Cultivation System

The Cultivation System () was a system of forced labor used to grow cash crops to pay taxes and for export. It was Dutch government policy from 1830–1870 in its Dutch East Indies colony (now Indonesia), requiring a portion of agricultural production to be devoted to export crops. It is referred to by Indonesian historians as ''tanam paksa'' ("enforced planting").

Background

By the late 18th century, the business model of the old Dutch East India Company, reliant on monopolies and market domination, led to the company's ruin. By 1805, the Dutch part of Java produced a revenue of only 2.5 million Java Rupees. The government of Herman Willem Daendels from 1808 to 1811 raised this to 3.5 million just before the English conquest. During the British occupation of Java, revenue rose to 7.5 million Rupees for Java and its dependencies in 1815. Another 2 million were contributed by the native lands. Most of this income was raised by a land tax. However, the land tax system soon failed, because in the long run, the tenants were unable to pay the amounts required.

From the late 1820s, the East Indies government then came under increased financial pressure. This started with Dutch involvement in the Padri Wars (1821–1837), followed by the costly Java War (1825 to 1830). The Belgian Revolution of 1830 brought the finances of the Netherlands itself into trouble. The costs of keeping the Dutch army at a war footing until 1839, turned this into a financial crisis, almost causing state bankruptcy.

In 1830, a new governor general, Johannes van den Bosch, was appointed to increase the exploitation of the Dutch East Indies' resources. The Cultivation System was implemented only on land directly controlled by the colonial government, exempting the '' Vorstenlanden'' (princely states) and the '' particuliere landerijen'' (private domains).

Implementation

The cultivation system was primarily implemented in Java, the center of the colonial state. Instead of land taxes, 20% of village land had to be devoted to government export crops; alternatively, peasants had to work in government-owned plantations for 66 days of the year. To enforce these policies, Javanese villagers were more formally linked to their villages, sometimes requiring permission to freely travel around the island without permission. This policy turned much of Java into a Dutch plantation. While in theory at most 20% of land was used for export crop plantation, in practice greater portions of land were used (some sources claim nearly 100%) until native populations had little to plant food crops causing widespread famine. The 66 day corvée was also sometimes exceeded.

To handle and process the cash crops, the Dutch set up a network of local middlemen who profited greatly and so had a vested interest in the system: compradors, similar to the cottier system in Ireland. The network was financed by bonds sold to the Dutch and new copper coinage at about a 2:1 ratio to the old, gaining massive seigniorage from the depreciation at the expense of the local economy.

'An ingenious device for increasing the Government profit was devised by General Van-der Bosch at the same time as he initiated the culture system. An enormous amount of copper coinage was manufactured in Holland, the intrinsic value being rather less than half the nominal value. This coinage was made a legal tender, and the cultivator was paid for his produce in this copper coin. Thus, as Mr. Money in his work Java; or, How to Manage a Colony, naively remarks:- "The loans, raised in Holland to start the system, produced an effect in Java equal to double their amount."'From Section 5 o
Some Notes on Java and its Administration by the Dutch
, by Henry Scott Boys, Late Bengal Civil Service, Allahabad, Pioneer Press, 1892

Effects

The policy brought the Dutch enormous wealth through export growth, averaging around 14%. It brought the Netherlands back from the brink of bankruptcy and made the Dutch East Indies self-sufficient and profitable extremely quickly. As early as 1831, the policy allowed the Dutch East Indies budget to be balanced, using the surplus revenue to pay off debts from the defunct VOC regime.1 The cultivation system is linked to famines and epidemics in the 1840s, firstly in Cirebon and then Central Java, as cash crops such as indigo and sugar had to be grown instead of rice.

Political pressures in the Netherlands resulting from the problems and rent seeking independent merchants preferring free trade or local preference eventually led to the system's abolition. Legal milestones to achieve this were the Suikerwet and the Agrarische Wet, both introduced in 1870. This was the start of the free-market Liberal Period in which private enterprise was encouraged.

See also

* Landrentestelsel
* Max Havelaar

References

Sources

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Further reading

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{{Authority control

Economic policy of the Dutch East Indies
Economic history of Indonesia