Unproductive plantation land takeover brews fresh crisis

The Government’s plans to takeover unproductive plantation land as announced in Budget 2012 have stirred a fresh round of concerns among the private sector.

Analysts said that the impact of the move is likely to have factored in the 3% dip in plantation sector price index yesterday in the Colombo stock market, whilst the bourse dipped by 1% as investors remained sceptical about the 2012 Budget’s fortunes.

Though commending the Budget overall, the Ceylon Chamber of Commerce with regard to the plantation lands identified as lands that are not used productively and which are to be reallocated, proposed that any measure to reallocate lands should be taken in consultation with the Regional Plantation Companies, being mindful of the plantation management aspects.

President and Finance Minister Mahinda Rajapaksa in his 2012 Budget presentation on Monday recalled that in the previous 2011 Budget speech, it was proposed that all lands given to the private sector that are not utilised for the purpose for which lands were given would be taken back by the Government.

“We have identified around 37,000 hectares of land that are not being used in the plantation sector. As these lands have not been put into productive use since the privatisation of plantation land in 1992, I propose to take steps to enter into alternate 30-year lease arrangements, having demarcated two-acre blocks from such identified lands to be distributed among smallholders,” the President said.

“Steps will also be taken to extend suitable financial assistance to such smallholder families to enable them to develop the lands. In addition, high quality seeds and planting material will also be provided to them,” the President added.

Several broking firms in their analysis of Budget 2012 had emphasised that the move would impact plantation companies’ prospects as well as attractiveness, whilst some said other positive measures are likely to cushion any impact.