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My first reaction to the speech at West Point was this.  But I can't give in to despair, so here is an alternative.

If you want to choke off the terrorist elements operating in Afghanistan and Pakistan, you have to treat them like any piratical scourge.  You have to disrupt their operations, deny them safe haven, and destroy their supply lines.  We know where the money is coming from.  It comes from the opium trade.  That supports the corrupt governments that provides safe haven.  It is also a major source of revenue for supplies.  

For about $6 billion USD we could buy the entire wholesale value of the opium crop for the next 10 years.  That is about what we'll spend in 2 months covering the cost of deploying 30,000 combat troops.

On top of that, when we were done, the average Afghan farmer would have a higher standard of living through sustainable farming.  Check out the numbers and tell me why that's a bad idea.

Controlling drugs in Afghanistan will not solve all of the country's problems,
but the country's problems cannot be solved without controlling drugs.[1]

-- Antonio Maria Costa, Executive Director, UN Office on Drugs and Crime

Reuters recently digested information collected by the UN [2] and found the following:

  1. The total wholesale value of this year's opium production in Afghanistan is estimated to be about $438 million USD.  
  1. That is lower than the value of last year's crop, which was about $730 million USD.  

The drop is not due to lower production rates.  There is a global glut of heroin and this has contributed to lower prices worldwide.  Heroin in the US traditionally came from Asia, but recent competition from Colombian and Mexican heroin have driven these prices down. [3]  The vast majority of Afghanistan's heroin winds up in Europe.  But even there, heroin is getting cheaper.  In fact, production is so far ahead of world consumption right now that heroin is being warehoused.  It is estimated that two years worth of global consumption is currently being warehoused to artificially maintain the current price levels.  That is an intelligence problem, not a military problem.  No one outside of the traffickers knows who is hoarding it or where they are storing the estimated 10,000 tons of produce. [4]

In recent years heroin production has decreased, but only by a few percent.  This is more than offset by increased efficiency of opium production in Afghanistan.  Today, they can get about five times more opium out of their poppys than Asian growers do.  

Assuming the warehoused supplies are beyond the reach of the Afghani and Pakistani governments, it would cost about $500 to $600 million USD per year to buy the entire Afghan crop.  

Let me put that number in perspective:  We could buy the entire Afghan crop for the next 50 years with the money that will be requested to send 30,000 more troops over there for a year.

Obviously, someone must have tried this before.  Turns out someone did.  The Taliban.  They cut opium production in Afghanstan by more than 70% in just 2 years. [5]   The only reason they didn't cut production by 100% was the remaining production came from the small part of the country controlled by our allies, the Northern Alliance.

The Taliban did not outlaw processing or trafficking, they taxed that.  However, the drop in production without a replacement crop left many small landowners and sharecroppers deep in debt. In the absence of a credit system, larger landholders customarily loan smaller farmers and laborers food, cooking oil or money for the winter, to be paid back after the harvest of opium gum. The landholders also offer fertilizer and seed in return for a portion of the crop.[6]

Consequently, a large number of the refugees who fled into Pakistan were opium farmers unable to pay their debts. As soon as the Taliban fell, many farmers returned to plant opium again.  That brings us back to the present.

Obviously, you have to do more than just buy their crop.  You have to have a replacement option for small farmers.   This is critical because half of the Afghan population is involved in farming.  

One example would be wheat.  In 2007, the Missouri National Guard successfully deployed agricultural development teams made up of Guard members who had backgrounds in farming or agriculture-related businesses.  [7]  But they did more than merely teach sustainable farming and provide a replacement crop.  Here's one success story, trumpeted by Missouri Senator Kit Bond:

The Missouri Guard ADT set up a canning plant for canning fruits and vegetables so they don’t have to be shipped to Pakistan and then come back at a much higher price.

That's a big deal.  Taking this innovative step introduced new economic structures that lowered the costs of goods while providing additional jobs.  That creates a virtuous cycle.  

The credit for this idea goes to Lt. Gen. Clyde A. Vaughn, director of the Army National Guard.  Vaughn, a Missouri native, reached out to the farming community in his home state for help.  Working with the Missouri Farm Bureau, they basically focused on taking farmers with the right skill sets who happen to be in the National Guard and deploying them to Afghanistan to work side by side with farmers in Afghanistan.  Colleges and universities with agriculture programs were also approached for help.  As part of the planning process, officials also met with Afghanistan’s agriculture minister to determine the country’s needs.

The cost of providing thousands of tons of wheat seed along with the equipment to irrigate is peanuts compared to what it costs to drop bombs in the same area.  When it's all over you have a sustainable situation that generates a viable cash crop.

You can grow tons of wheat on a hectare.  Depending on conditions, the value of wheat in some US markets can range from $110 per ton to $152 per ton [8].   Wheat comes in different qualities.  Wheat for bread in the UK recently soared to about $400 per ton. [9]  Closer to Afghanistan, the import price of wheat to Pakistan is expected to go for about $400 USD a ton.  In Khazakhstan, wheat hit a high of about $900 USD per ton.[10]

Wheat prices are going up globally.  In 2008, the inflation rate on wheat was higher than it was for oil or gold.  As population increases and global warming continues you can expect this trend to continue in the foreseeable future.  This is a great time to be getting in to the market.  

If you look at the wheat production in Pakistan's Punjab region, you find yields with proper irrigation of up to 6 tons/ha [11]  That means you could realistically be looking at somewhere between $1,200 and $2,400 per hectare of wheat.  Compared to the current return of about $3,600 per hectare for opium that might sound like a loss.  But that's just one crop.  You can also use wheat for grazing cattle and goats.  You can also grow other crops in different seasons.  You can also make money through light industry like the canning operations mentioned already.  

If we bought up the entire wholesale value of the opium crop for the next 10 years and paid in seed, fertilizer, equipment, training, infrastructure, and the occasional bribe, we could do this for about $5 billion USD.  We will spend more than that in 2 months to cover the cost of deploying combat 30,000 troops.

Basically, the majority of Afghan farmers could go from a market that has a declining demand and faces a global glut to a market with growing global demand and local economic value.  That means they would increase the standard of living for local farmers, who make up half the population.  Given the fact most of the farmers are living on credit now this would be a huge step up for them.  We will break their cycle of dependency while securing allies in a troubled region.  As a bonus, we get to spend the money on seeds, fertilizer, equipment, infrastructure and training.  That means jobs HERE.  Sounds like a win all the way around, except for the recalcitrant criminals we will have to wipe out.  But who cares about piratical scourges anyway?

Originally posted to 8ackgr0und N015e on Fri Dec 04, 2009 at 09:09 PM PST.

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