Economics

All about the Tobacco Industry

Despite its heavy regulation due to health concerns, tobacco remains an incredibly lucrative industry for countries such as the United States and China.

Description

The tobacco industry denotes those persons and companies engaged in the growth, preparation for sale, shipment, advertisement, and distribution of tobacco and tobacco-related products. Today more than ever, it is a truly globalized industry. Because tobacco can grow in any warm and moist environment, it can be farmed on all continents except Antarctica. Tobacco is an agricultural commodity product, with its price being determined by crop yields, which vary depending on local weather conditions, species, the total quantity on the market ready for sale, the area where it is grown, and the health of the plants.

Location

China, India and Brazil were rated among the leading producers of the tobacco worldwide, followed by the United States, Indonesia and Zimbabwe. Statistics from 2013 show that China alone produced more than 3 million metric tons of tobacco, comprising 40% of the world's total tobacco production. The world's top tobacco exporter is Brazil, owning 27% of the world's export market in terms of value. While the United Sates is fourth in production, it is the second leading exporter, with 10.5% of the world's export market share.

Process

In modern tobacco farming, tobacco (Nicotiana) seeds are scattered onto the surface of the soil, and the germination is activated by light, and the young plants are then covered in cold frames. After the plants have reached a certain height, they are transplanted into fields with more space to grow. This process has been automated by the invention of tobacco planters. A Tobacco planter will make a hole, fertilize it, and guide a plant into the hole. As the plants grow, they usually require topping and 'suckering' to remove unwanted growths. Upon maturation, the leaves then have to be removed for commercial use. During harvest, large fields of tobacco are harvested by harvesting wagons. Harvesting usually takes place for one crop annually in most locations. Upon harvesting, the crop must then be dried and cured before sell to tobacco comapnies and further processing can take place.

History

Tobacco has a long history, dating back to its usages by the early Native Americans. It was first discovered by the native peoples of North and South America and, following European contact, was later introduced to the rest of the world. With the arrival of Europeans into the Americas, tobacco became heavily traded and was one of the primary products supporting colonization, and a driving force in the incorporation of African slave labor well before cotton became a large-scale plantation crop. Europeans brought tobacco back to Europe, and also, through global colonization and removal of trade barriers, brought it to places such as Japan, Australia, and the Ottoman Empire. Today, the tobacco industry is a global industry, with China being the leading producer.

Regulations

The World Health Organization (WHO) has long been active in preventing the myriad of health issues that result from tobacco consumption. As one of the leading causes of preventable deaths globally, tobacco has seen an upsurge in both its consumption and its fatality rates worldwide, accompanying the increased interconnectedness of the global economy. Throughout the 1980s and 1990s, the WHO urged individual countries to adopt national laws to reduce tobacco use. In May of 2003, the WHO Framework Convention on Tobacco Control was passed. The treaty has been signed by 168 countries, and is legally binding in countries ratifying it.

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