Tobacco plantations and their impact on peasant society and economy in Surakarta residency : 1860-1980s

Abstract

The cultivation of Vorstenlands cigar tobacco in Surakarta, which first developed around 1860, reached its most substantial level of development between 1890 and 1915; the industry then experienced a decade of consolidation in the 1920s, before suffering a sharp decline in profitability during the 1930s Depression. It ceased to operate almost entirely between 1942-1950 and when it was restored to production in the 1950s, it was able to operate only at output levels far below those of the 1920s. The rapid increase of tobacco production between the 1880s and 1930s was made possible by the provision of capital on a large scale by new types of financial organization and by better management resulting from the incorporation of small individually owned companies into a few large ones. A major change in the organization of the industry around 1920 was the Agrarian Reorganization, which abolished the old apanage system and introduced a system of land tenure and land rental by the plantations more similar to the arrangements applying elsewhere in Java. This development reached a peak in 1921 with the reorganisation of NV-VKCM (Klaten Plantation Company) as a managing organisation for most of the major plantations in the Principalities, as well as other parts of Java. This more impersonal management style, heavier capital investment, tight quality control and a system of sophisticated organisational linkages to the international market characterised the tobacco industry through until 1942. The high profits achieved by tobacco companies enabled them to achieve further consolidation by taking over smaller estates. The high quality of Vorstenlands binder and wrapper leaf was achieved only through the thorough techniques of cultivation and processing and tight work discipline, which made heavy demands on the time of the peasants. This situation had important repercussions for the economy of the entire region. The peasants^ being unable to devote enough time to their food crops, were compelled to rely on the plantations for both wage and rental payments for the crops grown on the companies land, the paddy kongsen system. This meant an opportunity for the landless peasants to earn a livelihood on a sharecropping basis. The increased use of currency resulted in a new group of Javanese and Chinese traders emerging to take part in this economic activity. The development of tobacco cultivation in Klaten certainly made an important contribution to the economic growth of the region; but the decline of the industry after 1930 has had fewer adverse effects than might have been expected. This was mainly because of other economic changes which have occurred in Klaten since independence, such as a major increase in rice production, the emergence of new forms of small industries and tertiary services and a general increase in employment in both rural and urban occupations. Vorstenlands tobacco is no longer a major source of foreign exchange or income and the industry is maintained mainly to serve the interests of the state plantation enterprise now controlling it, rather than because of its significance to the overall economy of the region. Show more