in which there are no auspicious times. During the Nonegathe, traditionally, people are encouraged to engage themselves in meritorious and religious activities, refraining from material pursuits. This year the Nonegathe begin at 8.09 pm on Tuesday, April 13, and continues till 8.57 am on 14. New Year dawns at the halfway point of the transit, ushered in bythe sound of fire crackers, to the woe of many a dog and cat of the neighbourhood. Cracker related accidents are a common occurrence during new year celebrations. Environmental and safety concerns aside, lighting crackers remain an integral part of the celebrations throughout Sri Lanka.

This year the Sinhala and Tamil New Year dawns on Wednesday, April 14, at 2.33 am. But ‘spring cleaning’ starts days before the dawn of the new year. Before the new year the floor of houses are washed clean, polished, walls are lime-washed or painted, drapes are washed, dried and rehang. The well of the house is drained either manually or using an electric water pump and would not be used until such time the water is drawn for first transaction. Sweetmeats are prepared, often at homes, although commercialization of the new year has encouraged most urbanites to buy such food items. Shopping is a big part of the new year. Crowds throng to clothing retailers by the thousands. Relatives, specially the kids, are bought clothes as presents.

Bathing for the old year takes place before the dawn of the new year. This year this particular auspicious time falls on April 12, to bathe in the essence of wood apple leaves. Abiding by the relevant auspicious times the hearth and an oil lamp are lit and pot of milk is set to boil upon the hearth. Milk rice, the first meal of the year, is prepared separate. Entering into the first business transaction and partaking of the first meal are also observed according to the given auspicious times. This year, the auspicious time for preparing of meals, milk rice and sweets using mung beans, falls on Wednesday, April 14 at 6.17 am, and is to be carried out dressed in light green, while facing east. Commencement of work, transactions and consumption of the first meal falls on Wednesday, April 14 at 7.41 am, to be observed while wearing light green and facing east.

The first transaction was traditionally done with the well. The woman of the house would draw water from the well and in exchange drop a few pieces of charcoal, flowers, coins, salt and dried chillies into the well, in certain regions a handful of paddy or rice is also thrown in for good measure. But this ritual is also dying out as few urban homes have wells within their premises. This is not a mere ritual and was traditionally carried out with the purification properties of charcoal in mind. The first water is preferably collected into an airtight container, and kept till the dawn of the next new year. It is believed that if the water in the container does not go down it would be a prosperous year. The rituals vary slightly based on the region. However, the essence of the celebrations remains the same.

Anointing of oil is another major ritual of the New Year celebrations. It falls on Saturday, April 17 at 7.16 am, and is done wearing blue, facing south, with nuga leaves placed on the head and Karada leaves at the feet. Oil is to be applied mixed with extracts of Nuga leaves. The auspicious time for setting out for professional occupations falls on Monday, April 19 at 6.39 am, while dressed in white, by consuming a meal of milk rice mixed with ghee, while facing South.

Traditionally, women played Raban during this time, but such practices are slowly being weaned out by urbanization and commercialisation of the New Year. Neighbours are visited with platters of sweetmeats, bananas, Kevum (oil cake) and Kokis (a crispy sweetmeat) usually delivered by children. The dichotomy of the urban and village life is obvious here too, where in the suburbs and the village outdoor celebrations are preferred and the city opts for more private parties.

 

 

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New Year games: Integral part of New Year Celebrations

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Food, games and rituals make a better part of New Year celebrations. One major perk of Avurudu is the festivals that are organised in each neighbourhood in its celebration. Observing all the rituals, like boiling milk, partaking of the first meal, anointing of oil, setting off to work, are, no doubt exciting, but much looked-forward-to is the local Avurudu Uthsawaya.

Avurudu Krida or New Year games are categorised as indoor and outdoor games. All indoor games are played on the floor and outdoor games played during the Avurudu Uthsava or New Year festival, with the whole neighbourhood taking part. Some of the indoor games are Pancha Dameema, Olinda Keliya and Cadju Dameema. Outdoor games include Kotta pora, Onchili pedeema, Raban geseema, Kana mutti bindeema, Placing the eye on the elephant, Coconut grating competition, Bun-eating competition, Lime-on-spoon race, Kamba adeema (Tug-o-War) and Lissana gaha nageema (climbing the greased pole). And what’s an Avurudhu Uthsava sans an Avurudu Kumari pageant, minus the usual drama that high profile beauty pageants of the day entail, of course.

A salient point of New Year games is that there are no age categories. Although there are games reserved for children such as blowing of balloons, races and soft drinks drinking contests, most other games are not age based.

Kotta pora aka pillow fights are not the kind the average teenagers fight out with their siblings, on plush beds. This is a serious game, wherein players have to balance themselves on a horizontal log in a seated position. With one hand tied behind their back and wielding the pillow with the other, players have to knock the opponent off balance. Whoever knocks the opponent off the log first, wins. The game is usually played over a muddy pit, so the loser goes home with a mud bath.

Climbing the greased pole is fun to watch, but cannot be fun to take part in. A flag is tied to the end of a timber pole-fixed to the ground and greased along the whole length. The objective of the players is to climb the pole, referred to as the ‘tree’, and bring down the flag. Retrieving the flag is never achieved on the first climb. It takes multiple climbers removing some of the grease at a time, so someone could finally retrieve the flag.

Who knew that scraping coconut could be made into an interesting game? During the Avurudu coconut scraping competition, women sit on coconut scraper stools and try to scrape a coconut as fast as possible. The one who finishes first wins. These maybe Avurudu games, but they are taken quite seriously. The grated coconut is inspected for clumps and those with ungrated clumps are disqualified.

Coconut palm weaving is another interesting contest that is exclusive to women. However men are by no means discouraged from entering such contests and, in fact, few men do. Participants are given equally measured coconut fronds and the one who finishes first wins.

Kana Mutti Bindima involves breaking one of many water filled clay pots hung overhead, using a long wooden beam. Placing the eye on the elephant is another game played while blindfolded. An elephant is drawn on a black or white board and the blindfolded person has to spot the eye of the elephant. Another competition involves feeding the partner yoghurt or curd while blindfolded.

The Banis-eating contest involves eating tea buns tied to a string. Contestants run to the buns with their hands tied behind their backs and have to eat buns hanging from a string, on their knees. The one who finishes his or her bun first, wins. Kamba adeema or Tug-o-War pits two teams against each other in a test of strength. Teams pull on opposite ends of a rope, with the goal being to bring the rope a certain distance in one direction against the force of the opposing team’s pull.

Participants of the lime-on-spoon race have to run a certain distance while balancing a lime on a spoon, with the handle in their mouths. The first person to cross the finish line without dropping the lime wins. The sack race and the three-legged race are equally fun to watch and to take part in. In the sack race, participants get into jute sacks and hop for the finish line. The first one over, wins. In the three-legged race one leg of each pair of participants are tied together and the duo must reach the finish line by synchronising their running, else they would trip over their own feet.

Pancha Dameema is an indoor game played in two groups, using five small shells, a coconut shell and a game board. Olinda is another indoor board game, normally played by two players. The board has nine holes, four beads each. The player who collects the most number of seeds win.

This is the verse sung while playing the game:

“Olinda thibenne koi koi dese,

Olinda thibenne bangali dese…

Genath hadanne koi koi dese,

Genath hadanne Sinhala dese…”

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