Until the provision of all the items A 

 has been attended to, village agriculture 

 in Ceylon must remain at the low level 

 1. Given these, as the people get out of 

 the clutches of the moneylender, it will 

 rise to 2, and then improvement in agri- 

 culture, properly so called, begins. 



This improvement must be of the 

 most gradual kind, and every step must 

 be carefully tested by thorough experi- 



108 [February, 1909. 



ments before being recommended for 

 adoption. Improvement of cattle must go 

 hand in hand with improvement of the 

 tools they are to use, and with improve- 

 ment of their food supply, and so on. 



This must suffice as a brief indication 

 of what we are convinced, after 12 years ' 

 study, is the logical order iu which to 

 attend to the improvement of Ceylon 

 agriculture. 



Loans to Native Agriculturists. 



By J. C. Willis. 



Given that loans of money are to be 

 made, whether by Government or Agri- 

 cultural Co-operative Societies, to vil- 

 lage agriculturists, the question comes 

 up of how best to manage it, and how 

 to obtain good security, for in the case 

 at any rate of a Government loan, it 

 would be unsound finance to advance 

 against no security. 



The essential features of the Raiff eisen 

 loan schemes ( by means ot local Agri- 

 cultural Co-operative Societies ) — which 

 have been so wonderfully successful in 

 Europe, and are now extending in India- 

 are that the lending by any given soci- 

 ety is confined to the village where that 

 society is located, that it is managed by 

 a local committee who understand as 

 thoroughly as possible the financial 

 status and reliability of each borrower, 

 and that the liability is unlimited, so 

 that in the event of loss, it falls upon 

 each member of the society in propor- 

 tion to his holding. 



The question then is— Can these prin- 

 ciples be applied to local conditions? We 

 are decidedly of opinion that the strict 

 localisation of loans should be carried 

 out. Let for each small district a local 

 committee be formed, with the Govern- 

 ment Agent as Chairman, and the local 

 headman as deputy chairman, and let 

 this committee be responsible for the 

 making of the loans, which must of 

 course be absolutely confined to their 

 own district, 



The next item is the recovery of the 

 debt owed by the villagers. We would 

 suggest for this the revival of the old 

 levy of 10 % of the crop. This is a tax 

 the villager well understands, and there 

 would be no grievance in its revival, if 

 done soon, while the outcry that might 

 be raised against its being reinstituted 

 as a tax would fall to the ground if it 

 were simply revived for repayment of 

 loans, But as the least that could use- 



fully be advanced to the villager would 

 be the value of his seed paddy—say Rs. 2 

 to Rs. 4.50 per acre— it is doubtful if the 

 10 % tax on the crop, which in many 

 districts is barely ten-fold, would repay 

 the loan with interest at say 12£ %, 

 which must always be charged. We 

 would suggest a 15 % return or even 

 more in most cases, and where this 

 proved to be much too much, some 

 might be returned to the cultivator. 

 By this means the villager should in a 

 few years get so far rid of the load of 

 usury that at present oppresses him, 

 that he might be able to consider the 

 question of actual "agricultural" im- 

 provement. Probably only a lew at 

 first would in any case be willing to try 

 improved crops, tools, manures, or 

 cattle ; but let these succeed and others 

 would follow. 



Next as regards security for the debt. 

 We would suggest, as has already been 

 done by Mahawalatenne R. M., that the 

 greater headmen, as deputy chairmen of 

 the local committees, give security for 

 the amount to be advanced. This they 

 will very commonly be able to do, and 

 if they are at first debarred from 

 advancing more than the value of the 

 seed paddy, while the 10 % levy is 

 pledged for their repayment, there 

 should be no difficulty about this. 



The 10 %, 12h % or other levy would 

 obviously not bring in exactly the 

 amount necessary for repayment, but 

 the figure should be fixed at the nearest 

 2£ % above what is necessary ; e.g., if 

 18 % were considered needful, repayment 

 should be by a 15 % tax. 



In this way the local committee would 

 come into the possession of funds of 

 their own, and these might be again 

 lent in any way that seemed best to 

 them, adhering strictly to the principle 

 of local loans and unlimited liability, 

 and at an interest of say 12^%. As the 

 Government is about to lend for paddy 



