and Magazine of the Ceylon Agricultural Society. 



501 



THE BAR TO AGRICULTURAL 

 PROGRESS IN CEYLON: 



CHEAP CAPITAL AND HOW TO 

 PROVIDE IT. 

 A ready supply of cheap capital may, wo 

 venture to think, be regarded as the essential 

 primary condition of agricultural improvement. 

 The recognition of the principle has been long- 

 delayed in Ceylon but there is evidence that 

 it is now being gradually achieved. Dr. Willis, 

 in summing up the most noteworthy agricul- 

 tural features of the year 1908, in his recently 

 issued administration report gives premier place 

 to the announcement of the " steadily grow- 

 ing recognition on the part of the public 

 that the real bar to agricultural progress 

 among the poorer natives, who form the great 

 part of the cultivating community of Ceylon, 

 is lack of capital and that it is almost idle 

 to establish agricultural societies and other 

 'agricultural' organizations till this difficulty 

 has been overcome." It was extremely gratify- 

 ing to those who have the well-fare of the vil- 

 lagers at hea'rt and who have for some years past 

 being trying to improve their position by stimu- 

 lating their industries to learn from H.E. the 

 Governor at last meeting of the Agricultural 

 Board that the question of loans to agricul- 

 turists,agricultural co-operation an i agricultural- 

 banks, is one which His Excellency has " very 

 much at heart," and one upon which he is to 

 place his views before the Agricultural Society 

 at no distant date. The Coylon cultivator's 

 methods and practices, antiquated though they 

 be, are the best that are within his reach 

 and without providing him with cheap capi- 

 tal to realise his own ideals there is not much 

 use in placing new ideals before him. The 

 rural Sinhalese are essentially a race of culti- 

 vators and if their position is to be bettered 

 it must necessarily be by the advancement and 

 improvement of their agricultural industries. 

 The goiya is generally regarded as apatheti - 

 cally indifferent to progress and obstinately 

 opposed to change, but recent experience 

 has shown that his immobility and torpor 

 have been to some extent exaggerated. The 

 increased interest in new products and better 

 methods of cultivation which followed the 

 institution of the Agricultural Society by Sir 

 Henry Blake has proved to be more than a mere 

 mechanical response to abnormal stimulation. 

 The revival has gradually grown and evidence 

 of this is being afforded in the numerous 

 and successful agricultural shows being held 

 from time to time in many purely native 

 districts. But progress among the poorer 

 classes, as Dr. Willis points out, and as His Ex- 

 cellency recognises, is impeded by the want 

 of capital. This is the obstacle the well-wisher 

 of the native agriculturist has to overcome. 

 How then can cheap capital be made avail- 

 able to the village agriculturist ? In most 

 countries experience has shown that the best 

 machinery is the organisation of co-operative 

 credit : every agriculturist has a greater or 

 less amount of personal credit at his com- 

 mand, or in other words people believe that the 

 ordinary agriculturist means to pay his debts 5 



and if a number of agriculturists agreo to club 

 their personal credit, the mass of it becomes 

 relatively large, sufficiently so to command a 

 reasonable supply of capital for their common 

 use at much lower rates than they as indivi- 

 duals could hope to secure. It is this clubbing 

 of personal credit that is the foundation of 

 co-operation ; in comparison with it all other 

 questions are mere matters of machinery. 

 Now the question is whether the villagers 

 of Ceylon will or will not club their credit. 

 That was the question upon which much 

 discussion took place when tho question of or- 

 ganising the supply of agricultural capital came 

 within the sphere of practical politics in India. 

 It could be settled definitely and satisfactorily 

 only by experiment and eventually the Govern- 

 ment of India legislated in such a way that 

 experiment was possible. The result was emi- 

 nently satisfactory. We think similarly satis- 

 factory results would follow in Ceylon and we 

 trust the necessary assistance from Government 

 to make a start will be forthcoming. We have not 

 seen Mr Fremantle's last report on Co-operative 

 Credit Societies in India, but we have by us a 

 cutting sent us some time ago of a review of it 

 last year reproduced in an agricultural journal 

 from the Allahabad Pioneer. It deals with the 

 initial difficulties in the matter and we venture 

 to quote tho following, believing it will be in- 

 teresting, if not helpful, to those in Ceylon who 

 are now considering this question ; — 



"It must thon, we think, be taken as settled 

 that the agriculturists of the United provinces 

 already value, and will appreciate more and 

 more, the benefits to be obtained by clubbing 

 their personal credit, and that they can make 

 a wise use of the capital which their clubbed 

 credit commands. The question of the hour is 

 how to bring them in touch with sufficient float- 

 ing capital to meet their immediate needs. 

 Ultimately the accumulation of deposits, com- 

 pulsory and voluntary, will mean a huge addi- 

 tion to the capital of the country, but it can 

 hardly be expected that the societies will as a 

 body stand entirely on their deposits for many 

 years to come, and some capital must come 

 from outside. It is satisfactory to learn from 

 the report that the problem of the supply of 

 working capital has been attacked in various 

 ways, and that the line of least resistance is 

 now fairly clear. The rural societies are 

 financed in some cases by district or town 

 banks, and in others by central banks or by 

 individuals who combine philanthropy with a 

 good yield on sound security, but the first 

 method appears to promise best. District and 

 town banks are now springing up rapidly, and 

 are collecting tho floating capital of land- 

 holders, officials and professional men for dis- 

 tribution to the rural societies which they 

 finance; some of them are already able to 

 secure fixed deposits for as little as six per cent, 

 already they have an aggregate working capital 

 of over five lakhs and they have paid dividends 

 varying from '2i to l^i per cent, besides putting 

 aside substantial reserves. The rural societies 

 which borrow from these banks are as a rule 

 applying their compulsory deposits to the 

 acquisition of shares in tho bank with which 

 they deal, and will ultimately, we hope, gain, 



