A Million Indian Farmers Grew the Opium Britain Sold to China

Beside the Ganges at Ghazipur stands a walled compound the size of a small town. Through the nineteenth century, workers inside it tested raw opium, blended it, rolled it into cakes of about a kilo, and packed them into chests.

The chests went down the river to Calcutta, into an auction room, and onto fast ships for the China coast, where selling the stuff was a crime.

This was not a black market. It was a government department. The factory is still there, still making opium, legally, for medicines, on the site it has occupied since 1855.

The problem was tea

Britain had picked up an expensive habit. It wanted Chinese tea, silk and porcelain, and had almost nothing the Chinese wanted back, so it paid in silver, and the silver kept leaving.

Opium fixed that. Grow it in India, sell it in China, buy tea with the proceeds, and the silver stays home.

China had banned the drug outright by 1796, and by 1838 a smuggler could be executed for it. That turned out not to matter much. By the early 1800s British merchants were landing over a thousand tonnes of Indian opium in China every year.

A monopoly inherited, then industrialised

The British did not invent the state opium monopoly in India. The Mughals ran one in the sixteenth century, and as Mughal power faded, control of Bihar’s opium fell to merchants in Patna.

In 1773 Warren Hastings, the East India Company’s governor in Bengal, took the whole Bengal opium business for the Company and farmed production out to contractors. A monopoly here means what it sounds like: one legal buyer, one price, set by whoever holds it.

The contractors watered the product and leaned on the growers, so in 1797 the Company did something unusual for its day: it took production into the hands of the state.

Two Opium Agencies were created, one at Benares and one at Patna, each run by an Opium Agent reporting to the Revenue Department in Calcutta. Raw opium went to the factories at Ghazipur and Patna to be graded, blended and packed.

By 1879 the two agencies licensed more than 1.3 million cultivators between them: 631,226 in Benares across sixteen districts, 713,192 in Bihar across eleven. Together they had roughly 562,000 acres under poppy, nearly all of it for one customer country.

The advance

A cultivator took a licence to grow poppy on a set patch of land, and against it he got a cash advance from the government before planting. At harvest he handed over his opium and the advance was set against what he was owed. Fall short and the money was clawed back.

Cash before sowing is a powerful offer to a farmer with an empty store. It is also a debt. And the price at the other end was not a market price, it was whatever the Opium Department decided.

On paper, nobody was forced. The Bengal Regulation barred agents from compelling anyone to grow poppy and left it to each person’s choice to sign up or refuse. Whether that described life in a Bihar village is the argument historians are still having.

The part the Company pretended not to do

Selling opium into China was smuggling, and the Company knew it. So it did not sell in China. It sold in Calcutta.

The chests went under the hammer to private dealers, who carried the drug, the profit and the legal risk east. After 1834, when the Company lost its monopoly on the China trade, the business belonged to firms like Jardine, Matheson & Co. and Dent & Co. Exports doubled in five years, from 21,885 chests in 1834 to 1835 to 40,200 in 1838 to 1839.

The opium Britain could not control

Bengal opium had a rival. On the Malwa plateau, in what is now western Madhya Pradesh and southeastern Rajasthan, princely states outside British rule grew plenty of their own, and Indian and Portuguese merchants shipped it out.

From 1803 the Company tried to choke that trade, blocking opium exports from the west coast. Smugglers went around it: north Malwa to Pali in Rajasthan, across the Thar desert to Karachi, then by sea to the Portuguese port of Daman, which taxed the trade instead of banning it.

Britain then tried buying Malwa up and auctioning it at Bombay. That failed too. In 1831 it gave up and did the obvious thing: let private traders export through Bombay and charge a fee on every chest. If you cannot own a trade, tax it.

What it paid for

Figures put before the House of Commons in 1870 traced opium’s share of the Indian government’s revenue rising from under 5 percent early in the century to about 16 percent for the 1860s. Sceptical writers put the long-run average under a tenth, arguing the bigger numbers pick the peak years. Treat it as a range, not a figure.

What both sides agree on is the ranking. For most of the nineteenth century opium was the second largest source of revenue for the government of India, beaten only by the tax on land. An odd place for one crop to sit in a national budget, and one strand of the story of how Britain drained India.

Two wars over a drug

In 1839 the Chinese official Lin Zexu forced the merchants at Canton to surrender their opium and destroyed roughly 20,000 chests. Britain sent gunboats.

The first war, 1839 to 1842, ended with the Treaty of Nanking: Hong Kong Island ceded to Britain, five treaty ports opened (ports where foreigners could trade and live under their own laws), and 20 million silver dollars paid over, part of it for the destroyed opium. A second war, 1856 to 1860, forced China to legalise opium imports and hand over Kowloon.

Two wars, so that a crop grown in Bihar could be sold in Guangzhou.

Did the farmer come out ahead?

Here the record splits, and honest history has to say so.

The economic historian Rolf Bauer, studying more than a million peasant opium producers, concludes they grew poppy at a loss and were coerced into it, not by a law ordering them to sow but by what he calls a triangle of debt, state power and social dependence inside the village. Amitav Ghosh, in Smoke and Ashes, argues much the same: once land was marked for poppy, nothing else could be planted on it, and the price did not cover the cost.

Against that sits evidence that growers had more room to move. When opium prices sagged in the late 1850s they switched to indigo, cotton and sugarcane, and the Board of Revenue fretted that sugarcane advances would make poppy unpopular. In 1893, officials told Parliament that cultivators could hardly be persuaded to grow poppy at all, since other crops paid better.

In Rangpore in north Bengal, the historian Gunnel Cederlöf found peasants growing poppy illegally, outside the monopoly, because on poor land nothing else paid as well. Free of the licence they cleared far more than the roughly 10 percent margin the official system allowed. They hid plants inside village walls and burnt their own fields when the collectors came.

Both things can be true. The crop was valuable. The monopoly took the value.

The commission that found nothing much wrong

By the 1890s the anti-opium campaigners in Britain had forced an inquiry. The Royal Commission on Opium sat from 1893 to 1895 under Lord Brassey and largely cleared the system, comparing moderate opium use in India to moderate drinking in England.

In the Commons in 1895, MPs said the fix was in: the Government of India had issued instructions on how evidence was to be gathered, awkward witnesses were told they were not required to attend, and police had shadowed campaigners. Henry Wilson, the one dissenting commissioner, wrote a minority report.

Most later writers call it a whitewash. Not all do. The historian John F. Richards read the report as a document caught between two cultures rather than a cover-up, and thought the campaigners had blind spots of their own.

How it ended

Money, not conscience, closed it. Chinese domestic poppy grew until, by 1900, Sichuan alone outproduced all of India, and Indian tea had replaced Chinese tea in British cups.

In 1907 Britain and China signed a ten year agreement: China would suppress its own crop, India would cut exports by about 5,100 chests a year, and the trade would stop. The Patna agency closed in 1911 after 114 years and poppy growing in Bihar ended. The export trade was finished by 1917. Benares carried on for the medical market, still working close to half a million cultivators in the 1920s.

The mark it left

A working paper by the economist Jonathan Lehne compares districts inside the old opium zone with land just over the boundary, where poppy was banned. Inside the zone, the better the land suited poppy, the lower the literacy and the thinner the public services, right up to today. Outside, no such pattern. Colonial spending on schools and health there was lower, the police presence heavier.

One study is not a verdict. But Bihar and eastern Uttar Pradesh spent a century supplying the empire’s most profitable export, and are today among the poorest parts of India.

The opium money is not hard to find. It went into Hong Kong, into the great Canton trading houses, into fortunes made in Bombay and London. Almost none of it stayed in Ghazipur, where they made the stuff.