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Lucky Strike? The Rise and fall of the ‘Global Cigarette” in Honduras

Lucky Strike? The Rise and fall of the ‘Global Cigarette” in Honduras. © William M. Loker. Department of Anthropology. Organization of Presentation:. A brief history of tobacco and the tobacco industry in the U.S. and the world Global tobacco comes to the Cop á n Valley, Honduras

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Lucky Strike? The Rise and fall of the ‘Global Cigarette” in Honduras

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  1. Lucky Strike?The Rise and fall of the ‘Global Cigarette” in Honduras © William M. Loker Department of Anthropology

  2. Organization of Presentation: • A brief history of tobacco and the tobacco industry in the U.S. and the world • Global tobacco comes to the Copán Valley, Honduras • The local in the global: the effects of global tobacco in Copán • Global tobacco leaves Copán … but not Honduras!

  3. The Botany of Tobacco:Nicotiana rustica, N. tabacum

  4. Tobacco: a New World “Gift” • Early domesticate, 5,000-7,000 years ago in South America • Widely used in shamanistic ritual for curing, visionary experiences • Smoked, snuffed, chewed, drunk as tea, taken as enema, poultice on wounds, etc • Reached northern North America by 4,000 years ago … wherever it was possible to cultivate tobacco, it was grown, consumed

  5. Early European Experiences • 1492 Arawaks in Cuba offer Columbus and his men cigars, Columbus’ sailor, Rodrigo Xeres is first European to smoke tobacco in Europe • 1535 Cartier in Canada “There groweth a certain herb … they make a powder of it and then put it in the end of the … pipe and laying a coal of fire upon it … suck so long that they fill their bodies full of smoke till it cometh out of their nostrils and mouth like smoke from a chimney” • 1556 Andre Thevat brings tobacco seeds to France from Brazil, 1560 Jean Nicot, French Ambassador to Portugal becomes interested in curative powers of tobacco … his name becomes name for genus Nicotiana … • 1588 Thomas Hariot’s A Briefe and True report of the New Found Land of Virginia: There is an herbe which is sowed a part by it selfe & is called by the inhabitants uppówoc. . The Spaniards generally call it Tobacco. . . We ourselves during the time we were there used to suck it after their manner, as also since our return . . . • By 1776, Tobacco was the American colonies’ second leading export and employed 50% of workforce in it’s cultivation & trade

  6. Tobacco use in America • Chaw, snuff, pipes, cigars and … cigarettes • In 1900 Americans consumed about 400 million pounds of tobacco, 100 million lbs. in cigars, 290 million lbs. in plug, snuff and pipe tobacco and 10 million lbs. in cigarettes • In 1946 Americans consumed 1.3 billion lbs. of tobacco: 1 billion lbs. in cigarettes, 130 million lbs. in cigars, 170 million lbs. in plug, snuff and pipe tobacco • Per capita consumption nearly doubled 1900-1950 • Tobacco consumption peaked in the US in 1970s and has declined since then … but increased globally

  7. “Hello, boys, my name is Duke … • Bosnack machine (1881) and the cigarette revolution • 2,500/day to 120,000/day • The rise of American Tobacco Company • Early adopter of Bosnack machine • 1904 controls 80% of U.S. tobacco production James B. Duke 1856-1925 “The Tobacco Trust stands forth as a conspicuous example of that type of industrial combination which owes merely to the magnitude of its working capital those advantages in production and distribution that enable it to crush competitors until it is in possession of a large part of the entire market.” Jacobstein 1907:101

  8. … and I come to buy your business” • Tobacco Wars: 1901, ATC “invades” Britain • Imperial Tobacco: the British response • Truce in the Tobacco Wars: 1902 the founding of British-American Tobacco (BAT) … • ATC agrees to withdraw from British market and Imperial agrees not to enter US market • ATC and Imperial agree not to engage in exports except through BAT • Imperial and ATC split ownership of BAT Co. 1/3 Imperial, 2/3 ATC • BAT can not enter US or British market • BAT becomes leading international tobacco company

  9. “I have just completed a great deal with British manufacturers covering the world securing great benefit for our companies …” Duke in telegram to his father “With no international competitors of comparable size, BAT Co. was able to develop its activities abroad opposed only by domestic competitors in the countries where it invested. In those markets where tobacco manufacturing was still largely in pre-industrial conditions … BAT Co.’s brands and subsidiaries pioneered the development of modern cigarette manufacturing. …at the beginning of the twentieth century, therefore, BAT Co. was the only British or American tobacco firm with an international market for its products, and the leading manufacturer of tobacco products of various countries, most notably Australia, Canada, South Africa, India and China.” Cox 2001:6 Currently, the 2nd Largest Tobacco Co. in the world … “Is it not a grand thing in every way that England and America should join hands in a vast empire rather than be in competition? Come along with me and together we will conquer the rest of the world.” Duke at dinner celebrating BAT’s formation

  10. 1911: The Trust Busted • May 29, 1911, US Supreme Court hands down anti-trust verdict against American Tobacco Company. • “Undisputed facts overwhelmingly demonstrate that the acts, contracts, agreements, combinations, etc … were of such an unusual and wrongful character as to bring them within the prohibitions of the law.” • Out of the Ashes: ATC, Lorillard, Liggett and Myers and RJ Reynolds in the US • Duke forced to divest BAT holdings … BAT becomes a British company

  11. British American Tobacco: prototype of the TNC • Follows the ATC model of squeezing out local competition, then … • Buys up local cigarette manufacturers to avoid tariffs and other national barriers • Contract farming to avoid production risk, political fallout, and diversify sources • Major investments in China, India, Brazil … and Honduras

  12. Global Tobacco Comes to Honduras • 1928: BAT buys out two local (competing) cigarette manufacturers in Honduras and forms Tabacalera Hondureña, SA • 1950s: BAT enters into contract farming arrangements with local tobacco producers in Copán Valley • Transformation of tobacco production in Copán: Adios, Quinbí, Hello, Virginia …

  13. Tabaco, el patrimonio de Copán: ideal conditions (climate, soils, irrigation) for tobacco and a LONG history of cultivation of the crop … Map showing location of Honduras and the Copán Valley

  14. “Bright leaf” comes to Copán • Origins of “bright leaf” tobacco • Stephen, the sleepy slave, 1839 • Flue-curing tobacco • tobacco cured in “ovens” at temperatures of around 100-130 degrees F over 5-10 days • Adds to the complexity, labor intensity and energy requirements of tobacco production • Major component of cigarette tobacco

  15. Golden Years: La Companía and “Tabaco Virginia” in Copán • 1950s: BAT brings in the “good ole boys” from North Carolina • Flue curing technical package: • Varieties, fertilizers, pesticides, tractors, ovens • Contracts with planters: BAT provides seeds, agro-chemicals, credit, market • Planter provides land, labor, harvest • Rise of a planter class: Labor? Fuelwood? Power?

  16. Flue-cured Tobacco: social and environmental aspects • Highly labor intensive: original slave crop • Seed beds • Transplanting • Deflowering • Suckering • Agrochemicals • Harvest (~ 5 passes per plant) • Curing • Selection and Packing • 285 person days/hectare x 300 has = 85,500 person days of labor per season … major employer in valley • Mozos colonos in casas de basura …

  17. Preparing seed beds, spraying agrochemicals and transplanting tobacco in Copán

  18. Laboring in the Fields

  19. Flue-cured Tobacco: capital intensive • Credit for: • Seeds • Labor • Agrochemicals • Machinery • Irrigation equipment • Fuelwood for curing • BAT supply of credit + sole buyer of product = power in contract relationship

  20. Flue cured Tobacco: environmental aspects • Intensive use of agrochemicals: (2001 data) • Methyl bromide: fumigant, highly toxic, ozone depleting chemical • Vydate: carbamate, insecticide, EPA Type 1 • Lannate: carbamate, insecticide, EPA Type 1 • Mocap: organophosphate, nematicide, Type 1 • Nemacur: organophosphate, nematicide, Type 1 • Endosulfan: chlorinated hydrocarbon, insecticide, Type 1 • Furdan: carbamate, insecticide, Type 1 • Many other chemicals ... Change over time, synergistic health effects …

  21. Flue cured Tobacco: environmental aspects • Flue curing and deforestation • Boom years ~ 1960-1985 • ~ 300 hectares of flue cured tobacco/year • ~ 3 cubic meters of firewood per “horneada” • ~ 6 horneadas per hectare • ~ 5,400 cubic meters of firewood/yr • ~ 150 cubic meters of wood/ha in Copán area • ~ 36 hectares of forest/yr deforested • ~ 900 hectares of deforestation 1960-85 • Little regeneration, replanting

  22. Typical, and not so typical, tobacco hornos in the Copán Valley

  23. Copan Land Cover 1955-1978 … Area in Forest declined by 170 hectares, more than half … this is the height of the flue cured tobacco boom …

  24. Copan Land Cover, 1978-1999 … Area in Forest increased from 68 to 110 hectares … recovery of forest with decline of flue cured tobacco …

  25. The Global in the Local: summary • BAT: a pioneering TNC • In Copán, BAT built on an existing tradition of tobacco cultivation, transformed it with new technology, infusion of credit, market access • BAT’s tobacco production in Copán: • employment, (low) wages, poor health for many • prosperity for a few … reinforced inequality • controlled access to markets … la Companía as patron • degraded environment

  26. The Boom goes Bust: BAT has left the Valley … • Growers increasingly restive in 1980s-90s • Cost:price squeeze, new pests, diseases, macro forces • Laborers increasingly restive • Oversupply of labor, scarcity of land, subsistence squeeze • Rise of ethnopolitical movement • BAT increasingly under pressure • Lawsuits, competition, efficiency • Liberalization  less need for local supplies of leaf • 1999: BAT reorganizes, ends production of tobacco in Honduras, maquilization of cigarette manufacture in Honduras • A new phase of globalization?

  27. After the Bust … • Growers seeking alternative crops • Agricultural economy in decline • Some landowners selling out (at high prices) to government for land redistribution • Tourism: the new patrimonio of Copán?

  28. Sorting and Pressing Burley … … the Last Tobacco Crop in Copán?

  29. Conclusions • Understanding social and environmental change requires attention to the global, the local and their interplay • The insertion of global economic actors in a locality creates opportunities for, and at the same time, constrains social and environmental change • Unless carefully directed, global actors are likely to reinforce existing patterns of social inequality

  30. Conclusions • Global actors always hold the trump card of mobility in dealing with local actors, who by definition are rooted in determinant places  “race to the bottom?” • Global corporations are driven primarily by the profit motive and are difficult to “tame” • Localities are many (infinite?), global actors few: actions designed to rein in social/environmental abuses should be directed at global actors, therefore …

  31. Think Locally, Act Globally?

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