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Unlocking value of paddy land in Sri Lanka

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Overview of its significance in the island:

Rice is the main food source in Sri Lanka, with paddy crops being grown as wetland crops in all districts on approximately 708,000 hectares of land. There are two cultivation seasons for paddy, Maha and Yala, which correspond with the two monsoons.

The Maha season occurs from September to March during the North-East Monsoon, while the Yala season takes place from May to the end of August. However, not all paddy land is cultivated due to various reasons such as water shortages and unsettled conditions.

The Paddy Lands Act No. 1 of 1958, as amended, governs the regulation, control and development of paddy lands in Sri Lanka. Paddy lands are classified into two categories: wetlands and drylands. The Act establishes a Paddy Lands Commissioner and Paddy Lands Tribunals to oversee implementation and resolve disputes related to paddy lands. Rules regarding land acquisition, land use planning, leasing and other management matters are also outlined in the Act. Its aim is to protect the interests of paddy farmers, ensure food security and promote sustainable land use practices. In addition to the Paddy Lands Act, other laws and regulations, such as the Land Development Ordinance and the Forest Ordinance, may also apply to paddy lands in Sri Lanka.

Paddy lands in Sri Lanka are sometimes converted into high land due to various reasons, including farmers finding it more profitable to use the land for other purposes, such as building houses or commercial establishments, or cultivating high-value crops requiring less water and labour. Soil degradation, water logging and other factors may also make paddy lands less suitable for cultivation. Conversions can negatively impact food security and the environment by reducing the availability of paddy land and affecting natural habitats and biodiversity.

Importance of paddy land valuation

Paddy land valuation is important in Sri Lanka for several reasons, including taxation, land acquisition, investment and financing, land use planning and environmental conservation. Accurate valuation of paddy lands is essential to ensure that landowners pay their fair share of taxes, receive fair compensation for their land and that financial institutions can assess the value of collateral and borrower creditworthiness. It also assists authorities in identifying areas suitable for cultivation or conservation.

Approaches to paddy land valuation

The valuation of paddy land in Sri Lanka can be conducted using number of valuation methods and techniques, including the market approach, income approach and cost approach.

Market approach: This approach involves comparing the sale prices of similar paddy lands in the same or similar areas. This approach can provide a good indication of the market value of the land, but it may not be applicable in cases where there are no recent sales of comparable land.

Income approach: This approach involves estimating the income that could be generated from the paddy land over its useful life and then discounting that income back to its present value. Thisapproach is commonly used for valuing income-generating properties and can provide a good indication of the potential income stream from the paddy land.

Cost approach: This approach involves estimating the cost of replacing the paddy land with a similar one. This approach can be useful in cases where the paddy land is not commonly sold on the market or when there is no comparable land available for sale.

In practice, a combination of these approaches may be used, depending on the availability of data and the specific characteristics of the paddy land being valued. Additionally, valuers may consider other factors that can affect the value of paddy land, such as the location, soil quality, irrigation facilities and other amenities.

Factors affecting paddy land value

The value of paddy land in Sri Lanka is influenced by a range of factors, including:

Location: The location of the paddy land is an important factor affecting its value. Lands situated in areas with good infrastructure, transportation facilities and access to markets tend to have higher values than those in remote or less accessible areas.

Soil quality: The fertility and suitability of the soil for paddy cultivation affects the value of the land. Paddy lands with good quality soil and sufficient water supply tend to have higher values than those with poor soil quality and inadequate water supply.

Land size and shape: The size and shape of the land also affects its value. Lands with larger and more regular shapes tend to have higher values than smaller or irregularly shaped lands.

Land use restrictions: Restrictions on land use, such as zoning laws or environmental regulations, can impact the value of paddy land. Lands that are restricted in terms of their use, such as those that are designated for conservation or protected areas, may have lower values than those that are unrestricted.

Market demand: The demand for paddy land in a particular area is another important factor that affects its value. Areas with high demand for paddy land, such as those with expanding urbanization or increasing population, tend to have higher land values than those with low demand.

Crop prices: The prices of paddy crops and other crops grown on the land also affect the value of the land. Higher crop prices tend to increase the value of the land, as farmers can earn more revenue from their crops.

Infrastructure and amenities: The availability of infrastructure and amenities, such as irrigation facilities, roads, electricity, and telecommunications, can also affect the value of paddy land.

Overview of the valuation process for paddy land in Sri Lanka

The valuation process for paddy land in Sri Lanka involves gathering information on physical and legal characteristics of the land, choosing the appropriate valuation approach, analyzing comparable sales, evaluating potential income, assessing costs, combining the results and reporting the findings.

It is important to note that the specific steps involved in the valuation process may vary depending on the purpose of the valuation, the type of paddy land being valued and the data available.

The process should be conducted by experienced professionals with knowledge of the local market and the factors that influence paddy land values in Sri Lanka.

Challenges and Opportunities in Paddy Land Valuation


Lack of data and information: One of the main challenges in valuing paddy land in Sri Lanka is the lack of comprehensive data on land values, sales transactions and other relevant factors. This can make it difficult for valuers to accurately assess the value of a particular piece of land.

Lack of standardization: Another challenge is the lack of standardization in the valuation process. Different valuers may use different methods or assumptions when valuing paddy land, which can lead to inconsistencies and inaccuracies in the final valuation.

Legal and regulatory environment: The legal and regulatory environment in Sri Lanka can also pose challenges for paddy land valuation. For example, complex land ownership structures, unclear land titles and changes in land use regulations can all affect the value of paddy land.


Sustainable agriculture and agro-tourism: There are emerging opportunities for sustainable agriculture and agro-tourism in Sri Lanka, which can increase the value of paddy land. For example, farmers may be able to cultivate high-value crops or participate in eco-tourism activities on their land, which can generate additional income streams.

Technological innovations: Advances in technology, such as precision agriculture and digital mapping, can help improve the accuracy and efficiency of paddy land valuation. For example, digital mapping tools can provide detailed information on soil quality, topography and other factors that affect land value.

Improved data collection and sharing: Improved data collection and sharing among government agencies, private sector actors, and other stakeholders can help address the challenges of data scarcity and standardization in paddy land valuation. This can also help promote greater transparency and accountability in the valuation process.

Importance of accurate paddy land valuation for sustainable development in Sri Lanka

Accurate paddy land valuation is crucial for sustainable development in Sri Lanka for the following reasons:

Promoting agricultural development: Paddy land is a critical resource for agricultural production in Sri Lanka. Accurate valuation of paddy lands can encourage investment in agriculture, which can lead to increased productivity and income for farmers. This, in turn, can contribute to poverty reduction and sustainable economic growth.

Land use planning: Accurate valuation of paddy lands can help authorities in Sri Lanka to identify areas suitable for paddy cultivation and prioritize them for protection. This can help to prevent encroachment and conversion of paddy lands for other uses, such as urbanization or industrialization, which can negatively impact the environment and food security.

Environmental conservation: Paddy lands are important for the conservation of biodiversity and ecosystems in Sri Lanka. Accurate valuation of paddy lands can help to identify areas that are important for conservation and prioritize them for protection. This can contribute to the preservation of natural resources and the maintenance of ecological balance.

Disaster management: Paddy lands are vulnerable to natural disasters such as floods and droughts. Accurate valuation of paddy lands can help to identify areas that are prone to such disasters and prioritize them for disaster risk reduction measures, such as improved irrigation and drainage systems. This can help to reduce the impact of disasters on farmers and the environment.

Fair compensation: Paddy lands are often acquired by the government for various development projects. Accurate valuation of paddy lands is essential to ensure that landowners receive fair compensation for their land. This can help to prevent social conflicts and promote social justice.

In summary, accurate paddy land valuation is important for promoting agricultural development, land use planning, environmental conservation, disaster management, and fair compensation in Sri Lanka. These factors are essential for sustainable development and accurate valuation of paddy lands can help to ensure that they are properly addressed.

Illustration:Gampaha District, Western Province

Thursday, April 20, 2023 – 01:00

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