Study of two Sri Lankan rural development projects managed by the Ceylon Tobacco Co., Ltd.

(CTC), are herein examined. Farmers in both projects look back to CTC days as a time of excellent agricultural advice and input delivery, but in other ways the projects differed widely. In the first project, the Mahiyangana Colonization Scheme, CTC served as sole donor and manager from 1966 to 1980. While CTC's generosity to the 59 project families transformed their lives, it also created strong physical and psychological dependency. The result was an enormous economic and social impact on a small number of people, but not a model settlement. CTC played a lesser role in the second project, Mahaweli System H, Block 9, which at full size served 2,122 families. In 1979, CTC took over management of agricultural inputs, extension, and marketing through an informal understanding with the Mahaweli Authority of Sri Lanka (MASL); the latter remained responsible for water management and nonagricultural functions. A lack of clearly defined spheres of responsibility led to misunderstandings and competition between CTC and MASL. Also, CTC was never able to recover operating costs, even after negotiating a fee from MASL. In 1983 both parties agreed to end the arrangement. Lessons learned are: (1) Giving a private entity partial responsibility within a government system is a difficult task at best and must be supported by good planning documents rather than informal understandings. (2) Great endowment breeds great dependency. A settlement project can become self-reliant, if it sets specific limits on support (avoiding unusual and very expensive inputs), requires settlers to contribute labor and - once harvests are being marketed - money, is sparing in direct staff attention, encourages but does not direct or dominate farmer and water user organizations, and promotes a business relationship with farmers by trying to place agricultural inputs/services in private hands. (3) Donors and agents do best what they know well. A firm like CTC that knows one commercial crop is likely to do well in another but should not be expected to manage community development.