A growing war

There is concern that our continued efforts in Afghanistan are being undermined by widespread corruption within the administration of President Hamid Karzai. What few people are talking about is the opium cultivation and heroin production that is fueling this corruption. But should we do anything about it? Can we do anything about it? Not really.

Controlling opium production is a Sisyphean task -- hopelessly futile. Trying to eradicate the crop creates perverse incentives that actually lead to increased production, as NATO allies learned in the years following the ouster of the Taliban in 2001. However, if we do nothing about opium cultivation, farmers will naturally overproduce, stocks of stored opium will accumulate, prices will fall further and farmers will eventually abandon the crop of their own free will (as they did in 2000 and as they are starting to do now).

This year, the United Nations issued two reports suggesting significant drops in opium crop cultivation, suggesting that U.S.- and British-funded crop eradication and alternative development schemes were finally paying off. But the continued drop in the number of acres planted with poppies is not all that it seems. Thanks to increasing crop yields (because of more intensive planting and more efficient techniques), new opium production has fallen by far less than the numbers would suggest. Annual production levels are still double what they were in the decade before 9/11 and during the first few years of this war.

We should not be surprised. Western anti-drug policies are founded on three misguided assumptions, most of which have been refuted by highly respected academic studies that policymakers have rarely bothered to read.

The first false assumption is that crop eradication actually leads to a reduction in production. Graham Farrell, who worked with the U.N. Drug Control Program in the 1990s, looked at the impact of crop eradication efforts in different parts of the world and found that, in most cases, cultivation increased in the growing season following a crop eradication effort. It’s a counterintuitive conclusion, but it makes sense. If farmers know that some crops will be destroyed, they will plant more in the expectation that prices will rise from the induced scarcity. Sometimes they will plant separate fields in outlying areas, or farmers in countries and provinces neighboring the area targeted for eradication might increase their cultivation.

The second false assumption is that subsidized crop substitution programs help poor farmers. Discovering too late that eradication was counterproductive, the U.S. government decided this summer to switch its efforts from eradication to subsidized crop replacement schemes. However, rarely have alternative development programs worked, unless farmers are growing new crops that yield a naturally higher profit margin. Crop subsidy schemes are limited in duration and lack the funds to be sustainable.

The third false assumption is that these counter-narcotics programs will win the hearts and minds of Afghanistan’s rural poor. Improving transportation and trade infrastructure to help get legal crops to market would go further. But for those efforts to be sustained, the security situation needs to be improved first.

If all of these policies are counterproductive, what should NATO allies do in Afghanistan? Nothing at the extreme upstream end of the supply chain. Opium and heroin production has increased at such an alarming rate in the last eight years that the resulting supply glut has led to a dramatic fall in prices. Consequently, farmers in many parts of the country are switching to legal crops of their own free will.

Opium production levels have been so high in recent years that the United Nations estimates Afghan drug traffickers have stockpiled enough opium and heroin to supply the world’s addicts for more than two years. While it has been suggested that the Taliban might be stockpiling supplies in order to corner the market, a more likely explanation is that drug traffickers within the Taliban and the Karzai government are holding on to excess stocks as they wait for prices to recover. The temporary elimination of opium production by the Taliban in 2000-2001 was also because of massive overproduction in preceding years and a resulting price collapse in raw opium. The Taliban issued a “ban” on production that year to drive up prices so farmers and traffickers could sell off excess stocks.

The most sensible solution is to leave farmers alone and instead crack down on traffickers in the border regions. That is the only strategy that will squeeze the market. And if the farmers cannot find buyers for their opium, prices will be driven down even further, providing more incentive to voluntarily switch to crops such as dried fruits, pomegranates and spices.

So how does all of this fit in with the Obama administration’s new counterinsurgency strategy in Afghanistan? We know the Taliban is raising money from taxing and trafficking opium and heroin. But that has little to do with Afghanistan’s farmers. We need to leave the farmers alone and focus our efforts on controlling Afghanistan’s border crossings, targeting both drug traffickers and militants.