Cultivation System
Encyclopedia
The Cultivation System or less accurately the Culture System, was a Dutch
government policy in the mid-nineteenth century for its Dutch East Indies
colony (now Indonesia
). Requiring a portion of agricultural production to be devoted to export crops, Indonesian historians refer to it as Tanam Paksa ("Compulsory Planting").
and Padri Wars. The Dutch loss of Belgium
in 1830 brought the Netherlands to the brink of bankruptcy, and a concerted Dutch exploitation of Indonesian resources commenced to make quick returns. In 1830, a new governor general
, Johannes van den Bosch
, was appointed to make the Dutch East Indies pay their way.
In order 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, comprador
es somewhat like the cottier
system in Ireland
. This was financed partly by bonds sold to the Dutch themselves, and partly by introducing a new copper coinage at about a 2:1 ratio to the old, thereby gaining a massive seigneurage from the depreciation
at the expense of the local economy. From Section 5 of Some Notes on Java and its Administration by the Dutch, by Henry Scott Boys, Late Bengal Civil Service, Allahabad: Pioneer Press, 1892:-
The policy brought the Dutch and their Indonesian allies enormous wealth through export
growth, averaging around fourteen percent. It brought the Netherlands back from the brink of bankruptcy and made the Dutch East Indies self-sufficient and profitable. The Cultivation system is widely linked, however, to greatly increased hunger and poverty on Java in the late nineteenth century. Cash crops such as indigo and sugar, had to be grown instead of rice, and Java suffered famines and epidemics in the 1840s, firstly in Cirebon
and then Central Java
.
Political pressures in the Netherlands resulting partly from these problems, and partly from rent seeking
independent merchants who wished to share in the gains from development under the seemingly altruistic guise of free trade
or local preference (see the Henry Scott Boys work mentioned above), eventually led to its abolition (circa 1870) and replacement with free-market Liberal Period
whereby private enterprise was encouraged.
The impact of the cultivation system on the standard of living of indigenous Javanese has in recent years been disputed. R.E. Elson
, among others, has argued that the cultivation system directly contributed to the impoverishment of Javanese peasants, but indirectly improved their standard of living.
Netherlands
The Netherlands is a constituent country of the Kingdom of the Netherlands, located mainly in North-West Europe and with several islands in the Caribbean. Mainland Netherlands borders the North Sea to the north and west, Belgium to the south, and Germany to the east, and shares maritime borders...
government policy in the mid-nineteenth century for its Dutch East Indies
Dutch East Indies
The Dutch East Indies was a Dutch colony that became modern Indonesia following World War II. It was formed from the nationalised colonies of the Dutch East India Company, which came under the administration of the Netherlands government in 1800....
colony (now Indonesia
Indonesia
Indonesia , officially the Republic of Indonesia , is a country in Southeast Asia and Oceania. Indonesia is an archipelago comprising approximately 13,000 islands. It has 33 provinces with over 238 million people, and is the world's fourth most populous country. Indonesia is a republic, with an...
). Requiring a portion of agricultural production to be devoted to export crops, Indonesian historians refer to it as Tanam Paksa ("Compulsory Planting").
Background
Despite increasing returns from the Dutch system of land tax, Dutch finances had been severely affected by the cost of the Java WarJava War
The Java War or Diponegoro War was fought in Java between 1825 and 1830. It started as a rebellion led by Prince Diponegoro. The proximate cause was the Dutch decision to build a road across a piece of his property that contained his parents' tomb...
and Padri Wars. The Dutch loss of Belgium
Belgian Revolution
The Belgian Revolution was the conflict which led to the secession of the Southern provinces from the United Kingdom of the Netherlands and established an independent Kingdom of Belgium....
in 1830 brought the Netherlands to the brink of bankruptcy, and a concerted Dutch exploitation of Indonesian resources commenced to make quick returns. In 1830, a new governor general
Governor-General of the Dutch East Indies
The Governor-General of the Dutch East Indies represented the Dutch rule in the Dutch East Indies between 1610 and Dutch recognition of the independence of Indonesia in 1949.The first Governors-General were appointed by the Dutch East India Company...
, Johannes van den Bosch
Johannes van den Bosch
Johannes, Count van den Bosch was a Dutch Lieutenant General and politician.-Biography:...
, was appointed to make the Dutch East Indies pay their way.
Implementation and effects
It 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 crops for export, or alternatively, peasants had to work in government-owned plantations for 60 days of the year. In order to allow the enforcement of these policies, Javanese villagers were more formally linked to their villages, and were sometimes prevented from travelling freely around the island without permission. As a result of this policy, much of Java became a Dutch plantation.In order 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, comprador
Comprador
Comprador or Compradore is a term used to describe native managers of European business houses in East Asia.-History:...
es somewhat like the cottier
Cotter (farmer)
See also Canadian band The Cottars.Cotter, cottier or cottar is the Scots term for a peasant farmer formerly in the Scottish highlands. Cotters occupied cottages and cultivated small plots of land...
system in Ireland
Ireland
Ireland is an island to the northwest of continental Europe. It is the third-largest island in Europe and the twentieth-largest island on Earth...
. This was financed partly by bonds sold to the Dutch themselves, and partly by introducing a new copper coinage at about a 2:1 ratio to the old, thereby gaining a massive seigneurage from the depreciation
Depreciation
Depreciation refers to two very different but related concepts:# the decrease in value of assets , and# the allocation of the cost of assets to periods in which the assets are used ....
at the expense of the local economy. From Section 5 of Some Notes on Java and its Administration by the Dutch, by Henry Scott Boys, Late Bengal Civil Service, Allahabad: Pioneer Press, 1892:-
'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."'
The policy brought the Dutch and their Indonesian allies enormous wealth through export
Export
The term export is derived from the conceptual meaning as to ship the goods and services out of the port of a country. The seller of such goods and services is referred to as an "exporter" who is based in the country of export whereas the overseas based buyer is referred to as an "importer"...
growth, averaging around fourteen percent. It brought the Netherlands back from the brink of bankruptcy and made the Dutch East Indies self-sufficient and profitable. The Cultivation system is widely linked, however, to greatly increased hunger and poverty on Java in the late nineteenth century. Cash crops such as indigo and sugar, had to be grown instead of rice, and Java suffered famines and epidemics in the 1840s, firstly in Cirebon
Cirebon
Cirebon is a port city on the north coast of the Indonesian island of Java. It is located in the province of West Java near the provincial border with Central Java, approximately 297 km east of Jakarta, at .The seat of a former Sultanate, the city's West and Central Java border location have...
and then Central Java
Central Java
Central Java is a province of Indonesia. The administrative capital is Semarang. It is one of six provinces on the island of Java.This province is the province of high Human Development in Indonesia and its Points Development Index countries is equivalent to Lebanon. The province of Central Java...
.
Political pressures in the Netherlands resulting partly from these problems, and partly from rent seeking
Rent seeking
In economics, rent-seeking is an attempt to derive economic rent by manipulating the social or political environment in which economic activities occur, rather than by adding value...
independent merchants who wished to share in the gains from development under the seemingly altruistic guise of free trade
Free trade
Under a free trade policy, prices emerge from supply and demand, and are the sole determinant of resource allocation. 'Free' trade differs from other forms of trade policy where the allocation of goods and services among trading countries are determined by price strategies that may differ from...
or local preference (see the Henry Scott Boys work mentioned above), eventually led to its abolition (circa 1870) and replacement with free-market Liberal Period
Liberal Period (Dutch East Indies)
The Liberal Period refers to the economic polices instituted in the Dutch East Indies from the mid-nineteenth century.-Background: the cultivation system:...
whereby private enterprise was encouraged.
The impact of the cultivation system on the standard of living of indigenous Javanese has in recent years been disputed. R.E. Elson
Robert Elson
Robert Edward Elson is an historian, author and academic regarded as an authority on Indonesian history, with his biography of former President Suharto and works on the cultivation system in Colonial Java considered leading works on their subjects...
, among others, has argued that the cultivation system directly contributed to the impoverishment of Javanese peasants, but indirectly improved their standard of living.