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MADELAINE DROHAN: VALUE ADDED

Opium economics

Ending illegal opium production in Afghanistan: Why there are no silver bullets

July 5, 2007

There is broad agreement among countries whose soldiers are fighting and dying in Afghanistan that peace and stability will never be achieved unless something is done to curtail the country’s soaring opium production.

Afghanistan is now a narco-state. It produced 92 per cent of the world’s opium last year, according to the latest UN World Drug Report. The illegal trade involves everyone from poor farmers, to warlords, to senior government officials. Drug money buys weapons that are used to continue the conflict. It fuels the rampant corruption undermining the fragile institutions of the Afghan state. And it defeats attempts, some of them funded by Canadian taxpayers, to build a viable economy and national system of law and order.

But while the problems caused by illegal opium production are all too clear, what to do about it is not. How do you wipe out an industry that employs an estimated 2.9 million people and accounts for somewhere between one-quarter and one-third of the economy without destroying an already devastated country?

By the numbers

  • Afghanistan produced 92% of the world's opium in 2006.
  • The opium industry is estimated to employ 2.9 million Afghans.
  • The opium trade is estimated to account for up to one-third of Afghanistan's economy.
  • The average crop yield is 37 kilograms per hectare.
  • The farm-gate price of opium was estimated at $125 US per kilogram in 2006.

In such a situation, simple solutions — so-called silver bullets — have an understandable allure. At least three are being debated: eradication, where chemicals or bulldozers are used to destroy poppy crops; alternative livelihoods, where farmers are given support to grow other crops or pursue other businesses; and legalization, where opium is purchased from producers and used to make legal painkillers.

A sobering predicament

Would that they were as simple as they sound. They are not. Two experts with long experience in Afghanistan outlined the drawbacks of each approach at a recent conference in Ottawa organized by the International Development Research Centre and the Aga Khan Foundation Canada. David Mansfield, a drugs and development specialist, has spent 10 years in the country doing research in rural areas. William Byrd is a World Bank economist specializing in South Asia. Their analysis was sobering.

Eradication is favoured by the United States, which has used crop spraying in its so-called war on drugs in South America and wants to do the same thing in Afghanistan. The problem is that the two crops are not the same. Coca leaves that are used to make cocaine grow on bushes that take time to mature, and destroying them can set producers back years. Poppies are an annual crop. Wipe them out one year and they can be replanted the next, sometimes in the same area, sometimes in a different part of the country. The opium industry is "footloose and flexible," Mr. Byrd said. Eradication also hits the poorest farmers the hardest. It deprives farm families of funds from the current crop, but also plunges them further into debt because many of them have borrowed money against anticipated earnings from the harvest. They face stark choices: plant more poppies next year to make up for the shortfall, sell some of their meagre assets, or even arrange marriages for their young daughters.

Those with money can bribe government officials to overlook their fields. But this results in an uneven application of eradication, which only increases discontent with the government among the poor.

Canada favours alternative livelihoods

Encouraging alternative livelihoods sounds wonderful. And if Afghanistan is to survive as a country, all those involved in the illegal drug trade will have to find some other way to make money. This is also the policy prescription that Canada favours. (Canadian troops are not involved in the eradication campaign.)

But while the goal is clear, how to make the transition is not.

As Mansfield points out, no other crop offers the same attractions as opium. It is easily transportable, does not perish en route to market, and garners much higher returns than most agricultural products. The UN report said the farm-gate price of opium was $125 US per kilogram last year. (The farmer would not keep all of that, as he would have costs, such as labour and bribes.) The average yield is 37 kilograms per hectare. Poppy cultivation is more labour intensive than other crops. Switching to wheat or vegetables, where soil conditions make such crops possible, automatically means higher unemployment.

Still, in areas where land is fertile, transport reliable, and there are markets nearby, wheat and vegetables represent viable alternatives. They fetch a lower price, but the risks of having the crop confiscated by a warlord or wiped out in an eradication program are low. However, much of Afghanistan has poor soil and bad roads. Farmers in these areas have fewer choices.

Development workers can sometimes worsen the situation with well-meaning but poorly thought out interventions, says Mansfield. For example, building a new irrigation system to give farmers access to more water might actually encourage them to grow more poppies if they do not have access to a market for other crops. Each area is different, so programs have to be tailored to local circumstances, which are changing all the time.

Legalization requires a functioning government

Legalization of the illegal industry, which is being promoted by the Senlis Council (and was recommended at least as a pilot project in a recent report of the House of Commons National Defence committee), also has its drawbacks. It has been done successfully in Turkey. Other countries, such as India and France, have legal opium industries. But as these two experts point out, a legal industry requires government infrastructure to impose and enforce regulations, something that Afghanistan lacks. The majority of the opium in Afghanistan is produced in the unstable provinces of the south and southeast, where Western troops, including those of Canada, are still fighting.

Without strict government oversight, illegal production could flourish alongside the legal industry. Only three per cent of farmland is currently used for poppy cultivation, leaving lots of room for expansion. They also believe there is no shortage of legal opium globally, so producer countries will have to cut production to make room for Afghan production. This last point is disputed by the Senlis Council. Finally, it is not just the Afghanistan government’s ability that is lacking, it is also its willingness to end an illegal trade that involves some senior government officials. So what is the answer? Attractive as the idea seems, there is no silver bullet. Instead, a mix of well-designed and well-integrated policies is needed to tackle illegal opium production in Afghanistan. And even then, success will take decades, not years.

Of course, there is another approach that governments outside of Afghanistan could take. The market for opium and its derivatives, such as heroin, operates like any other on the principles of supply and demand. All of the solutions proposed above tackle the supply end. But what about demand? If that were wiped out, there would be no market for illegal opium and the suppliers would have to find other ways to make a living.

This is a problem best tackled from both ends, and not just on the ground in Afghanistan.


LETTERS:

It doesn't matter that Afghanistan produced 92% of the world's Opium crop last year. You know what'll happen if they decide to eradicate the crops in Afghanistan? Opium will be produced elsewhere!! This is the DRUG trade.... you can't view it the same as you would a legal industry, it doesn't work like that. You can't just shut it down.

There are no rules or regulations.... if it doesn't get produced in Afghanistan, another country's going to do it, because the demand will still be there. You can't stop the demand, short of incarcerating everybody who uses the drug, and as long as there's a demand, there WILL be a supply.

It's sad that even in 2007, national governments and the media still don't understand that.

—Andrew Gobeil | Thunder Bay, Ont.

Ms. Drohan's article contains an important point at the centre of this debate: The Senlis Council does indeed vigorously debate the belief that legal world opium production is currently adequate.

Legalized and regulated in countries like Turkey and France, why then are the farmers of Alberta being courted to produce the opium variety which is supposedly less used for the illegal drug trade? Either variety can be used for either purpose. Why not seek every effort to beat the illegal trade at its own game and give decent prices to the subsistence farmers of Afghanistan? Is it because the price might be too high for the legal trade, in spite of the debated growing demand for the product?

The cancer industry is one of if not the fastest growing industries on the planet. If there were a will by the cancer lobby, there would be a way to deal with the poor or even non-existent governmental infrastructure of Afghanistan.

The need for legalized, pain-killing morphine and other forms derived from the poppy, including the psychic pain-killing effects of illegal uses for those downtrodden by our horrifying world, are unlimited.

—D.M. Holmlund | Ont.

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ABOUT THIS AUTHOR

Biography

Madelaine Drohan

Madelaine Drohan is an award-winning author and journalist who has covered business, economics and politics in Canada, Europe and Africa. She is currently the Ottawa correspondent for The Economist. She spent eight years in London as the European correspondent for the Globe and Mail, a beat that gradually extended as far north as Siberia and as far south as southern Africa. Before that, she covered Parliament Hill for eight years for the Canadian Press, Maclean's magazine, the Financial Post and the Globe and Mail. She was awarded a Reuters Fellowship at Oxford University in 1998, the Hyman Solomon Award for Excellence in Public Policy Journalism in 2001 and was a 2004-2005 Media Fellow at the Chumir Foundation for Ethics in Leadership.

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