Afghanistan's opium trade going strong
Cultivators can be seen gathering resin from the crop near the main road through Kandahar.
The Associated Press
Afghan farmers near Kandahar harvest an opium crop yesterday. Afghan farmers near Kandahar harvest an opium crop yesterday.
MAYWAND, Afghanistan - Afghan farmers have begun harvesting this year's opium crop, exposing the limits of a U.S.-sponsored crackdown on the world's largest narcotics industry despite claims by President Hamid Karzai that drug cultivation was down sharply.
The sobering harvest news came a day after the arrest in the United States of an Afghan accused of being one of the world's biggest heroin traffickers and of close ties to the ousted Taliban regime.
Yesterday morning, farmers could be seen gathering resin from opium poppies near the main road through the southern province of Kandahar, a key growing region belatedly targeted by American-trained eradication teams.
"Now even if we do our best, we cannot eradicate it all" in Kandahar, Gen. Mohammed Daoud, deputy interior minister for counternarcotics, said. "It is a bad example for the other provinces and will make our job much harder."
Production of opium, the raw material for heroin, has boomed since the fall of the Taliban in 2001.
Last year, cultivation reached a record 323,700 acres, yielding nearly 80 percent of world supply and buoying the economy.
U.N. drug experts have cautioned that cultivation is shifting to more remote areas and rebounding opium prices could encourage a revival in planting next year.
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Countries, including the United States and Britain, are pouring hundreds of millions of dollars into the anti-drug campaign.
The cash is being used to train police units to destroy laboratories, arrest smugglers and destroy crops, as well as to fund irrigation systems and other agricultural projects to help farmers grow legal crops.
Mohammed Nahim, 40, works in the fields dotted with red and white flowers near the town of Maywand.
He said he cultivated about 2 1/2 acres of land with poppy because no assistance had materialized.
"A lot of money is coming for our farmers. But we didn't get a penny, not one sack of wheat," Nahim said.
He clutched a black plastic bag filled with thick opium paste from his poppy crop. He said opium returns were 10 times higher than those from wheat and were the only way to cover costs of hired tractors and diesel fuel to pump water into fields.
Opium poppy. Photo by Catherine Giayvia
Most heroin sold in Europe comes from Afghanistan's poppies. This past week, the 2005 opium harvest was in full view and going full speed in Afghanistan. The cultivators gathering resin from the crop are operating even near the main road through Kandahar and the farmers are out gathering resin from opium poppies in full view.

Last year 80% of the world's opium came from Afghanistan and production is up over 239% since 2003, according to U.S. government estimates.  Afghanistan is the world's largest producer of illegal drugs.

In 2002  ads, the White House sent out the message that "drugs fund terrorists".  Doug Wankel, a former U.S.  (DEA) official, says the opium industry is "financing terrorism. It's financing subversive activities. It's financing warlordism... And if it's a threat to the government of Afghanistan, it's a direct threat to the national security interests of the United States."

"The Bush administration has decided not to destroy the opium crop in Afghanistan," stated a U.S. intelligence official returning from Afghanistan in relation to the 60% smaller 2002 crop. The source, who requested that he not be identified, noted "U.S. forces could destroy the crops using aerial spraying techniques, but no such actions are planned."

U.S. plans to spray the crops were canceled at the request of Afghan President Hamid Karzai, who has called for  or "holy war", but is concerned that aerial spraying could be harmful to the health of Afghan villagers.  The U.S. claims that the spraying would be safe, but is granting Karzai's request.

Karzai has indicated that he may change his mind if other U.S. strategies fail to halt the opium. Congress budgeted $774 million for anti-drug operations in Afghanistan just this year.
Black tar (raw) opium seized in Afghanistan, spring 2005. Photo by Bentlogic.
==== Estimating the value of the crop ====

The CIA reports in ''From Flowers to Heroin that'' it takes 10 kg of opium to make 1 kg of 90% pure heroin. The CIA states that impurities are introduced into the processed heroin before it hits the street, making the purity of the end consumer product about 40%.  That implies that 10 kg of opium makes about 2.25 kg of 40% pure heroin.

The Guardian reports that the 2002 opium harvest was 3400 metric tons. Using the conversion supplied by the CIA, 2002's 3400 opium harvest could be converted into 765 metric tons of heroin.  According to the International Narcotics Control Board, the 2003 opium harvest was 3600 metric tons.  Using the estimated 239% increase of the present harvast over 2003, it means that the 2005 harvest is about 8600 metric tons.

The 2002 street price of heroin in the UK was about 60 £ per GRAM, or (assuming the present 1.89 USD to 1 £ exchange) 113.40 USD per GRAM. As the supply goes up the price will come down some, so for this calculation only the 2002 figures will be used. If all the opium harvest is converted into heroin and all of it is sold at the UK street price, the total street value of the harvest is 86.7 billion USD. (765 metric tons x 1000 kg/metric ton x 1000 grams/kg x 113.4 USD/gram = about 86.7 billion USD.)  To the extent the 2002 numbers are valid today, the street value of the 2005 harvest should be roughly twice the street value of the 2002 harvest, about 173 billion USD.

To put these numbers in perspective, the total market capitalization of Ford, General Motors and Daimler Chrysler combined is about 76 billion USD. The total market capitalization of Toyota and Honda combined is about 167 billion USD.

==== No Statement by the Financial Action Task Force  ====

The Financial Action Task Force (FATF) was formed to promote harmonization of international antimoney laundering (AML) laws. Despite the fact that tens of billions of USDs are generated from the Afgan opium harvest alone, the FATF has not added Afghanistan to its blacklist of uncooperative nations.  One has to wonder, therefore, what the poppy farmers are doing with their share of the money that escapes the notice of the banking system and the FATF.