LABOUR USE AND PRODUCTIVITY IN PEASANT AGRICULTURE IN SRI LANKA P.S. Ramakrishnan, B. Sc. (Hons) Agric.

Transcription

1 LABOUR USE AND RODUCTIVITY IN EASANT AGRICULTURE IN SRI LANKA by.s. Ramakrishnan, B. Sc. (Hons) Agric. A sub-thesis submitted in partial fulfilment of the requirements for the degree of Master of Agricultural Development Economics at the Australian National University August, 1980

2 ii DECLARATION Except where otherwise indicated, this sub-thesis is my own work. August, 1980.S. Ramakrishnan \ r /

3 iii ACKNOWLEDGEMENTS The topic of this thesis is the outcome of discussions with Dr. R.M. Sundrum of the Research School of acific Studies and Dr. D.. Chaudhri, the present convenor of the M.A.D.E. rogramme. I am grateful to them for their advice and especially to the latter, who supervised this work. The invaluable suggestions, criticisms and guidance of Dr. D.. Chaudhri greatly inspired me to complete my research work. Dr. Anne Booth of the Research School of acific Studies and Dr. Dan Etherington, former convenor of the M.A.D.E. rogramme, contributed immensly through their suggestions and advice in improving the manuscript. Many thanks are due to the Agricultural Development Council for the Fellowship Award which made my present study possible; also to the Secretary of the Ministry of lan Implementation and Director, Regional Development Division for their approval which enabled me to undertake this course at the Australian National University. And finally to Mrs Bridget Boucher for editing my work; Mrs Daphne Boucher for typing the manuscript and to the staff of the Development Study Centre for their concern towards my well-being. I can hardly express the extent of my gratitude to my parents in Sri Lanka for looking aer my little son and to my wife, Bhavani, who, like my parents, was not only a constant source of inspiration but gave me much needed encouragement and moral support during the preparation of this sub-thesis.

4 iv ABSTRACT Employment generation is an important policy goal of the Government of Sri Lanka with agriculture continuing to be the dominant sector in the economy, both in terms of production and employment. An analysis of the labour utilisation pattern in the vital food producing sub-sector and the technical conditions associated with it is an important aspect for exploring the potential for greater employment opportunities in the agricultural sector. With this intention, this study investigates the levels and trends in the growth of output and employment in the food producing sub-sector, mainly in paddy production during the period The macro aspects of employment in paddy production is investigated using growth rate analysis and the change in levels of selected variables during the period considered. The relation between productivity of land, manpower employed and input usage is examined along with the possible substitution - complementarity effects between labour and a few selected modern inputs using correlation and multiple regression techniques. The study is extended to the micro-level labour use pattern using farm survey data of an irrigated paddy scheme. The relevance of the macro-level determinants of employment is analysed in the context of the micro-level total labour use in farms taking into consideration the mode of employment as well. The study, aimed mainly at providing an insight into the macro-level and micro-level labour use pattern in paddy production in Sri Lanka concludes with the possible implications and limitations of the study.

5 CONTENTS age ACKNOWLEDGEMENTS ABSTRACT LIST OF TABLES LIST OF FIGURES iii iv viii X CHATER 1 INTRODUCTION Introduction The roblem Hypotheses Data Sources opulation of Sri Lanka Sectoral Distribution of Output and Employment Economy of Sri Lanka Agricultural Sector Land Use attern The Organisation of the Thesis 15 2 ADDY 'RODUCTION AND LABOUR USE - A DISAGGREGATE ANALYSIS addy Cultivation in Sri Lanka The Rainfall Regimen Zones of Sri Lanka opulation Distribution by Agro Climatic Zones Growth in addy Output Growth Rate Analysis of Area and Yield Increase 26 (A) Increases in Area Under addy 27 (B) Increases in Yield Under addy Components of the Growth of addy Output Employment in the addy Sub-Sector Land and Labour roductivity in the addy Sub-Sector 45

6 vi CHATER age 3 LABOUR USE, INUT USAGE AND CULTURAL RACTICES - SUBSTITUTION AND COMLEMENTARITY EFFECTS Complementarity and Substitution Between Inputs: Some Theoretical Considerations Correlation Analysis and Complementarity The High Yielding Varieties rogram in Sri Lanka The Major Determinants of Employment in addy Cultivation The Approach to the roblem Variables Considered Empirical Analysis of Factors Affecting Employment in addy Cultivation The Employment Effect of High Yielding Varieties Limitations of the Macro-Level Study Extension of the Study to the Micro-Level 79 4 A MICRO-ANALYSIS OF LABOUR USE IN ADDY CULTIVATION Choice and Description of the Study Area Sampling Technique and Survey rocedure General Farm Characteristics of the Farmers in the Sample Size of Irrigated addy Holdings Size of Highland Holdings Family Size and Family Labour Sources of Labour Seasonal Variation in addy Cultivation Seasonal Variation in addy Yields roductivity and Labour Use: Seasonal Variations Correlation Analysis Seasonal Variation 91 (A) Labour Use in Yala Season 94 (B) Labour Use in Maha Season Determinants of Labour Use er Acre and its Composition 102

7 vii CHATER age 4.6 Limitations of the Study Summary SUMMARY, CONCLUSIONS AND OLICY IMLICATIONS Summary Conclusions ossible Implications Limitations of the Study 117 * * * BIBLIOGRAHY 119 AENDIX 125

8 viii LIST OF TABLES Table Title age 1.1 Farm Size, Yield and Labour Input for Rice in Selected Countries opulation of Sri Lanka Age Structure of the opulation, Growth of Labour Force, opulation by Employment, Average Annual Growth Rates of GD, opulation and Employment, Employment, GD and Elasticity of Employment to Income, Employment in Agricultural Sector, Extents Under Major Crops and Employment er Acre, Zonal Cropping Intensity, 1962/63 and 1971/ Zonal Area Under Irrigation 1962/63 and 1971/ addy Holding Size by Zones, 1962 and opulation Density by Zones, Growth Rates (Compound) in Area Increase - District Wise, 1963/ / Growth Rates (Compound) in Area and Yield Increase - Zone Wise, 1963/ / Growth Rates (Compound) in Yield Increase - District Wise, 1963/ / The Components of the Total Output in addy - Zone Wise, 1963/ / Range and C.V. of Area, Yield and Employment Growth Rates (Compound), Inter-District Data, Growth Rates (Compound) in Employment Increase - District-Wise Net Migration Rate of Selected Districts, Growth Rates (Compound) in Employment Increase - Zone Wise, Land and Labour roductivity in addy Sub-Sector, Changes in Intensity of Employment - Zone Wise, 1963/

9 ix Table Title age 3.1 The Matrix of artial Correlation Coefficients Among a Few Selected Variables in addy Cultivation , 1971, Size Distribution of addy Holdings, Estimates of Coefficients of Linear Equations for Total Employment in addy Cultivation Estimates of Coefficients of Double Log Equations for Total Employment in addy Cultivation Estimates of Coefficients for Employment per 100 Acres of addy Cultivated Chow Test for Stability of Coefficients of Linear Equation, Model I Summary of Results - Chow Test earson Correlation Coefficients of er Cent Area Under High Yielding Varieties With Selected Variables / Employed opulation in Agricultural Sector by Occupational Status, Size Distribution of Sample Total addy Holdings Size Distribution of Highland Holdings Among Sample Farms Simple Correlation Between Labour Use and a Few Selected Variables Seasonal Variation in Labour Use Means of Selected Variables Among Different Farm Size'Groups - Yala Season, Means of Selected Variables Among Different Farm Size Groups - Maha Season, 1978/ Adoption of Selected Cultural ractices Among Different Farm Size Groups - Maha Season, 1978/ Labour Use attern Among Different Farm Size Groups - Maha Season, 1978/ Analysis of Variance in Total Labour Use - Maha 1978/ Analysis of Variance in re Harvest Labour Use - Maha 1978/ Analysis of Variance in Family Labour Use - Maha 1978/ Estimates of Coefficients of Linear Equations I Estimates of Coefficients of Linear Equations II 107

10 X LIST OF FIGURES Figure Title age 2.1 addy roduction and Yields in Sri Lanka /61 to 1974/ Rainfall Regimen Zones of Sri Lanka roportion of Cultivated Land Under Major Crops in Sri Lanka Scattergram Showing Growth Rates (Compound) in Area Increase and Employment Increase Using Inter- District Data, ( ) Scattergram Showing Growth Rates (Compound) in Yield Increase and Employment Increase Using Inter-District Data, ( ) Growth in Area Under addy, ( ) Growth in Yield in addy, ( ) Growth in Employment in addy Cultivation Complementarity and Substitution Between Two Inputs Scattergram of District Wise addy roduction With Employment in addy Cultivation Scattergram of District Wise Farm Size With Employment per 100 Acres of addy Cultivation er Cent Area Under Improved Varieties - Zone Wise, (1969/ /74) Map of: Vavuniya District Showing the Location of Survey Area 83

11 CHATER 1 INTRODUCTION 1.1 Introduction Labour use in agriculture has been gaining increasing attention in recent times and is a subject of importance to Sri Lanka, with agriculture continuing to be a dominant sector in the economy, both in terms of production and employment. Continuous growth of per capita income need not necessarily stem from an increase in employment opportunities; instead it could result from an increase in productivity. This necessitates a better understanding of the major determinants of employment and the potential areas where productive employment could be effectively increased, especially in the dominant sector of the economy - agriculture. 1.2 The roblem Labour use in agriculture is extremely uneven, not only across south asian agriculture as pointed out by Ishikawa (1978), but across regions within a country as well. Hence, possibilities for increased labour use in agriculture do seem to exist in countries like Sri Lanka which has a relatively low labour input per unit of land (Table 1.1). With this objective, this study intends to investigate the levels and trends in the growth of paddy output and employment^ in the peasant food 1 Analysis of employment in paddy cultivation while dealing with district and national data, we mean the number of persons employed in paddy cultivation sub sector. Employed persons are those who are engaged in any kind of work (connected with paddy cultivation) for pay or for profit (Dept, of Census and Statistics, 1978). In this sense, they are more dependent on paddy sub-sector for livilihood rather than employed in the strict technical sense. The extent of open or disguised unemployment is unknown to us and not examined.

12 2 rd X \ w >1 f t in CM X 1 o X f t X rd CM CM f t 1 1 ID X X X X Td f t t i CM X i i X 1 1 X X C f t rd X e FARM SIZE, YIELD AND LABOUR INUT FOR RICE co w H g O U Q H Eh O w w CO 2 H N X fd f t a CO p X X CTv fd rd f t i 1 f t f t X x LO o f t X rd \ f t x LD L D CM CM X X X X rd > fed 0 a fed fd L o X u L X a> X CM CM CO X CO 00 f t id m f t i rd L X fed p rd X i 1 i 1 in o o o i i X o fd CQ N H X f t 1 1 p rd 0 f t H rd X 2 u p *. T3 > i 0 fed p L f t fed 0 (U 0 f t rd w L f t fd E CJ X 5>~i X X X X X CD (1) (D H CD <1) a) (U cu u X CO CO X Q S 2 X w f t 0 X p p 0 X X X p Ü 0 p X fed O X X X X X 0 X X X X X rd p L CM CM X w f t fd x X X X f t X X X X X CD f t cr> f t ID X X X X 1 1 X > H X X l f t <7s f t f t f t 1 X 0 i 1 t 1 i t X r 1 X D X U) L 0 o X 0 X Ü rq E Ü X fd 0 L X L f t X L X X p X w e c rd W X X 0 X fd fd i i X Q o p 0) cu S X Q X X ID X L X fd CD L H 0 fd X fd X ID CO f t Eh X rd X U) 0 X i i X X fd X 0 X 0 X X fd Q X X X rd rd rd w fd a c p L L L >1 X <d p X ID X X X X fd fd X 0 fp CO a i i > X i i p 0) (U Q) rd rd rd 0 rd u O o 2 X CO X (U o L r-h X X 0 X CM X LO ID ko ID ID CO

13 3 producing sub-sector of the economy for the period 1963 to Sri Lanka has a co-existence of diverse technology along with varying institutional arrangements in the peasant sub-sector. Employment in this sub-sector is a function of the choice of crop-mix, cropping intensity, level of technology, substitution possibilities between labour and other inputs and also the valuation of the produce by the society in terms of prices. Sri Lanka exhibits a wide inter-district and inter-temporal variation in paddy production and employment. An investigation of the implications of the inter-regional and intertemporal variation in growth of paddy output and the agricultural labour absorbtion pattern associated with it forms one aspect of this study, constituting the macro-aspects of labour absorbtion in the paddy subsector. This is followed by a micro-level analysis of an irrigated paddy settlement scheme to identify the possible causation factors, especially labour use in terms of modes of employment. 1.3 Hypotheses More specifically, this study examines the following hypotheses in order to understand the labour absorbtion pattern in Sri Lankan paddy sub-sector: (i) The yield, area and employment effect of the growth of paddy output varies across the regions/districts. (ii) A high level of paddy productivity is associated with a high level of agricultural employment. (iii) A complementarity exists between manpower employed and the use of agricultural inputs

14 4 in the paddy sub-sector. (iv) The farm size has a noticeable effect on the selected use of inputs. These inputs would of course include the relative usage of hired and family labour. The first three hypotheses are examined at national and regional/district levels while the last two are applicable to microlevel study. 1.4 Data Sources Due to the paucity of systematically collected data on labour use in Sri Lanka, this study intends using the employment figures stated in the census of population for the macro-analysis. The use of census data poses basic problems such as: (i) the lack of data on duration of employment and unemployment because the census data uses a 'stock' concept rather than a 'flow' concept, which would have been more appropriate for this study; (ii) the seasonal pattern may not be indicated in the census data; and (iii) there could be possible changes in concepts and definitions from census to census thus causing comparisonal difficulties, which did not arise in the census of 1963 and The 1963 census was carried on 8th July, a slack period in traditional agriculture while the 1971 census was conducted on the 9th October, the busiest period for farmers, being the commencement of the main paddy season. However, since special provision was made in the

15 5 questionnaire in order to enumerate the seasonal workers, the data of the economically active population in the 1963 census were not subject to the under enumeration in comparison with 1971 data" (Wilson, 1975, p.30). The period selected for the study is from the cultivation year 1961/62 to 1973/74, which also includes the census years of 1963 and This enables us to observe whether the new seed- fertilizer technology introduced in the late sixties has made any significant contribution to production and employment in Sri Lanka, and to identify the possible causation factors for productivity increases, if any, and their inter-relation with employment. The time period selected also allows the testing of the macro-level observations on the micro-level data. It should be noted that Ishikawa's central theme relates specifically to micro-level farm characters. "The use of aggregated data on labour force employed in agriculture for specified areas such as districts and relating to its overall agricultural productivity is a very poor substitute..." (Naseem, 1979, p.l). Despite these limitations, studies have been done using the census data on employment such as those by Alagh et al. (1978) and Naseem (1979). Hence, given the limitations of the data, this study illuminates some of the issues involved with the labour absorbtion pattern in paddy production. Farm survey data of 52 farm families under Kanakarayankulam tank in Vavuniya district for the cultivation year 1978/79 constitutes the basis of the analysis for the micro-level study. This survey was conducted by the author in December 1979.

16 6 1.5 opulation of Sri Lanka The problem of unemployment is increasingly felt in Sri Lanka. Creation of productive employment opportunities tends to have been aggrevated by the pressure of rapid population increases in the post-war period. The average annual inter-censal growth rate of the population was well below two per cent during the pre-war period and since then it has been well above two per cent. Table 1.2 shows that the population TABLE 1.2 OULATION OF SRI LANKA Year opulation C000) er Cent Increase Average Annual Rate of Growth (Compound) _ Source: Dept, of Census and Statistics, doubled from 2.4 million during a period of 50 years while it took only 30 years for the subsequent doubling. The change in the age structure of the population, especially due to the decrease in infant mortality, has produced a population that is heavily skewed towards the young age groups; a common problem of many late developing countries. In 1971, 39 per cent of the population was under 15 years of age while only 57 per cent was in the economically active age group of years (Table 1.3).

17 7 TABLE 1.3 AGE STRUCTURE OF THE OULATION C ) Year All Ages > , , , , (100)1 (42) (18) (36) (4) , , , , (100) (39) (21) (36) (4) Note: 1 Figures in parenthesis refer to percentage of all ages group. Source: Dept, of Census and Statistics, These factors cumulatively contributed to a substantial increase in the labour force^ in the post war period (Table 1.4). The distribution of this population shows that in 1971, 77.6 per cent was in the rural category. 1.6 Sectoral Distribution of Output and Employment The sector-wise distribution of the employed population for the period shows a varying magnitude of growth in employment in the different sectors of the economy (Table 1.5). While the population increased by 20 per cent during this period, employment shows a change of only per cent, thus aggravating the unemployment situation. Of this, the highest share is contributed by industries with a growth rate2 1 The concept of labour force poses a number of limitations. See Wilson (1975) for a detailed analysis of the concept as it applies to Sri Lanka. "...demographically, the population at ages years represent largely the bulk of the labour force covering 94.7 per cent of male and 96.1 per cent of female labour force (ibid., p.9) 2 Throughout this study, growth rate refers to annual compound growth rate.

18 8 TABLE 1.4 GROWTH OF LABOUR FORCE Year Total Labour Force ( 000) % Increase Annual Average Rate, of Growth (Compound) Source: Wilson.,1975. TABLE 1.5 OULATION BY EMLOYMENT Sectors 1963 % 1971 % _ ^, Annual er Cent _, Growth Change Rate (1) (2) (1) to (2) (Compound) Agriculture 1\681, ,828, Industry 394, , ,09 Services 943, ,040, Activity Not Adequately Described 175, , All Sectors 3,195, ,648, Source: Dept, of Census and Statistics, 1978.

19 9 of 2.09 per cent. Although the agricultural sector has experienced the least growth over this period, the relative contribution of each sector has changed only marginally, with the agricultural sector providing the largest absolute number of employment opportunities. 1.7 Economy of Sri Lanka Table 1.6 summarises what has been achieved by economic development in Sri Lanka during the period The annual growth rate of employment has been slower than the annual growth rate of the labour force and population, and hence has compounded the problem of 1 unemployment. The economy is able to provide employment only to half the population entering the labour force each year. In effect, the economy of Sri Lanka has not expanded sufficiently to keep pace with the increase in population or the total labour force. TABLE 1.6 AVERAGE ANNUAL GROWTH RATES (COMOUND) OF GD, OULATION AND EMLOYMENT, Gross Domestic roduct"*" opulation Labour Force Employment (4) as a percentage of (3) (4) as a percentage of (2) 72.7 Note: Source: 1 At constant (1959) factor cost prices. Central Bank Annual Reports, Dept, of Census and Statistics, ILO Report examines the problem of unemployment and underemployment. For details, refer ILO (1971).

20 10 The measure of employment income growth elasticity identifies the absorbtion possibilities of different sectors to changes in value added (Oshima, 1971). The agricultural sector has experienced the lowest rate of growth of 2.15 per cent in its contribution to GD. But the elasticity of agricultural employment with respect to income, indicating its responsiveness to changes in value added, ranks highest amongst the sectors (Table 1.7). This elasticity value is substantially higher, of the order of , if only the paddy sub-sector is considered (Wickramasekara, 1979). TABLE 1.7 EMLOYMENT, GD AND ELASTICITY OF EMLOYMENT TO INCOME, Sectors Growth Rate in Employment Growth Rate in GD1 Elasticity of Employment to Income Agriculture Industry Services Total Note: 1 At constant (1959) factor cost prices. Source: Table 1.4 and Central Bank Reports. Despite the fact that its contribution to GD and employment continues to decline relatively, agriculture still maintains its pride of place and constitutes a foundation for all other economic activities. The population and labour force are increasing faster and because of the inability to absorb the increasing labour force by non-agricultural sectors, the agricultural labour force continues to rise in absolute

21 11 numbers even though a marginal decline in the relative proportion is evident. The small size of the domestic market, shortage of foreign and domestic capital, increasing capital intensity rather than labour intensity of the modern industrial sector all impose constraints on the potential labour absorbtion by non-agricultural sectors. Hence, the agricultural sector, especially the paddy sub-sector, occupying the dominant position in the economy will have to continue its role of providing greater employment opportunities for many years to come. A direct policy that emphasises the employment aspects is needed in this connection as opposed to emphasising the production - income aspects and leaving employment opportunities to expand as a by-product of the development policy which seems to have taken place in Sri Lanka. It follows from the above that economic development should be able not only to increase the GD but more importantly, should provide greater employment opportunities. "In many, if not most of them (LDCs), unemployment is turning into a major social problem and obstacle to development. The failure to create meaningfull employment is the most tragic failure of development" (earson Report, 1969, p.58). Sri Lanka is no exception to this. 1.8 Agricultural Sector The agricultural sector in Sri Lanka consists of the modern export oriented plantation sub-sector producing tea, rubber and coconut and the traditional domestic food producing sub-sector comprising the peasant farmers, cultivating mainly paddy and also other subsidiary food crops. The total employment in the export sub-sector shows a relative decline of about 0.8 per cent per annum during the period Despite this, total employment in the agricultural sector shows an

22 12 increase of 1.05 per cent due mainly to a substantial increase in the employment growth rate of 3.20 per cent in the peasant paddy sub-sector, thus showing the largest growth rate in employment among the activities of the economy (Table 1.8). The paddy sub-sector has also absorbed nearly 40 per cent of the new employment created in the economy during this period. 1.9 Land Use attern The land utilisation pattern in Sri Lanka is shown in Table 1.9. addy constitutes the largest single crop occupying eight per cent of the geographical area. In 1971, the area under paddy increased by 20 per cent while the extent under plantation crops changed very marginally. TABLE 1.8 EMLOYMENT IN AGRICULTURAL SECTOR, Sub-Sector 1963 % 1971 % Growth Rate addy 623, , Tea 587, , Rubber 160, , Coconut 39, , lantation Crops 787, , Others 270, , Total 1,681, ,828, Source: Dept, of Census and Statistics, 1978.

23 13 EXTENTS UNDER MAJOR CROS AND EMLOYMENT ER ACRE 1 1 CO O p t '' O CM D cr>. 1 0) i i o i 1 O CD p Ü cd <C E \ "H p d m CD CD in O d rh in a d E ro o CO ro (D f t CD or C CM O o ( i 1 o o o o 1 1 cd p d p i i p d p u, -p 0 13 p p d tn o CD d cd O ro CM o rh rd C 1 CM cd p e CM o CD d 0 C d u i 1 d < O i 1 CO 13 d CD 0 i i -H CD CD e' p in i 1 en d (D Ü d i i CL) tn O' CN CD cd cd i u d C CD o C o Re ro cd 1 in CD cd p p C rh o E C CD o p O rh C <d!--1 CD c - <p Co C «4 cd cd CD p r 1 fd d d i 1 p O 13 cd H, CO O' C C f t m in i 1 C 4-1 > 1 CD V V 1 cd 13 d H d p o l"' CD CD CD Ü CD C CD 13 E CO H fi CO LD in CD!>i X -* H w i 1 CD E i 1 O - 0 f t d E in CD in CD p u H o i 1 tn cd d LD p CO CD <D d H... ro ['- C CM t tn H W 00 CO o cd cd in in no cd > p CD d d cd o r - 00 CM CD < CD C U CD 00 CD in > o p rh fill LD in m rh cd cd CD (D t X ' V v i 1 p cd w in cd ü d cd rh H cd d i i d CD 0 -H o in ro u cd i 1 H 1 0 > f in u cd o cd p CO C d i i CM CO 0 CD d p 13 p o u 13 p u CD cd CD 3 o cn O C C u CD d CO

24 14 The inter-relation between employment and the area under various crops over this period shows that the employment per acre of cultivated crop has not changed substantially. Employment per acre of paddy increased from 0.40 units to 0.43 units while in tea the increase was 0.06 units. As opposed to this, in the case of rubber, employment per acre in fact declined by 0.04 units. Hence, it could be said that the increased employment opportunity created in the agricultural sector during this period is more due to new (paddy) lands brought under cultivation than due to an increase in employment per unit of land. If this is so, then the possibility of raising the level of employment lies in bringing new lands under cultivation. Various estimates have been put forward as to the potential availability of additional land for cultivation, ranging from 800,000'*'acres to 2,500,000 acres (Dept, of Census and Statistics, 1965). The completion of the Mahaweli Diversion Scheme as envisaged, would bring an additional 654,000 acres under irrigation. Further development of new land, "...being in the drier part of the country, is closely linked with the provision of irrigation facilities and the lack of sufficient number of perennial rivers and the failure to find sub-terranean water supplies have restricted the development of irrigation almost entirely to the restoration of ancient irrigation schemes" which in turn is limited due to paucity of capital funds (Bansil, 1965, pp.74-5). Hence, the potential for increasing the intensity of employment in the dominant sub-sector needs to be examined. 1 otentially irrigable.

25 The Organisation of the Thesis Aer this introduction, the next chapter deals with the disaggregate analysis of the growth in paddy output and employment including inter-temporal and inter-regional/district variations. The third chapter relates the theoretical framework for the possible substitution - complimentarity effects among factor inputs and labour and formulates the outline of the micro-level analysis based on the outcome of the macro-study. The fourth chapter presents the results of the farm survey data analysis and a discussion of the results. The final chapter gives the conclusions of the study followed by a discussion of the possible implications and suggests areas of future improvement.

26 16 CHATER 2 ADDY RODUCTION AND LABOUR USE - A DISAGGREGATE ANALYSIS The investigation of the first hypothesis that the yield, area and employment effect of the growth of paddy output varies across the region/districts forms the major part of this chapter. The interdistrict and inter-temporal variation in paddy production and employment is examined in the context of different agro-climatic regions and population density. In particular, growth in paddy output, both in terms of district-wise and agro-climatic region-wise is analysed in terms of its components and their inter-relation with employment in the paddy sub-sector. 2.1 addy Cultivation in Sri Lanka addy cultivation continues to be the major activity in traditional peasant agriculture. Since rice constitutes the staple food of the people, considerable importance is given to the expansion and modernization of paddy production. This is well reflected in all the successive development plans of the government since independence, emphasizing the need for increased paddy production and hence achieving the goal of self sufficiency. addy production in Sri Lanka increased from 43 million bushels to 76.3 million bushels during the period 1960/61 to 1973/74 (Figure 2.1). A general upward trend in production could be observed although 1964/65 and 1974/75 cultivation years constituted bad, drought stricken crop years while 1969/70 and 1973/74 cultivation years had exceptionally good harvests. The complete dependence on rainfall for paddy cultivation seems to be a major factor contributing to the

27 17 o H o m i 0 i 1 m CD 0 H n U c m m m m 0 fo O-i p p J I I (aao\f Jtsd sxsqsng) euov uod T^TÄ ADDY RODUCTION AND YIELDS IN SRI LANKA in \ r- cn rh o r-' \ cn 10 <n i I u rö<d m 10 \ i0 cn i i >h C O H > H +J rh 0u Source: Based on data from Dept, of Agriculture, (sxaqsng u o t x x j w ) uorgonpoud Äpped

28 18 fluctuations in paddy output over time. The main cultivation season referred to as the Maha season lasts from September to February and coincides with the North-East monsoon, while the paddy cultivated during March-August is referred to as the Yala season and coincides with the South-West monsoon. A major portion of the paddy is cultivated under wet land conditions and in the absence of any perennial river sources, rainfall determines the availability of water for irrigation which in turn affects the pattern of paddy production in the island. Sixty per cent of the total paddy land is provided with some form of irrigation facilities while the balance 40 per cent is rainfed. 2.2 The Rainfall Regimen Zones of Sri Lanka The agro climate of Sri Lanka is characterised by two monsoonal seasons; the South-West monsoon during mid May to September and the North-East monsoon during December to February, with the inter- monsoonal season in between. The variations in the intensity and duration of rainfall at different seasons of the year result in a broad demarcation of the island into a wet zone and a dry zone'*' based on the 75"-isohyet of the mean annual rainfall superimposed by the 20"- isohyet of the mean South-West monsoonal rainfall (Thambyahpillay, 1965). The wet zone of Sri Lanka corresponds roughly to the South-West quadrant, covering nearly 30 per cent of the total land area. This could be further subdivided into a low country wet zone comprising the coastal districts of Colombo, Kalutura, Galle and Matara and a mid country wet zone encompassing the central hilly districts of Kegalle Kandy, Nuwera-Eliya and Ratnapura. The annual rainfall exceeds the potential evapo-transpiration during the average normal years and in 1 Wet zone and dry zone are not internationally valid terms but applicable only to Sri Lanka, representing relative terms; no rainfall station in Sri Lanka records a mean annual rainfall of less than 35" (Domros, 1974).

29 19 addition, wet zone is characterised by the absence of an effective dry period. ^ On the other hand, the dry zone occupying nearly two thirds of the island and receiving less than 75" of mean annual unimodal rainfall is characterised by the occurrence of an effective dry period and the potential evapo-transpiration exceeds the mean annual rainfall (Domros, 1974). Farmer (1957) has also shown that the variability of rain is greater in the drier parts of the island than in the wet areas. Instead of a direct boundary between the wet zone and the dry zone, the Hunting Survey Corporation (1960) introduced a transitional zone called the intermediate zone comprising the districts of uttalam, Kurunagala, Badulla and Matale, where the potential evapo-transpiration more or less equals the mean annual rainfall. The classification of the 22 administrative districts based on the above agro-climatic characteristics reveal that the district boundaries do not coincide with the agro-climatic zonal boundaries and in fact, few districts fall under two zones. Despite this limitation, this study is based on the district-wise and zonal classification as in Figure 2.2 due mainly to the limitation imposed by the non-availability of macro-data at other levels. Figure 2.3 shows the relative importance of the plantation and food producing sub-sectors in each district, considering the total cultivated area. lantation agriculture dominates in the wet zone while in the intermediate and dry zones, the food producing sub-sector occupies a greater proportion of total cultivated land. Looking at paddy production at the zonal level, bimodal rainfall 1 The effective dry period is defined by a period of at least three consecutive months, each of which receives less than 4" of rainfall (Wikramatilake, 1963, cited in Domros, 1974).

30 20 FIGURE 2.2 RAINFALL REGIMEN ZONES OF SRI LANKA Jaffna Low Country Wet Zone Mid Country Wet Zone Intermediate Zone Dry Zone Agro Climatic Zone District Boundary

31 FIGURE 2.3 ROORTION OF CULTIVATED LAND UNDER MAJOR CROS IN SRI LANKA Source: Domros, 1974.

32 22 p a t t e m of the wet zone ensures sufficient water for a successful paddy crop in both seasons. In fact, due to the relatively poor soils, the coastal areas of the wet zone are subjected to bad drainage and flooding, thus limiting the scope for increased production. The wet zone, with nearly 34 per cent of the paddy land produces 32 per cent of the total paddy output. Both the low country wet zone and the mid country wet zone contribute equally to this production despite the area under paddy in the mid country wet zone being much less than in the low country wet zone. Double cropping is oen practiced with an index of 1.67 (1971), the highest amongst the zones of Sri Lanka (Table 2.1). Since this zone benefits from both monsoons, more than 65 per cent of the cultivated area falls under rainfed conditions (Table 2.2). The average size of paddy holding declined from 1.19 acres to 1.03 acres within a decade indicating the small and continued fragmentation of the holdings in the wet zone (Table 2.3). The intermediate zone comprises 19 per cent of the total paddy land and contributes to 18 per cent of total output. Inadequate rainfall limits the scope for double cropping. This is also reflected in the reduced area under rainfed conditions covering only 36 per cent of the total area under paddy. The average size of paddy holding is 1.41 acres, being closer to the national average. The dry zone, with 47 per cent of total paddy holdings, produces nearly half the total paddy output of the island. The uncertain unimodal rainfall pattern coupled with inadequate supplementary irrigation, despite nearly 70 per cent of the area being under irrigation, lead to the lowest cropping intensity of 1.06 in The average size of paddy holding is 3.32 acres compared to the island's average of 1.78 acres.

33 23 CM ' ~ ro or CN h \ ID 43 p- or O CN i i H p- i 1 rh 1 t t i i W CTi G rh 0) G 1 1 H " \ to, - G CM ro H or 00 m 00 or Cl \ U0 in in CN o CN Cl CN 0 43 rh i i i i i i 1 1 t I 1 CT> u ( 1 W CD 4-1 0) Td Grd 3h r I c o g o H rd > H!--I 6 U ZONAL CROING INTENSITY /63 AND 1971/72 CN 43 ' C CN 43 or ~ ot p ' 43 O ro CO \ CO C CO o p ' in i 1» «.» - ' ro ro 1 1 rh o CN <Ti i 1 ~ or p- ~ 43 G i 1 43 CO CN ro CO - 0 CD i 1 cn in ' U cd cd CD ^ 1 CO i 1 C rn 43 p ' or <C 43 O 1 I CO CT» ro ro \ O or in 43 i 1 00 CM V «.». v - v 43 CO o CN O " o C CN CN O o CN in r 1 in ro CN ro ' in i 1 CN 43 O 43 ~ O ro Td - CN o - o 0) \ CN 00 CO in 43 or N I 1 >» - >.» v H - C CO O o 00 CO e. C 43 CN or 43 i 1 or 3 i n i 1 CO CN!--1 CN 00 or Td CD rh Td 1 i i CD u 5 cd cn < ro 43 CN or ro ro CN rd 43 " 00 C O CD \ O O C ro p-~ i 1 1 CN * v V *. v «< ID p- i l t I C C CO o CN or p- or i 1 ro CN i 1 CN 43 CN QJ C 3h rh 0 CD p IS) G 4-1 pi 0 G G 0) N 3 3 p 0 o rd Td u u -H G CD Td CD rd G 2 Td CD G i 1 O 0 H 6 O to IS1 p N H CD rh i i p 3h rh CD G i 1 H Q < t Td Td td Cl p o 44 Td CD Td rq 0 >i. JG rh CN cn rh ~ rd \ cn H rh C3 - td CD C CD d rh 3h in CD Td CD G CO rd T3 G m rd 43 rd i 1 \ CN Td 0 43 CD p C rh cn G p CD CD rd O p CD CD rh CD p C G rd rd 0 CD H CD > rd rd rd > Td H i 1 CD p rd N 1 H H 3 C U C p CD Td CD 3 Td tdh CD C H cn 0 3 < O i ih Cd cu p o 2 CN 43 r- C I--1 CD 3 I I 6 u H Cn < 44 O Cl 0) Q d) u 3 o m

34 24 TABLE 2.2 ZONAL AREA UNDER IRRIGATION /63 AND 1971/72 Zone Major Irrigation % Minor Irrigation % Rainfed % 1962/ / / / / /72 Wet Zone Low Country Mid Country Intermediate Zone Dry Zone All Island Source: Dept. of Agriculture, TABLE 2.3 ADDY HOLDING SIZE BY ZONES 1962 AND 1973 ry Zione Average Size of addy Holding (Acres) Wet Zone Low Country Mid Country Intermediate Zone Dry Zone All Island Source: Dept, of Census and Statistics, 1962 and 1975.

35 opulation Distribution by Agro-Climatic Zones The distribution of the population over the island shows a marked unevenesss as in any other country. The overall density of the population increased from 418 persons/sq. mile in 1963 to 508 persons/ sq. mile in Considerable variation in the population density is observed between districts and between agro-climatic zones (Table 2.4). TABLE 2.4 OULATION DENSITY BY ZONES Region opulation ('000) Area (Sq. Miles) Density (ersons/sq.mile) Wet Zone 7, ,818 1,320 Low Country 4, ,539 1,860 Mid Country 2, , Intermediate Zone 2, , Dry Zone 2, , All Island 12, , Source: Computed using data from Dept. of Census and Statistics, The largest concentration of population is found in the wet zone, more specifically in the low country wet zone with a density of 1,860 persons per sq. mile. All districts of the wet zone, except Nuwera-Eliya and Ratnapura, show a density of more than 1,000 persons per sq. mile while in Nuwera-Eluja it is 950 and in Ratnapura 529 persons per sq. mile. As opposed to this, the dry zone is very sparsely populated, with an average population density of only 187 persons per sq. mile. In this zone, the density of population of all the districts except Jaffna is well below 400 persons per sq. mile, while in Jaffna, due to its special

36 26 ethnic importance, the population density is 728 persons per sq. mile. With the population density of the intermediate zone being 481 persons per sq. mile, the demarcation of the island based on agro-climatic factors also seems to accommodate the observed gradual decrease in the population density from the low country wet zone to the dry zone. 2.4 Growth in addy Output Growth Rate Analysis of Area and Yield Increase The total area sown under paddy increased from an average"'- of million acres in 1963/64 to million acres in 1971/72, denoting an increase of per cent. 2 At the same time, the average yield increased by per cent from Bush./Acre to Bush./Acre, representing a higher per cent rise than the former. The yield per acre continued to rise substantially, especially aer the 1964/65 cultivation year, reaching a maximum of Bush./Acre in 1969/70 aer which it fluctuates around 47 Bush./Acre (Figure 2.1). In analysing the performance of the districts and the zones, annual compound growth rates are computed for the period 1962/63 to 1971/72 using quinquennial average values centered at the years specified. The use of quinquennial average values are considered appropriate for three reasons: (i) (ii) to eliminate the effect of seasonal fluctuations; to make the best use of the available data from 1961/62; and (iii) to observe the trend before and aer the introduction of new high yielding varieties in Quinquennial average centered at the year specified. 2 Quinquennial weighted average centered at the year specified.

37 27 The use of quinquennial averages, due to the five year periods involved, could sometimes conceal the real situation. The growth rates'^ based on two year and quinquennial averages for both periods indicate that the latter is higher in almost all cases but the differences seem to be not very substantial. Hence, the use of quinquennial average for computing the growth rates is adopted. Figures 2.4 and 2.5 show considerable inter-district variation in both area increase and yield increase growth rates. Since this study intends to analyse the inter-district variations in yield changes and the associated characteristics, grouping of districts based mainly on yield growth seems to be more appropriate. The trend in yield growth rate indicates a clear pattern with a gap between 1.50 per cent and 2.25 per cent. Considering that the growth rates of area and employment increase as well, a three-tiered classification based on the districts showing growth rates of less than or equal to 1.75 per cent, between 1.76 and 3.5 per cent and more than 3.5 per cent is followed for the subsequent analysis. This enables the districts to be grouped as low, medium and high growth districts respectively with regard to each of the variables considered. (A) Increases in Area Under addy The range of values obtained for area growth rate varies from 0.96 per cent to 4.98 per cent with a coefficient of variation of per cent (Table 2.5 and Figure 2.6). Interestingly, both Vavuniya district with the lowest growth rate and Moneragala district with the highest growth rate are located in the dry zone. This leads to the 1 Growth rates here and elsewhere refer to annual compound growth rates in per cent.

38 28 AND EMLOYMENT INCREASE USING INTER-DISTRICT DATA, ( ) cn rh < Employment Increase Growth Rate H p W H T3 CM <U a I I - C r Q -p rd i O - TJ C <d 0) 4H a o rh LT) CM st ro CM aqeh qqmo-io aseaaoui aaav rh < CM < I I O W CD lh rh a Li I I I CM CM I

39 29 SCATTERGRAM SHOWING GROWTH RATES (COMOUND) IN YIELD INCREASE Employment Increase Growth Rate ON I

40 30 x: -p 5O CD o co 00 oo I I CO CTi f t f t G G CD CD O O GROWTH RATES (COMOUND) IN AREA INCREASE - D IS T R IC T W ISE I CM f t \ I l r-~ I l I cd \ ro co i I C OJ Ü p x: cd O' 1 f t H X G CD u p (D 3 I ma H! n CD 2 O CD G (D Ü (D O I i n - u H p p CO H Q x: o p CD o H p-p CO H Q x; -p o p CD u H p CD I I p CD (D I--1 rö e ou c H h CD x: 03p c < o ih rh e 03 I i 03 I CM 03 G 03 CM 03 I IX) 03 I CD G O 2 CD CM CD 03 C O r I o i~h CD CM p o po H ro c D 0 H ou m CD I I f t I I H I I CO w H 0 H i Q H i 1 p G i 1 0 p G i 1 0 f t ) > f t i 1 f t f t f t G 0 e p > 2 CD 2 <2 2 f t 2 I I I I I t CD O CD ro O IX ) G > CD 2 O CD H H Ü CD (0 <D CD x: p CD CD C CD U CD CO CD CO CD CD > rh H C C CD G H a I I p o 2 Source: Computed using data from Dept, of Agriculture, 1976.

41 31 FIGURE 2.6 GROWTH IN AREA UNDER ADDY, ( ) Medium Note: Numbers refer to the districts - See Figure 2.2. Source: Table 2.5.

42 32 fact that the mere existence of bare uncultivated land alone is not a sufficient condition for bringing additional areas under cultivation but other factors also need consideration in this regard."*" Of the high growth districts, only Ratnapura falls within the wet zone while the other four districts are either in the intermediate zone (Matale, uttalam) or the dry zone (Anuradhapura, Moneragala). It has already been observed that Ratnapura has the lowest population density amongst 2 the wet zone districts, receiving a mean annual rainfall of 153", and is hence classified under the wet zone despite a fair portion of the district falling outside the wet zone. The low growth areas seem to be dominated mostly by wet zone districts like Galle, Matara, Kegalle, Kandy and Nuwera-Eliya. Considering the exceptionally high population density of the Jaffna district despite it being in the dry zone and also the popularity of cultivation of subsidiary food crops, a relatively low growth in area under paddy is expected and observed. The zonal analysis indicates that the wet zone has the least growth in area increase with 2.10 per cent. Of this, the coastal low country wet zone contributes only 1.95 per cent while the mid country wet zone has experienced 2.35 per cent, this high value being mainly due to the Ratnapura district. The low growth in area increase in the wet zone is in conformity with the prevalence of its land-scarce situation. The intermediate zone has the highest growth rate of 2.66 per cent while the dry zone shows 2.29 per cent (Table 2.6). (B) Increases in Yield Under addy Unlike the area increase, nearly 75 per cent of all the 1 Water, inputs, labour availability and profitability of paddy pro-. duction are among other relevant factors influencing area under paddy. 2 Average for the period

43 33 CD CO CO in CO 'd' p C i 1 00 CM CO t-1 Q [Si 1 1 CM CO CM 1 1 CO CM CO GROWTH RATES (COMOUND) IN AREA AND YIELD INCREASE - ZONE WISE I I CM \ I I I I I \ co I I CD - cd H Q) E [SI CD - C H o H - CD CM O CO ID 00 co in O CO ID 00 in i i co * O i 1 CO CM in in CM o CM CO 'd CM CO CO i 1 O 'd in o CM co o 00 co rh rh d* s 9 CO r- in CN i 1 co CM i i i i CO 'd' CO in ^0 cm 00 LD CM o CM I I o CM CO CO CO CM CTi CO CO 00 CO o CM I 1 U0 CO in I I in rh p1 CM CM I I m CO CO CO i I CO o CO co I I o m CD CD rc <D C U) C cd cd U CM,C CD CQ d 1 CM CD C ID U - - ' \ \ cd \ \ cd CO i 1 - K CD CO i 1 -p p^ CD ID C m c m CD rc cd CD cd i 1 i! U - CD 1 1 i 1 -p CD S p 0 u 0 u CD c CD p c h H i T5 0) H 4H H OCD m cd CD CD r: - - cd "Ö CD p CD CM - CD o Td CD in p CD p ro in CD cd p CD > cd rh cd H c c CD C H OC I I CD - O 2: Source: Using data from Table 2.5 and Table

44 34 districts have experienced medium to high growth rates in yield increase. The low country wet zone with its inferior physical characteristics and soil suffering from iron and sulphide toxicity have only a limited scope for yield increases under the existing technology as shown by the fact that all four districts in this zone fall within the category of low growth districts (Table 2.7 and Figure 2.7). The dry zone districts of Hambantota, Amparai and olonnaruwe with per cent of the total area under irrigation show relatively high growth in yield increase ^ while among the wet zone districts, Nuwera-Eliya and Ratnapura also are high growth areas. The zonal analysis shows that the mid country wet zone has undergone the highest yield increase followed by the dry zone and then the intermediate zone (Table 2.6). TABLE 2.7 GROWTH RATES (COMOUND) IN YIELD INCREASE - DISTRICT WISE 1963/ /721 Low < 1.75 per cent District Growth Rate Medium per cent District Growth Rate High > 3.5 per cent District Growth Rate Galle 0.79 uttalam 2.25 Amparai 3.52 Kalutura 0.96 Matale 2.38 Ratnapura 3.97 Moneragala 0.98 Kegalle 2.67 Hambantota 4.04 Vavuniya 1.00 Mannar 2.81 olonnaruwe 5.01 Matara 1.39 Badulla 2.89 Nuwera-Eliya 5.68 Colombo 1.50 Kurunagala 3.00 Jaffna 3.00 Batticaloa 3.03 Anuradhapura 3.05 Kandy 3.28 Trincomalee 3.49 Note: Source: 1 Quinquennial averages are used centered at the year Computed using data from Dept, of Agriculture, Mean 2.75 per cent C.V per cent

45 FIGURE 2.7 GROWTH IN YIELD IN ADDY, ( ) Medium Note: Numbers refer to the districts - see Figure 2.2. Source: Table 2.7.