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India - Opium

During the Mughal period no attempt was made to encourage or restrict the cultivation of opium. The chief centers of production were Bihar in Bengal. By the middle of the 18th century Bihar had become the province in which opium of the best quality and greatest quantity was produced. In the anarchy of the period, the Government monopoly had fallen into abeyance. Bengal was the principal area for cultivation of the poppy. As the price of this variety began to increase at an alarming rate, they turned their attention to Bengal opium. The poppy was grown for opium in the Punjab to a limited extent, but it had been decided to entirely abolish the cultivation there within a short time. The cultivation of the poppy was also carried on in Afghanistan, Kashmir, Nepal and the Shan states of Burma, but the areas and production are not known.

Salt-petre was required in the manufacture of gunpowder. The European countries being frequently involved in warfare, the demand for this commodity quickly developed in Europe. The trading commodity next in importance to salt-petre was opium. Sarkars Bahar and Monghyr were notable for opium cultivation. Patna opium was thought to be of a better quality than the Monghyr opium. Merchants from northern and western India used to come to Patna to buy opium. There was an export trade in opium which expanded considerably owing to European participation in it.118 There is reference to a few dealers who established a monopoly in the purchase of opium in the seventeenth century and sold it at an immense profit to foreign merchants. It is not known who these dealers were. Evidence suggests that Deepchand and Amirchand held an interest in opium in Patna1, but it is not known whether they established a monopoly in the purchase of that commodity or not.

The Dutch were the first among the European companies to be involved in the opium trade. The Dutch reckoned that in 1688 the total production of opium in Bihar amounted to 8,700 mans.131 Out of this total output, only about 0.6% was consumed within Bihar. About 10 to 12% was sent to parts of Bengal, another 31.5% to 46% was exported to Agra and Allahabad. The remaining 41 to 55% was exported through the ports of Bengal. The Dutch company procured annually about 1000 mans i.e. about 11.5% of the total output.

Patna was an old center for the export of opium. Dutch demand there generated an incentive among the peasants to cultivate opium regularly on a part of their holdings. The English also took some interest in the opium trade at the very outset, although the Dutch were the principal exporters of opium from Bihar. But it was only after the battle of Plassey that the Englishmen serving the East India Company at Patna established an unofficial monopoly in opium to be replaced by an official Company monopoly much later in 1773. This unofficial monopoly of the private Englishmen over opium production led to the ruin of the Dutch, after they were unable to ship their Bengal opium to Batavia. Until the establishment of the English private monopoly of the 1760s the opium trade was less restricted than the salt-petre, but even so by the mid eighteenth century the main participants seemed to have been the Europeans and the great merchants based in Bengal. Opportunities for the government at Patna to obtain a direct revenue from the opium trade were not very great.

The poppy was grown chiefly in Behar, the opium being manufactured at Patna, and known in commerce as Patua opium. No one is permitted to engage in the opium business except on account of the government, which makes advances to the cultivators, and purchases the whole crop from them at an established price - usually at less than one dollar per pound - and sold it for exportation from Calcutta to China, at an enormous profit. The chief sources of revenue to the government were from the land-tax and the opium monopoly.

The policy laid down had been announced by the Marquess of Salisbury, when Secretary of State for India in 1876, and had been reiterated in the House of Commons on behalf of the Home Government in 1891 by Sir James Fergusson and the late Eight Hon. W. H. Smith. The latter said : " The policy which this Government has taken, and which all Governments have taken, during the past few years - for the present Government take no credit for greater care and consideration for the morality of the people of India than has been shown "by preceding Governments - has been to diminish the area of cultivation" in India.

The resolution of the House of Commons in 1893, after recognising the "strong objections urged on moral grounds to the system by which the Indian opium revenue is raised," and after pressing on the "Government of India to continue their policy of greatly diminishing the cultivation of the poppy and the production and sale of opium," proceeded to request the appointment of a Royal Commission to inquire into the question " whether the growth of the poppy and manufacture and "sale of opium in British India should be prohibited except for medical" purposes. But at that time the quantity of both Bengal and Malwa opium exported to China and the Far East was far larger than that consumed in India, to which it bore the proportion of about 12 to 1.

In 1888, the Indian Government, finding its stock of opium unusually heavy, and fearing to diminish prices by throwing a large supply upon the market, ordered the diminution of area. The competition of China-grown opium was the chief reason for the fall in the price of opium which reduced the net opium revenue from 6,977,949 in 1889-90, to 2,674,828 in 1899-1900. In Behar 10 percent, and in Benares 24 percent, of the cultivation was not allowed to be renewed. During the following aeven years, owing to bad seasons and poor yields, the production of opium fell off greatly. Accordingly, in its Resolution on the Report of the Opium Department for 1894-95, the Indian Government determined that the area of cultivation be fixed as far as possible to produce 54,000 chests per annum.

Opium was formerly produced in large quantities, but the output, as well as the importation from India, was greatly restricted, pursuant to government decree and to the Anglo-Chinese treaty of May 8, 1911. The government of India agreed that the export of opium from India to China should cease before 1917. conditionally upon the establishment of proof of the non-existence of poppy cultivation throughout the republic by that date. No Indian opium may bo brought into any Chinese province which had succeeded in suppressing cultivation. On the the same date, the stock of Indian opium in China was 8100 chests (486 tons). The net import of Indian opium in 1913 was reported at 1088 tons, or 227 tons less than in 1912. .



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