Registan.net

In response to my post on stopping poppies, Pierre-Arnaud Chouvy, a scholar who studies the geopolitics of illicit drugs in Asia, pointed out an article he wrote last year that was deeply critical of both eradication measures and a licensing scheme for opium in Afghanistan. His arguments against eradication and interdiction are familiar to readers of this blog; it is his criticisms of licensing, however, which intrigue me (he also quibbled with the 1997 year for the Taliban’s first attempt to ban opium, though I’m unsure as to why—I got the date from the Congressional Research Service). His first criticism is the same one in that ICG op-ed about the market for opiates:

According to the International Narcotics Control Board (INCB), which is in charge of examining on a regular basis issues affecting the supply of and demand for opiates used for medical purposes, the supply of such opiates has for years been “at levels well in excess of global demand”. …

However, simply raising levels of morphine production, whether by licensing opium production in Afghanistan or by increasing the yields of current producers, is unlikely to increase the medical consumption of morphine and codeine in the world.

The recommendations of the World Health Organization (WHO) that morphine and codeine be used as analgesics are too often impeded by obstacles that are not, or not only, supply-related: concerns about drug addiction and drug diversion, restrictive national laws, insufficient import or manufacture, but also deficiencies in national health-care delivery systems, insufficient training, etc.

While this is undoubtedly correct, that doesn’t mean the market for opiates won’t grow, especially as China and India develop more capable and responsive public health systems. I would also argue with his point about the high levels of herbal medicine consumption in both China and Africa, in that while there is a culture and tradition element to such consumption, there is also a very strong economic one: morphine (and its derivatives, like codeine and demerol) is expensive, and a country with fairly low income and little public health infrastructure won’t be able to afford much.

The more interesting portion of Mr. Chouvy’s argument comes when he examines India, one of the two favorite case studies of the Senlis Council (though he ignores Turkey, the more obvious case study of legalizing opium production, and the example more commonly used by the Senlis Council).

Cultivators are issued a license for growing poppies and the entire opium produced by all farmers is purchased by and only by the Central Bureau of Narcotics at a price fixed by the central government. The price paid to the farmers depends on the yields achieved, with farmers producing more opium getting paid a higher price per kilogram: in 2004-05, the minimum price paid per kilogram was Rs750 (US$17) for yields up to 44kg per hectare. The maximum price paid was Rs2,200 for yields above 100kg/ha. The average national yield was 56kg/ha and was paid at a price Rs1,150 per kilogram.

However, it is important to bear in mind that, to try to prevent diversion to the illicit market, in 2004-05 the maximum licensed area to be cultivated in opium poppies was 0.10 hectare. Therefore, the maximum income that Indian farmers can derive from legal opium production is limited by fixed prices and by limitation of areas cultivated by each of them.

With such low prices paid to Indian opium farmers, diversion to the illegal market, where opium can fetch prices as much as four to five times the minimum government price, clearly takes place; although there is no reliable estimate of such diversion.

So an artificially low price creates an inducement to produce extra crop for illegal sale. So far so good. Mr. Chouvy predicts that the saturated current global market for opiates would require Afghan farmers to legally sell at such a low rate they wouldn’t bother selling it legally. Again, so far so good.

I think we should think bigger: buy opium at a higher price. Many countries don’t rely on the market to set agriculture prices. The U.S. and Europe, for instance, deliberately subsidize domestic agriculture with the intention of keeping farmers in business and well-paid; why this same model could not be applied in Afghanistan for opium farmers isn’t said. In other words, subsidizing legal opium production at a locally profitable rate would eliminate one of the primary market incentives against illicit sale.

Such an idea carries the same caveats and fundamentals a “buy & burn” program would: domestic political pressure in the West. Declaring an intention to use taxpayer money to purchase opium, even if it is just for eventual eradication or medicinal uses, would immediately be spun off as “the government funding drug lords.”

Regardless, Mr. Chouvy’s ultimate solution is the same one we hear everywhere else: alternative livelihood programs (though, to be fair to him, he places it in the proper cause/effect context, in which poppy cultivation is a symptom, rather than a cause, of poverty and instability). While these programs look wonderful on paper, they run into the exact same weaknesses licit cultivation does: price. Cereal, fruit, and vegetable cultivation is very wholesome, but it is not very profitable, especially in light of the above mentioned Western subsidies, which drive down world food prices (the dynamic might be changing as grain prices adjust to the American push for ethanol fuels, but the trend is so early it’s tough to say where it will go).

Again, subsidy is a way around this, but getting European and American polities to agree to subsidize foreign agriculture, even if it’s through an intermediary like the World Bank or IMF (or UN) is a non-starter. Furthermore, Afghanistan is greatly hindered by being so remote: assuming proper irrigation and water control can be set up—an expensive, years-long program highly vulnerable to low-cost asymmetric attacks by insurgents—the sheer length of time it would take to bring such agriculture to market would negate much of its benefit. In the absence of good infrastructure like paved roads and railways, airplanes are the only reliable way to quickly move produce out of the country—driving up costs even more.

The unfortunate reality is that, if Afghanistan is to have a world market for agriculture, opium seems the only crop with which it could ever make any money. That is why, despite well-intentioned calls for non-opium agriculture—something that would, in the long run, help Afghanistan far more than growing drugs—trying to eliminate poppy is ultimately, pardon the term, fruitless.

UPDATE: Bonnie tries to throw more cold water on the licensing arrangement, and she does a really thorough, top notch job on why present conditions make licensing and even feckless calls for “alternative livelihoods” bad ideas.

I am not, however, much concerned with short (and possibly even medium) term solutions. There is no way to avoid Afghanistan remaining a mess over those time frames. What I see at fault is a general failure of narcotics policy, both in the US and Europe, and also in Afghanistan. Even moving apart from the moral dimension of the typical libertarian argument for drug legalization (i.e. people have the right to choose to take addictive substances) is the broader question of what, exactly, the counternarcotics campaigns have achieved. Though way beyond the scope of what I’m getting at here, I will suffice it to note that the same policies that have turned Colombia and Mexico into enormous hubs of organized crime and drug smuggling are exactly what have turned Afghanistan into the world’s poppy field.

Changing that general mindset toward drugs—from an absolutist opposition to a more realistic take on both why people create demand, and why it is only advantageous for the world’s poorest to supply them—is going to be how Afghanistan can be weaned off its poppies. For the time being, there is literally no viable alternative for these farmers—nothing will pay them as much, as quickly, and as reliably.

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