Dutch Colonial Economy System in Java and Sumatra

           
            When the Java War between the Javanese and the Dutch came to an end in 1830, the Dutch colonial period in Java began. In the 1830s, the Dutch suffered economic loss from the Javanese War and Belgium independence. Therefore, when the Dutch controlled Java, the Netherlands government saw Java would be profitable to the Netherlands, because the island of Java could produce commodities which would be salable on the world markets.[1] As a result, when Johannes Van Den Bosch, the first Dutch governor-general in Java, arrived Java in 1830, he introduced the Cultuurstelsel, or the Cultivation System.

The Cultivation System forced Javanese to cultivate the crops that were lucrative to the Dutch government, such as coffee, indigo, and sugar. Under the Cultivation System, the Javanese villages owed a land tax (the ‘land rent’) to the government, normally calculated as 40 percent of the village’s main crop. Van den Bosch’s idea was each village should set aside part of its land to produce export crops for sale at fixed prices to the colonial government. The village would thereby be able to cover its land tax commitment, and Van den Bosch estimated that the produce of 20 percent of the village land should be sufficient for this purpose. If the village earned more by the sale of crops to the government than its land tax obligation, it would keep the excess payment; if less, it must still pay the difference from other sources.[2]

In 1870, the Dutch colonial government abolished the Cultivation System. The Agrarian Law opened Java to private enterprises, and it was known as the Liberal period (c.1870-1900). During the Liberal Period, private estate agriculture could now develop in Java as well as the outer islands such as Sumatra. By 1885, private exports were ten times those of government. Moreover, the Liberal Period represented a major intensification in the exploitation of Java’s agricultural resources, as well as Sumatra.[3]

The Dutch expanded its influence in Sumatra since the 1820s, and to avoid Anglo-Dutch conflict in the Straits of Melaka, in March 1824 the Treaty of London defined British and Dutch spheres of interest. The treaty allowed the Dutch to contain Sumatra, but Aceh in the northern Sumatra remained independent. However, when the Dutch realized the economic potential of Aceh due to its fertile volcanic soil made it eminently suitable for the cultivation of tobacco, rubber, and palm oil.[4], they invaded the area of Aceh in the 1870s, which was known as the Aceh War. The conflicts lasted for about three decades. By 1903, a fairly stable government in Aceh under the Dutch was established.

Similar to their economic policy in Java, the people in Sumatra engaged in crop plantation for export under the guidance of the Dutch and other private enterprises. For example, rubber, tobacoo, and tin developed rapidly in the plantation belt located at the Deli area in the East Coast Sumatra since the 1860s. Moreover, since the existence of petroleum deposits in the Langkat area of North Sumatra has been known since the 1860s, palm oil in North Sumatra was being exported to other parts of Asia by the Dutch enterprises such as the Royal Dutch Shell during the late 19^th century and the early 20^th century.

The Cultivation System and the export economy in Java and Sumatra benefited the Netherlands government and the Dutch, but it also brought lots of impacts to Java and Sumatra. Therefore, this essay will elaborate the impacts of the Culivation System and the export economy in Java and Sumatra.

The Cultivation System in Java did not improve the life of the peasants, and they still lived in proverty. Although the peasants could earn profit from the cash crops, however, when their profits grew, the land tax would rise at the same time. As the payment for the crops rose, officials used this as a justification for increasing the land tax assessment, so that much of the excess crop payment was brought back into the hands of government.[5] Therefore, many peasants in Java did not earn much from the Cultivation System, so many of them remained poor.

During the years of  the Cultivation System, the Dutch saw coffee and other crops such as sugar and indigo were the lucrative cash crops, so they forced the Javanese to engage in plantation related to these crops. Hence, many of the workers turned into coffee or indigo growers, so they could not have enough time to cultivate rice properly and produtively. Furthermore, the development of sugar and indigo plantation took land and water away from rice cultivation. Because of these reasons, the situation under the Cultivation System was not favourable to rice cultivation, so it made rice cultivation difficult.

Too much time spent on government cultivations resulted in neglect of the rice crop which, when combined with a one or two year failure of the rice harvest, resulted in famines, epidemics, and migrations to other areas.[6]

In 1844 there was a major rice crop failure in Indramayu, the northernmost part of Cirebon Residency and traditionally a large producer or surplus rice to other parts of Java and other regions of the achipelago. Of itself, the crop failure, which seems to have been the result of a severe drought, exacerbated by neglect of water works.[7] Meanwhile, the price of the rice was very high. According to Table 4.2 of Village Java Under The Cultivation System 1830-1870, in many areas of Java, the price of rice rose from around 2 guilders per picul to 9 guilders per picul in 1845.[8] When the peasants were poor, they just could not afford rice. As a result, famines occurred frequently during the 1840s, and it was followed by the typhoid fever epidemic, so many people died during this period with the combination of famines and epidemics. From 1845 to 1850, the amount of population in Java dropped from 7.5 million to 7.2 million.[9]

Crisis migration occurred during the famine and epidemic years as well. For example, in 1846, crops failures, together with excessive demands for labour on forced cultivation and water works construction, saw Banyumas’ population in the East Java drop by around 30,000 people. The catastrophic famines of the mid- and late 1840s, in combination with the epidemics already noted, were responsible for the massive movement of people from affected areas of central Java such as Banyumas to areas as distant as Malang in easternmost Java.[10]

The plantation economy also brought bad impacts to the ecology in Java and Sumatra. In Java, the indigo plant exhausted the soil. After a few years, neither indigo nor any other crop would grow on the land.[11] Because of that, new areas from other villages had to be opened for plantation, so more areas in Java encountered the same ecological problem. When rubber plantation grew in both Java and the east coast of Sumatra since the 1860s, many rubber trees were being cut down, so it brought ecological changes in the jungles in Java and Sumatra. Moreover, because palm oil industry in Sumatra was prosperous in the northern Sumatra since the late 19^th century, it was possible that the oil could leak into the sea and caused the water pollution in Sumatra.

The peasants were directly exploited by the Dutch colonial government and the private enterprises during the Dutch colonial year. The Cultivation System and the export economy increased the demands of material resources from the peasantry, and the raw materials in Java and Sumatra were extracted by the Dutch. The Cultivation System had made substantial calls upon the peasantry’s material property – firewood from the forests to fuel boilers and furnaces, timber for constructing factories, sheds, storeshouses and residences.[12] When rubber and tin were exported to the Netherlands and other countries, the amount of raw materials in Java and Sumatra decreased. Hence, the exploitation by the Dutch made the villagers in Java and Sumatra weak and poor. The planters’ transgressions of indigenous land rights threatened to undercut the very subsistence base of the native inhabitants in both Java and Sumatra. Therefore, Indonesian faced difficulties in economic development and reconstruction when the Dutch left the archipelago after the World War II, because most of the raw materials in Java and Sumatra were being exploited during the Dutch colonial period.

The export economy during the Dutch colonial regime put Java and Sumatra into the world market. The economic context within which Indonesians lived was alerted by the world-wide economic Depression of the 1930s. Price for some of Indonesia’s products were already on a downward trend and the market for sugar exports was contracting as beet sugar production expanded elsewhere, particularly in Great Britain and Japan. Indonesia was heavily dependent on its export, particularly oil and agricultural products. In 1930, as much as 52 percent of these exports went to the industrialized nations of Europe and North America. The economic crisis in these lands followed by the widespread adoption of protectionism, coupled with falling prices, suddenly plunged Indonesia into an economic crisis from which it never fully recovered before the Japanese conquest in 1942.[13]

Despite the population decreased by around 2 million from 1845 to 1850 in Java, the population actually increased dramatically in both Java and Sumatra from 1830 to the end of the Dutch colonial period. Under the Cultivation System, the people in Java required a larger family, because plantation economy required a large number of labour. Larger families meant more hands to share in the labor burden, and more man power meant better productivity for a better profit, so many people prefer a larger families in order to compete with each other. Therefore, there was a higher fertility in Java, and population increased a lot. For instance, the number of population in Java was around 6 million in 1837, but it increased to 13.5 million in 1870.[14] On the other hand, imported labors in Java and Sumatra also accounted for the increase of population. In Sumatra, immigrant plantation labor force grew by tens of thousands every year. In 1880 East Sumatra’s population was estimated at somewhere near 100,000. Fifty years later – with the inflow of Javanese, Chinese, Europeans, and Indians working for the estate industry or in its service sectors – it had reached 1.5 million.[15]

Although the Cultivation System and the export economy brought lots of bad impacts to Java and Sumatra, they improved the transport infrastructure in Java and Sumatra indirectly.

           Before 1830, the road system in Java was poor, so there was a great reliance on riverine transport, notably along the Solo River, and produce was transported only by coolies or beasts of burden. The transport system in Java was inconvenient at that time. However, there was a major change since the introduction of Cultivation System in 1830. The Dutch colonial government believed that a proper transport and a road network were required for the expansion of cultivation, so the colonial government instigated a program of widening and improving existing roads and constructing new one leading to sugar and indigo factories. The necessity for better communications with and between villages moved the Dutch officials to improve village roads. Besides that, more roads meant more bridges, so many bridges were built in Java during the colonial period.[16] In Sumatra, a railroad system emerged along the factories in the east coast Sumatra for transoporting goods from factories to the ports.

In fact, the transportation arrangements for the movement of cultivation products to factories and ports were a growing sources of extra income to the people in Java and Sumatra.   

The Cultivation System and the export economy exploited the Indonesian, because the Dutch enjoyed an enormous profits from Java and Sumatra, when the people there were not benefited by the system, and they still lived in proverty and remained weak. However, during the Dutch colonial rule, the social condition and the politics in Java and Sumatra were still fairly stable, because there was no warfare during this period, and most of the people just focused on their work in plantation. Also, the Dutch helped to advance the transportation system in Java and the east coast Sumatra was a big achivement. Because of that, Java and the east coast Sumatra emerged as metropolis due to the growth of transport infrastructure, communication, factories, and warehouse.

Yet, the economic problems facing the newly independent Indonesia in the 50s were still enormous, and Indonesia remained as a third world country.

Bibliography

Elson, R.E. Village Java Under The Cultivation System 1830-1870.

Sydney: Allen And Unwin, 1994

Ricklefs, M.C. A History Of Modern Indonesia Since C.1200 Third Edition.

Standford: Standord University Press, 2001

Stoler, Ann Laura. Capitalism and Confrontation in Sumatra’s Plantation Belt 1870-1979. New Haven: Yale University Press, 1985

Van Niel, Robert. Java Under The Cultivation System

Leiden: KITLV Press, 1992