Sri Lanka cash-strapped state plans 14,000-acre land grab in currency crisis: report

ECONOMYNEXT – Sri Lanka’s agriculture authorities are planning to grab 14,000 acres of paddy, violating property rights of the owners claiming that there are ‘fallow’ and give them ‘young persons’ to cultivate them, a report said, recalling Zimbabwe style land reform.

The plan to take-over 14,000 acres of paddy land comes as the country is going through the worst currency crisis in the history of its soft-pegged central bank which printed money and made food prices almost double and a bloated cash-strapped state defaulted on its foreign debt.

Under Sri Lanka’s Paddy Lands Act, considered by some as a post-independent folly along with previous repeated expropriation of private property, rice paddies cannot be put to more productive or alternative uses, putting their owners in difficulty.

“The government has allocated 550 million rupees to cultivate 14,000 acres of fallow paddy lands,” state-run Daily News newspaper reported.

“These fallow lands will be brought under the government and steps will be taken to cultivate them using the funds made available by the government

“Agriculture Minister Mahinda Amaraweera instructed the Agrarian Development Departmetn to bring these fallow paddy lands under plough by making use of this allocation.”

The rulers have decided to “take over and cultivate’ 2,774 acres of paddy in Matakl, Nuwara Eliya, Vavuniya, Kurunegala, Puttalam, Badulla and Moneragala districts which have not been cultivated for over five years and 11,256 acres in other districts.

Minister Amaraweera has also instructed the Commissioner General of Agriculture to take steps to bring amendments to the ‘Agricultural Act’ for the implementation of the project.

Then are 47,471 acres of ‘fallow land’ in the remaining 17 districts.

“Minister Amaraweera advised that if the owners do not cultivate these fallow paddy fields, they should be handed over to the government and given to young persons who have no land to cultivate them for up to five years,” the newspaper said.

The violation of property rights of the private citizens come as President Ranil Wickremesinghe is trying to create conditions to attract investment and make the country and export competitive nation.

Sri Lanka’s farmers do not grow internationally traded grades of rice and also are also not cost-competitive due to years of protection.

Young people who try to grow high value export crops in rice fields including face severe difficulty in getting ‘permission’ from the state to cultivate their own land with alternative according to anecdotal reports.

Sri Lanka’s people got freehold land rights after European rule especially after Colebrook–Cameron reforms of 1832 ended service tenure paving the way for broader freehold.

The reforms put the Sri Lanka on the path to a modern commercial economy, President Wickremesinghe said recently.

Repeated expropriation which discouraged foreign and domestic investment and the Paddy Land Act which led to land use restrictions came after independence.

“When Sri Lanka became a commercial economy, a modern commercial economy, after the Colebrook–Cameron reforms and opening up the abolition of Rajakariya, the British came in, but not only the British the Sri Lankan’s also came,” President Wickremesinghe told a Sri Lanka economic policy forum.

“They had no banks, they had no means finding money, and there was no World Bank to give them assistance on a concessionary term. But what did they do? They build up a big business empire.

“While the British planted tea, we planted coconut, we exploited our graphite. And then in 1948 after the war was over, we stood second to Japan. But we started destroying it from the sixties and the seventies.”

Due previous expropriation of land and businesses by the post-independent state, ex-President J R Jayewardene put in a constitutional guarantee to re-assure foreign investors as he wooed FDI’s in an effort to boost exports.

However in 2011 the then rulers expropriated more businesses through an ad-hominem law targeting chosen enterprises including two public listed companies and several with foreign investor involvement.

There are fresh fears that land under lease on privatized plantations – which were part of the expropriation involved in economic destruction of the ‘sixties and seventies – will be re-expropriated under similar pretexts as ‘fallow land’.

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Re-expropriation of Sri Lanka plantation land to violate property rights, scare investors

Though service tenure ended, critics say almost a 100 years later hard-hearted native rulers with a feudal outlook still imagine that the other people’s land belongs to them to be used directed.

However after central banks trigger economic crises rulers tend to engage in various sudden interventions undermining the investment environment – a phenomenon known as regime uncertainty – which was blamed for delaying an economic recovery from the Great Depression triggered by the Fed.

(Colombo/Dec29/2022)courtesy economynext