Formal Institutions and Agricultural Development : The Experience of Sri Lanka

Before the changes introduced with advent of Western Colonial power, many of the economic and social institutions related to the peasant agriculture in Sri Lanka were self help and self reliance. Those ancient rural institutions were guided by community leaders, and people participation in the established law and day-to-day administration was very high. After Sri Lanka became a British colony in 1815, the colonial policies under a new administrative system focused mainly on plantation sector development while neglecting the traditional peasant agriculture. It is true that, since the 1920s, certain policy changes regarding allocation of public resources for peasant agricultural development had taken place. However, those changes were not sufficient to fulfill the requirement of rural farmers, and hence their agricultural practices remained basically unchanged. Since Sri Lanka gained independence in 1948, policy makers paid considerable attention to promote the peasant agricultural sector through creating various types of formal institutions. Despite the relatively improved performance, the fact is that Sri Lanka is still unable to get the maximum use of the existing formal institutions and hence the country still lags behind her potential agricultural growth