By Garvin Karunaratne

Half a century ago I was privileged to be one of the youngest lieutenants handpicked to implement the Paddy Lands Act, the magnificent piece of legislation devised by the visionary leader Hon Philip Gunawardena to allay all the ills of peasant agriculture in Sri Lanka.

 It was a time when our country, basking in the early glory of independence, was seeking new roots to serve the people. Hon Philip Gunawardena was a man of the people, loved by the people and admired by all who worked under him. With a background of academic expertise gained at famous seats of learning at the Universities of Illinois and  Wisconsin, he joined the band of patriotic statesmen- Dr N.M.Perera, Dr S.A.Wickremasinghe, Dr Colvin R de Silva and spearheaded the movement for the common man.

 When Hon SWRD Bandaranayake of the SLFP and Hon Philip Gunawardena came together and formed a pro Sinhala Front, the MEP- Mahajana Eksath Peramuna we were all enthusiastic supporters. That was a move for the people to move forwards, a move from colonialism to the sovereignty of the people at large.

 I was  young, having only a years’ experience,  a product of the free education system of our country. In about January 1956 I was posted as Assistant Commissioner for Development of Agricultural  Marketing at Ratnapura. Ven Henpitagedera Gnanasiha’s temple happened to be in Ratnapura.‚  Ven Gnanasiha took on the mantle of supporting the cause of the downtrodden masses led by Hon SWRD Bandaranayake and Hon Philip Gunawardena. Many an evening I met Ven Gnanasiha at the temple‚  and came to admire his‚  teachings and political slant. He stood up for the Buddhists and the Sinhalese.   The visits to the temple became more frequent as the 1956 General Election approached, with Ven Gnanasiha playing a major role. Every day he left the temple in the early hours of the morning in his car, a Volkswagon, as far as my memory goes, and came back late in the night to be greeted and worshipped by us. He was busy addressing publicity meetings all over the island. We had endless discussions on how the masses had to be victorious at the elections. Ven Gnanasiha was an eloquent speaker and his famous dictum was “-Are you a Buddhist?, are you a Sinhalese?, then the choice is clear.”

 With victory at the 1956 General Election, Hon Philip Gunawardena‚  was appointed the Minister for Agriculture, Food and Cooperatives and a few of us Assistant Commissioners were handpicked from the Marketing Department for the Agrarian Services Department, a special department created overnight.

 I served under Minister Hon Philip Gunawardena only for the years 1956 to 1959. That was because Minister Gunawardena had to relinquish his duties as a Minister due to the rightist  and non socialist elements in the Bandaranayake Government,  taking over power. Hon Philip Gunawardena  was not going to change his policies to suit anyone. He was for the masses and if that was not accepted he gracefully backed out.

 As the Minister for Agriculture he drafted and passed the Paddy Lands Act in Parliament. That was a  progressive piece of legislation intended to solve the ills that the peasantry suffered since the colonial days.  His sudden departure from the Cabinet did not erase what he had done. He was a visionary leader who left his imprints on the sands of time within a short space of three years. He had established a major Department , the Agrarian Services almost overnight and built up a brigade of young officers in whom he instilled the duty of working for the masses and I am proud to have been‚  one of them. All was not lost with his departure from the Cabinet because the officers took on his mantle to work for the masses. We were an enthusiastic lot that could not be tamed. The Department of Agrarian Services, covered the full services required for advancement in paddy cultivation- the Guaranteed Price Scheme for purchase of paddy and other cereals, rice milling, crop insurance, minor irrigation, fertilizer subsidy and distribution, agricultural credit, agricultural extension and the people’s organization- the cultivation committees. 

In addition he established Multipurpose Cooperatives with an apex body at the Divisional level to support the village level multipurpose cooperative. This was a vast organization covering‚  all aspects of paddy production, agricultural marketing and even though Hon Philip Gunawardena left he had provided the essential development administrative framework, which could not be brushed away. Most of the development work in future years was possible because of the development infrastructure he left behind

My experience tells me that we can today benefit immensely in the manner that Hon Philip Gunawardena directed us.

 Tackling Inflation

As Assistant Commissioner for Marketing we were in charge of fair price shops in almost every city.  In Colombo there were easily over fifty. These were established before Minister Gunawardena came in,  but he fine tuned them to work very efficiently. We ran around in circles to keep all these shops fully stocked with  essentials like dhall, chillies, flour, sugar, vegetables etc. all sold at a rock bottom priceš‚  Working in charge of the Tripoli Market it was my duty to see that every shop was having the essential stocks and also selling them to genuine consumers and not selling in large quantities to traders.

 I can remember an incident. At the District  Coordinating Committee in Anuradhapura in around 1957, the District Land Officer reported that the colonists who had just moved in to Padaviya were fleeced by the traders who kept fantastic margins of profit.  I said that the Marketing Department was meant to tackle that problem and I undertook to solve it.‚  One telephone call to the Commissioner for Marketing BLW Fernando brought me approval. Those were the days of Hon.Philip Gunawardena who never bowed down to the trader mafia. No errant mafia could ever get near him. I think they could not face his very gaze. He looked a tough rough that could not be tamed. Under him, we were not worried to make decisions. We obtained some buildings in Padaviya, collected a staff of assistant managers and labourers. They were moved in a lorry with all the goods. I followed. We worked till late in the night establishing the shop and that night I slept on some gunny bags. It was a task accomplished within three to four days.

 The answer to the present problem of inflation is,. as far as imports are concerned to import and sell at a rock bottom priceš‚  so that no trader can sell at a higher price. This is being done today by Satosa to reduce the margins of profit kept by the traders.

 As far as local produce is concerned the Marketing Department purchased vegetables and fruits at the village fairs, transported it overnight to Tripoli Market, the headquarters where the vegetables were graded and sent to the fair price shops all over, As the Assistant Commissioner at Tripoli.‚  I studied the prices at the wholesale market in Colombo and fixed the prices at which produce was to be bought all over the island.  The Assistant Commissioners in the District had to report to me the prices at which traders were buying at the Fairs and I fixed a higher price. The Department kept only 10 to 15% margin to cover transport and handling and sold the produce at cheap rates to city consumers. This can be compared with 50% or more which each trader keeps The trader who purchases at the Fair keeps around 40 to 50% and the wholesaler in Colombo too keeps a margin and the retailer also keeps a margin. This easily totals to over 100%. . Our aim‚  was to compel‚  all traders to sell at a price close to what we sold at our shops. The traders had to be satisfied with keeping a low margin because otherwise they would be out of business. Under Hon Philip Gunawardena we fine tuned this scheme and though the Department purchased  only 10 % of the crop we were able to control the prices unofficially.

 The  Canning Factory was further developed  and during Hon Philip’š‚  time we became totally self sufficient in fruit juice, tomatoe sauce and jam. The Canning Factory enabled us to offer floor prices- prices at which we will purchase the entire stock offered in tomatoes, red pumpkin, ash pumpkin and pineapple.  Recently the farmers at Hanguranketa built a pandal with tomatoes to prove to the Government that they could not sell their crop.  The Red Pumpkin was turned into Golden Melon Jam and the Ash Pumpkin was turned into  Silver Melon Jam.

 The UNP of President Jayawardena under the advice of the IMF disbanded the Marketing Department and privatized the Canning Factory. Today Sri Lanka imports Jam, Fruit Juice etc, all produce which we can manufacture. A year ago I saw Keels Supermarkets full of Heinz Tomatoe sauce. Meanwhile our tomatoe producers cannot sell their produce.

The message is very clear. Re establish the Marketing Department’s Vegetable and Fruit Purchasing Scheme and the Canning Factory. We can tackle inflation as well as help the producers with a better price than what the traders offer.  A very valid development, something we did do in the past.  Today have we not created another trading unit between the producer and the consumer by establishing Economic Centers- nothing other than  a conglomeration of traders. 

 Inflation in the prices of food is caused in two ways. In the case of imports we have to be guided by the import prices. But in those days‚  we had a staff that did specialize in imports, that was in the CWE and the Food Commissioner’s Department. The Food Department was in charge of importing flour and there was a special team led by a Deputy Director to contact foreign governments and foreign suppliers to negotiate supplies at competitive rates..‚  President Jayawardena under the guidance of the IMF to privatize all commercial undertakings‚  came to a deal with a Singaporean Company to handle all the flour imports. He sold the task of importing, milling and selling wheat to Prima, a Singaporean company.  Thereafter the profits in milling flour went to Singaporeans. Under Hon Philip Gunawardena it was the Food Commissioners Department that imported flour. We continued the method of importing and establishing‚  rice mills and also encouraging local entrepreneurs to establish rice mills. In this process the profits in milling rice stayed with local people. Then the Government directly imported wheat flour. From the time of President Jayawardena it was a foreign firm Prima that bought the wheat for milling. Prima is authorized to buy at prices it likes and sell the flour to us at its price.

. A few years ago it was reported that when there was a shortage of flour in Sri Lanka, Prima sold flour to the Maldives. Prima also takes away the bran, which is the main ingredient for cattle feed.  Our Dairy farming will get a shot in the arm by‚  using the bran. The message is that Prima should be sent packing

 

The Public Sector as the Engine of Growth

 Hon Philp Gunawardena was for the public sector as opposed to the private sector being in charge of development. That is a forte which is very valid for today.  During his time and right up to 1977 it was the public service of administrators and engineers that brought about the development of Sri Lanka.

There was a Planning Department that looked after the development of the country and President Jayawardena disbanded national planning and accepted the private sector as the engine of growth under the tutelage of the IMF. The Private Sector development today is to open up Supermarkets and to import and sell. Earlier, the Government Departments played a major role in every development aspect. Take industries, the Government produced paper at Valachchena. The Government produced Textiles at mills and Powerlooms. The Powerlooms were guided by a specialist unit at Velona in Moratuwa and we did produce suiting and textiles of excellent quality. All Powerlooms were run by administrators, working as the President of a cooperative. At Matara it was the Divisional Revenue Officers that were in charge and they were not paid. They had to attend to this task in addition to their duties. In my work at Kegalla as Additional GA and at Matara as the GA I was responsible for the proper functioning of all powerlooms and I interfered if there was a problem.  Take the Marketing Department, the Department that totally controlled  the prices at which traders purchased vegetables and fruits all over the island and also controlled the prices at which traders in the cities offered vegetables and fruit to consumers. This was done by the Commissioner for Marketing, a Grade I officer. He did not draw‚  millions of rupees in salary‚  like the Golden Key directors- Golden Key is said to have had some seven Deputy Chairmen who drew salaries of over  three million rupees, plus many perks  a month. The motto of the Public Service is service to the people, not to aggrandize profits and to get paid fantastic salaries.  It is true that currently certain commercial undertakings of the Government are in the red. The answer is not to offer them to the private sector and allow the people to get further fleeced but to build up expertise within the public sector to run them efficiently. We have within us the administrators to tackle  them.

 

 Agricultural Extension in the hands of the people

In agriculture the main message that Hon Philip Gunawardena‚  tells us is that‚  Paddy Cultivation was to be directed not by officials but by the people themselves.  This was the Paddy Lands Act in action. The Act ensured that a Cultivation Committee, elected by the farmers would make all decisions regarding the cultivation of paddy. Paddy cultivation has to be done by the cultivators in an entire village in cooperation. Before the Paddy Lands Act the Government Agent appointed a Vel Vidane for every village and it was his duty to hold a meeting of all proprietors of paddy land to decide when to commence clearing the irrigation canals, commence cultivation, when to sow, when to harvest etc. The Vel Vidane controlled cultivation. With the Paddy Lands Act this task fell to the cultivation committee. It was my experience in Kegalla and Anuradhapura that the farmers were very active participants in the cultivation committees. Further when there was, any repair to be done on an anicut or canal or tank the cultivation committee was entrusted with that task and the work was done by the people, not by outside contractors‚  The importance of this lies in the fact that people- community leaders‚  gain expertise in management as they cooperate in doing tasks together. This is actually community development in action. I can make a definite statement that the cultivation committees in Kegalla in 1960 and in Anuradghapura in 1962 to 1964 did attend to development tasks very efficiently. That was possible because the Paddy Lands Act put the farmers at the helm of decision making.  Today the cultivation committees are disbanded and all decisions are made by an O Level qualified official called a Niyamaka, who is also not trained in agriculture. This Niyamaka is today the laughing stock of the farmers. Paddy cultivation is dependent on the rain, which requires that the Kanna Meetings are held systematically and the dates fixed for cultivation etc. are adhered to. Today the Kanna Meetings are held in many areas but the decisions are not adhered to with the result that there is crop damage due to farmers cultivating late. This is due to pests originating from fields that had been planted earlier. Further late cultivation means that the harvest comes in late, with the rains damaging the crop. Even the next season is cultivated late as a consequence. A visit to any district today will find paddy fields with the crop at different stages.  Recently looking out of my window at Devon Hotel Kandy I saw paddy fields just sown alongside fields that had a three month crop.

The message is simple. A farmer organization has to be entrusted with paddy cultivation. Not officials. The Niyamaka is an officer. The active cultivation committees paved the path for the use of high yielding seed and fertilizer use. It is unfortunate that the Paddy Lands Act was not implemented seriously after the UNP took over in 1977, which led to the cultivation committees being disbanded. Let us hand over the cultivation of paddy to the people. Incidentally, the only success story in peasant cultivation to talk of comes from Comilla in Bangladesh where people organized in cooperatives did double the paddy yield and create a Division of full employment within nine years. The Comilla- Kotwali Thana, a Division is a  paradise in a world of poverty. This is documented in my book:How the IMF Ruined Sri lanka & Alternative Programmes of Success, Godages).

Handing over the management of paddy cultivation to farmers is a must for progress and Hon Philip’s cultivation committees show us the path to success.

 

Community Cooperatives.

 Multipurpose Cooperatives and its apex body at the Divisional Level, the Union of Multipurpose Cooperatives was the brainchild of Hon Philip Gunawardena to handle all commercial aspects. It was to provide all the services- supplies of food, fertilizer etc. for agriculture, the purchasing of paddy etc.  The aim was also to get community members involved in the development of their area. As community leaders  get involved in commercial activities their abilities and capacities develop and they can attend to further development aspects.  The effect of these cooperatives were not very evident in the time when Hon Philip was a Minister, but in later times it was this framework that enabled rural development.  The Powerlooms that were established were cooperatives and these were thriving commercial ventures that provided employment to the people and also provided textiles of high quality, cutting off imports. 

The flagship of the Sirimavo Government, the Divisional Development Councils Programme(DDCP) used the Cooperative structure left by Hon Philip to the maximum. Cooperatives handled all commercial ventures. In Matara, the Crayon Factory, which produced crayons of high quality for about a tenth of the island’s requirements was a cooperative venture. The Deniyaya Multipurpose Cooperative Union handled the production of Coop Crayon and had islandwide sales under the leadership of Sumanapala Dahanayake the Member of Parliament of the area.  This was only one of the commercial ventures commenced to provide employment to youths.  In that process the community members who handled this venture got the experience to handle more and by the close of 1977 the cooperatives had a large number of commercial ventures implemented successfully. This was the situation in other areas too. At Matara the Cooperative Boatyard was a great success. Similarly many cooperative industries sprang up all over the island under the DDCP because of the infrastructure that Hon Philip had once created.

The message from Hon Philip for today is to rejuvenate the cooperative structure, with the Divisional apex body and to get the community totally involved in the development of the rural areas. This will never be done by the private sector because as  a venture becomes successful the owners will move themselves and their ventures to areas of luxury, leaving the original habitat. Rural Development and creating employment in rural areas‚  is key to development today and cooperatives have to play a major role.

 

Hon Philip Gunawardena had the idea that banking was important and that a bank of the people should be formed. He gave out this idea in discussions and it was left for Minister T.B. Illangaratne to implement‚  this task when he became a Minister in the  1960 Government of Mrs Sirimavo Bandaranayake..

Today foreign banks are mushrooming and taking the profits away.  The foreign banks are even allowed to fix the sale price of‚  foreign exchange they collect and take the profits away. It has even been found that when there is a shortage of foreign exchange the banks that hold foreign funds are allowed to bid the price of the foreign exchange upwards. This did happen in January 2001 when just after the Rupee was free floated a State bank had to pay a large oil bill and the two State banks did not have sufficient dollars. They approached the private banks‚  and these private banks bid the price upwards. The Rupee that was valued at Rs. 85 to the pound was devalued to Rs 115 in a flash.  In other words our foreign exchange is today a commodity where banks can create profits and devalue our currency in the process. This is documented in my book: How the IMF Ruined Sri Lanka& Alternate Programmes of Success.

The message from Hon Philip to our finance section is that foreign banks cannot be trusted. The State banks have to be solely in charge of our foreign exchange. 

 The Industrial Development Board(IDB) established by Hon Philip Gunawardena. Industries have to be developed to enable the people to be employed and also to manufacture the requirements of the people. . The IDB has highly qualified technicians and engineers who could provide plans for establishing industries.  The IDB is thus the prime institution and deserves to have  a unit in each District, to study the produce in the area and to draft plans to enable manufacture, a task that falls to the cooperatives. Today we import everything; we do not make even a bicycle. Most of our industries are of the assembly type. Instead  we should get down to manufacture. To quote the success of the Crayon Factory which I myself established as a cooperative, which could have been easily developed to produce all our requirements, the way ahead for us  to create employment and also to save foreign exchange that we today spend  on imports‚  is to develop industries.

In this task the IDB of Hon Philip can easily play a major role.

 

Conclusion

 It has been a pleasure to pen this paper detailing how the ideas of Minister Hon Philip Gunawardena can help the present Government’s effort at development. Truly the Programmes. of the present Government, like Gama Neguma are a success, but it has to be said that if the development infrastructure created by Hon Philip could be used, Gama Neguma and other programmes will flower to greater success.

 Hon Philip Gunawardena’s idea of Power to the People is also the motto of President Rajapaksa and it will augur well for him to consider having farmers and community leaders to be in charge of their development, in agriculture, animal husbandry and small industry. It could be an elected body like the cultivation committees or a cooperative like at Comilla. At Comilla,  a village farmer took the role of the extension officer. He was trained a day every week. As far as I can see this is the devolution of power that has to be done to activize the people and bring about prosperity. All officials and institutions like the IDB should be providing expertise to this august body and the people have to be  activated‚  to plan and further paddy cultivation, the Cooperatives to establish Tractor Stations to help cultivators and also to establish Fruit Canneries in fruit growing areas, Creameries churning out butter and cheese and all types of small industries. For instance, today we burn wood shavings and saw dust. In the UK and USA these are turned into processed timber with the addition of some latex. We import such processed timber from Malaysia and India. Many such industries have to be developed. Creating full employment should be the aim and in my experience this is a task that can be achieved in a few years.‚ 

Garvin Karunaratne, Ph.D.

Former SLAS