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Thursday, 13 January 2011






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Agriculture revival

First step in the way forward:

The following are excerpts of a paper presented at the 23rd OPA Annual Sessions by Lloyd F Yapa.The purpose of this paper is to discuss the much neglected subject of development of agriculture in view of the readiness on the part of the country to undertake a major economic take off (and achieve prosperity in 2020) in the aftermath of the defeat of terrorism and the unification of the nation

Agriculture contributes about 12 percent to the GDP. About 70 percent of the population of about 20 million people still live in rural and estate areas. Approximately 41 percent of the people are poor.

The fact is that most of these poor live in rural areas. However,if the incomes of the mass of such people can be raised substantially the greater demand for goods and services that would result, without doubt, could drive up rates of economic growth. In fact most of the high performing economies of Asia such as those of Japan, Taiwan and South Kora, started their march towards prosperity through manufactured exports via land reform, (land consolidation and not distribution as under land reform in Sri Lanka). Surprisingly policy makers enamoured with more glamorous goals like industrialization or converting Sri Lanka into a services hub tend to ignore this approach. It is therefore time, policy makers pay greater attention to the development of agriculture to help in the realization of the economic growth rates of 8 or more as envisaged in the Mahinda Chintana – Idiri Dekma.

Land consolidation

More than 80 percent of the land in this country is owned by the State. Government has been parcelling out land to rural farmers under the Land Development Ordinance (LDO) and providing irrigation to dry zone areas in the hope of raising the level of agricultural production.

The average extent of such parcels has been 2 acres, which is too small for obtaining economies of scale (reducing average or unit costs) and improving productivity/competitiveness. The farmers do not own land under this system. The farmers therefore engage in subsistence farming and are not inclined to invest in farming as a business.

What is important here is the scale of production to reduce unit costs and being able to afford the acquisition of the necessary technical/ managerial/marketing expertise and technologies including machinery and equipment, to improve returns especially by adding value to products.

Those who sell their fragments of land with the implementation of land reform have to be provided with other job avenues such as in agro industries and services preferably in the rural areas themselves.

State or private sector?

The State alone cannot bring about this transformation. Perhaps it could provide the planning, the (land reform) laws, appropriate policies/incentives and the basic physical and social infrastructure to facilitate the process. The rest should be the responsibility of the private sector as plenty of opportunities to make profits exist, if (rural) agriculture were to be commercialized.

Company led model

There are several models, that could be used to get the private sector involved; in order to obtain the optimum results, this step should be preceded by land reform to vest the ownership of holdings with the farmers. The first can be described as the ‘Company Led Model’ (CLM), where parent companies could provide the inputs, extension services and marketing. The Ceylon Tobacco Company type of this model may be suitable for products, where the only buyer is a parent company.

Outgrower model

However, there could be variations of the above model, where the parent company may have a nucleus farm and the others are out-growers adopted by the former.

Internet enabled model

With the development of information and communication technology, electronically networked versions of the model have been making their appearance.

For example, according to the article, ‘Serving the World’s Poor Profitably’, Harvard Business Review, September 2002, the agro business division of ICT, one of the largest companies in India, had been connected with some 600,000 farmers through 970 internet-enabled kiosks.

As reported there, the farmers of some 5,000 villages in India, supply the company with farm produce such as soy-bean, coffee, shrimp and wheat. The ICT, through this program “helps increase farmers’ productivity by facilitating the supply of quality inputs... The kiosks also serve as an e-procurement system, helping farmers earn higher prices by minimizing transaction costs involved in marketing farm produce.”

Such a process, if properly planned and co-ordinated could yield enormous benefits. Farmer incomes would rise. With rising incomes, food clothing, shelter and other necessities of life would become available to most people in rural areas relieving them of poverty.

The rise in purchasing power will create markets for industrial goods produced in the urban areas of the country and other businesses including Small and Medium Industries set up in the rural areas themselves.

Questions and Answers

Right of Pradeshiya Sabhas

Question: I am the complainant of one district court case regarding compensation. One respondent of it is the Pradeshiya Sabha. The complaint was damage to a built structure by the local authority within my own land contrary to the powers vested under the Pradeshiya Sabha Act.

Is there any possibility to spend fund of Pradeshiya Sabha or public funds for private lawyers instead of State counsels comply to the clauses of the said Act with or without the consent of Commissioner of Local Government. If it is not so, who should I complain it to?

H A W-e-mail

Answer: When we made inquiries from the Attorney General’s Department, we were made to understand that Pradeshiya Sabhas are free to appoint private lawyers.

They are not obliged to go through the Attorney General’s Department. If there is any contravention by the Pradeshiya Sabha the District Court Judge would have raised this question.

Therefore there is no point or any purpose on your complaining about this matter.

We hope that you will be successful in getting the due compensation through this case in the District Court.

Apartment ownership

Question: My daughter is living in an apartment, for which she paid full price and also signed a Sales Agreement. According to the Sales Agreement, the vendor has to sell to the vendee, the residential condominium ‘free from all encumbrances’ However, even after the lapse of several months, the Property Developer/Vendor has not given the deeds to the apartment:- When questioned, I am told that there is a mortgage on part of the land on which the property stands and there is delay in transferring/redeeming this mortgage from the original party. Isn’t this a contradiction of ‘free of all encumbrances’? When we examined the apartment prior to purchase and even at the time of signing the Sales Agreement, we were not told of this impediment.

We are also charged maintenance each month and to our surprise, charges for certain services are increased substantially, without our consent. We have protested but so far there has been no response. Since it is our money being disbursed, are we not entitled to be consulted and our approval obtained prior to such increases? A request for a meeting with the developers are also not heeded.

We are not provided with proof that the charges levied are in fact given to that category. How are we to know that, for example, the Security Service is actually given the sum of money charged from the owners?

I shall be grateful if you would kindly let me know what redress we have in this rather hopeless situation.

Ranjith Fernando Colombo 7

Answer: Your daughter is facing two problems, one of not receiving the Deed. The other is one of unfair maintenance charges. Your daughter as a resident or an owner of a Condominium Apartment has the right to form a Management Committee or Corporation along with other residents and register it with the Condominium Authority of the National Housing Development Authority (NHDA).

Their office is on the 1st floor of the NHDA building at Sir Chittampalam A Gardiner Mawatha, Colombo 3. (It is near to the Regal Cinema and the Lake House). Their telephone No 011-244742. You can collect a form for the registration of Management Committee by making a payment of Rs 288.40. Once the residents even though the Apartment is not fully occupied, complete the form and hand it over.

They should be able to register the Management Committee None receipt of the deed is not a barrier for registration of the Management Committee. Once you register, the Committee can seek the assistance and advice the Condominium Authority in obtaining the Deeds as well taking over the maintenance by the Management Committee or to negotiate an acceptable maintenance fee with the owner.

Cheque issued without funds

Question: I have lent to a childhood friend a sum of Rs 1,000,000 (one million) for a business, eight months ago. She has given me a cash cheque for the same amount. Kindly let me know how I am to get this money back as she says that there is no money in the bank at present and not to present it to the bank.

What are the options if I present it to the bank? Do I have to go through a Court case? The cheque is dated 20-10-10. How long is the cheque valid?

D Perera Nugegoda

Answer: Your undated question was received on 21-12-10, so how could you expect an answer by 21-12-10 which is Tuesday, not even 23-12-10 which is a Thursday. Any how due to holidays, this may appear only by Thursday 13/01/2011.

In your case either you have to think of your childhood friendship or your money. In case you want to keep your friendship you have to hope and wait that you will get your money back someday. If not you have to forget about your friendship and try to recover your money.

In this case you should without delay present the cheque for payment preferable to the same branch of the Bank on which the cheque has been drawn. You may warn your friend about it. Once the Bank rejects the cheque for non-availability of funds, you should take the cheque to the Police-Colombo Fraud Investigation Bureau at No. 5, Dharmarama Road, Colombo 6.

The Fraud Bureau will record your complaint and summon the drawer of the cheque and if not settle, the police will file action against your friend in courts as a criminal case. Thereafter your friend will have no choice but to settle your dues. If the cheque is issued on a bank in Colombo, you should go to the Colombo Fraud Investigation Bureau or if it is on a Bank in Nugegoda, you have to go to the Mirihana Police - FCIB Branch.

Refund of EPF

Question: This has reference to your reply in the Daily News on December 2, 2010 under the caption ‘Questions and Answers’ against my question of ‘EPF Balance’ payment.I thank you for your valuable advice in this regard.

However, I give below further information for your easy reference and an early action please.

* I have already provided my EPF No as 16,428/c-838 which you have erroneously taken as under payment Rs 16,428.

* I was paid only Rs 11,202/73 for three months, where as I have worked - 13 months (June 2008 to June 2009) copy of EPF Central Bank form Rs-426 is attached herewith

* Enclosed copy of letter d/05-03-10, addressed to me by the ACL, Panadura saying that I am due for under payment, as my employer has paid (EPF Contribution) with the penalty for his late payments.

* Enclosed one copy of letter d/19-10-2009 addressed to the Superintendent, EPF, Central Bank, Colombo-01, by the ACL of Panadura saying my employer has settled all dues, including my contributions.

* Enclosed copy of application-refund of unpaid balance d/05-05-2010 under Ref. No EPF/AC/PP/Cor. And one officer at Central Bank, Colombo has quoted Ref: U-134.

Awaiting your favourable reply through the ‘Questions and Answers’ in the Daily News paper.

- Concerned Bulathsinghala

Answer: Thanks for forwarding all relevant information which helped us to sort out your matter. Sorry about the mistake on our part of not identifying your EPF number due to lack of clarity. We checked up with the part payment section of EPF at the Central Bank of Sri Lanka. The Tel No 011-2477224.

After checking up they confirmed that your payment will be sent to your Account on 14/12/2010. By the time this Q and A appear in the Daily News, hopefully Rs 38,690/73 would have been credited to your account at Seylan Bank, Horana. If you have not already found this out from your bank, you may now check up. If in the rare instance of this amount not being credited to your account you may call the above indicated telephone number and made an inquiry or contact us.


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