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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.
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
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.
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
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.
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.
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.
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).
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.
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.
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 Spaniards' attention, therefore, was divided between tobacco
growing and the introduction of the Christian faith to the Filipinos.
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.
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
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
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.
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.
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.
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
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.