[I found it surprising and fascinating that an acre of pomegranates can be as profitable as an acre of opium, or at least close enough to within hailing distance of it to be pushed over the top by its other virtues (e.g., that it's respectable, legal and not anti-islamic). Of course the article also lists the million reasons why drugs work better in time of war and why these economics can only be a reality in a time of peace. But in itself seems like news. It seems as if poor Afghanistan has no conceivable substitute for opium that grows there well. And it seems that's not true. The same land that is uniquely great for growing opium is also uniquely great for growing other high-value ag products, and the traditional products they used to ship out (the saffron, figs, dates, dried fruit and seedless grapes) are, from the farmer's point of view, within striking distance of it. So all the world needs to do is end the war completely, bring back peace and political stability and support it with aid for 10 years while the trees grow and the support systems are set up. Which is pretty hard to imagine. But that's better than inconceivable :o)
January 14 2008 Financial Times
From poppies to pomegranates By Jon Boone
The high-security hanger just yards from the runway of the Kandahar Air Field must be one of the most unusual outposts of the international grocery trade anywhere in the world.
Normally, the cavernous structure at this strategically important military base in Afghanistan holds stores and equipment used by the international forces attempting to subdue the resurgent Taliban in the southern province. But last Autumn it was receiving shipments of pomegranates on enormous flatbed trucks.
Well over 1,000 tonnes of the bulbous fruit have been brought from the orchards around the city to an airfield that normally plays host to jets, helicopters and unmanned spy drones. The boxed Kandahari pomegranates - among the world's best, connoisseurs claim - are then loaded into cargo planes chartered by the US military and flown on to supermarket shelves in Dubai, Vancouver and London.
Shoppers in Dubai pay up to $11 (£5.60, E7.40) a kilo for the highest-quality fruit, compared with the $1.20 locals will stretch to. For the US government-funded contractors overseeing this export business, those price differentials will be key to helping Afghanistan develop legal cash-crops capable of taking on the country's booming narcotics business. Officials from the United States Agency for International Development (USAID) say that the country has huge potential to make money by reclaiming its reputation - lost after decades of war - for producing high-quality fruit.
Certainly, the comparable value of poppy and pomegranate makes the latter seem like an attractive financial alternative. According to research by David Mansfield, a British expert on the economics of poppy farming, the gross price for a hectare of poppy in Helmand this year is around $3,697. USAID says that farmers have this year been able to make around $5,000 for a hectare of pomegranates - although their profits can be eaten away by the high cost of hiring workers to collect the flower's resin during the short harvest season.
During a visit to the cold storage facility financially supported by USAID - near the airbase where the pomegranates wait for their cargo plane - Assadullah Khalid, the governor of Kandahar, told the Financial Times that farmers in his province did not need much encouragement to switch from a business that is forbidden in Islam. "People don't like these poppies, but farmers have to feed their families. But if they can get a good price for fruit they will grow that instead."
It is a view echoed by Haji Padsha, a farmer in Aghandab district who has six hectares of pomegranates. He says he can get more money from poppy, but prefers to grow pomegranates. "I don't want to make a lot of money, I just want to feed my family. Most of the money from poppy doesn't go to the farmers, it goes to the smugglers." If he could access foreign markets, he says, he could double his income.
The US strategy is to link farmers with international markets, in part through a series of seven big agricultural fairs hosted around the country, and in part by telling them how to meet the quality standards demanded by retailers such as Carrefour, the French supermarket that stocks Kandahari pomegranates in its stores in Dubai. That entails teaching farmers and traders to separate their fruit into the standard sizes demanded by stores in developed markets, shipping them in specially printed cardboard boxes rather than packed with straw in wooden crates and generally trying to overcome buyers' suspicion of the "made in Afghanistan" label.
As part of a $6.6m Kandahar orchard programme, USAID is also offering credit to farmers and planting new pomegranate trees, particularly on former poppy land.
But the pomegranate farmers of Kandahar, the saffron cultivators of Herat and many other embryonic agricultural businesses currently receiving international cash in Afghanistan are pitted against a narco-economy that looks set to dwarf these legal activities for a long time to come.
Although only 4 per cent of agricultural land is used to cultivate poppy, the wider drugs industry, with its smugglers and refiners, dominates the economy. The drugs trade, experts say, is now Afghanistan's largest industry and employer.
According to a United Nations report, the total export value of Afghanistan's opium in 2006 was $2.7bn, with Afghan traffickers making $2.14bn in profit. The total "farm gate" value that year was $560m, compared with just $193m for all Afghanistan's legal exports.
While various fruit and nut projects have started since 2001, the drugs industry has been growing in both output and sophistication. Opium production jumped 34 per cent last year, with the country now accounting for 93 per cent of global supply. Afghanistan is also moving up the narcotics value-added chain, with much more raw opium refined into heroin, increasing the profits that go to traffickers.
According to Barnett Rubin, an Afghanistan specialist at New York University, the country is now akin to others in the developing world that rely heavily on cash crops such as jute, tea or rubber. "The drug traffickers have for the first time linked a very large portion of the Afghan peasantry to international markets for a commercial crop, most of which is processed into a high-value commodity in Afghanistan."
The traffickers make life easier for farmers who choose to grow poppy over other crops. Sometimes drug traffickers will simply not give farmers much choice, using so-called "night letters" to menace farmers into growing poppy on pain of death. Traffickers also offer farmers futures contracts, known as salaams , for crops that have not yet been cultivated.
"The drug traders provide cultivators with credit, cash and security," Mr Rubin says. "Thus far the international efforts to provide Afghans with 'alternative livelihoods' have barely started to offer a fraction of the benefits that the opium economy does."
Even the pomegranate project has big obstacles to clear if it is to beat the drugs industry at its own game.
This year's shipments of fruit to Dubai will, according to the team of advisers from Chemonics, one of the biggest USAID contractors in Afghanistan, only break even - although they have high hopes that in the coming years they will be able to raise their prices as Kandahari pomegranates regain their reputation for being among the best in the world.
The scheme is meant to be selfsustaining but for the time being the pomegranate farmers are enjoying substantial uncosted subsidies. The airlifting of the fruits is being done at a fifth of its normal cost by a cargo company that is happy to let the scheme use planes which would otherwise be flying out of the country empty. Dog handlers who check the pomegranate boxes for drugs and explosives also do so as a favour, free of charge.
Security is going to be an ongoing problem. Half of the pomegranates seen by the FT during a visit in November came from "behind Taliban lines", according to one of the agricultural contractors who cannot be named for security reasons. In late October the Taliban attacked Aghandab district directly to the north of Kandahar city. Although the insurgents were later expelled by Canadian and Afghan forces, agricultural advisers working for Chemonoics said they were still engaged in "combat farming" and that large parts of the district were no longer accessible.
Pomegranate is regarded as one of the easiest crops to export internationally. The fruit is not nearly as perishable as seedless grapes, another crop that prospers in Afghanistan. It also requires minimal processing compared with raisins or other dried fruit.
But high-value agricultural products are often the ones that take the longest to mature. A pomegranate orchard takes between six and nine years, almonds up to four years, and apricot up to five. In contrast poppy, the crop of which is currently being planted around the country, takes just six months.
Factors such as these that have led many to conclude - including the British government, which has the lead role in counter-narcotics - that freeing Afghanistan from the taint of drugs will be a slow process.
Development experts often point to the examples of Thailand and Pakistan, two states that were once centres of opium production and where the problem has been brought under control. In both places, however, the anti-drug efforts took decades.
But not everyone believes there is time for such a weaning process to play out in Afghanistan. The country's booming poppy harvests are causing acute unease among military planners worried that the narcotics economy is corrupting the government and bankrolling the Taliban. Dan McNeill, the commander of the Nato-led International Security and Assistance Force, has said that the insurgency could be receiving as much as 40 per cent of its funding from the drugs trade. Other experts believe this is a conservative estimate.
Critics fear that eradication via crop spraying in areas where alternative crops have not been developed will create economic hardship for farmers and further enrich narco-traffickers.
This actually happened in 2000 when the Taliban stamped out poppy production. Then, the value of stockpiled drugs soared while farmers suffered. Several analysts, including Mr Rubin, argue that the crackdown contributed to the toppling in 2001 of the Taliban movement, which had forfeited much of its rural support with its anti-poppy programme.
Aerial spraying has been taken off the agenda for this year after the Afghan government refused to bow to intense US pressure to send cropdusters to the country's poppy fields.
But critics such as Mr Rubin fear that US is only paying "lip service" to the need for a gradual transition away from an economy dominated by opiates. "The ideology and operational doctrine of the 'war on drugs' effectively prevents the Afghan government from developing a realistic transitional programme that would recognise the need to phase out narcotics production as security improves through agreements with communities."
Copyright The Financial Times Limited 2008