Agrarian Markets and Co-operative Challenges

Co-operatives are gaining ground in the North. The co-operative movement serving small producers grew into a rural giant during the middle of the 20th century in northern Sri Lanka. Battered by the civil war, its limbs broken, but its brain and arteries surviving the bombardment, this sleeping giant is now awaking with a turn to food, agriculture and rural production amidst the most severe economic crisis in our postcolonial history. 

The entire country is facing shortages and price hikes of food. However, it is not clear if the co-operative system in the southern part of the country – dismantled for the most part by four decades of neoliberal policies – can be revived. Great economic crises bring about tremendous human suffering and major social changes for better or worse. In this column, I consider some changes in the markets for food, relate that to some insights about rural livelihoods particularly of women, and suggest some ideas about agrarian change, meaning changes in people’s relationship to crops, livestock and fisheries.

Spending on food 

There is a great inequality in people’s spending on food. For example, when considering food expenditure as a ratio of total household expenditure, the wealthy 10% spend less than a sixth on food compared to the bottom 40% who spend over half of their total expenditure on food. Furthermore, when considering expenditure on food of the entire population, over 40% of all food expenditure is on fish, rice, milk and coconuts. (Household Income and Expenditure Survey 2016)

The emphasis on food – and the few essentials, I have chosen such as fish, rice, milk and coconuts – are important for the working people in particular. Furthermore, it is that section of the population that also form the membership of the co-operatives in the North. However, access to natural resources determine possibilities of producing some of these essential foods for their own subsistence. For example, a couple of acres of paddy land assures rice throughout the year for the household, half an acre of highland often comes with coconuts and vegetables for home use, a couple of cows and access to pasture land will ensure milk for the family, and proximity to the ocean or ponds can ensure fish on the table. In short, rural households with access to resources, particularly land and water, are better able to withstand the current crisis.

"As markets and homes become intertwined with production and consumption, women inevitably will play an even bigger role. For the co-operative giant to rise up in the North, it will have to lean on the shoulders of women"

The point I want to focus on is how the national economic crisis leading to changes in agrarian markets have opened some opportunities for small farmers and fisher folk. A noticeable recent phenomena are the many women lining up at the coconut oil mills with home-made copra; this is both a consequence of the increasing price of cooking oil as well as health concerns about the use of palm oil and adulterated coconut oil. Similarly, dry fish production in coastal areas by women are on the rise as they increase production to meet the higher demand created by import restrictions on seafood; particularly shortages and price increases in tin fish, dry fish and sprats due to Sri Lanka’s ongoing balance of payments problems. Indeed, it is a shameful state of affairs that until two years ago, an island nation like ours was importing seafood on the order of US$ 200 million each year.

Women producers

These changes in rural production have important implications; unless co-operatives step up marketing, the rural producers will continue to be exploited by the traders and large corporations. Given that such agrarian changes today are driven by markets, co-operatives focusing on credit, production and local consumer outlets, should also engage the broader dynamics of markets. 

While there is a dearth of research on agrarian markets in Sri Lanka, scholars such as  Prof. Barbara Harris -White and Prof. Sukpal Singh have done considerable research in this field in India, and South Asia more generally. They have shown how changes in agrarian markets – including through changes in state policies and the expansion of private markets and super market chains – have adversely affected small producers. Their insights on conceptualising markets, including how markets might reshape production with some actors gaining and other such as rural women producers losing out, require careful consideration in Sri Lanka. For example their research shows that drastic market reconfiguration driving changes in production practices in rice milling and contract farming are gendered, where women’s incomes are reduced or their livelihoods dispossessed.  

Going back to the two examples of coconut oil and dry fish by small scale producers, there is great seasonal and regional variance that not only affect their sustained engagement with markets, but also their bargaining power when they have to compete in the national market. Traders exploit such variations in production to their advantage by making these rural producers price takers. 

This is where the co-operatives in the North are initiating agricultural collection and marketing; where co-operatives absorb the risks and costs of marketing, particularly for women producers. Furthermore, provincial co-operative federations for example can bridge the seasonal variation of fish production in the western, northern and eastern sections of the long coastline of the Northern Province. Dry fish produced in Palali, Mannar and Mullaitivu during different seasons can all be marketed throughout the year in Vavuniya. Next, these essential foods whether it is fish, rice, milk or coconuts are not just for the export market often cornered by large corporations, rather such products and their distribution serve diverse markets and uses; from subsistence needs provisioned by women, supplies for the rural shops and meet demand in national markets. Therefore, the vast infrastructure of co-operative shops, over 450 shops in the North, are important along with strategic assets such as trucks for transport and outlets in urban centres. 

The next few years will be times of great fluctuations and drastic changes in agrarian markets. The impact of markets are going to be felt in the setting of priorities for rural production; whether it is the type of fish to be caught, the amount of land to rent and type of crop to be cultivated, the number of cattle to be raised, and how to process the coconuts and fruits that are harvested. Moreover, market changes are also going to determine what households consume. As markets and homes become intertwined with production and consumption, women inevitably will play an even bigger role. For the co-operative giant to rise up in the North, it will have to lean on the shoulders of women.