History of Tobacco
Tobacco use dates back to the fifteenth century. Columbus was brought the dried leaves and drug in the new world. In his journal, he records that he was offered dried leaves that have a distinct smell. It was used as medicine to dress wounds. The Portuguese used the drug for commercial purposes in the past where they cultivated it in their territories that include Brazil. King James was the first person to impose heavy taxes on tobacco in the 16th century. Early travelers of the Americas, Rodrigo de Jerez, cultivated the practice of smoking tobacco back to Spain around 1504. By 1511, smoking was trendy all over Spain, and by 1531, Europeans were farming tobacco, “Nicotiana tabacum” in Santo Domingo (Fichtenberg & Glantz, 2002, np). Tobacco smoking became a custom that increased and the habits prove hard to quit for the addictive qualities of the nicotine it contains.
In the mid-1500s, tobacco was used as a medication. Patients were given via a variety of ways like smoking, chewing and others. Tobacco was believed to effectively treat diseases like the colic, nephritis, hernia, dysentery, toothaches, falling fingernails among others. Towards the start of the year 1602, a connection was however attached to the cancers and lung diseases experienced by smokestack sweeps and infections brought about by the tobacco use (Fichtenberg & Glantz, 2002 np). In some states in the U.S tobacco was used as a trade commodity. As its fame grew, tobacco increased in worth value. In the American Colonies, tobacco was used as money throughout the 17thand 18thcenturies. In Virginia, in 1619, the very first American Thanksgiving celebrated a high-quality tobacco harvest. Tobacco was a form of currency. The healing perception of the tobacco was stamped out after research produced evidence that the smoke was the cause of cancer of the lungs among other illnesses. The harmful properties of tobacco are a topic of contention in the society. Nevertheless, tobacco has several factors that make it economically relevant in the world.
Understanding the tobacco production and farming sector is vital. This subsequent section examines the key players in tobacco production and trade, and the size of the international production in conditions of the quantity of service it creates; to evaluate countless people would be potentially affected by direct policies. One focuses on tobacco agriculture as it has attracted the most contests, and since it gives far more to jobs than cigarette manufacture (Fichtenberg & Glantz, 2002). Tobacco production is done by more than a hundred countries that include 80 developing countries. The shift in the production of tobacco in the world has moved from the low income countries to developed nations. Prices and Sale middle income countries. The production in the developing countries reduced drastically while the developed countries increased their production.
In several rising countries, there has been substantial stress on an agricultural study to increase the effectiveness of tobacco farms. The plans include raising farmers’ profits and exports, plummeting dependence on imported tobacco, and earning or safeguarding alien exchange (Fichtenberg & Glantz, 2002, np). An added factor is the increase in demand for tobacco yield in rising countries, as incomes and procurement power have matured. In some countries, farmers are encouraged to plant tobacco to provide new dispensation to plants built to increase local cigarette invention.
Prices and sales
Tobacco is a very addictive drug in the world. Facts prove that tobacco is the most addictive form of drug in the world. In the past three decades, several economic studies encompass research on the contact of price and tobacco manage guidelines on tobacco use. These studies have examined the applicability of a basic principle of economics. The law of the descending inclined demand curve to tobacco use (Fichtenberg & Glantz, 2002, np). Given the public fitness cost of smoking, some administration began to mediate in the tobacco industry with the purpose of dropping tobacco use. However, many administrations have declined to give in to taking sturdy battle because of unease that these intrusions may harm the financial system, or because of strong biased links with the tobacco industry. Price in the market is done with price elasticity of demand. When prices increase the rate of cigarette consumption also reduces. In the world records show that, poor people are more prone to use the drug compared to the rich folk. The sales in the poverty stricken areas are higher than in the areas where the rich people reside. Sales are recorded high in the event of cheap price (Fichtenberg & Glantz, 2002). The sale of the product is reliant for the prices set for the products. In the efforts by governments to help reduce the addiction rates, they increase the rate of taxes. This however is not so effective. The tobacco companies find loopholes in the measures and make profits.
Demand and supply
The theory of demand states that as the price of a product increase, the amount demanded of that, merchandise decreases. Economists find, cost includes the purchasing price of the merchandise but also the moment in time and additional costs related to the exchange of that product, as well as the wellbeing price and other costs starting from use of the product. The population taking the tobacco determines the demand of tobacco. Indefinite low-income and middle-income countries, tobacco growing is essential for numerous purposes, primarily since its labor strength and its aptitude to produce reliable ready money flow for poor small farmers (Gruber, 2000). Tobacco is amongst the manual crops and a further reason why farms are ample unlike the developed countries that have commercial farms for the same purpose. Cyclic labor is necessary for relocation of immature plants from seedbeds or orangery to the ground, and for harvesting tops when the plants begin to flower and suckers that breed out of the track to exploit development and eminence of leaves. The Flue-cured tobacco is reaped by amputation of a few leaves at a time, a blue-collar procedure (Jha & Chaloupka, 2000. np). Equipment are accessible for flue-cured harvesting and have been embraced in some areas, however, there is no automation for Burley tobacco. Often, curing is done on the farm to make sure the proper moisture, nicotine, and sugar substance, which influences the worth and taste. Automation has been tricky to realize in tobacco agriculture, due to the difficulty of these tasks. Additionally, much tobacco is grown on undulating or steep land that is inappropriate for mechanized gear (Federal Trade Commission). Tobacco has always made an economic impact in every country that grows. Regulation or no regulation in the industry there will be recorded more profits recorded. The production of tobacco manufacture and farming sector is imperative. These ensuing essays scrutinize the key principles in tobacco production and do business, and the size of the international production in conditions of the quantity of service it creates in the world.