Poppies Flood Afghanistan; Opium Tide May Yet Turn
By DAVID ROHDE
July 1, 2004
So many farmers grew opium poppies in Afghanistan this spring that the opium market here is now flooded, causing prices for the illegal drug to drop by an average of 65 percent across the country, according to Afghan officials, Western diplomats and opium farmers.
While an overabundance of opium is a setback for the country in the short term, Afghan and Western officials say this year's drop in prices may actually prove to be a boon in the effort to slow the explosive spread of opium here.
Afghanistan produces two-thirds of the world's opium, but comparatively little of it is consumed domestically. Almost all of it winds up in Europe, where it is shipped after being processed into heroin in remote border areas and in neighboring Pakistan.
Because most of the heroin in the United States comes from Latin America and Southeast Asia, the glut of opium in Afghanistan is not expected to affect the price of heroin on American streets, said Bill Grant, a spokesman for the federal Drug Enforcement Administration.
Experts say the high profit Afghan farmers make on opium is by far the largest incentive they have to grow the illegal crop. If prices tumble far enough and the government mounts a credible crackdown, farmers may decide that growing opium is no longer worth the risk, they say.
''There is a tremendous opportunity developing now,'' said a Western diplomat.
Afghan and Western officials consider the drug to be one of gravest threats to Afghanistan's stability. Proceeds from the trade function as a powerful force pulling the country apart by corrupting local officials, strengthening regional warlords who defy the central government and financing an increasingly violent Taliban insurgency.
These officials say they must speed up efforts to introduce alternative crops in areas where farmers who grew opium this year fared poorly. They say a brief window exists to persuade impoverished Afghans that opium will no longer enrich them.
Even with the drop in prices, the scope of the country's opium trade remains staggering. It appears that a record number of Afghan farmers, including vast numbers in areas where opium had not been grown before, chose to sow it this year.
Last year, an estimated 1.7 million Afghans, 7 percent of the country's population, grew opium in 28 of the country's 31 provinces. Opium generated an estimated $1 billion in 2003, roughly one-quarter of Afghanistan's gross domestic product. Limited efforts by the Afghan government, the United States and Britain to use eradication and alternative crops to slow opium production have failed.
American and Afghan officials say the production boom was fueled by a surge in prices, creating an almost insurmountable temptation for farmers in one of the world's poorest countries. For decades, opium prices remained comparatively low in the country, at roughly $30 a kilogram (2.2 pounds), according to the United Nations Office on Drugs and Crime. But after the Taliban enacted a brief ban on production in 2001, the prices soared to $750 a kilogram.
Eager to get in on this bonanza, farmers planted more and more opium in 2002 and 2003, according to the United Nations. Higher production brought prices down to roughly $350 a kilogram in 2002 and $283 in 2003.
This spring's oversupply has driven the price down to an average of roughly $100 a kilogram, according to Western diplomats. In the southern province of Helmand, long a center of opium cultivation, tomatoes are selling for more, according to farmers and shopkeepers.
One Western diplomat said strong crops in the north flooded the opium market there. A handful of government raids on processing labs also appears to have made dealers nervous about buying large amounts of opium, he said. That, too, has driven down demand and prices.
In the south, the same thing appears to be happening. A trip last weekend to Helmand and Kandahar Province, another bastion of opium cultivation, confirmed a sharp drop in prices. In Kandahar, agricultural officials said the prices farmers got for their opium fell 50 percent from last year.
In Helmand, agricultural officials said two different obstacles for opium farmers. In northern Helmand, where a multiyear drought continues, a plant disease and a lack of water resulted in some fields' producing very small amounts of opium, with some farmers losing money on the year's crop. In southern Helmand, the opium crop was very strong, but so many farmers grew it that the market was flooded, officials said.
The vast majority of profit from opium is believed to go to middlemen, processors and smugglers. Many impoverished Afghans grow it as sharecroppers -- borrowing land, seeds or cash. Lower prices this year may increase their indebtedness.
Falling prices are also affecting other parts of Helmand's economy. Merchants selling vanity items like satellite phones, televisions and refrigerators have seen sales fall this spring.
Ubaidullah, a satellite phone salesman in the provincial capital, Lashkar Gah, said his phone and international call sales plummeted from roughly $4,000 last spring to $1,000 this spring.
''All the people are depending on opium,'' he said. ''If there was no opium, I don't think I'd have one person coming to make a call.''
The unlikely winners in Helmand are farmers who looked like fools this winter. Sardar Muhammad, 22, could barely contain his glee last weekend as he explained why he chose to plant cucumbers, tomatoes, potatoes and okra instead of poppies. ''I was thinking no other people grow these things,'' he said. ''So I thought I could make a lot of money.''
He was right. So many farmers grew opium in the province this year that there is now a shortage of vegetables, according to farmers and shopkeepers. The price of tomatoes, okra and cucumbers have soared, while the price of opium has plummeted.