In the rural areas of Bengal and Bihar, a large number of poor peasants were made to produce opium for the British. They had to accept the low price for their products. The government was reluctant to increase the price of opium.
(i) The Britishers wanted to produce opium at a cheap rate and sell it at a high price to opium agents, who then shipped it to China.
(ii) This difference between the buying and selling price was the government’s opium revenue.
Impacts of this policy were
(i) Angry peasants began agitating for higher prices and refused to take advances.
(ii) In some regions, farmers began giving up opium cultivation. Instead of it, they produced sugar, potatoes, etc.
(iii) Many cultivators sold off their crop to travelling traders who offered higher prices to them.