Afghan Drug Cartels Finance Poppy Farmers With Forward Contracts

Like farmers the world over Haji Afzal has locked in the price for his crop with a forward contract.

Rather than a contract on the Chicago Board of Trade -- like an American wheat farmer or a Thai rice grower -- Afzal was paid 400,000 Pakistani rupees (5,000 dollars) by a middleman for the world's biggest drugs cartels.

Afzal will harvest in a month, when the tall green weeds on his land have burst into scarlet bloom and the poppy bulbs ooze sap that will become opium.

The cash ensured Afzal had all he needed for a good crop -- seed, water, fertilizer, tools -- supplied by the men who will process his opium into heroin and ship it across the world.

But opium prices have fallen over the past year by about 30 percent, to less than 50 dollars a kilogramme, and Afzal worries officials will destroy his plants -- or demand bribes not to.

He also worries his farm will be squeezed between the Afghan government with its Western military backers and Taliban militants who control poppy production in Helmand province, source of most of the world's opium.

Azfal -- not his real name -- lives in Gereshk and is watching closely as US Marines lead efforts to assert government rule in Marjah, a farming district further south down the Helmand River.

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The area has for years been controlled by insurgents and drug traffickers who compel farmers to grow poppies, paying for the raw opium they produce or making life difficult if they do not.

"We know the government has started a campaign to eradicate opium," said Azfal, referring to new plans to wipe out poppies.

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"Some people are worried, although we know they cannot extend their campaign to our district because there are Taliban who will resist and attack them.

"But we are also worried about the military -- if the Marjah operation goes well, they may plan to extend their operation to other parts of Helmand," he said.

-- Poppy farmers squeezed between drug cartels, corrupt officials --

Marjah is the target of a coordinated campaign to push out militants and drug dealers and establish government control with police and civil services.

Operation Mushtarak ("together" in Dari and Pashto) is the test of a US-led counter-insurgency strategy focused on winning the confidence of local people with a level of security to keep the Taliban and drug lords from returning.

It has not worked in the past because the Afghan government could not ensure a stable and accountable presence with officials immune to the temptations of corruption inherent in the three-billion-dollar-a-year drugs business.

"Drug money is addictive, and is starting to trump ideology," said the head of the UN's Office on Drugs and Crime, Antonio Maria Costa, in a September report.

Cooperation between the Taliban, drug smugglers and corrupt officials has turned areas such as Marjah into mafia fiefdoms.

Militants provide the muscle to coerce farmers to grow poppy and protect the processing labs and smuggling routes through Pakistan to the east, Iran to the west or the former Soviet states to the north.

The Taliban use religion and violence to bolster their power -- telling local people it is un-Islamic, for instance, to send their girls to school, and administering rough justice to ensure compliance.

This "marriage of convenience" has turned Afghanistan into a narco-state comparable to Colombia, Costa said.

Afghan opium funds crime gangs, insurgencies and terrorism in Afghanistan and elsewhere, his report said, adding "collusion with corrupt government officials is undermining public trust, security and the rule of law".

-- Eradication efforts a failure --

In Lashkar Gah, a reconstruction team -- where British bureaucrats lead a multinational team of experts in such areas as governance, justice and counter-narcotics -- has distributed wheat seed to 40,000 Helmand farmers in an effort to provide alternatives to poppy, said deputy head Bridget Brind.

"These sort of counter-narcotics initiatives reduce insurgent influence and increase government authority," she told reporters, adding that the fall in opium prices was matched by a wheat price rise, another reason to switch.

But the figures don't quite match the rhetoric and UNODC has called eradication "a failure."

In 2008-2009, only 10,000 hectares of opium, or less than four percent of land planted, were eradicated.

Norine MacDonald, president of the International Council on Security and Development (ICOS), said: "If these calculations are accurate, it still leaves a staggering 1.4 million people involved in illegal poppy cultivation.

"Despite good intentions and investment in alternative development programs there is still no structural solution for these millions of Afghans," she told a US Senate hearing in October.

UNODC found opium output down by 10 percent, to 6,900 tonnes in 2009, but said yield rose 15 percent because farmers extracted more opium per bulb.

Production far outstripped annual world demand of 5,000 tonnes, it said.

For farmers the world over the equation of over-supply and falling prices is simple and in Afghanistan cartels are hoarding, with stockpiles of opium estimated at 10,000 tonnes.

That's two years supply of heroin for addicts, or three years of morphine for medical use, according to UNODC.

-- Amid military campaign, smugglers look for other routes --

Nevertheless, the Afghan government this month announced eradication had begun anew in Helmand, Nangahar and Farah provinces, and will soon begin in Kandahar.

Deputy Interior Minister Mohammad Daud Daud said poppy cultivation had stopped in 21 of Afghanistan?s 34 provinces by 2009, but there was "minor" planting in 18 of those provinces this year, suggesting a re-emergence.

He said he hoped the program would see 25 provinces cleared of poppy by the end of this year.

Interdiction had also failed, with only about two percent of the world's opium seized in Afghanistan, UN figures show.

Sending in the military is having an impact, another expert said on condition of anonymity, comparing it to the short-lived but effective tactics of the Taliban's 1996-2001 regime.

It will only work if the government can provide security along with alternatives, she said, "because there is so much money to be made".

A Helmand smuggler said the Marjah campaign has shaken up kingpins, who are now looking for alternative routes.

"Our main route for transporting drugs to neighboring districts, provinces and countries was Marjah," he said, giving his name as Haji Abdul Qudos.

As he had already advanced 10 million rupees to farmers, he would be looking for other ways to get the drugs out, not ways to get out of drugs.

"We will find alternative routes or even use Marjah roads, but (the military campaign and presence of police) mean it is more difficult now, with the danger that our opium is sometimes confiscated by international forces," he said.

"At the moment no one's farms have been eradicated but there is the concern that they might be."

Source-AFP
TRI