From D Pathirana and C Aluthge’s A History of Underdevelopment & the Political Economy of Inflation in SL: Chapter 3 on the impoverishment of the peasantry.
Peasants, deprived of their traditional chena and forest land through the expansion of coffee plantations, were simultaneously battered by the heavy blow of the paddy tax. While the appropriation of chena lands deprived peasants of their means of income, the paddy tax drained out peasant surplus into the coffers of tax farmers, and to the colonial administration, which redeployed it mainly to expand plantations. Peasants thus had to rely on usurer’s advances to prevent themselves from sinking below the level of subsistence and non-repayment of the paddy tax.
The effect of the paddy tax is analogous to that of appropriation of chena land for plantations expansion which provided peasants daily subsistence, for food requirements, as well as a cash income. Chena cultivation assisted an even flow of income and evenly absorbed their labour during the slack periods of paddy cultivation. Therefore, the form of surplus extraction from the peasantry which the English administration established hand-in-hand with the encroachment of the plantation economy in turn altered production relations in the paddy economy in a way that engendered the predominance of merchant-cum-usurer, enabling them to control and appropriate a greater surplus from peasant labour. Furthermore, the debt repayments were made in kind which put the peasant at a great disadvantage since the effective paddy price of repayment was calculated much lower than the existing market price for paddy by the usurer, exploiting the peasant by all means possible.
The cattle population declined during the English administration due to encroachment of the plantation economy on wasteland and forests, which deprived them of their feeding grounds. Prof N Shanmugaratnam notes in this connection, ‘decline in cattle population was due among others, to the slaughter of cattle by the English during the uprisings of 1818 and 1848, the loss of communal pastures due to the expansion of tea and rubber, and the spread of diseases like rinderpest’. The ensuing impoverishment of the peasantry also impelled the latter to sell their stock of cattle. ‘The growing need for money to buy consumption goods, and the cycle of debt in which the peasant families were caught led to disinvestment.
Peasants had to sell their cattle and even implements to have money for pressing daily needs. The decline in cattle population in turn further constrained peasant ability to produce their means of subsistence. The subsequent indebtedness of the peasantry and inability to debt repayment in turn caused them to forfeit their lands to the merchants-cum-usurers. The process thereby accelerated the rise of sharecropping based on absentee landlordism. ‘The only security [the peasant] had to offer was his plot of land. With each cycle of cultivation there was an increasing cycle of debt on the peasant and it was only a matter of time for the shopkeeper to become the absentee landlord’
The combined cultivation of paddy and chena crops before the expansion of plantations in turn increased the paddy surplus that could be exchanged for non-agricultural goods and hence while being a subsistence crop, ‘paddy occupied the role of a cash crop’ simultaneously and its dominant qualitative characteristic varied according the quantitative change in its output and the chena crop. So long as the paddy output and the chena crop were high the former occupied the role of a cash crop, while chena cultivation was predominantly used for subsistence consumption. ‘…in the traditional order, finger millet had an equal place with rice so that all chenas were cultivated with that crop during the Maha season to fulfil subsistence needs of the household… Families also took care to keep the harvest for the rest of the year and sold any portion only after they reaped the next millet crop, ie, after a year’.
[for similar histories deliberately ignored in economics and by economists, read www.eesrilanka.wordpress.com]