The first Portuguese settlers began colonizing the islands around 1420 or 1425. The three Captains-majorhad led the first settlement, along with their respective families, a small group of minor nobility, people of modest conditions, and some prisoners, who could be trusted to work the lands. To gain the minimum conditions for the development of agriculture, they had to rough-hew a part of the dense forest of laurisilva and to construct a large number of canals (levadas). In some parts of the island there was excess water, while in others water was scarce. During this period, the settlers relied on fish for about half of their diet, together with vegetables and fruits cultivated from small cleared parcels of land. Initially, these colonists produced wheat for their own subsistence, but later exported a surplus to continental Portugal.
On 23 September 1433, the name Ilha da Madeira (English: Madeira Island, or literally island of wood) was first used in a document, followed by other papers and maps. The name given to the islands corresponded to the large dense forests of native laurisilva trees that covered the island at the time of settlement.
Grain production began to fall and the ensuing crisis forced Henry the Navigator to order other commercial crops to be planted so that the islands could be profitable. The planting of sugarcane, and later Sicilian sugar beet, allowed the introduction of the “sweet salt” (as sugar was known) into Europe, where it was a rare and popular spice. These specialised plants, and their associated industrial technology, created one of the major revolutions on the islands and fuelled Portuguese industry. The expansion of sugar plantations in Madeira began in 1455, using advisers from Sicily and financed by Genoese capital. (Genoa acted as an integral part of the island economy until the 17th century). The accessibility of Madeira attracted Genoese and Flemish traders, who were keen to bypass Venetian monopolies.
By 1480 Antwerp had some seventy ships engaged in the Madeira sugar trade, with the refining and distribution concentrated in Antwerp. By the 1490s Madeira had overtaken Cyprus as a producer of sugar.
Sugarcane production was the primary engine of the island’s economy, increasing the demand for labour. African slaves were used during portions of the island’s history to cultivate sugar cane, and the proportion of imported slaves reached 10% of the total population of Madeira by the 16th century.
Barbary corsairs from North Africa, who enslaved Europeans from ships and coastal communities throughout the Mediterranean region, captured 1,200 people in Porto Santo in 1617. After the 17th century, as Portuguese sugar production was shifted to Brazil, São Tomé and Príncipe and elsewhere, Madeira’s most important commodity product became its wine.