20 Oct 2009

Why do Afghani farmers grow the "wrong" crop?

This [unedited] guest post is by a student in my EEP100 class (background post).
Please praise/critique/comment on its economic quality and importance to you.

Colin Kerrigan says:

Why do Afghan farmers continue to plant opium poppy when certain vegetables can actually give a higher return per acre?

While opium poppy is a rather valuable crop when compared to a staple such as wheat, farm gate prices for raw opium in Afghanistan are an order of magnitude lower than the street price of heroin in Western Europe and the United States.* In 2007 a farmer could expect to receive about 66,000 Rs (Pakistani Rupees, roughly equivalent to $800) per acre of opium poppy. While wheat only brings in half that amount, vegetables such as shallots, onions, and tomatoes can go for 100,000 Pakistani Rupees per acre. Even the humble potato goes for about as much per acre as raw opium. So why then do farmers grow opium, which they almost invariably recognize as being contrary to their sense of morality when they could receive as much money growing perfectly legal crops?

The short answer is that they can't. Such vegetable crops require a reliable source of water. While farmers with a source of river fed irrigation can and do grow high value vegetables, the poorest farmers on marginal, rain-fed land generally can't grow anything that will simultaneously pay the rent to their landlords (which can run as high as 80% of crops grown) and still have enough money to feed themselves save for the relatively hardy opium poppy. Additionally, opium's vastly lower transportation costs enable farmers to reliably sell their output. Drug traffickers will pick up the raw opium at a mountain farm and often provide credit to smooth out the farmer's income flow over the course of the year. Unlike opium, high value vegetables are bulky, perishable, and difficult to export since produce shipments are often blocked outright or damaged by customs officials looking for hidden opium or heroin. For legal livelihoods to be feasible for the worst off farmers, physical infrastructure improvement must occur along side institutional improvements to make both the growth and sale of legal crops possible. Until then, impoverished Afghan farmers will chose survival over a clean conscience.

Bottom Line: When forced to chose between a legal livelihood and an illegal one, most people will pick the less risky of the two. If the alternative to an illegal livelihood leads to even deeper poverty and starvation, people will pick the illegal one in spite of moral or legal apprehensions.
Opium Poppy and Informal Credit
Opium Poppy Cultivation in Nangarhar and Ghor
* [DZ's note: Since it takes 10kg of opium to make one kg of heroin, this statement implies ZERO markup on heroin going to the US, which is obviously false. For more, read my paper on Opium in Afghanistan and the US.]