July 28, 2009

Purchasing Poppies Produces A Peaceful Planet

This is an opium poppy in bloom, almost ready for harvest. Opium poppies were originally indigenous to Asia Minor and Thessaly, and were allegedly introduced to Afghanistan by Alexander the Great during his conquests there.

This photograph was taken from a specimen grown in a garden in Derbyshire, England. The UK, France, and Australia provide the bulk of opium grown for legal (that is, medicinal) purposes, with the balance coming from Turkey, India, and China. However, Afghanistan is where 92% of the world's illicit opium -- that is, opium used to make illegal recreational narcotics like heroin -- is grown.

The opium is a product of the green bulb you see in the middle of the flower. As the flower matures, its petals will fall away and the bulb will grow larger and fill with sap. This sap is refined into a variety of products, one of which is heroin, sold to inner-city youth worldwide and consumed in great quantities by urban drug addicts in Europe and Japan, and increasingly the United States and Canada. The flower is planted in the wintertime and harvested in the early spring.

Today, al-Qaeda and the Taliban jointly control the opium markets in Afghanistan. They "tax" the sale of opium by the farmers, or buy it directly and then serve as the middlemen moving the harvested opium to refiners and global distributors. This is thought to be the primary source of money funding their operations. In 2006, Afghanistan produced a crop thought to be 6,100 metric tons of opium, which commanded a market price of $125 per kilogram.

Currently, the U.S.'s policy is to destroy a field of poppies wherever they are found. In theory, we are supposed to be working with the Karzai government of Afghanistan to encourage farmers in that war-torn nation to grow vegetables and other useful crops rather than opium poppies.

There are many problems with this policy. First of all, the Afghan government is simply not in control over much of its own territory -- which is either actually run by local warlords or is in the functional control of the Taliban. Certainly there is no effective way of getting cash out to these farmers to subsidize their growing broccoli and carrots.

Secondly, poppies are also much less water-intensive than vegetables or wheat. A relatively small patch of land can be used to cultivate the flowers and they do not need particularly level terrain (although flat land does lend itself to harvesting better than hillsides). Therefore they are a more versatile crop, less labor-intensive, and less water-intensive, than most vegetables or grains.

Third, the cash value of opium poppies far exceeds that of anything else that the land is good for, even with vegetable subsidies. $125 per kilogram produces a yield per hectare more than twenty times the value of wheat. The fact that the U.S. and British militaries are periodically destroying poppy fields decreases supply further, and therefore increases the market price for the plentiful poppies that make it to harvest.

So Afghan farmers have powerful financial incentive to grow poppies. And our policy, counter-productively, both increases supply and the profits going to the bad guys who are masters of the markets.

We need to change the policy. If we are audacious enough, we can solve several problems at one bold stroke. We should buy all the poppies we can get our hands on, direct from the farmers.

By buying the poppies direct from the farmers, we provide them with a ready, steady market for their crop. We also subsidize the daily lives of farmers in the countryside of Afghanistan, becoming their customers and benefactors and helping to fight poverty there. The farmers, in turn, do not have to pay al-Qaeda's tax when they sell to us. And we wind up with the opium instead of the bad guys.

What do we do with the opium? Well, I suppose we could make heroin out of it and sell it ourselves -- but obviously that's not a good thing to do and we're not going to do that. It's not only heroin that can be manufactured from the stuff. Morphine is also made from opium. So is coedine. These drugs are used for a wide variety of purposes, mainly as painkillers and anesthetics. So what we do is make medicine out of the opium, and either give it away or sell it. I suppose we could burn all the poppies we buy in excess of the medicinal demand.

Because we would control the raw material, we would be able to drive up the street price of opium worldwide to the point that most kids could no longer afford it -- making it, at worst, a luxury narcotic on the order of powder cocaine, and ideally, something rare and exotic. Most of the world's junkies would have to dry out and more importantly, a bunch of those junkies would never become junkies in the first place because the drug would be too hard to find and too expensive to buy.

How much would it cost to buy functionally all of Afghanistan's opium poppy crop? A good guess, to be sure. If Afghanistan produces a crop like it did in 2006, that's 6.1 million kilograms of heroin, at a price of $125 per kilo, or $762.5 million total paid to the growers. But if we begin participating in the market, we will drive up demand. And supply may well have increased from its 2006 levels -- from the 2005 crop to the 2006 crop, production increased by nearly half again what it had been, in no small part because the western powers supporting the government lost ground during that time. So we might easily be looking at a crop of as much a 10 million kilos of opium, with a market price of, let's say, $175 per kilo. That would mean that it would cost us $1.75 billion to buy all the opium in Afghanistan.

That's how much the "Cash for Clunkers" program will cost, when you include both subsidies to consumers and administrative costs. Would you rather have kind of a crappy car, or would you rather bankrupt the Taliban to the point they can't even buy bullets any more?

Health care reform, according to the Obama Administration, will have a price tag of $787 billion -- and the CBO says no, it will wind up being about twice that. I suspect that at that price, federally-reformed health care will be spending more than $1.75 billion on anasthetics alone.

Liberals love pricing programs in terms of weapons systems, so this one's for you, lefty Readers: We have 141 F-22 Raptors in the skies right now. We could have bought every poppy in Afghanistan for less than the cost of 6 of those airplanes in 2006, or 12 of them today.

The point is, for less than 9% of what it cost us to bail out Bank of America, we could starve our biggest terrorist threat of money to the point they couldn't even buy bullets any more. Fewer of our soldiers would be coming home from Afghanistan in coffins and fewer hotels would get shot up or blown up. We'd win the hearts and minds of farmers across all of Afghanistan, becuase we would be the ones paying top dollar for their crops, not the Taliban. We would have all the painkillers and anesthetics we would ever need to supply the world's medicinal needs and reduce the cost of our own health care reform efforts. And millions of kids around the world wouldn't be getting hooked on recreational poison and ruining their own lives because of it, since 92% of the supply for those drugs would be dried up.

What have I missed, Readers? I'm looking for the downside here and I'm just not seeing it. Someone please tell me why we aren't already doing this.Stumble Upon Toolbar

3 comments:

Arnie said...

How will this affect the price of legitimately grown poppies? Will we drive those farmers out of business? The monies we pay the farmers may be extracted from them by Al Qaeda as extortion in order to stay alive. I like the idea of driving up the price to discourage drug use, but I think all it will do is incentivize someone to make the new ecstasy or meth as a low-cost addictive.

Transplanted Lawyer said...

How will this affect the price of legitimately grown poppies? Will we drive those farmers out of business?

Yes, we probably would undercut all of those farmers to the point that poppy production would no longer be viable. When I looked into this I found that most of the medicinal poppies, at least in the UK and France, are grown by or under contract to the pharma companies, so I'm not too worried about them going bankrupt since they have many other highly profitable products. But yes, it would negatively impact private poppy growers in places like India and Turkey. And we'd probably have to eventually face trade sanctions under anti-dumping rules of the WTA. But if I'm right, we'd only need to do this for a few years to starve the bad guys out of existence.

The monies we pay the farmers may be extracted from them by Al Qaeda as extortion in order to stay alive.

I thought about that too and yeah, there seems to be no way to avoid keeping the bad guys from imposing a protection racket on the innocent farmers. One thing to point out, though, is that the Afghani farmers don't seem to mind paying "taxes", but they will recognize extortion for what it is, so at least we'd still be buying ourselves popular support, which might help out our military efforts in any number of ways. And the bad guys might hesitate to do really awful things to the locals for fear of breaching the powerful traditions of hospitality that currently compel those same locals to provide them with shelter and aid.

...all it will do is incentivize someone to make the new ecstasy or meth as a low-cost addictive.

Well, I'll concede that effectively removing heroin from the drug market might add to that incentive, but wouldn't you agree that a powerful incentive to think up the next "big thing" already exists even with heroin on the market? Ecstasy's rise to popularity in the 1990's is a good example of that. The drug scene is unquestionably better without heroin than with it.

His Lordship said...

Interesting strategy, I wonder if it would work.

Certainly we could make tasty bagels with all the extra seeds produced by these plants.

I read a study that claimed that when the Netherlands legalized marijuana, they saw a reduction in heroin use. Perhaps such an approach combined with your strategy would effectively end heroin trade?