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A new report from the United Nations shows that opium production in Afghanistan is up. This, despite efforts on the part of the United States to sharply limit opium production in the country. America’s efforts, while well intentioned, have fallen victim to the law of unintended consequences. When the United States leans on the Afghani government to crack down on opium, they are effectively funding the Taliban, our Afghani opponent in the war on terror. The U.S. should stop these efforts immediately.
The United Nations Office on Drug and Crime, in collaboration with the Afghani Ministry of Counter Narcotics, just released its annual Afghanistan Opium Risk Assessment, predicting yet another rise in Afghani opium production in 2013. Poppy cultivation rose from 131,000 hectares in 2011 to 154,000 hectares in 2012 — an 18 percent increase; this trend that is unlikely to stop. This is bad news for an obvious reason: as a part of the broader War on Drugs, the U.S. and its UN allies have been striving to suppress opium production since the mid-2000s.
It is even worse news for a different reason: much more of this production now takes place in Taliban-controlled areas, out of reach of the Afghani government and its international allies. Eradication and interdiction programs have shifted production from secure, government-controlled parts of the country to those controlled by opposition forces. As the UN report puts it, “a strong association between insecurity (..) and opium cultivation continues to exist.” In retrospect this should not be surprising; it is difficult if not impossible to enforce prohibitions in regions of the country where the government has little control.
Opium has been produced in Afghanistan for centuries, and generates about half of the country’s GDP. Nowadays it is, of course, typically converted into heroin to satisfy the requirements of often heavily addicted users. The fact that many of these users are heavily addicted is important, as it makes them quite willing to forego all other consumption — an economist would say that their demand for opium is very inelastic.
The same turns out to be true for the total demand for Afghani opium, according to a new research paper from economist Jeffrey Clemens of the University of California at San Diego. This means that when the supply of Afghani opium drops, its price rises rapidly, and the quantity of opium rebounds quickly in response. This is not surprising, as Afghanistan is one of the very few primary sources of opium for these users. It also has important policy implications. When the U.S. attempts to combat poppy cultivation in the parts of Afghanistan it fully controls, it drives up the price producers in the rest of the country receive: and it’s the latter group of producers that pays taxes to the Taliban, in Hilmand, Farah, and Kandahar.
Cutting off funding to the Taliban has been the second major justification for opium suppression efforts by the U.S. in Afghanistan, next to combating heroin addiction and consumption. What Professor Clemens shows is that these efforts have had the opposite effect. Anti-opium efforts increased the flow of opium income to farmers in Taliban-heavy districts from some $240 million in 2004 to $580 million in 2010, or double in both absolute numbers and share of total opium production. That’s a lot of money in a country with a GDP per capita of about $1,000. The Taliban take an important cut from all of this business. They impose a 2 to 10 percent tax on farmers, the ushr, and they provide protection services to traffickers.
Whether you believe in the effectiveness of the War on Drugs in terms of consumption levels or not, making more resources available to your enemy in a decade-long armed conflict is not a great idea. And then the question becomes, as it is for other anti-narcotics policies: should ending the consumption and production of illegal drugs be the be-all and end-all of all public policy, or are there important trade-offs that may not be receiving the attention they deserve?
Stan Veuger is an economist at the American Enterprise Institute.
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