Farmers turning to tuk-tuk drivers
View(s):One fine evening, there was a surprise phone call from a friend whom I hadn’t met for a long time. It was Nalaka Mendis, a former Professor at the Medical Faculty of the Colombo University. I shouted over the phone: “What a surprise, after such a long time!”
He replied: “Yes, yes; it has been a long time. I thought of giving you a call, after I read your interesting story on “Digging holes and filling them up” – very informative”.
“Oh… thank you. So how are you? And where are you this evening?”
“I’m doing great, and actually relaxing too. Now I’m mostly in Diyatalawa.”
“Oh… yes, I remember your ‘holiday bungalow’ in Diyatalawa. We used to drop there for a fresh cup of upcountry tea, when we were travelling those days to Moneragala along that route.” I reminded him about our association with a research project in Moneragala.
He revealed some different news. “The house was damaged recently, because a tree fell down on it from the hill.” What he said next was interesting: “I learnt then that the trees in the forest belong to the Forest Department, but not the trees that fell down.”
I replied: “Of course, if there were monkeys on those trees, they might belong to another department! By the way, sorry to hear that anyway, but this is not the first time I hear about ‘falling trees’ in Diyatalawa”.
He responded: “Absolutely; similarly a tree fell down on a bus, killing a passenger in it – a student from Uva Wellassa University.”
Changing landscape
As we continued our discussion over the phone, he gave me a description about the present outlook of Diyatalawa town and how it has changed so rapidly. As a city-dweller in Diyatalawa, he must have observed the changing landscape of the small city much more than any occasional visitor.
Diyatalawa is a small city in the hill country with narrow roads located on a mountain slope, while part of the mountain was covered with a forest reserve. Anyone who travels to the cities in the Central or Uva or Southern provinces might remember its surrounding beauty, fresh flowers and vegetables, and the cool breeze through the hill tops.
When people talk about Diyatalawa, what immediately comes to their mind is “calm and cool vacation spot” to get away from hectic lifestyles.
My curiosity was aroused, however, by a piece of information that Nalaka revealed while talking to me: The town is already squeezed by mountain walls and cliffs, trees, buildings, while every tiny space left along the narrow town stretch is now encroached by tuk-tuks; there are 400 plus tuk-tuks in the town so that travellers don’t find a parking space to stop anymore in Diyatalawa!
Progress or regress?
My curiosity was about what kind of economic factors drive the thriving tuk-tuk industry not only in Diyatalawa, but also in all the urban locations throughout the country. There are over one million tuk-tuks registered in Sri Lanka; over 100,000 new registrations as of 2015, has now declined to just 20,000 in 2018 in response to recent tax hikes.
File picture of a parched paddy field in Sri Lanka.
I did some research to find out the answers. Even before I found anything, I knew one thing: For good or bad, the increase in tuk-tuk business was a response to emerging market opportunities. If people didn’t respond as such, it must have been an irrational behaviour, assessed by economic principles.
I must also emphasise that emerging market opportunities may not be a result of progress only; it can also be a result of regress too, which might be important for our discussion.
In Diyatalawa, the majority of tuk-tuk drivers were the farmers in the surrounding areas. Some of them have virtually abandoned farming to shift to the tuk-tuk business, while others have made farming a “part-time” work, in order to devote full time or more time for the tuk-tuk business.
In addition, I found there were craftsmen such as carpenters, sales workers, and even retired public sector employees.
Give subsidies, not lands
An important economic determinant of switching from one type of occupation to another is the lower opportunity cost: What is lost is not worth, compared to what is gained! As per my observations, even on a worst day the income of a tuk-tuk is around Rs. 2000 in Diyatalawa, which might go up to around Rs. 4000 in a normal day. And most importantly, a daily income is almost guaranteed because a tuk-tuk rarely goes a day without any income.
It is highly unlikely that farming in Sri Lanka could guarantee an income as such, and a regular income. One of the major issues is related to “small-scale farming” practices in Sri Lanka.
On the one hand, the average farm size which is estimated to be little more than 1 acre, has been considered to be too small for an average family to produce a competitive output and to earn a sufficient income. On the other hand, even those small farm plots get fragmented from generation to generation and get smaller and smaller. Consequently, small-scale farming has increasingly become commercially unsustainable.
By the way, much of the rural farm lands in Sri Lanka are under government ownership so that the farmers actually do not have the legal rights to convert it to a productive asset. This has prevented the long-term land consolidation too. The farmers too hold on to their “unproductive” lands, in spite of the lack of commercial viability.
Expansion of non-agriculture
It is the traditional rural agriculture sector, which has released the unproductive labour from subsistent agriculture to productive use in the industry and services sectors. This has been the development experience of any developed or developing country in the world.
If it is a fact, here comes another problem: We have over 2 million labour force I would say, “trapped” rather than “employed” in the agriculture sector without a way out. Some of these people are willing to leave it, as we have seen with urban-rural migration in the country.
The issue is, however, that economic growth has been sluggish, and that industrialisation and service sector expansion towards the peripheral regions have been dismal. There is labour supply in the rural sector, but where would they go without demand. At least some of them would choose the thriving tuk-tuk business.
Cash-strapped local governments
The tuk-tuk business is an informal transport industry that has emerged in response to the market need. It has also been a response to the public transport problem. Thus, tuk-tuks fulfil the transport needs of the country too.
Cash-strapped local governments also come to the picture. By charging a “monthly parking fee”, they have made it a legitimate business activity, in spite of its informality. Thus, increased number of tuk-tuks in the locality is welcomed by the local governments too although they don’t really perform any worthwhile role there.
Being informal, but with the need for defending the legitimate rights, the tuk-tuks in urban locations have also formed their own “trade unions” and adopt their own rules and regulations for “my road and my style”. They also demarcate their trade rights preventing others’ interference, ensuring their incomes and welfare, and protecting the territory from rival intruders.
Two-way response
The market responds to people’s requirements, and people respond to market opportunities. But markets need to be guided with regulations, when they are not moving in the desired directions.
By the way, there is one more thing to say: It is natural that people move upward in the process of social mobility until and unless they come to the days of owning a motor car, a tuk-tuk is an affordable choice for the lower income strata group.
(The writer is a Professor of Economics at the University of Colombo and can be reached at sirimal@econ.cmb.ac.lk).