YEMEN WIELDS CAPITALISM IN WAR ON NARCOTIC PLANT

One Investor Pays Farmers To Grow Alternative Crops

SANA'A, Yemen -- Like many countries, Yemen has been hit hard by
soaring food prices. But the food problem has an added dimension
here. Farmers use much of the nation's scarce water and arable land
to cultivate qat, a mildly narcotic stimulant chewed by many Yemenis
throughout the day.

Now, some officials hope they can kill two birds with one stone by
getting farmers to convert part of their land to coffee beans or food
crops from qat, pronounced "cat." The alternative crops could bring
in cash from exports or help Yemen reduce its dependence on imported
staples such as wheat. And officials hope to lure growers away from
planting a drug that has long been blamed for keeping worker
productivity low here. "You need to be pragmatic and propose economic
solutions for a possible substitution" of qat, which remains a
popular cash crop, says Salah Al-Attar, the chairman of Yemen's
General Investment Authority, a government body promoting investments.

Indian businessman Shabbir Ezzi's family company has invested about
$1 million in a project that encourages farmers in East Haraz, a
mountainous region west of Sana'a, to grow more of Yemen's prized
coffee beans and less qat. Easy to grow and sell domestically, qat
appears to have ballooned at the expense of other crops, although
reliable farming statistics are hard to come by here. Between 2002
and 2006, one agriculture ministry official estimates, the number of
acres used to cultivate qat increased by more than 40%. According to
a separate estimate, qat plants cover as much as 20% of all
agricultural land in the country.

Yemen's stability is of interest to the U.S., because al Qaeda
maintains an active presence here. After the Sept. 11 attacks, Yemen
declared its support for the U.S.-led war on terror, and in the last
two weeks, Yemeni security officials have announced the arrests of a
number of suspected members of the group. To some, chewing qat is a
moral issue. The Ismaili religious community, a Shiite sect, has
spearheaded an antiqat drive in East Haraz. In the years before Mr.
Ezzi moved to Yemen, religious leaders, including those visiting from
India, have been speaking to farmers against the drug, persuading
some of them to uproot qat trees.

Mr. Ezzi is part of the religious community, but he steers clear of
"say-no-to-qat" messages. Instead, he guarantees a fixed minimum
price for coffee from farmers. That insulates growers if local prices
fall. And he boosts his price if farmers increase the quantity they
bring him. The more farmers grow for him, he says, the more profit
his venture will make selling coffee to buyers in the U.S. and
Europe. He says the project isn't yet in the black.

In addition to cash payments, Mr. Ezzi hands out coupons to farmers
for specific amounts of coffee. They can use the coupons to buy
machinery, new coffee plants and medical care. About 500 farming
families currently sell him coffee.

"We decided to appeal to the farmers from a commercial angle,
explaining to them how coffee in the long run is higher in value than
qat," says Mr. Ezzi, whose family also runs paper-processing
businesses in India and Egypt. "No matter what language anyone
speaks, everyone understands one common language: money."

Some government officials and international agencies are watching the
experiment. "If it's proven successful...it can serve as a model,"
says Mohamed El-Kouhene, country director for the United Nations's
World Food Program. The WFP has been working with the government to
encourage farmers to plant other crops, like wheat. Yemeni officials
have also given more agricultural machinery and seeds to encourage
wheat and corn output. The effort faces significant challenges:
Chewing qat is a way of life for many here, and demand is strong.
Growing qat typically is more profitable than growing coffee beans,
and the tall and leafy qat plants require less attention than coffee trees.

Still, some families in Haraz are giving coffee a try. "When the
farmers see they can bring in more money for coffee, this encourages
them to uproot more qat," says Murtada Ali. He still grows qat in
steep terraces carved out of the mountains. But now the plant grows
alongside his coffee crops.