Ruling the Countryside: Revenue Systems and Agriculture

Ruling The Countryside (Intro)

After gaining control over vast territories in India, the English East India Company became the ruling power in the countryside. Their primary concern in rural areas was to maximise the collection of land revenue, which was the main source of income for financing their wars, administration, and trade.

The Company realised that ruling the countryside meant establishing control over land and agriculture, as the majority of the population were peasants and the economy was predominantly agrarian. They introduced various land revenue systems, which aimed at fixing the amount of revenue to be collected, identifying the people responsible for collection, and ensuring a regular flow of income to the Company.

These revenue systems had a profound and lasting impact on the lives of peasants, Zamindars (landlords), and the agrarian structure of India.

Revenue For The Company

The English East India Company's transformation from a trading company to a territorial power was fundamentally linked to its ability to acquire and manage revenue resources. Controlling land revenue was crucial for financing its activities in India.

Acquisition of Diwani Rights:

• Following the Battle of Buxar in 1764, the Mughal Emperor granted the Company the Diwani of Bengal, Bihar, and Odisha in 1765.
• Diwani refers to the right to collect revenue and administer civil justice in these territories.
• This grant made the Company the official revenue collector and administrator of these wealthy provinces, significantly increasing its financial power.
• The Company aimed to use the revenue from Bengal to purchase goods for export, reducing the need to bring in silver and gold from Britain.

The Need To Improve Agriculture

• Initially, the Company focused on maximising revenue collection without much concern for the welfare of the peasants or the improvement of agriculture.
• However, this led to agrarian distress, decline in cultivation, and fluctuations in revenue collection.
• The Company officials realised that to ensure a stable and high revenue income, agriculture needed to be improved and production needed to increase.

A New System Is Devised (Permanent Settlement context)

• To address the problems of fluctuating revenue and agrarian distress, the Company, under Lord Cornwallis, devised a new land revenue system for Bengal, Bihar, and Odisha.
• This system was the Permanent Settlement of 1793.
• Features of Permanent Settlement:
  • The revenue amount to be collected was fixed permanently, meaning it would not be increased in the future.
  • The Zamindars were recognised as the owners of the land (previously they were primarily revenue collectors). They were given hereditary rights to the land as long as they paid the fixed revenue to the Company.
  • Zamindars were responsible for collecting revenue from the peasants and paying a fixed amount to the Company. The amount to be paid to the Company was fixed very high.
  • If a Zamindar failed to pay the fixed revenue on time, his Zamindari (land) could be auctioned off by the Company.

The Munro System

• The Permanent Settlement was not implemented uniformly across all territories. In other regions, different systems were devised.
• In the south, the Company introduced the Ryotwari System.
• This system was devised by Thomas Munro and implemented in the Madras Presidency (and later extended to parts of Bombay Presidency and Assam).
• Features of Ryotwari System:
  • The settlement was made directly with the cultivators (ryots).
  • Ryots were recognised as the owners of the land.
  • Revenue was assessed directly on the land held by each ryot. The revenue rate was high and not fixed permanently; it was subject to periodic revisions (usually every 20-30 years).
• The aim was to eliminate intermediaries (like Zamindars) and establish a direct relationship between the state and the cultivator. However, in practice, revenue officials often exercised considerable power, and the high revenue demands caused distress to the ryots.

All Was Not Well

Despite the intentions, none of the revenue systems (Permanent Settlement, Ryotwari) fully succeeded in improving the condition of agriculture or the peasants.

• High revenue demands: The fixed revenue demand under Permanent Settlement was very high. Under Ryotwari, the revenue rates were also high and subject to increase.
• Impact on peasants: Peasants often struggled to pay the high revenue demands, especially during droughts or crop failures. They were forced to take loans from moneylenders and often lost their land due to debt.
• Impact on Zamindars (under Permanent Settlement): Many Zamindars initially failed to pay the fixed revenue on time, leading to the auction of their Zamindaris (see Section I4). This led to the decline of many traditional Zamindar families and the rise of new purchasers.
• No incentive for improvement: Under Permanent Settlement, Zamindars had a permanent financial stake, but many were absentee landlords who did not invest in improving agriculture. Under Ryotwari, the high revenue demand and periodic revision reduced the incentive for ryots to invest.

The revenue systems established by the Company were primarily designed to extract maximum revenue, which often led to agrarian distress and social changes in the countryside.

Crops For Europe

The English East India Company, after gaining political control, also sought to control and manipulate agricultural production in India to ensure the availability of crops that were in high demand in Europe. This led to peasants being forced or persuaded to grow specific crops required by the Company, impacting traditional cropping patterns and agricultural practices.

Crops in Demand:

• European markets had a high demand for Indian crops like indigo, opium, cotton, jute, tea, coffee, sugarcane.
• The Company and later the British government encouraged or forced peasants to grow these commercial crops (also called cash crops) instead of food grains, often in areas best suited for food production.

Why The Demand For Indian Indigo?

• Indigo is a plant that produces a rich blue dye. In the 18th and 19th centuries, there was a high demand for blue dye in Europe for the textile industry.
• The dye produced from the indigo plant was valued for its vibrant and permanent blue colour, which was superior to the dye produced from woad (a European plant used for blue dye).

Britain Turns To India

• The demand for indigo in Europe was met by supplies from the Americas (e.g., plantations in the Caribbean and North America).
• However, the American Revolution and other factors disrupted the supply of indigo from the Americas.
• Britain then turned to India as a source for indigo. The climate in Bengal and other parts of India was suitable for indigo cultivation.
• Indigo cultivation expanded rapidly in Bengal under the Permanent Settlement.

How Was Indigo Cultivated?

There were two main systems of indigo cultivation:

• Nij cultivation: The planter cultivated indigo on lands directly controlled by him, either using hired labourers or his own ploughs and bullocks. This was often difficult to expand because it required large areas of fertile land (which were often already under rice cultivation) and significant labour resources.
• Ryoti cultivation: This was the more common system. Planters forced or persuaded ryots (peasants) to sign a contract (satta) to cultivate indigo on their land.
  • Peasants were given a small loan (advance) by the planter to grow indigo.
  • The peasant had to grow indigo on a fixed portion of their best land (often land that would have been used for rice).
  • The planter provided seeds and a drill. The peasant prepared the soil, sowed the seed, and looked after the crop.
  • After harvest, the crop was delivered to the planter at a low price fixed by the planter.
  • The low price received for the indigo did not cover the cost of cultivation, and the peasant was left in debt, often forced to sign a new contract for the next season. This created a cycle of debt.

*(Image shows an illustration or historical painting depicting indigo fields, peasants working in indigo fields, or indigo processing in a factory)*

The forced cultivation of indigo under the Ryoti system led to severe agrarian distress, as peasants were unable to grow food grains on their best land, received low prices for indigo, and were trapped in a cycle of debt. This eventually led to peasant resistance, such as the Indigo Revolt of 1859 in Bengal.

Bengal And The Zamindars

Under the Permanent Settlement of 1793 in Bengal, the Zamindars were recognised as the owners of the land and were made responsible for collecting and paying a fixed amount of revenue to the English East India Company. However, this system led to unforeseen consequences for both the Zamindars and the rural society.

Permanent Settlement - Recap:

• Revenue amount fixed permanently.
• Zamindars recognised as landowners.
• Zamindars responsible for collecting revenue from ryots and paying a fixed sum to the Company.
• Revenue demand was fixed very high.
• If Zamindars defaulted on payment, their Zamindari would be auctioned.

An Auction In Burdwan

• The high revenue demand and the strict time limit for payment (Sunset Law - if payment was not received by sunset on the fixed date, the Zamindari was auctioned) led to many Zamindaris being auctioned off by the Company.
• The case of the auction in Burdwan in 1797 illustrates this. Many Zamindaris of the Raja of Burdwan (a prominent Zamindar) were put up for auction due to non-payment of revenue.
• However, surprisingly, the purchasers at the auction were often agents of the Raja himself, who were buying the Zamindaris in the names of other people or in the names of the Raja's mother or other relatives.
• This was a strategy used by Zamindars to manipulate the system and avoid the auction while retaining control over their Zamindaris.

The Problem Of Unpaid Revenue

• The primary problem from the Company's perspective under Permanent Settlement was that the fixed revenue was often not paid by the Zamindars, leading to revenue arrears.
• This led to frequent auctions of Zamindaris.

Why Zamindars Defaulted On Payments

• High initial demand: The fixed revenue demand was deliberately set very high, as the Company believed future increase in agricultural production would not lead to increased revenue for them under a permanent system.
• Rigid collection schedule: Revenue had to be paid on time, regardless of crop failure, drought, or flood.
• Initial low prices of agricultural produce: Prices were low in the 1790s, making it difficult for Zamindars to collect enough revenue from the ryots.
• Power of the Zamindar limited: The Company and the courts sometimes intervened to protect the rights of the ryots, reducing the Zamindar's ability to force collection.
• Rise of Jotedars: In the villages, a group of rich peasants, called Jotedars, became powerful and often resisted the Zamindar's attempts to collect revenue from the ryots, especially when the Zamindar was an absentee landlord.

The Rise Of The Jotedars

• Jotedars were rich peasants who owned considerable amounts of land in the villages. They were a new class that emerged in the late 18th and early 19th centuries.
• They cultivated their own land (often using sharecroppers) and also controlled local trade and moneylending.
• Jotedars were powerful within the villages and often opposed the Zamindars. They mobilised the ryots against the Zamindars when the latter tried to increase demands or force collection.
• When Zamindaris were auctioned, Jotedars sometimes bought parts of them, increasing their local control.
• The rise of Jotedars weakened the position of Zamindars in the villages and created a new power structure in rural Bengal.

The Zamindars Resist

• Zamindars employed various strategies to resist the system and avoid losing their Zamindaris, as seen in the Burdwan auction case.
• They used benami transactions (buying in the name of others), transferred property to relatives, or deliberately defaulted to create problems for the Company.
• They also tried to use their social influence to prevent outsiders from purchasing their Zamindaris at auctions.

The Permanent Settlement, while intended to create a stable revenue system and a loyal class of Zamindars, led to agrarian distress for peasants, the decline of many traditional Zamindars, and the rise of a new powerful class of Jotedars in rural Bengal.