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Abstract
Today India is among the major sugar producers and sugar-making has a long tradition, yet the adoption of modern sugar technologies was delayed. Which factors underpinned this? This article examines the attempts of European sugar entrepreneurs to adopt new sugar technologies in 1830s–1840s Bihar. Its findings correspond with recent literature on Indian economic development which emphasises the role of declining agricultural productivity in economic stagnation in the colonial period. This article supports the conclusions that low agricultural productivity was the outcome of inadequate investment on the part of the British Empire. It also highlights that in the case of commercial crops – such as sugar – investment into new technologies with potential for increasing productivity was hindered by British trade policies. As British imperial policies gave preference to the welfare of the British consumer, lacked consideration for colonial manufacturing, they did not create a beneficial environment for long-run investment projects.
Acknowledgements
Thanks are due to Giorgio Riello, Spike Gibbs, Maanik Nath, Jordan Claridge for reading various versions of the article, and three anonymous referees.
Disclosure statement
No potential conflict of interest was reported by the author.
Notes
1 Moreover industrially made sugar was cheaper, could be stored longer and had a higher sucrose content, which brought its flavour closer to the taste of pure sweetness without any extraneous taste. Bosma, Sugar plantation, pp. 20–21.
2 Gupta, ‘Falling behind’, pp. 803–808; Broadberry and Gupta, ‘Historical roots’, p. 274.
3 Broadberry et al., ‘India and the great divergence’, pp. 71–73.
4 Broadberry et al., ‘India and the great divergence’, p. 72.
5 Prebisch, Economic development of Latin America.
6 Frank, Latin America, Wallerstein, Modern World-System, and Amin, Unequal Development.
7 Gupta, ‘Falling behind’, pp. 813–815; Broadberry and Gupta, ‘Historical roots’, pp. 267–268.
8 Broadberry and Gupta, ‘Historical roots’, pp. 265, 267–278.
9 Railways on the other hand decreased trade costs, expanded trade and fostered market integration in India. Donaldson, ‘Railroads of the Raj’, pp. 931–932; Hurd, ‘Railways’, pp. 268–274.
10 Gupta, ‘Falling behind’, p. 813.
11 Roy, ‘Delayed revolution’; Roy, Economic history, p. 135.
12 Chaudhary et al., ‘Agriculture in colonial India’, pp. 109–111.
13 Gupta, ‘Falling behind’, p. 814.
14 Aldous, ‘From traders to planters’, pp. 5–6.
15 Aldous, ‘From traders to planters’, pp. 5–6, Ray, Bengal industries, pp. 226–227. Maund equals to approx. 80 lbs.
16 Its paid-up capital amounted to £200,000 in 1866. Aldous, ‘Avoiding Negligence’, p. 665.
17 Hutková, English East India, p. 119.
18 Hutková, English East India, p. 157.
19 First report of S.C. on sugar and coffee, p. 100.
20 First report of S.C. on sugar and coffee, pp. 17–18. The Jummoah factory was producing just 84 tons of sugar, however its production capacity was potentially higher.
21 Gupta, ‘Falling behind’, pp. 813–817; Broadberry and Gupta, ‘Historical roots’, p. 266.
22 Antrobus, History of the Assam Company; Griffiths, History of Indian Tea; Aldous, ‘From traders to planters’; Nadri, Political economy of indigo, pp. 7–8; Gupta, ‘Rise of modern colonial industry’, pp. 67–83.
23 Logan, ‘India – Britain’s substitute’, pp. 475–478; Riello, Cotton, pp. 256–262.
24 Hutková, English East India, pp. 159–163.
25 Aldous, ‘Avoiding negligence’; Aldous, ‘From traders to planters’, pp. 14–15.
26 Bagchi, ‘Colonialism’, pp. PE40–PE42.
27 It is also important to note that by the early nineteenth century the British administration in London relied on increasingly laisser-faire approaches with respect to production in India and trusted that it should be left to private entrepreneurs. Bosma, Sugar plantation, pp. 38–42.
28 Bosma, Sugar plantation, pp. 36–38. Roy shows how the plans of a Bengal zamindar and entrepreneur Dwarkanath Tagore to set up a large-scale sugar plantation were thwarted by dissenting tenants on his estate. Roy, ‘Factor markets’, p. 143.
29 S.C. on East India produce; First Report of S.C. on Sugar and coffee; S.C. on Sugar industries.
30 Although research shows that the nineteenth century was not really a heyday of laisser-faire policies, in the realm of trade policies shift towards more free trade came with the 1822 appointment of Frederick John Robinson and William Huskisson to the Cabinet. William R. Brock. (1940). Lord Liverpool and Liberal Toryism, 1820 to 1827 (pp. 121–177). Cambridge: Cambridge University Press; Norman Gash. (1979). Aristocracy and People: Britain 1815-1865. London: E. Arnold.
31 Huzzey, ‘Slave sugar’, p. 359.
32 Huzzey, ‘Slave sugar’, p. 363–365. The previous literature perceived abolitionism and free trade as mutually incompatible. See for example: Hall, Civilising subjects, pp. 338–339; Drescher, Mighty experiment, p. 166.
33 Huzzey, ‘Slave sugar’, p. 361.
34 Huzzey, ‘Slave sugar’, p. 361.
35 Access to sugar for working people was a matter of large debate in the 1840s. See for example, Hilton, Mad, bad, p. 575; Burnett, Plenty and want, p. 15. For a summary of the contemporary discussion: Huzzey, ‘Slave sugar’, pp. 364–365.
36 Major emphasises that here the interests of abolitionists and East Indian merchants intersected to create the image of ‘free grown’ sugar for the East Indies produce. The fact that various forms of unfree labour existed in India was not taken into consideration. Major, ‘Slavery’, pp. 502–503.
37 S.C. on East India produce, p. 12.
38 S.C. on East India produce, p. 13.
39 S.C. on East India Produce, p. 13.
40 Making sugar from beet has significantly higher technological requirements and could only develop following advancements in the chemical industry, namely the Archard process of obtaining sugar from sugar beet. Similarly the process of refining developed a higher level of sophistication as machine making advanced in Continental Europe. By the late nineteenth century, European sugar processing technologies were exported to sugar cane producing areas as they proved to be more efficient.
41 Shrivastava et al., ‘Sugarcane’, p. 267.
42 An exaggeration based on consumption in Bengal. First report of S.C. on Sugar and coffee, p. 45.
43 First report of S.C. on Sugar and Coffee, p. 46.
44 First report of S.C. on Sugar and Coffee, p. 46
45 Bosma, Sugar Plantation, p. 47.
46 Quantities brought to Europe by private merchants were miniscule, although private merchants proclaimed interest in the sugar trade. Bowen, Business of Empire, p. 245.
47 S.C. on East India produce, p. 54.
48 Begah was 1/3 of acre.
49 S.C. on East India produce, p. 55.
50 S.C. on East India produce, p. 101.
51 First report of S.C. on Sugar and coffee, p. 47.
52 S.C. on East India produce, p. 55.
53 First report of S.C. on Sugar and coffee, p. 19.
54 First report of S.C. on Sugar and coffee, p. 19.
55 S.C. on East India produce, p. ; First report of S.C. on Sugar and coffee, p. 173.
56 Indian sugar was exported to the Asian markets, principally to central Asia, Russia and Persia. First report of S.C. on Sugar and coffee, p. 170.
57 First report of S.C. on Sugar and coffee, p. 47. Whitened khar, if not sent to Europe, was consumed in India. Its price was higher than khar and in the 1840s Calcutta sold for 17 s. 10 d. to 24 s. 9d per cwt.
58 First report of S.C. on Sugar and coffee, p. 19.
59 There is fragmentary evidence that sugar factories ran by Europeans might have existed even before the 1830s/40s. See for example Wilson, History of Behar, pp. 14, 19.
60 Ratledge, From Promise to Stagnation, pp. 180–200. This should not be surprising as adoption of the newest technologies tends to be easier and cheaper than upgrading existing technologies. See for example Abramovitz, ‘Catching-up’, pp. 386–390. David, ‘Dynamo’, pp. 357–358.
61 The land that they rented was either waste land or land that needed clearing. Yet, from the fact that it allowed for cultivation of an array of crops from grains to sugar and indigo the quality of the land could not be too inferior. Cleared land in particular was found to be as very fertile. S.C. on East India produce, pp. 11–12.
62 S.C. on East India produce, p. 46.
63 S.C. on East India produce, pp. 46–47.
64 S.C. on East India produce, pp. 51–52; 63–65.
65 First report of S.C. on Sugar and coffee, p. 96.
66 First report of S.C. on Sugar and coffee, p. 47. In Calcutta muscovado made in vacuo from dhoosa, bhalee, or goor sold on average for 19s.3d. to 24s. 9d. and muscovado simply re-boiled from khar for 17s. 10d. to 24s. 9d. (the higher price was rarer as only the very best muscovado would fetch this price.
67 First report of S.C. on Sugar and coffee, p. 195.
68 First report of S.C. on Sugar and coffee, p. 63.
69 Second Report S.C. on sugar and coffee, p. 43.
70 First report of S.C. on sugar and coffee, pp. 45, 102.
71 Tirhoot was some 300 miles in a straight line from Calcutta and around 1,000 miles by river transport. First report of S.C. on Sugar and coffee, p. 12.
72 Tirhoot gained importance in sugar production, especially in the late nineteenth century. The biggest factory in the region was the Tirhoot Factory also known as the Ryam Sugar Company and in 1914 was incorporated as Tirhut Co-operative Sugar Co Ltd. The principal managing agency in Cawnpur Begg, Sutherland and Company, had a key role in the development of the Ryam Sugar Company. Bagchi, Private Investment, p. 188.
73 First report of S.C. on sugar and coffee, p. 12.
74 First report of S.C. on sugar and coffee, pp. 14–15, 20, 32–33.
75 First report of S.C. on sugar and coffee, p. 12.
76 First report of S.C. on sugar and coffee.
77 First report of S.C. on sugar and coffee, p. 13.
78 McCook, States of Nature, p. 80.
79 First report of S.C. on sugar and coffee, p. 13.
80 First report of S.C. on sugar and coffee, p. 51.
81 First report of S.C. on sugar and coffee, p. 13.
82 Water for irrigation was taken from deep wells or rivers with the use of oxen or manual labour. S.C. on East India produce, pp. 54, 86; First report of S.C. on sugar and coffee, pp. 53–56.
83 It seems that the factory servant was employed by the sugar factory on a longer term basis than coolies or superintendents, who were paid by day at Crooke’s when in employment. First report of S.C. on sugar and coffee, p. 14.
84 First report of S.C. on sugar and coffee.
85 First report of S.C. on sugar and coffee, p. 15.
86 S.C. on East India produce, p. 50.
87 The native cane was even more difficult to break than the Otaheite variety. First report of S.C. on sugar and coffee, p. 14.
88 The actual price of 1 cwt of sugar would be 70s. but 24s. was a duty payable in Britain. There were no duties on the molasses trade within India. First report of S.C. on sugar and coffee, pp. 50–51.
89 Although, 330 miles in straight line, navigation by river made the distance close to 1,000 miles. First report of S.C. on sugar and coffee, p. 12.
90 First report of S.C. on sugar and coffee, p. 15.
91 First report of S.C. on sugar and coffee, p. 14.
92 First report of S.C. on sugar and coffee, pp. 17–18.
93 First report of S.C. on sugar and coffee, p. 17.
94 This10% consisted of an interest of 8% and 2% commission. S.C. on East India produce: Index, p. 24. This amount is not dissimilar to interests paid by European indigo planters etc.
95 10%. S.C. on East India produce, p. 62.
96 S.C. on East India produce, p. 62.
97 For the Dhobah East India Sugar Company the commission charges, when commission was carried out under the umbrella of the company, amounted to 7s. 6d. per cwt. However, they had to employ an outside broker. First report of S.C. on sugar and coffee, p. 62; S.C. on East India produce, p. 138.
98 Freights from West Indies – those for Cuba or Demerrara were lower. First report of S.C. on sugar and coffee, pp. 38, 166.
99 First report of S.C. on sugar and coffee, p. 19.
100 The costs of transport by steamboat amounted to £1 7s. 4d. a ton versus 19s. 7d. by a small boat. Ibid., 20.
101 The total price for insurance, freight and charges in London has been stated to be £9 per ton in 1847. Assuming freight to be £5 per ton, insurance amounts to around £4. The insurance charge seems to include also fire insurance in London. Charges in all probability consisted of dock and landing charges. House of Commons, Sugar and coffee: Index, p. 39. In 1839 insurance together with dock and landing charges amounted to 3s. 8d. per cwt, that is £3 13s. 5d. for a ton. S.C. on East India produce, p. 150.
102 First report of S.C. on sugar and coffee, p. 100.
103 First report of S.C. on sugar and coffee, p. 48
104 For comparison in the Straits of Malacca average muscovado production per acre was 20 cwt, in the West Indies also 20 cwt, and in Mauritius even 30-40 cwt with newly planted cane. First report of S.C. on sugar and coffee, pp. 21, 233.
105 S.C. on East India produce, pp. 54, 86; First report of S.C. on sugar and coffee, pp. 53–56.
106 First report of S.C. on sugar and coffee, p. 43.
107 First report of S.C. on sugar and coffee, p. 98.
108 First report of S.C. on sugar and coffee, p. 100.
109 This is based on a comparison between total aggregate costs in 1840 and dividends paid in the same year. It is not entirely clear how much sugar was produced exactly, though there is no reason to suppose that production was significantly larger or smaller than 7,000 tons. Even when using different estimates it seems that refining is included in the £7.5 or was in the range of shillings. Alternatively, the costs of refining might have been included in the buying price of sugar. The sources are not very clear on this, however what is apparent is that unit costs of refining were low if the scale of production was large.
110 Prices depended also on quality – sugar could be bought for as little as 4 s. per cwt. First report of S.C. on sugar and coffee, pp. 83, 98–99.
111 First report of S.C. on sugar and coffee, p. 99.
112 Unfortunately, the information about the Dhobah Company is sketchy as its records do not seem to survive so more detailed analysis is impossible.
113 First report of S.C. on sugar and coffee, p. 99.
114 First report of S.C. on sugar and coffee, pp. 128–129.
115 First report of S.C. on sugar and coffee, pp. 129–130.
116 First report of S.C. on sugar and coffee, p. 128.
117 The key complaint of the British West Indies planters was that free labourers were working only 5 days a week instead of seven and could not be made to labour for 12–18 hours a day. This together with the fact that wages of free labourers were higher than the costs of a slave’s subsistence made them uncompetitive.
118 S.C. on East India produce, p. 225.
119 First report of S.C. on sugar and coffee, pp. 42, 118, 124.
120 The Importation Act also repealed Corn Laws.
121 Only refined sugar from the British Empire retained a certain small advantage (see Table 9). This Indian artisanal sugar was popular in the grocery trade so could compete on the markets. Ratledge, From Promise to Stagnation, p. 115.
122 Anthony Howe, Free Trade and Liberal England, 1846-1946, pp. 50–55. Bosma; HL Deb 10 August 1846 vol 88 cc467-545.
123 HL Deb 10 August 1846 vol 88 cc467-545.
124 Howe, Free Trade and Liberal England, p. 51.
125 See for example: Howe, ‘Free Trade’, pp. 401–402.
126 First report of S.C. on sugar and coffee, p. 49.
127 Howe, Free Trade and Liberal England, pp. 52–53; R. A. Lobdell, ‘Patterns of Investment and Sources of Credit in the British West Indian Sugar Industry, 1838-97’, Journal of Caribbean History, 4, 1972, pp. 31–53.
128 First report of S.C. on sugar and coffee, pp. 120–121, 135, 167. Their situation was worsened further by the 1848 financial crisis in Calcutta and the fall of the Union Bank that wiped out credit from the market. Bosma, Sugar, p. 78.
129 First report of S.C. on sugar and coffee, pp. 98–100.
130 First report of S.C. on sugar and coffee., p. 100.
131 Two of the factories were rented to one of the proprietors of the Company’s stocks for a rent below the properties price. First report of S.C. on sugar and coffee, p. 100.
132 The Chairman of the East India Company brought attention to the fact that the trade volumes did not decline in the 1846-47 period since the sugar already made was imported to London despite the universal loss made in such trade. First report of S.C. on sugar and coffee, pp. 120–121.
133 Here the best example is Crooke, who never found his enterprise making any net profit over more than a decade that he was involved in sugar making in Bihar.
134 Bosma, Sugar Plantation, pp. 31–32.
135 House of Commons, East India: Sugar importation and cultivation (1899), p. 3.
136 More capital intensive technologies such as steam-based sugar production started to expand into India only in the twentieth century.
137 Second report of S.C. on sugar and coffee, p. 44.
138 The only exception was John Gladstone, father of William Evart Gladstone, who sold his Indian sugar business two year prior to the passing of the 1846 Sugar Bill. Yet, he still made a loss. First report of S.C. on sugar and coffee, p. 100–101.
139 First report of S.C. on sugar and coffee, pp. 100–101.
140 Second report of S.C. on sugar and coffee, p. 44.
141 First report of S.C. on sugar and coffee, p. 43. The East India Company officials were worried that if sugar ceased to be exported to Britain the remittances would have to be made in bullion and such outflows would undermine the monetary system: ‘it will be the ruin of the country, of course, because the exchanges will go down, and rupees must be sent home’.
142 Gupta, ‘Falling behind’; Broadberry and Gupta, ‘Historical roots’.
143 Gupta, ‘Falling behind’, p. 814.
144 For the discussion of the transfer of revenue from India see First report of S.C. on sugar and coffee, pp. 115–116.
Additional information
Notes on contributors
Karolina Hutková
Karolina Hutková is a Research Officer in the Department of Management, LSE. Her book The English East India Company’s Silk Enterprise in Bengal, 1750–1850: Economy, Empire, and Business was published by Boydell Press in 2019.