Both reports agree on the potential momentous consequences for livelihoods and the national economy: the ban has deprived millions of people who would have grown poppy in 2023 of an income at a time when the rest of the economy is contracting (by 20.7 per cent in 2021 and 6.2 per cent in 2022, as reported by the World Bank, with AAN analysis here). Poppy income has always been so large that there are national implications of the ban: opiates have generally brought in the equivalent of around 10 to 15 per cent of Afghanistan’s licit Gross Domestic Product (GDP), the value of all the goods and services produced in the country in any one year. Not all of that was lost in 2023 as trade in opiates continued, but a continuation of the ban on cultivation into a second year and a clampdown on trade would cut into Afghanistan’s national income.
The ban and the now apparent sharp reduction in the cultivation of poppy raise any number of questions – which this report will try to address: What has been the impact on the household economies of farmers and others who get/used to get an income from opium poppy? Will the IEA extend the ban on cultivation into a second year, and will it extend it to traders? What are the political and economic consequences of this policy?
The significance of opium
Opium has been a critical part of the Afghan economy for many years. In the years between 2006 and 2022, Afghanistan produced between 3,300 and 7,400 metric tons of raw opium annually, according to UNODC’s annual estimates. The relative importance of the crop varied in any given year according to the area under cultivation, yield and price and the size of other sectors of the economy, but an indication of opium’s importance can be seen by comparing it to Afghanistan’s licit GDP. In 2015, UNODC valued the opiate economy, including domestic consumption and exports, as equivalent to about 16 per cent of licit GDP (valued at USD 19.2 billion by the World Bank). In 2021, UNODC valued it as equivalent to 9-14 per cent of licit GDP (valued at USD 14.94 billion by the World Bank). As for 2022, although UNODC did not give a figure, it calculated that the opiate economy likely represented an even greater share of the total economy, not surprising, given how severely licit GDP has contracted since the Taleban takeover. UNODC did say the value of opiates was equivalent to 29 per cent of the entire agricultural sector in 2022. However, in its latest report, UNODC estimated that the value of opiate exports dwindled to USD 190-260 million in 2023, a drop of 90 per cent from USD 1.4-2.7 billion in 2022.
The importance of this sector for income and jobs is also vast. One indicator is Mansfield and Alcis’ estimate that the ban on cultivating poppy has hit 6.9 million people. From a report they published in June 2023, they give other indicators: in the south, the landless typically earn up to a third of their annual income weeding and harvesting poppy. In Helmand alone, in 2022, they say the poppy crop provided almost 21 million days of work and USD 61 million in wages.
Yet, the ban has hit different people differently. Indeed, while many Afghans will have been thrown into economic distress as their income from poppy dried up, others have seen a windfall.
The variable impact of the ban on farmers and labourers
Anyone who had stocks of opium paste (which stores well and is used as a means of saving and borrowing in Afghanistan) – likely richer farmers and traders – will have benefited from the ban. This is because it triggered a hike in prices and initially, at least, trading was not affected.
Opium prices had been increasing since the re-establishment of the IEA in August 2021, but in August 2023, said UNDOC, they reached “a twenty-year peak,” surpassing even the price hike following the first IEA ban in 2000/2001. Opium prices had then peaked at USD 383 a kilogramme in 2003. This time round, twenty years later, in August 2023, they were as high as USD 408 a kilogramme. That meant that anyone possessing an inventory of opium paste who decided to sell it has seen bumper profits.
Poorer farmers, on the other hand, who borrow opium seeds ahead of the harvest, sharecroppers who are paid a portion of the harvest, or labourers who get seasonal work weeding and harvesting poppy fields will all have seen their income dry up or severely curtailed because of the ban. See the chart below from Mansfield and Alcis showing the differing impact of the ban on different farmers and workers.
In their June 2023 report, Mansfield and Alcis elaborated on different farmers’ strategies in the face of the 2022 ban:
The natural response to the prospect of a pending ban was for farmers to hoard what opium they could. Were a ban imposed, prices would inevitably rise providing a potential windfall for those that had the financial means to retain the crop that they had grown that year. In some cases, farmers would have sold other assets just so that they could retain all or part of their final yield: some livestock, or a motorbike – assets that would diminish in value – in order that they could keep their opium and gain from a future rise in prices.
Not all farmers had opium stocks or assets to sell to buy opium. Richer farmers employing others in 2022, could typically buy back the opium they have given in wages to itinerant workers or sharecroppers at harvest time, when prices are at their lowest, and would then have been able to keep the whole crop to sell as prices rose in anticipation of the ban on cultivation being enforced.
Mansfield and Alcis said those best placed to profit were farmers with large landholdings [three to four hectares of land] in the south and southwest who “not only have sufficient land for food and other crops to meet their family’s needs but also plenty of land for poppy.” Much of this is new land in what was formerly desert brought under cultivation by using solar-powered pumps to bring up groundwater. By contrast, they say, landholdings are far smaller in the east and northeast: those with more than a hectare of irrigated land are considered land-rich and poppy is concentrated in areas where landholdings are much smaller. In that June report, Mansfield and Alcis pointed to “growing evidence” of heightened economic distress among households in Nangrahar province who have been compelled to abandon poppy, for example, selling productive assets such as farm equipment and land and jewellery to meet basic expenses and sending male family members abroad.
Income lost to the poor, they also point out, translates into savings in outgoings for the largest landowners who have not had to pay sharecroppers and travelling harvesters this year, but have still had opium stocks themselves to sell.
Farmers’ income from selling the 2023 opium harvest, in total, declined by more than 92 per cent from an estimated USD 1,360 million for the 2022 harvest to USD 110 million in 2023. However, those earnings will have been concentrated in the hands of farmers with stocks or farmers who did manage to cultivate poppy. Both reports found that the ban was not enforced/complied with evenly across the country. Mansfield and Alcis found that opium poppy cultivation is now limited to only 15 provinces, with just under half of Afghanistan’s total opium poppy cultivation concentrated in the northeastern province of Badakhshan.” It gave the following breakdown.
Helmand by far the largest cultivator of opium, saw, they said, a 99 per cent reduction in cultivation, Farah (5th largest) 95 per cent and Uruzgan (3rd largest) 88 per cent, but neighbouring Kandahar (2nd largest) only 65 per cent. The area of land under poppy in Nangrahar (6th largest) was 88 per cent reduced, but in Daikundi (7th largest) only 41 per cent. In Badakhshan (4th largest), farmers planted more opium: the area under opium cultivation there increased by 11.5 per cent in 2023 compared to 2022. Such variations, if allowed to continue, would seem inevitably to increase tension between those who are able and those unable to grow opium. Compounding any tension is the inadequacy of other annual crops to provide an equivalent source of income and demand for labour.
|Ranking in 2022||Province||% of change in area under cultivation|
The switch to wheat
According to UNODC, 68 per cent of fields that had previously been planted with poppy were planted with wheat in 2023. In Farah, Helmand, Kandahar and Nangrahar provinces, all major opium poppy cultivators — together, they made up 74 per cent of the country’s total opium cultivation in 2022 – UNODC recorded an overall increase of 160,000 hectares in cereal cultivation in 2023 compared to the previous year. However, that will have earned farmers a relative pittance – USD 770 per hectare for wheat, compared to USD 10,000 for poppy. The ban and the switch to wheat would have cost farmers in these four provinces, said UNODC, around one billion dollars in potential income.
UNODC said that:
Some farmers reported that the sudden implementation of the ban prevented them from transitioning to high-value pomegranate, almond, pistachio and hing (asafoetida), which can take years to fully mature. The availability of wheat seeds has been reported as a reason to choose wheat over other annual crops such as okra or peas.
Veteran agriculturist, Anthony Fitzherbert, was not convinced by this argument. He said:
Pomegranate, almond, pistachio, grape-vines etc … are all long term investment orchard crops and anyway do not usually occupy the same land as opium poppy, or have the same water and irrigation requirements.
As for asafoetida, the deep-rooted plant from the carrot (umbelliferous) family, which produces a pungent spice widely used especially in Pakistani and Indian cooking, a wild plant now increasingly cultivated, it also needs years to produce an income, says Fitzherbert: “The plant takes several years to mature before it is ready to be harvested. This is done by a process of tapping the roots to extract the gum. A process which usually kills the plant.” He points out that, like the orchard crops, asafoetida does not occupy the same ground as opium poppy. “Usually [it is] grown on rain-fed and otherwise waste land, so is not a direct competitor crop to opium poppy anyway.”
Wheat is the most important cereal crop in Afghanistan. The country produces on average 4.6 million tons of wheat annually (see US Department of Agriculture website). However, it is not self-sustainable in wheat and every year imports wheat and wheat flour. For most Afghan farmers, says Fitzherbert, wheat is grown as a subsistence staple, not a cash crop and in poppy-growing areas is traditionally grown in rotation with poppy, which is sown every other year or every third year. Significantly for those looking for an alternative to poppy is the fact that, unlike most other crops, wheat is also sown and harvested at the same time as poppy – both crops are sown around October/November in Afghanistan. It seems most likely the availability of wheat seeds and the concurrence of the sowing and harvesting cycles of wheat and poppy were the main factors behind the nationwide switch from poppy to wheat.
In locations where double cropping is possible (such as Helmand and Kandahar), says Fitzherbert, opium poppy has the advantage of having a shorter growing period before being harvested and therefore, requires fewer irrigations and less water. The opium crop is harvested earlier than wheat or any other possible alternatives, so that a second summer crop of maize, beans, mung, sunflowers or okra can be sown earlier.
Opium has been an important cash crop for Afghans for many decades and the ban on cultivation has already hit many farmers hard. However, both UNODC and Mansfield and Alcis noted something else already referred to in this report, that trade in opiates continued after the ban.
UNODC noted that traders have had “to rely on their potential opium inventories to make up for the income they lost during the 2023 harvest” and that “[d]ata on seizures in and around Afghanistan indicate that following the ban, opium inventories from past record harvests are being sold off…” In their June 2023 report, Mansfield and Alcis said:
There are few restrictions on trade. Opium grown prior to the imposition of Haibatullah’s ban continues to be sold and seizures by Afghanistan’s neighbours and further afield, suggest a continued supply of both opiates and methamphetamine. In March 2023, the Taliban even removed the formal tax they imposed on the export of opiates since coming to power, easing the transactions costs for the cross border trade.
One eyewitness visiting Helmand province at the end of September also said it was “business as usual” there. “After the issuance of the [April 2022] decree of Mullah Akhundzada,” he said, “there has been no change in the buying and selling of opium in any of the districts of Helmand province.” In their most recent, 2 November 2023 paper, however, they reported “growing evidence that the Taliban are ratcheting up the pressure on those involved in the opium trade.” They spoke of a decision in July 2023 to shut down catapults that had proliferated on the Afghan border with Iran following the Taleban takeover which had been used to get drugs across the border. They also noted:
Smuggling costs have also increased along the primary routes following the announcement of the new law. Of particular note is the recent closure of the route from Nangarhar to Peshawar via Durbaba and Tirah, and the claim that drugs are now being rerouted south. We have not seen these kinds of pressures before under Taliban rule. As yet, the only route that has not experienced a rise in smuggling costs is the journey via Bahramchar [sic] in Helmand province, possibly reflecting continued privileges afforded to those in Helmand. This is clearly a dynamic environment – and like the ban on cultivation – reflects the uneven nature of Taliban rule in which some groups are favoured over others.
However, Mansfield and Alcis cite a new law issued by the IEA on 1 October 2023 which may signal its intention to carry the ban on cultivation into a second year and, possibly, start hitting trade.
Tightening the knot
The new drugs law that Mansfield and Alcis say has been in the making since August 2023 prescribes penalties and punishments for the cultivation, trafficking, trade, collection, etc of drugs and other psychoactive substances, such as alcohol (see the text of the Pashto original and an English translation by Alcis). It is an elaboration of the succinct, two-paragraph-long, April 2022 ban. A maximum prison sentence prescribed is up to seven years for trafficking and trading different types of narcotics in the amounts defined by the law. It is noticeable that the new law was promulgated at a time when farmers were weighing up what to sow. Opium and cannabis farmers are also punishable by the new law (six months in prison for cultivating less than half a jerib of land, nine months for half a jerib and one year = for more than one jerib).
Mansfield and Alcis suggested that there is “evidence that the new drugs law is already having an effect, with many provincial authorities receiving a copy of the ordinance and a number disseminating news of the prescribed penalties through meetings with elders and in mosques.” It is not yet clear then how far the ban on cultivation will be enforced in its second year, or in the words of Mansfield and Alcis whether the authorities will “engage in a robust effort against the trade” and in particular, whether “they move against inventory and processing.”
The new law has pushed prices up even further, although with geographic variations, according to Mansfield and Alcis, by 40 per cent in the east, 20 per cent in the northeast, but only 10 per cent in the southwest, “possibly reflecting the high levels of inventory in provinces like Helmand and Kandahar.” As prices rise, the potential benefits of disobeying the ban mushroom. Yet, the new law also highlights the increased risk of growing poppy.
Already, the landless and land-poor have lost income. A second year of the ban on cultivation will be hard for many to bear. Any farmer who has sold his inventory will also start to see the ban biting into their household economies. If the authorities block trade, the damage to households would spread even to wealthier farmers and traders.
Any perceived geographic variation in how the IEA treats opium farmers and traders could be potentially destabilising. If, for example, the authorities allow Badakhshi farmers to benefit from high prices but continue to clamp down on farmers elsewhere or ignore the opium trade in Helmand while blocking other routes, there could be a political price to pay. In general, Afghans have learned to be wary of bans and eradication. In the past, they have often been used to consolidate the market, favouring those with more political influence to grow richer and more powerful as their weaker rivals are taken out.
There are other potential consequences to government income. The Ministry of Agriculture was taking ushr on opium, as on the harvest of other crops, and passing the proceeds to the office of the Supreme Leader who is in charge of its distribution. That is now lost, as is the tax on trade and exports, which also apparently never came to the Ministry of Finance, but was an informal income stream for the authorities. Income from opium poppy has also been valuable, nationally, for covering imports, significant because Afghanistan runs a trade deficit and many imports are essential – medicine, food and fuel. (For a recent in-depth look at the economy, including the balance of trade, see our recent publication, ‘Survival and Stagnation: The State of the Afghan economy’.)
Any tightening of the knot against Afghan opium cultivation and trade could also have regional and global consequences, but probably only eventually, if the ban on cultivation continues. According to UNDOC, it takes a couple of years for opiates produced in Afghanistan to reach their destination. Moreover, there are stockpiles of opiates everywhere, not just in Afghanistan. In other words, supply will outstrip demand for some time. However, if Europe’s supply dropped significantly, there would be pressure on old illicit opium producers like Turkey and North Macedonia to return to poppy cultivation. If Asian markets were left short of supply, another old producer, Myanmar, which is already seeing an increase in cultivation – a consequence of its internal instability – could also see more poppy cultivated. But if this were to happen, it would take years, maybe a decade of the IEA maintaining a strict drugs ban.
For now, the main consequences are in Afghanistan. We are now in the autumn sowing season when farmers in poppy-growing areas have to decide which crop to sow, and the authorities whether they take action against those who disobey the law. If farmers do choose to sow poppy, they risk seeing their crop eradicated and losing everything. If they do not, some may be unable to cover household expenses this year. For the authorities, eradication carries risks if people feel they are being unfairly targeted or that the government is forcing them into penury. And will the IEA really put a good portion of its rural, work-able population in prison? As the IEA’s policy on narcotics moves into its second year, it is clear that the consequences are not just economic, but could have repercussions for politics and social peace.
Edited by Roxanna Shapour
|↑1||Alcis first reported in June 2023 (AAN analysis here) a significant drop in poppy cultivation in Helmand province, from more than 120,000 hectares in 2022 to less than 1,000 hectares in 2023. Helmand is Afghanistan’s leading poppy cultivator.|
|↑2||UNODC and Alcis both use satellite imagery to measure opium cultivation.
Alcis’ estimates, it says “are the result of analysis of satellite imagery collected across the whole of Afghanistan repeatedly throughout the winter cropping season. As such, it is a method that “reviews every field in Afghanistan multiple times through its growing cycle.” They say this method also estimates the amount of land “dedicated to wheat, orchards, vineyards, and other crops – the agricultural alternatives to poppy – and thereby insights into how enduring a ban will be, and how this varies by area.”
UNODC describes using 900 “very high-resolution satellite images on a field-by-field basis,” obtained as a particular province’s poppy is likely to be coming into bloom, a variation based on climate difference.
|↑3||To put this in perspective. More than 15 million people globally, UNODC estimated in 2010, use opiates (opium, heroin and morphine), which means that in opium equivalents, they use approximately 3,700 tons of opium annually. See UNDOC’s World Drug Report from 2010. This is the most recent estimate of the number of opiates users globally, known to us.|
|↑4||Helmand dwarfs all other provinces in terms of hectares under opium poppy. In 2022, poppy was grown on almost 130,000 hectares of land. The next largest province, Kandahar, grew poppy on just over 164,000 hectares.|
|↑5||In the 2022/23 marketing year (July/June) are forecast at an above‑average level of 3.4 million tonnes, over 8 per cent less than in the previous year, the FAO reported.|
|↑6||UNODC reported a different motivation for the reported temporary lifting of the tax on opium exports: “The goal was reportedly to end the opium trade in Afghanistan by liquidating all remaining stocks and discouraging future poppy cultivation.”|
|↑7||The law was agreed upon in a meeting chaired by Mullah Hibatullah on 28 August 2023 with the head of the Supreme Court, five provincial governors and other members of the Taliban leadership in attendance, according to Alcis.|
|↑8||The official English translation of the April 2022 ban, taken from the Al-Emarah website, is:
As per the decree of the supreme leader of the Islamic Emirate of Afghanistan (IEA), All Afghans are informed that from now on, the cultivation of poppies has been strictly prohibited across the country.
If anyone violates the decree, the crop will be destroyed immediately and the violator will be treated according to the Sharia law. In addition, usage, transportation, trade, export and import of all types of narcotics such as alcohol, heroin, tablet K, hashish and etc., including drug manufacturing factories in Afghanistan are strictly banned. Enforcement of this decree is mandatory. The violator will be prosecuted and punished by the judiciary.