Collapse of Coffee

In 1869, when the future of the coffee industry was well entrenched in the country, and the prospects well assured, there appeared for the first time, an enemy most insignificant on arrival, but in less than a dozen years, was responsible for bringing down the export of this great staple to one-fifth of its extent. Though it appeared as a minute fungus, and new to science, it destroyed an entire industry.

The bright orange spots that were later established as the “Coffee Leaf Disease” that appeared on an estate in a remote corner of Badulla, was treated as a matter of little concern. The sudden increase in the international price of coffee completely eclipsed the gradual decrease in crop intakes.

The insidious leaf disease had been working deadly mischief. When it was found difficult to arrest, the planters had no option but to turn to science. It was found too communicable for arresting, and before long it had spread to coffee districts of India and Java.

Nature in a sense, had revenged herself as she had done in Island, when potatoes threatened to become the universal crop, as well as on extensive wheat fields elsewhere, and on the French vineyards. The chief provocation for this visitation had been the limitation of one crop over vast areas which had previously been covered with varied vegetation.

The Coming Product

King Coffee is dead, we grieve for him
And mourn his short-lived reign
For never shall we hope on earth
To see him again.

Cinchona too once raised our hopes
We thought that we really had
A fortune, but to tell the tale
Is very, very sad.

Of how our hopes were dashed to earth
For people will not drink
Quinine all day to make us rich
Unreasonably we think.

And cardamoms need friendly shade
We tried, but oh, the price
Has fallen sadly, and we wish
We’d never grow that spice.

And now queen tea, our eyes are turned
With hopeful gaze of thee,
We look to thee, to bring once more
Our lost prosperity.

Grow sturdy plant, though carest not
For cold or cruel heat,
Soon Kaltura and Pedro’s height
Will bow beneath thy feet.

Grow sturdy plant, our coffers fill
Which long have empty been,
Grow on, we will gladly own
Thee, gentle, gracious queen.

Grow sturdy plant, if thou should fail
To bring us timely aid,
Then must we leave fair Lanka’s isle
Or drop the pine and fade.

Tea Takes Over

The rise of Ceylon as a tea producer is said to be the brightest chapter in the story of private enterprise in the country.

Tea replaced coffee as the staple but in the meantime, two other crops, tea and cinchona were introduced in a small way, with cinchona as the main subsidiary crop. Tea did not turn up among indigenous vegetation, but was imported into the country from India in December 1839. This was about fifteen years after George Bird; the island’s planter had opened the first coffee plantation at Sinnapitiya in Gampola.

The government continued to obtain regular consignments of planting material from India. A delivery of 200 plants received in 1841 was tried out in Nuwara Eliya. These “originals” now deeply rooted in our soil, are still reported to be very much alive on Neasby, now a division of Mahagastote plantations. A further delivery of Chinese varieties were planted on Rothschild estate in Pussellawa at about the same time. Another shipment of plants from Assam followed in 1842, and they were planted on Penylan estate in Dolosbage.

Cultivation of tea was carried out on an experimental basis for a further three decades. It remained so until James Taylor on Loolecondera was able to prove that tea could be grown as an alternative plantation crop to coffee, which was by then on its way out. It was to people such as Taylor, who with foresight and grit, were able to start over again, to re-build their fortunes, risking all they had in their efforts to do so. Hidden in statistics is a story of pluck and courage, that could have had few equals elsewhere.

The rugged life of the Ceylon planter had often drawn admiring comments. The legend is that they were not only hardy individuals, but mighty carouses in their leisure. It is said that, in some cases when time and weather had totally destroyed the crude huts in which the planter lived, the only indication of their original site were the mounds of empty bottles left behind.

The rapid expansion of the tea industry was to a great extent assisted by the country’s topography. The island was blessed with two monsoons, the North East and the South West, and the life giving rainfall from these weather systems fall practically without fail on the range of hills in Central and Southern Ceylon.

It is recorded that the bulk of tea planting in the late 1890’s had been centred in Dimbulla, Dikoya, Maskeliya, Kelani Valley, Dolosbage, Pussellawa, and Matale districts. In 1892, there were eleven estates of over 1,000 acres in extent. They were Diyagama East, Meddecombra, Spring Valley, Dambatenne, Glen Alpine, North Matale, Pallekelle, Westhall, Great Western, Rothschild, and Lebanon. Of these, Diyagama belonged to the New Dimbulla Company, and it was most exclusive with 2,343 acres under revenue. It is probable that Diyagama was the first company owned estate in Ceylon, a fact enshrined in the Tamil name “Company Totom.”

It is no doubt that the efforts of the British planting community of a century ago were made basically in their interests, but it cannot also be denied that they showed grit, in turning away from a crop that had given them their livelihood for a near half century, to focus their confidence and their resources on a plant that had yet to prove itself. Had they not taken these steps, King Coffee would have carried on, despite the blight that eventually ended its reign, and the world would never have known the story of “Ceylon Tea.”

From Independence to Nationalisation

Independence for Sri Lanka was gained through negotiation and not through revolution, as a result the structure of the plantation economy remained largely unaffected. The process leading to independence did not in any way create any social or political groups much different to what existed during colonial rule. Power was merely transferred to a native elite who were eager to maintain ties with the British. It so happened that this privileged few were subordinate to colonial capitalist interests, and offered all assistance to further its interests.

Independence was granted on very clear-cut and practical conditions. They ensured that the colonial economic interests, which centred round the plantations were protected. The granting of independence to the three Asian nations such as India Ceylon, and Malaysia was based on negotiations, and this explains why nationalisation of plantations did not take place in any of these countries immediately after granting of independence.

At the time of independence, two-third of the country’s tea sector was owned by Sterling companies based in London, and managed by British controlled Agency Houses in Colombo. Shipping, banking and insurance for the industry was also controlled by British institutions, while the marketing of the commodity was totally in their hands.

These factors ensured that the British maintained a strong-hold over Ceylon’s economy. This situation largely negated the effects of political freedom. In an attempt to raise funds for ambitious development programmes, the government, after independence, introduced an export duty on tea. Exchange control soon followed in 1952, and the threats of nationalisation that were being voiced with increasing frequency, eroded the confidence of the Sterling companies further. The installation of the Bandaranaike government to the seat of power in 1956 shattered the future hopes of the colonial interests in the country, and this was the start of a process that led to the development of tea plantations in East Africa, as an attractive alternate to Ceylon.

The drift in land policies from the old to the new was a slow process, perhaps due to the amalgamation of interests of the colonial and the native rulers, in the period immediately after independence. Political problems were surfacing fast as a result of population explosion, and restructuring land policies were considered to be the most effective instrument to defuse these uncertainties.

In the political atmosphere that existed after the elections in 1956, Marxists and common citizens were brought into the bureaucratic stage. The Marxists in the MEP government maintained that the excessive profits made by the Sterling companies drained the nation’s economy, while the Kandyan citizens demanded the lands which had been squandered by the British for the plantations. This marriage of the Marxists with the Kandyan interests through the common platform of nationalisation of the plantations was a significant alliance, which was in essence, responsible for the final take over in the 1970’s.

Examination of alliances deserves careful analysis. In the way of Marxist thinking, Mr Philip Gunawardene, the Minister of Agriculture in the MEP government, based his demand for nationalisation on the principle that the “commanding heights” of the economy should be controlled by the state for the benefit of the people, which included the Indian Tamil workers. The programme of nationalisation drawn up by Gunawardene only envisaged the take over of the foreign owned plantations, as the Rupee companies were already considered to be “Ceylonised."

As a seasoned politician, he realised that while the nationalisation of the Sterling companies would be a popular move, any act against the Rupee companies would disturb the strong local land owning power base, which meant loss of votes. The Sinhalese nationalists were not concerned with the Marxist doctrine; their aim was to take over the plantations, including the locally owned estates, for redistribution among the land-less Sinhalese peasants, and to repatriate the Indian plantation workers.

Prime Minister Bandaranaike had his own ideas on the question of nationalisation. He believed that the Sterling estates were among the best run in the world, and contributed significantly to the economy as a vital foreign exchange earner. Although he confirmed in public for political reasons, that Sterling estates would be nationalised, he clandestinely added a stipulation that it would not take place in the near future. He was all the time trying to woe the British to invest in the country, and an attempt at that stage to nationalise the plantations would have endangered this move altogether.

Dr N. M. Perera the Trotskyite realised that the nationalisation of the foreign held plantations was not a matter to be taken lightly, when he said in 1957 “I have not the slightest doubt that the nationalisation of the estates would lead to the British government causing us trouble. It is even possible that there would be joint Anglo-US action to prevent the break up of this capitalist order.” There was also the real fear that the international aid agencies would blacklist Ceylon for future loans. This actually happened in 1960.

Once the threat of nationalisation had been made, it may have been preferable to carry it through, and this was the opinion expressed by Nicholas Kaldor, adviser to the Bandaranaike government. He went further to say, “if nationalisation is decided upon, there is something to be said for giving effect to it as soon as possible.” It was argued that, had the plantations been taken over in the early 1950’s they would have been in a reasonable condition, instead of the rundown state in which they were twenty years later.

Dr Colvin R. D. Silva, the Minister of Plantations in the United Left Front government, was determined to take decisive steps on the path towards land reform. The Republican Constitution of 1972 provided the framework for the nationalisation of foreign owned estates, and the stage was finally set for its implementation.

The Janatha Vimukthi Perumuna insurgency of 1971 also provided a powerful catalyst for land reform. The Land Reform Act of 1972, which professed to take over all private land in excess of 50 acres was in fact a move to calm the JVP, whose programme too included far reaching reforms in the field of land ownership. The Sterling plantations were untouched by this act. In this instance, 563,000 acres came under the control of the government.

The state that Ceylon’s privileged few took over in 1948 was merely a client state, whose centre of power was based in London. The UNP leadership had shared power most amicably with the colonial rulers, and remained under the shadow of the British Plantation interests. After the nationalisation of the British owned plantations in 1975, the public sector became truly identified, at long last, with the country’s march on the road to anti-colonial and anti-capitalist development.

The Land Reform Laws provided the state with an excellent opportunity for solving the innumerable problems which had been raised over the past 150 years, on the question of land settlement.

Unfortunately, the objectives and ideals of land reform have not been achieved, but they have not even been addressed to by the subsequent governments. They merely superimposed the state estate management organisations (JEDB and the SLSPC) over the administrative structures of the Sterling companies and the Agency Houses, with little change in concept and attitude.

It took a further 20 years after nationalisation for the government to take positive steps to restructure the plantations' industries on a more feasible manner. They have now been handed over to the private sector for management.