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TOBACCO MONOPOLY

  1. 1. By: Alissa B. Cariaga
  2. 2. Tobacco Monopoly The Tobacco Monopoly refers to the 1782 economic program of Spanish Governor General Jose V. Basco, in which tobacco production in the Philippines was under total control of the government. Some pueblos were designated as tobacco districts, like Ilocos and Cagayan, and tobacco planting became compulsory to the point that some crops were abandoned. Brought in the country from Mexico, this became the Philippines' (under Spanish colonial rule) most important industry in the 18th century. It took effect through a royal decree signed by King Carlos III of Spain.
  3. 3. History Tobacco as smoke and snuff became very popular to the Spaniards, other foreigners in the Philippines and Filipinos alike but the colonial government learned to exploit its popularity only in the latter part of the 18th century. The actual establishment of the Tobacco Monopoly in 1782 came only after considerable prodding from the metropolitan government. Maintaining the Philippines as a colony was a serious drain on the coffers of the Spanish Empire. Expenses incurred in running the colony were usually paid for by a yearly subsidy (called real situado) sent from the Philippines' sister colony, Mexico. This financial support from the Spanish royal court was often insufficient, especially with expenditures in the Philippine colony growing each year.
  4. 4. This prompted the royal fiscal assigned in Manila to devise a plan allowing the Philippines to raise revenues on its own and thus be able to supplement the Spanish subsidy. This royal fiscal was Francisco Leandro de Vianna, who first proposed creating a tobacco monopoly. De Vianna reasoned that tobacco was a product widely consumed throughout the islands, with a market of roughly one million. He projected earnings of as much as P400,000 from the venture. The first time the proposal was made, however, both King Carlos III of Spain and the colonial officials did not prioritize it. All of that would change during the term of Governor-General Basco. Basco had plans to develop and promote Philippine agriculture and de Vianna's proposal seemed attractive to him. After studying the proposal, Basco sent his plan to establish large-scale tobacco production in the colony under complete ownership and management by the colonial government of Spain. What probably perked up the ears of the Spanish king about Basco's plan was its "selling point" to make the Philippine colony financially self-sufficient, thus removing a huge financial burden from the Spanish crown. The King of Spain issued a royal decree on 9 February 1780 setting in motion Basco's plan.
  5. 5. By this decree a monopoly was created which remained in operation for a hundred years. This monopoly strictly supervised the growing and grading of the leaf and had factories in Manila for the manufacture of cigars, cigarettes and smoking tobacco . In the field the chief appraiser residing at the provincial capital had a force of subordinates known as "alumnosaforadores". These were in charge of districts composed of municipalities and in each municipality there was a "caudilo" (headman) who was also the “gobernadorcillo” (little governor) who by the aid of his " tenientes " (lieutenants or overseers), supervised the growing of tobacco being remunerated for this service by a percentage of the crop produced. The chief appraiser set the date when the first seed beds were to be sown and also determined the date of planting and number of subsequent seed beds. The program laid out by the chief appraiser went into considerable detail, even designating the number of and when they should be done, as well as the number of plants to be set out in a unit of land.
  6. 6. Reintroduction of Tobacco The habit of smoking, sniffing or chewing tobacco and the knowledge to grow the crop remained with the Filipinos. It became part of their cultural heritage. Unlike in the days of the monopoly, however, the crop was grown as the people wished it. A proof of the continued growing of the crop was the Tobacco Inspection Law enacted on February 4, 1916. This law was enacted to improve the methods of production and the quality of tobacco in the country and at the same time developed an export trade.
  7. 7. The then Bureau of Agriculture was instructed to purchase seeds of well-developed tobacco plants, have the seeds to pass through a cleaning machine and distribute free to the growers. It was then unlawful for any tobacco producer to cure, dry, ferment or treat the leaves in any building other than the curing shed built under specifications of the BA. The Director of Forestry was instructed to give license to any producer of tobacco to cut first class timber for the construction of curing warehouses. Moreover, to encourage the farmers to produce the best leaves, they were awarded diplomas for excellence in tobacco production. Inspection fees were collected and these were accumulated into the Inspection Fund, of which 30% was spent in the establishment and maintenance of tobacco experimental farms.
  8. 8. Tobacco Types Grown During the 100-year regime of the tobacco monopoly, the country grew sun-cured and air-cured wrapper in addition to filler tobacco. New cigar types, especially from seeds originating from the United States and the Netherlands East Indies, were introduced and grown successfully. Other tobacco types, especially for the manufacture of cigarettes, were grown from seeds produced in the United States, Turkey, and Russia (Foreign Agricultural Report, 1952).
  9. 9. In 1927, the Virginia or flue-cured tobacco was test-planted at the Ilagan Agricultural Station in Isabela for adaptability to soil and climate conditions (Rabe, 1983). In 1942, Japan sent a team to analyze the soil, climate, rainfall and weather conditions in La Union, one of the four Ilocos provinces in northwestern Luzon, for potential tobacco growing areas with the hope that the Philippines would eventually become one of its territories. The team found the conditions in La Union similar to the areas planted to flue-cured tobacco in Japan. (Duldulao, 1985) During World War II, the Japanese grew small quantities of flue-cured tobacco from seeds produced in Japan and Formosa, now Taiwan. The best flue-cured tobacco ever produced commercially in the Philippines was grown during the 1949-1950 season. Attempts to grow Burley were not yet success- ful. However, small quantities of this type and Oriental tobacco were already tried.
  10. 10. Tobacco Finds its Way to the Philippines The Tobacco plant circled the globe before it finally reached the Philippines. Columbus first noticed Arawak Indians in 1492 to be smoking the dried leaves of a peculiar plant - tobacco. Seven years later, Amerigo Vespucci visited an island near Venezuela and noted that the inhabitants were chewing dried leaves. When the Spaniards invaded Mexico in 1519, they found that the people were already growing tobacco at an advanced stage. It was figured out that the seafaring Spaniards and Portuguese introduced tobacco to mainland Europe, East Indies and Asia as they went searching for spices and converting people to Christianity. The Spanish galleons were laden with treasures and curios of all kinds from the New World, among which were tobacco seeds. Through the colonizers, the use of tobacco was introduced into most of the civilized world by the end of the 16th century. Soon, there were more people converted to smoking than to Christianity.
  11. 11. Meanwhile, the Spaniards experimented on the cultivation of tobacco in the places they colonized. In the Philippines, the Augustinian friars brought 6.2189 kilograms of cigar tobacco seeds in the last quarter of the 16th century. Among the major commodities in the galleon trade was tobacco. In this plant, Spaniards saw the potential of becoming rich while gaining big income for Spain. It could also provide big revenue to the Spanish government in the Philippines. The colonizers toyed with the idea to commercialize the growing of tobacco and establish the tobacco monopoly to assure the Spanish government of bigger revenue on a sustained basis. It could also be a means of catering to the demands for tobacco by Spain and other foreign countries and thus, the establishment of the tobacco monopoly in the Philippines. The Spaniards' attention, therefore, was divided between tobacco growing and the introduction of the Christian faith to the Filipinos.
  12. 12. On June 25, 1881, a Royal decree was issued abolishing the tobacco monopoly in the Philippines. The order was applied in the islands in 1882, and the suppression of the monopoly was completed in 1884. The tobacco monopoly was arranged by Governor Basco y Vargas in pursuance of a royal order of February 9, 1780. Although opposed by certain classes, especially the friars, the monopoly was organized by March 1, 1782, and approved by royal order May 15, 1784. With the monopoly in place, no man might raise or sell a single leaf of tobacco without first having permission from the government.
  13. 13. Before the monopoly, anybody who wished to do so might raise as much tobacco as he could, and might sell it when and as he pleased. All this was changed. The farmers who had good tobacco land were compelled to raise this crop, or else forfeit the use of their land and its products for a term of years. If a man refused to plant tobacco, his land was taken from him for three years, and another man might cultivate it. A law was also passed compelling the tobacco planters and laborers to work on the crop whenever labor was needed.
  14. 14. The way in which the plan worked was very simple. The government made a contract with a planter for his crop. The price to be paid was based upon an estimate of what the land was likely to yield. If at harvest time the crop-was less than this estimate, the planter had to pay a heavy fine. If, on the other hand, it was larger than had been estimated, he could not keep a single leaf for his own use; it must all be turned over to the officials, and what the government did not use was destroyed.
  15. 15. This was very hard for the farmer, and the power given to tobacco inspectors made it harder still. These officers had authority to look wherever they saw fit for hidden tobacco. They might search the house of a tobacco grower, or even the persons of himself and his family, if they suspected him of hiding a few leaves for his own use.
  16. 16. The new system of tobacco-growing worked well for the authorities. Never before had the treasury been so well filled. The royal dues were promptly paid, and for the first time in the history of Spain's rule here, the colony seemed likely to become profitable to the Crown. The home government was delighted, and Vargas was much praised. The tobacco monopoly, however, oppressed the farmers and the landowners.
  17. 17. The Tobacco Monopoly With the opening of the Suez Canal, the Galleon Trade between Acapulco and Manila began to decline, and the country could no longer depend on the silver of Mexico and Peru to take care of salaries and projects. This started the cultivation and monopoly of tobacco which was hoped to be the main source of government revenue. Like all monopolies, however, that of tobacco opened the way to many abuses. Because the government was the sole buyer, it always set a price favorable to it, even if it was unfair for the farmers. The middlemen, like their latter-day counterparts, had their eyes not only on their commission, but on the commission of some hanky-panky. Aand the farmers, to defend their interests, were forced to device ways to countercheat the cheater. In 1786, the monopoly having failed, the government prohibited altogether the cultivation of tobacco. It was then that tobacco began to be grown in forest clearings and distributed as contraband at bandit's price. What we now hear about the 'marijuana' does not seem to be new at all.
  18. 18. Yet Cagayanos keep some sweet memory associated with the tobacco monopoly. At about that time, the government also made it compulsary for the people to grow cacao trees in their backyards. We still remember how sakulati and kamosi (boiled tuber) were served to the neighbors who came to help in care and cure of tobacco, in the spirit of ivve. Even today, cacao is still a favorite tree in many Cagayan backyards and sakulati continues to be a preferred beverage. The not-so-sweet effect of the monopoly among the farmers of Cagayan was that the young men, finding their work unrewarding, began an exodus in Manila and elsewhere in search of jobs for which they had no preparation, bringing the male population of the province to a one-to-three proportion vis-à-vis the female. The province was now poorer in money and man-power.

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