Tuesday, 11 October 2011

Taliban Financing Jihad with ... Heroin

Afghan poppy cultivation climbs as price soars

A large field of poppies grows on the outskirts of Jelawar village in the Arghandab Valley north of Kandahar

A large field of poppies grows on the outskirts of Jelawar village in the Arghandab Valley north of Kandahar
By Zhou Xin and Martin Petty

KABUL (Reuters) - The poppy economy in Afghanistan, which provides a financial lifeline for insurgents in the war-torn country, has grown significantly in 2011 with soaring prices and expanded cultivation, a report said on Tuesday.

Land under poppy cultivation in 2011 climbed 7 percent from 2010 as farmers sought to capitalise on a sharp rise in opium prices caused by an unidentified disease last year, according to a joint report by the U.N. drugs agency and Afghanistan's counter-narcotics ministry.

Three provinces in the north and east of the country that had been declared "poppy-free" have returned to production, it said, and the increase came even though crop eradication was 65 percent higher than a year ago, and took place in 18 provinces, up from 11 in 2010.

Jean-Luc Lemahieu, the Afghanistan country head for the United Nations Office on Drugs and Crime (UNODC), estimated militants may rake in up to $700 million (448.3 million pounds) from opium in 2011.

That compares to an annual $200 mln in the previous 10 years.

"In 2011, farmers made $1.4 billion, so, potentially, insurgents this year are receiving $700 million," Lemahieu told a news conference.

"I will let you calculate how much will go to corruption within the economy."

The figure is based on the profit-share model of the last decade in which insurgents got 10 percent and farmers 20 percent of profits in Afghanistan. The rest is unaccounted for.

If the initial numbers are right, the size of the poppy economy in Afghanistan in 2011 would be about $7 billion. Afghanistan's gross domestic product (GDP), excluding the poppy economy, was $16 billion in 2011, according to official data.

Opium prices in Afghanistan more than doubled last year after production was cut due to an unexplained disease, and farmers netted $10,700 per hectare of poppies cultivated, surging 118 percent from $4,900 a year earlier.


About 95 percent of poppy growth was concentrated in the south and west, the country's most insecure regions, confirming a "direct link" between poppy cultivation and the Taliban-led insurgency, according to the report.

"In spite of all our hopes, the predictions did confirm what we were all afraid of," Staffan De Mistura, a special representative to U.N. secretary-general, told reporters.

"The speculation has raised prices, and it in turn raised production and profits -- that's bad news."

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