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 year.
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 "alumnos aforadores". 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.
Almost two years after the royal decree was issued, Basco ordered local officials and military commanders to prevent unnecessary losses of tobacco revenues. By 2 March 1782 tobacco production was established in Luzon, with La Union, Ilocos, Abra, Cagayan Valley and Nueva Ecija (still part of Pampanga at the time) as the centers for planting, growing, harvesting and processing tobacco.
The Filipinos, especially those in the Ilocos Region and in Cagayan Valley, were forced to plant tobacco. Each farmer had a quota to produce. Tobacco was grown on small plots by individual farmers instead of on a plantation wherein the government would have complete control of the operations. The government, therefore, had to negotiate with individual farmers, thus, involving hundreds of separate contracts and the need for more people to implement the activity. At the start, the farmers were treated fairly and got the right price for their produce. But in the end, the Filipinos abhorred tobacco not because of the difficulty in growing it but due to the abuses committed by the Spaniards as they forced the Filipinos to grow this crop.
A collector was contracted to collect the leaves from all the tobacco areas. In effect, these collectors served as middlemen between the government and the farmers, so the difference between what the government gave them to pay the farmers and what they actually paid the farmers was theirs. The collection of leaves was placed under direct government administration after many complaints. This gave the farmers better terms like fair treatment and the correct prices. To soften the impact of the monopoly as a radical and burdensome measure, tobacco production was linked to the program on economic development of the country. Those who were permitted to raise tobacco were promised prompt and adequate payment for their produce.
Fruits of forced production
By 1850 the tobacco monopoly was producing immense financial gain for the colonial government. Some reports at the time pegged the earnings by as much as USD500,000 (P21.275 million). One account in 1866 reported a much higher amount, as earnings rose to USD38,418,939 (P163.4 million) that year. Behind the great financial success of the tobacco monopoly however, was the anger of Filipinos who were exploited by the monopoly.
The injustices suffered by Filipinos in the tobacco growing areas were many. They were fined heavily if they failed to meet the quota. They were not allowed to smoke their own product. The prices were dictated by the government under unfair terms. To make matters worse, government agents often cheated the tobacco growers.
The monopoly heightened the exploitation of the Filipinos under the pretext of religion and obedience to the Spanish crown as it also aroused hostility among the people. Since the monopoly created many problems among the Spanish officials and the people, there were proposals to abolish it and let the Filipinos pay double tribute. There could be alternative crops to grow and the hatred towards the Spaniards could be lessened.
Novo Ecijanos suffered a lot from the system. Nueva Ecija was more often able to meet production quotas compared to the other districts. Despite this, tobacco policy imposed a lower price on tobacco from areas closer to Manila. That meant that first-class tobacco leaf grown and harvested from Nueva Ecija was priced lower by one dollar, compared to those from Ilocos, La Union and Cagayan Valley. Despite the diligence, cooperation and huge earnings given by Novo Ecijanos to the Spanish government, they were deprived of the fruits of their labor.
Remarkably, this abuse in the hands of the tobacco monopoly did not spur Novo Ecijanos to revolt, unlike the Ilocanos who staged an uprising over the injustices in the system. Some tobacco growers in Nueva Ecija resorted to smuggling their own harvests in order to get some profit. But getting caught entailed harsher fines and penalties. Even sympathetic local officials had no choice but to enforce the unjust policies under pain of arrest and hard labor, once laxity on their part resulted in low production.
The flourishing tobacco industry coupled with the rich agricultural lands in central and northeastern Nueva Ecija also attracted migrants from neighboring Pampanga, Ilocos and Tagalog areas. This made Nueva Ecija a melting pot of cultures and influences, the results of which are still evident in present-day Novo Ecijano culture.
As the tobacco monopoly fueled further unrest, Spain finally abolished the monopoly on December 3, 1882. It was only then that they could all once again grow rice for food. In the end, the monopoly did not only force the people, especially those from the north and Cagayan to grow tobacco, but compelled them to produce more than what their piece of land could yield. The collection of the produce alone was burdensome for the Filipinos, who suddered under the pain of 25 blows if they did not comply to transport the produce on their back. A century of hardship and social injustice brought about by the tobacco monopoly spurred Filipinos in general and Novo Ecijanos in particular, to aspire for freedom from colonial bondage.
- Arcilla, Jose S. Kasaysayan Vol. III - The Spanish Conquest. Philippines: Asia Publishing Company Limited, 1998.