Afghanistan produces 90% of the opium in the world. Opium production represents 10% of Afghanistan's GDP, and the Economist reports that Afghanistan is set to have a bumper opium crop this year.
... The annual poppy harvest begins soon, and despite all the efforts to reduce cultivation, it looks likely to rise yet again. The harvest in nine of the growing provinces will probably increase and it is expected to remain steady in about in another eight. In only one of Afghanistan’s provinces does it looks set to fall, according to the forecast.Notwithstanding that Islam supposedly prohibits growing narcotics, the Taliban are behind much of the growth in opium production, using it as a source for funding their war. (See also this article from the Guardian). As this article notes:
Cultivation is still lower than when it was at its peak, in 2007, but the nationwide trend now looks to be moving in the wrong direction. This year’s bumper crop means that Afghanistan’s heroin will continue to feed an exploding population of addicts within the country’s own borders as well as in neighbouring Russia and Iran. Taliban coffers will swell with the proceeds and everywhere the drug money will poison attempts to build an Afghan state. Helmand, which alone grew nearly half of Afghanistan’s opium in 2011 and is the focus of the most intensive counter-narcotics push, is one of those provinces where production is unlikely to change.
Sky-high opium prices are being blamed for the recent backsliding. Other factors, including such familiar conditions as poverty, insecurity, corruption and government complicity, all continue to play their bleak roles.
Helmand is the world’s largest opium-producing region, responsible for 75 per cent of the world’s opium. Thus the Taliban fights here to protect its lucrative crop: this is an insurgency of politics, guns, drugs and power, not one of ideology.
However, this MSNBC report paints a more positive picture:
The alleged income from smuggling opium and donations from private sources in the Gulf no longer appears to be enough to finance the insurgency.I think that there is a real risk that if the Taliban continue to rely on drug revenue, opium production and trafficking will become the raison d'etre for the Taliban's existence, similar to what happened to FARC in Columbia. According to this article from the Council on Foreign Relations:
Internationally sponsored, poppy-eradication programs operating throughout the country seem to have had an effect, even if a recent survey by the United Nations Office of Drugs and Crime showed that the success rate of such programs had decreased and predicted more farmers might soon return to the lucrative business.
Experts estimate that FARC takes in between $500 million and $600 million annually from the illegal drug trade. The FARC also profits from kidnappings, extortion schemes, and an unofficial "tax" it levies in the countryside for "protection" and social services. About sixty-five of the FARC's 110 operational units are involved in some aspect of the drug trade, according to a 2005 International Crisis Group report, but evidence from that period indicates they primarily managed local production. A 2008 International Crisis Group report notes that the nature of the FARC's drug involvement varies from region to region, and that the group's control of population and territory in rural areas "has allowed it to dictate terms for coca growth, harvest, and processing." The U.S. government alleges the FARC's role in the drug trade is more significant. According to a 2006 U.S. Department of Justice indictment, the FARC supplies more than 50 percent of the world's cocaine. A 2009 report by the U.S. Government Accountability Office says the FARC accounts for 60 percent of the total cocaine exported from Colombia to the United States. The U.S. Treasury Department has frozen the assets of several individuals it asserts are significant foreign narcotics traffickers within the FARC. However, other evidence suggests the FARC's involvement with the drug trade remains local. According to the 2007 UN World Drug report, the bulk of drug trafficking in Colombia is controlled by professional drug smuggling groups, while the FARC is focused on the cultivation and processing of coca (PDF).There have been suggestions that the U.S. buy up the opium crops--essentially transform it into a legitimate crop. The problem is that subsidizing a crop guarantees that it will be produced. And while purchasing the crops theoretically would produce a price ceiling (i.e., establish the market price), the U.S. is not going to turn around and release the opium into the illicit drug market. The demand for heroin would guarantee a premium price for those farmers willing to grow the crops and illegally sell them to drug traffickers, but make it harder to distinguish the legitimate farmers from those selling illegal products. (In reality, farmers would probably do both--sell some of their production to the government, and the remainder would go to traffickers).