Is the Drop in Afghan Opium Production a Sign of Success?

As Nick Gillespie noted this morning, a new report from the U.N. Office on Drugs and Crime (UNODC) says Afghan opium production fell 10 percent between 2008 and 2009. Is this good news, finally, for the drug warriors who are always trying to eradicate the poppies that become the opium that becomes the heroin that ends up in the noses and veins of Europeans and Americans? Not exactly:

United Nations officials said this year's decline stemmed largely from a steep drop in the value of opium amid a huge supply glut; high prices last year for some other crops that caused farmers to switch; and more aggressive counternarcotics actions by Western and Afghan forces.

They said it was not clear whether the decline would continue, especially if the difference between prices for opium and other crops were to widen to previous levels. Just two years ago, for example, an acre of opium fetched 10 times as much as an acre of wheat, but that ratio has diminished to three to one.

Whatever impact "aggressive counternarcotics actions" have had, they have not succeeded in raising retail prices (which have fallen dramatically since the early 1990s) or reducing heroin consumption. The "steep drop in the value of opium" is due not to a decline in demand but to oversupply:

"Lower opium prices in Afghanistan reflect the continuing high levels of opium production, which is thought to exceed global demand for opium and its derivatives," according to the 42-page report issued today. "Annual world demand for illicit opium has never exceeded 5,000 tons."

Yet even after the 10 percent drop, Afghanistan produced some 6,900 tons of opium this year. Where does all the extra opium go? The answer worries the UNODC:

United Nations officials...reported that perhaps more than 10,000 tons of illegal opium—worth billions of dollars and enough to satisfy at least two years of world demand—is now secretly stockpiled. They said they were concerned that part of this stockpile could be a "ticking bomb" in the hands of people who could use it to pay for "sinister scenarios."

Opium is easily smuggled and stored and "is an ideal form of terrorist financing," Antonio Maria Costa, the executive director of the United Nations Office on Drugs and Crime, said in an interview. "It's a huge amount of money to have in the wrong hands."

To sum up: After years of crop eradication and other "aggressive counternarcotics actions" in Afghanistan, production routinely exceeds worldwide demand, prices are lower than ever, and terrorists are sitting on "a huge amount of money" that would not exist but for the risk premium created by prohibition.

The UNODC report is available here. In a July column, I discussed the Obama administration's plans to move away from crop eradication in Afghanistan, which special envoy Richard Holbrooke called "a waste of money" that "just helped the Taliban." More Reason coverage of Afghan opium here.

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  • ||

    They said they were concerned that part of this stockpile could be a "ticking bomb" in the hands of people who could use it to pay for "sinister scenarios."

    So I guess CIA will be leasing their surplus waterboards to the DEA now?

  • Joe M||

    The WoD continues to be a smashing success. No need to change a single policy. As you were; nothing to see here.

  • Cabeza de Vaca||

    I had wondered when I heard about the massive poppy crops being grown in Afghanistan. Where were all the addicts were that desired that much smack. I don't know anyone or even heard of anyone in my area that does smack. So massive over production makes a lot of sense to me. I guess it just took a few years for the market signals to reach the producers.

  • ||

    Wholly crap, that PDF from the UNODC is impressive stuff. US street price, per gram, adjusted for inflation and purity is less than 25% of it's 1990 value.

    What I find most interesting is that even with the 2000-2001 Taliban driven nosedive in Afghan opium production the price decline was damn near constant. That tells me that there was at least some sort of "stockpile" then.

  • ||

    Man, the cops that get to seize that huge amount of money are gonna be able to retire comfortably.

    Silver Lining

    (oh wait, theyre never gonna catch those guys? nevermind then)

  • ||

    Oh, and you gotta love that we cant win the war-on-some-drugs in a country where we're actually at war. With real soldiers, not the cheap knockoffs we get domestically.

  • wayne||

    and terrorists are sitting on "a huge amount of money" that would not exist but for the risk premium created by prohibition.

    This, of course, makes me think of those television commercials where innocent looking children say, "I helped to murder a judge..., etc".

    I wish LEAP would run a similar series of ads like that where DEA agents, politicians and a drug czar admit their culpability by way of maintaining the risk premium.

  • LarryA||

    It's sure a good thing that this report made the front page of our major media, as they do their job of educating the public about important national policy issues.

  • Hacha Cha||

    you can't stop a plant that only takes around 3 months to grow from seed to final product and grows nearly anywhere in the world.
    how the fuck can a plant be illegal. this plant has helped more people than it has ever hurt. individuals and companies should be free to grow this plant for its beauty or the medicinally and recreationally useful alkaloids.
    it is illegal to use real dried poppy pods in flower arraingements yet it is easy to acquire in many floral shops. farms even grow it and sell it for dried flower arraingements. yet if you are caught you are technically guilty of possession/sale of a schedule II controlled substance.
    a CA man was even arrested because he brewed a beer using poppy seeds (which are exempt from controlled substance status) to flavor his beer. 2, or more, companies use poppy seeds as a flavor in their ingredients which are approved by the TTB. allegedly someone at the guys homebrew club snitched him out saying the guy made morphine beer and law enforcement showed up at the guys house. they found that after he used the seeds to flavor the beer he threw them in his backyard, and they sprouted. now the guy is guilty of "manufacturing" and possession of a controlled substance.
    free the flowers!

  • Hacha Cha||

    by the way, the taliban stockpiled opium and then banned the growing of opium, in a silly attempt to artificially control the market and raise prices. it didn't work.

  • ||

    When you know that the CIA actually traffics the drugs and the DEA is only meant to go after the "bad" drug dealers and the government is frequently involved in false flag terror attacks it gives a different meaning to "the terrorist have stockpiled lots of heroin"

  • ||

    Did the feds know that teh Taliban was profitting from the drug trade in 2001?

    If so why were we giving the Taliban money to "fight the drug war" right up until 9/11?

    The CIA is not that dumb.

  • Canada Guy||

    Instabilty and war are the primary factors responsible for increased opium production in Afghanistan. Before the Soviet invasion, and during the brief rule of the Taliban, opium production was either very limited, or deliberated curtailed. Soon after the war is over, production is likely to plummet.

    http://watching-history.blogsp.....istan.html

  • han||

    Yet even after the 10 percent drop

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