By R.H.S.T. Samaratunga
Ceylon Cinnamon has been one of the world’s most sought-after spices for centuries, particularly since the 16th century. At one time, this commodity was considered more valuable than gold. Historically known as ‘true cinnamon,’ Cinnamomum zeylanicum from Sri Lanka induced colonial conquests and competition, igniting conflicts across Asia for centuries as colonial authorities pursued monopoly and control.
European nations from the 16th century onwards were drawn to its lucrative trade and made cinnamon a central element of their colonial enterprise and commerce in Asia. Today, Sri Lanka remains the world’s leading producer and exporter of Ceylon Cinnamon, supplying about 85–90% of global demand. It is also the country’s fourth largest agricultural export, supporting the livelihoods of more than 70,000 smallholder growers and approximately 350,000 workers.
Government interventions over the centuries helped transform Sri Lanka’s cinnamon industry from a forest-harvested product into a structured, regulated, and modern enterprise.
Cinnamon enterprise in the early colonial period
Sri Lanka’s cinnamon industry has a long history, one that goes back prior to the arrival of Europeans on the island in the early 16th century. It became a structured and regulated industry, however, only after European colonial intervention in the island.
The advent of the Portuguese in Sri Lanka in 1505 formalised the control of the international trade in cinnamon. The Portuguese captains general in Sri Lanka made deals with Sri Lankan kings to secure quotas of cinnamon annually, while collecting cinnamon produce by force in the island’s territories under their control. Accordingly, a money-spinning cinnamon monopoly was formed by the Portuguese through both the association and military might.
By the middle of the 16th century, the Portuguese held unqualified control over the international cinnamon trade, and the severity of the control was such that the death penalty, among others, was imposed on those smuggling cinnamon out of Sri Lanka. It was so lucrative that European markets paid over 2,000% markup on Sri Lankan cinnamon in the middle of the 16th century.
This severe extraction of cinnamon-based fortune, though it generated seeds of resistance among Sri Lankans of the day, enriched the Portuguese for nearly one-and-a-half centuries until the middle of the 17th century.
The Kandyan Kingdom, in 1638, formed an alliance with another European colonial power, the Dutch, to eject the Portuguese from the island. The Vereenigde Oostindische Compagnie (VOC), the Dutch East India Company, had taken control by 1658 of all territories of the island held by the Portuguese. Then, the Dutch held the monopolistic enterprise of cinnamon, guarding it even more passionately than ever before.
The Dutch went further by transforming cinnamon, which had been gathered from the forests of the island, into a plantation crop. Accordingly, for the first time in history, the organised cultivation of cinnamon was introduced to Sri Lanka. Dutch Governor Willem Falck successfully cultivated cinnamon plantations around Colombo between 1765 and 1785, and found that cinnamon could be grown at scale as a plantation crop in the island’s wet zone.
By the late 18th century, previously wild cinnamon trees were being cultivated in plantations and homestead gardens largely across the island’s western and southern wet zones, leading to a rapid increase in the country’s production. The Dutch maintained control over Sri Lanka’s cinnamon production and trade until the end of the 18th century, exporting large volumes of this valuable commodity annually to the European markets.
The Dutch rule also pioneered the introduction of a formal government regulatory system for Sri Lanka’s cinnamon industry. The VOC established a dedicated cinnamon department (the Department of Mahabadda), headed by the ‘captain of cinnamon,’ to firmly control cultivation, peeling, collection, storage, and export, as well as to regulate those engaged in the industry, particularly the peeling and processing community.
All cinnamon peeling was restricted to members of the Salagama caste, who were forced into peeling service as a hereditary obligation under this bureaucratic department of which the top echelons were manned by the Dutch themselves, whereas the lower grades were managed by locals, including hereditary mudaliars.
The sole aim of the Dutch colonial authorities in this exercise was to prevent any other nation or local group from seizing the prized commodity, cinnamon, which yielded fortunes in Europe. Even cinnamon grown in the then independent Kandyan Kingdom had to be transferred, on agreements, to the Dutch.
Accordingly, the Dutch had designed procurement schemes in such a way that nearly all cinnamon on the island, whether from the Dutch territories or not, streamed through the VOC to the world. Hence, of all the Dutch monopolistic enterprises in the island, none was more enviously guarded than cinnamon.
However, the oppressive system of the procurement of cinnamon, particularly in Dutch-held territories, created conditions conducive to the formation of resistance, leading to uprisings against the Dutch from time to time by the local communities associated with the industry. Dutch records noted a 1723 uprising in the Negombo region, where the cinnamon-peeling community, objecting to the brutal and unbearable annual harvest quotas imposed by Dutch Governor Johan Schaghen, had destroyed cinnamon godowns.
Besides, the tight control of the industry by the Department of Mahabadda was such that severe penalties were inflicted upon any person who cut cinnamon shoots. Persons who unlawfully peeled cinnamon shoots, extracted oil from bark or leaves, or produced camphor from roots were liable to punishments including death or banishment to the Cape of Good Hope in South Africa for a term of 25 years.
Such episodes emphasise how deeply the cinnamon industry had become intertwined with the island’s Dutch colonial authority and the severity of local resistance.
British era reforms
At the time when the British captured the Dutch territories of the island in 1796, cinnamon’s significance as a commodity of international commerce was already beginning to dwindle in the European markets.
The British inherited Ceylon at a time when cinnamon’s global monopoly was on the decline. The competition both from substitutes and alternate supply sources had increased by 1800, resulting in a decrease in its international prices.
British colonial records from the early 19th century indicate that coffee and tea were rapidly rising to dominate Ceylon’s exports due to colonial commercial preferences, while cinnamon, though still profitable, had been relegated to a place of secondary importance in colonial export priorities. Yet, the island still had around 40,000 acres under cinnamon plantations even by 1850.
The British rulers dissolved the VOC’s monopolistic cinnamon department (the Mahabadda) in the 1830s, freeing the industry from the forced labour system inherited from the Dutch period and creating space for local entrepreneurs to participate fully in the industry.
In fact, the hereditary mudaliars of the coastal wet zone were encouraged to grow cinnamon independently, without direct government involvement, during the first two decades of British rule. As a result, they became one of the principal entrepreneurial classes of the early British colonial period, having generated significant surpluses from the cinnamon trade.
This liberalisation process also brought a vast number of smallholder cinnamon producers into the industry across the wet zone, establishing a production and ownership structure that continues even at present. It is widely known that an estimated 85–90% of Sri Lanka’s cinnamon is currently produced by small-scale farmers on their own land.
Three decades after independence
After independence in 1948, Sri Lanka prioritised tea, rubber, coconut, and rice in the country’s respective development programmes, while minor export crops like cinnamon received minimal State attention in its development policies.
It was not until 1973 that the Government took serious notice of the need to resuscitate and regulate the cinnamon industry, for which a new entity called the Department of Minor Export Crops, under the then Ministry of Plantation Industries, was established, having recognised the value of the commodity for generating foreign exchange in the context of promoting non-traditional exports.
This was a time when Sri Lanka faced severe shortages of foreign currency reserves. Accordingly, the promotion of non-traditional agricultural exports, including cinnamon, was positioned high on the Government’s policy agenda.
In fact, the new incentive scheme called the Convertible Rupee Account (CRA), introduced in 1972, included cinnamon as one of the commodities eligible to receive benefits under the scheme. The CRA was designed to boost non-traditional exports by allowing exporters to retain a portion of their foreign exchange earnings without surrendering them to State control.
The department (later named the Department of Export Agriculture) marked a renewed public investment in the spice industry from then onwards.
Post-1980s reforms
A series of actions towards the meaningful modernisation of the spice industry began in the 1980s, as the Government recognised that it needed to protect and enhance its role in the world spice market.
In the mid-1980s, the Government’s National Agriculture, Food, and Nutrition Strategy recognised the importance of spice products, including cinnamon, for the expansion of cultivation, having understood their potential for export promotion.
Subsequently, for the development of the industry, a National Cinnamon Research and Training Centre was established in Thihagoda in the Matara District, a principal cinnamon-producing region, for the purpose of improving Research and Development (R&D) activities, and it was complemented by farmer training and extension programmes as well.
By 2010, improvement of product quality became an essential element in the promotional programmes. Accordingly, the Sri Lanka Standards Institution (SLSI) introduced standards such as SLS 81:2010 for Ceylon Cinnamon to combat contamination with cheaper cassia imports.
Regulators of the cinnamon industry began to crack down on exporters trying to sell inferior cinnamon varieties as Ceylon Cinnamon. Beginning in the early 2000s, the Sri Lanka Ports Authority in Colombo initiated action to search for and seize cassia mislabelled as Ceylon Cinnamon as part of the Government’s quality-enforcement measures and to protect the local industry from contamination.
Such steps were decisive in the preservation of the country’s reputation, as foreign buyers had often been deceived by cheaper substitute cassia, primarily from Southeast Asia, being sold under the name of Ceylon Cinnamon.
Another significant landmark action taken by the Government was to pursue Geographical Indication (GI) protection for Ceylon Cinnamon. After years of Government efforts in this respect, in 2013, Sri Lanka was able to register Ceylon Cinnamon as a GI nationally, and the Government’s decade-long effort later ensured the recognition abroad as well. This became finally successful when the European Union (EU) bestowed Ceylon Cinnamon a Protected Geographical Indication in 2022.
The GI status was a milestone game-changer, yielding legal protection for the name ‘Ceylon Cinnamon’ in the EU and in countries elsewhere. This recognition thwarts low-quality substitutes from being sold under the name of the finest cinnamon.
With the GI recognition now in place, Sri Lankan exporters can differentiate their cinnamon decisively and successfully from its substitutes and can enjoy a significant competitive advantage, yielding higher prices based, among others, on the exclusive source of origin and quality features of pure cinnamon.
Besides, the Government and private sector have jointly taken initiatives to elevate skills among the workforce in the industry.
Established in 2006 in Kosgoda, Galle, the Cinnamon Training Academy (CTA), funded by the EU, has been offering certification for cinnamon peelers undergoing a systematic programme of vocational training. These certificates are conferred in line with the Government’s National Vocational Qualification (NVQ) framework. This Public-Private Partnership (PPP) programme is undoubtedly valuable for the professionalisation of the cinnamon industry’s workforce.
With the improvements in training, quality, branding, image, and GI protection, Sri Lanka has established a solid footing for a strong cinnamon industry in the decades to come.
The Government interventions so far were firmly consolidated, upgraded, and solidified with another initiative taken recently by way of establishing a new Government organisation. In 2023, the Government established a dedicated Department of Cinnamon Development (DCD), the first standalone governmental body for the development of the cinnamon industry. This was the most significant and novel government intervention to be initiated in about two-and-a-half centuries since the days of the Dutch.
The DCD is fittingly headquartered in a principal cinnamon-producing, processing, and trading region, Karandeniya in the Galle District, and is tasked with transforming cinnamon from a cottage-industry status to a foremost commercial export product, with an ambitious goal of doubling exports beyond the medium term through the expansion of cultivation, increase in production, productivity improvements, quality assurances, and market development.
It has already taken over the National Cinnamon Research and Training Centre, Thihagoda to support the industry’s R&D activities and has devised a roadmap for long-term developments, including promoting new planting methods, upgrading post-harvest activities, and conducting effective marketing programmes overseas. With these advances, Sri Lanka is also aiming to embrace its olden spice glory as well.
It is important to note that the overall expectations of the newly established department, however, can be achieved mainly with adequate resources being secured for farmer engagements, market development, research and extension services, and capacity building. Besides, the industry is still in need of a comprehensive national strategy, a need that has been echoed for decades chiefly by agricultural scientists, growers, and the trading community.
Conclusion
Although Sri Lanka can be proud of its over-a-millennia-long history in relation to cinnamon production and exports, an organised, structured, and modern cinnamon industry has evolved only after the Western colonial enterprise in the island, particularly after Dutch colonial rule.
Two principal actions by the colonial authorities changed the industry’s character. First, Dutch colonial rulers developed a government regulatory system for the cinnamon industry and made cinnamon a plantation crop in the middle of the 18th century. Second, British colonial rulers in the early 19th century permitted the industry to be managed directly by the local private sector without direct government intervention.
After independence, the industry has, in the main, remained in the hands of the country’s private sector. The government has since played the role of a facilitator for the promotion of the industry, with no direct intervention as seen in many other crop sectors within the country.
(The writer is a postgraduate student at the Department of Economics, University of Colombo, and can be reached at [email protected])
Disclaimer: The views and opinions expressed in this article are those of the writer and do not necessarily reflect the official position of this publication.
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