Gunapala, A.K.

Coconut Research Institute Repository

T H E M A R A W I L A C O C O N U T P R O D U C E R S ' C O - O P E R A T I V E SALES SOCIETY By A.K. GUNAPALA, Publications Officer, Coconut Research Institute of Ceylon. Nearly two-thirds of the Coconut lands in Ceylon are owned by small holders. This fact has an important economic significance. I t means tha t most of them would not be in a position t o own machinery for cultivation practices and the production of coconut products. Facilities for transport, storage would be lacking. A large number of middlemen therefore creep into the industry. Apart from the small holders problem of not having enough capital to bring about the necessary improvements in their small plantations, there is a s tate of indebtedness among them. I t is a common practice for small-scale land owners to obtain advance payment for the crops, which compels t hem to sell the crop at a price dictated by the dealer. In an economic set up of this nature the importance of co-operative action cannot be over emphasised. The Marawila Coconut Producers.' Co-operative Sales Society is one of the most successful Societies of its kind. A study of i ts development and expansion is therefore useful. T h e Format ive Period The Society came into being in late nineteen tlurties, a period of economic hardships caused by the unsatisfactory prices fetched by coconut products. The first step was the formation of the coconut credit society in 1939 for the limited purpose of giving loans to coconut producers in order to prevent them from geting indebted to coconut dealers. As initial capital they obtained a loan of Rs. 2,000/- from the Ceylon Coconut Board and utilized this money to advance credit to members. At the out set, membership was only 28 and the share capital was Rs. 141.50. I t was no doubt a small beginning. Within a few months after the forma­tion of the Credit Society, a Coconut Producer and Sales Society was formed, for the purpose of obtaining coconuts produced by members and manufacturing copra- Since then they have been manufacturing Es ta te copra and white copra. This wasa step forward in the direction of eliminating oneclassof middlemen who purchased nuts for the manufacturing of copra. The "Credit 'Society' and the 'Producers' and Sales Society' served.more 16 or less the same group of members and functioned as separate identities for same time, bu t were amalgamated in 1940 to form "The Marawila Coconut Producers' Co-operative Sales Society". The Marawila Society took the initiative in the formation of the Go-operative Sale Societies Union of Ceylon, to promote the export of coconut products manufactured by member Societies. Having first eliminated the local manufacturer by undertaking manufacture of coconut products, the formation of the Union had as i t 's object to the elimination of the private exporter. A direct link between the producer and the foreign buyer was established with the formation of the Union. The Second World War brought the Society under severe strains. Transport of products to Colombo became a severe problem. Bullock carts were engaged to transport copra to Colombo. The carts on their way-back brought poonac for cattle raised by some members. The War period however was not entirely unfavourable. The copra pr ices improvedtowardsthela t terpar tof this period and the members left a part of the income received from copra sales in the hands of the Society. Apar t from these deposits, the members left fixed deposits in the Society. At the end of 1946, the total amount of deposits of both kinds was Rs. 35,729.60. In this year the share capital stood at Rs. 2,108.68, reserve fund Rs: 2,522.09, divisible profits Rs. 1,669.83. There were 89 members who owned 1,215 acres of coconut lands. I t is evident that the Society has firmly established itself. P e r i o d of Expans ion Up to 1947, the Society was manufacturing only white copra and Esta te copra. Desiccated coconut was fetching high prices during this period. The members realized tha t more profits could be made by turning coconut into desiccated coconut instead of copra. The capital necessary t o establish a desiccated coconut factory was too heavy, for the Society t o undertake this work. A loan of Rs. 150,000/- was obtained for this purpose from the Local Loan Development Fund. The Desiccated Coconut Factory established with this money went into production in 1948. Due to higher profits obtained by the sale of D.C. the nuts supplied by the members to the Society could be paid a higher price. The advantages members derived apparently have induced others in the neighbourhood to seek admission to the Society. In 1948 the membership increased from 69 to 123 and the total share capital from Rs. 2,520.68 to Rs. 22,026.98. The ne t t profit earned during this year was Rs. 151,050.13-The Society was in a position to solve the transport problem they had to face for a long period. They purchased 4 lorries during this year. 17 Year 1949 saw further expansion and progress. A white copra kiln, of the Pearson type, at the exp< use of Rs. 25.000 '- and an office building at the expense of Rs. 20,000 were constructed. Further more they paid back Rs. 30,000. - of the loan obtained from the L.L.D.I•'. The nett profit earned during this year was Rs. 130,575.82. In 1950. a boom year for Desiccated Coconut Industry there was a remarkable increase in the nett profits to Rs. 550,008 30. In this year the balance of the loan from L.L.D.F. was paid back. One-fourths of the profits to be distributed was converted to share capital thus increasing the share capital to Rs. 437,400.8.4 Oil and Fibre mills newly constructed went into production during this year. They writ* now producing a variety of products, as a result of which they were able to produce more of the article which fetched better prices. There was a parallel improvement in the services rendered by the Society to the members. At first, seedlings were issued to members from a Nursery established by the Society under the instructions of the Coconut Research Institute. Later, seedlings were obtained from the Nurseries of the Coconut Research Institute and distributed among members. Payment for seedlings obtained could be made in instalments. Fertilizer* too were supplied on a similar basis. Estate and household requirements were also supplied under easy terms of credit. Conso l ida t ion The period from 1956 onwards was one of consolidating the achieve­ments of the past. In a period of boom, they could afford to continue without paying much attention to organisational matters. Precautions had to be taken against possible'economic difficulties in the period ahead. They carefully studied the process of production and introduced measures to eliminate the wastage of labour power and to use the machines to full capacity. There were further investigations to find the following : 1 Copra —D.C. parity. 2. Copra -D.C. equivalent. 3. Oil and poonac percentages. 4 . Copra - D.C. price conversions. 5. Husk Fibre percentages. 6. Average percentages of No. 1, 2 and 3 copra. The information gathered by the above investigations had helped the Society a great deal in deriving the maximum economic benefit from their operations. IS The administrative set up had to change to cope with the new demands tor greater efficiency, economy and larger business undertakings. A new building to house the Administrative Staff was constructed and costing was introduced into the system of accounting. New calculating machines were purchased. Even though the main concern during this period was consolidation, the situation was far from remaining static. They were alive to the new changes taking place around them. The electrification of the machines in 1961 , at a cost of Rs. 6 0 , 0 0 0 / - was a major change, in the direction of modernisation. When the danger of Salmonella in Desiccated Coconut was brought t o light, this Society was one of the first t o bring about necessary changes to ensure safe production of D.C. free from Salmonella. Quick response to changes that are necessary, may perhaps be one of the causes for successful functioning of the Society in the face of fierce competition. The progress of the Society is further illustrated by the accompanying table. The figures given below give a fair indication of the position of the Society at the end of 11)62— 1. Value of fixed assets and movables after deducting all depreciations as a t 31 .12 .62 . . Rs. 2. Reserved deposit in Banks as at 31 ,12 .62 . . Rs ' Investments in Shares as a t 31 .12 .62 . . Rs 3 . Other Solid Cash in business circulation as at 3 12.62 Cash in Banks . . Rs Members and other Debtors . . Rs Stocks . . . . . . . . Rs 4. Divisible Profits for the year 1962 . . Rs 5. Contributions by members towards Capital Expenditure as at 31 .12 .62 . . Rs A Mode l Socie ty The remarkable progress of the Society, from very small beginnings to the status it holds today should arrest the attention of al! interested in the Coconut Indus t ry and Co-operative development. The principles of co-operation as applied to coconuts have successfully worked a t Marawila, and should serve as ari inspiration to other producers who should apply these principles for the successful consolidation of ihe coconut industry of Ceylon oh a sound, stable basis. 2 8 5 , 2 5 3 . 0 3 1 1 8 , 7 8 4 . 9 1 2 6 , 3 5 9 - 7 0 1 3 6 , 4 5 8 . 2 3 2 0 6 , 0 0 4 . 2 2 4 8 , 6 9 5 . 4 6 3 8 , 1 0 6 . 1 2 1 4 3 , 2 8 3 . 2 4 21 4 1 K 3 ^ '~r: -S' •ft. •Ci, f -it , t ^ N T f. t-> ^ j - m f O f O O gm n ro c i « *<r rO'O W IT) XI CO ( n M wi \ o r - . to n i i rt \o >n M 00 N l>» N • t m h do 3 C S i n M O I n G O f ) O -O ^ 1 m . . . . , I n S'- I n C O I n M f u - ) M co •£ m ^ o o > a c o >-m i n ^ C - I O T <>5 S n C I/) N f ) H i \ in ^ a t Q co — -"i- co m S \ r ; it. « » c » as co X c c-. m to • C - » In (n C< IN . 3 O » !C K K » O i n oo oe o i n c o omo * tq i n g o c> m m m n ro i n o - n > - i « 3 c o m c c o o m c o -*t- m u-> i-o -,o i n s o ro i n w i n -"i- m ^ - w m i n m i n m N t t N N N N m m c c oo O G c o c o ^t- «*> o is CMfl a h \ c <1 ^ 'IL ST' * H cO " 1 - f + h ^ o m a o m O N i n IN In In IN CO " r - J - c o c o r o c o r o r o m • t t rr ^ t •* V c > o a m f-i m m ci m 5 * m o a -t to r o i n i n u-i -T T t" 1 - S3-(N -tf" tN - f rN co to m c o r o ^ i n iS fO J N O "f fO ^ t i n i n i n » n i n i ^ ^ 22 A c k n o w l e d g e m e n t Much information for the preparation of above article was obtained from a publication entitled "A Short History of the Marawila Coconut Producers' Co-operative Sales Society" written l>v Mr. W. W. Mathew Fernando, President of the aljove Society. Writer also Uianks Mr. S, Wijayawecra. Manager of the siune Society fur the information given. 1 23 

The Marawila Coconut Producers' Co-operative Sales Society

The Marawila coconut producers' co-operative sales society

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The Marawila coconut producers' co-operative sales society

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