U.N. REPORTS THAT TALIBAN IS STOCKPILING OPIUM

UNITED NATIONS -- Afghanistan has produced so much opium in recent
years that the Taliban are cutting poppy cultivation and stockpiling
raw opium in an effort to support prices and preserve a major source
of financing for the insurgency, Antonio Maria Costa, the executive
director of the United Nations drug office, says.

Mr. Costa made his remarks to reporters last week as his office
prepared to release its latest survey of Afghanistan's opium crop.
Issued Thursday, it showed that poppy cultivation had retreated in
much of the country and was now overwhelmingly concentrated in the 7
of 34 provinces where the insurgency remains strong, most of those in
the south.

The result was a 19 percent reduction in the amount of land devoted to
opium in Afghanistan, the United Nations found, even though the total
tonnage of opium produced dropped by just 6 percent.

The high output per acre was attributed to a good growing season in
the south, a heavily irrigated area where the Taliban maintain a
strong presence in five provinces and have for several years
"systematically encouraged" opium cultivation as a way to finance
their insurgency, the study said.

Last year, the insurgents made as much as $300 million from the opium
trade, by United Nations estimates. "With two to three hundred million
dollars a lot of war effort can be funded," said Mr. Costa, an Italian
diplomat who has served at the United Nations Office on Drugs and
Crime for six years.

But after three years of bumper crops, including this one, the Taliban
have succeeded almost too well, producing opium in amounts far in
excess of world demand. The result, Mr. Costa said, was now a glut
that was putting downward pressure on the price, which had dropped by
about 20 percent.

The fact that prices had not collapsed already, he said, was evidence
that the Taliban, drug lords and even some farmers have stockpiled the
opium, more and more of which is also being processed in Afghanistan.
"Insurgents have been holding significant amounts of opium," Mr. Costa
said.

The surplus -- as much as 11,000 tons, or more than twice world demand
in the last three years -- now threatened to devalue even those
stockpiles, Mr. Costa said. In 2008, Afghanistan produced 8,500 tons
of opium, the United Nations found. World demand was estimated at
about 4,400 tons a year.

This year, the Taliban are taking a "passive stance" toward
cultivation, apparently putting less pressure on Afghan farmers to
plant opium poppy. "They have called a moratorium of sorts as a way of
keeping the stocks stable and supporting the price," Mr. Costa said.

He said the information came from undercover surveyors in Afghanistan
who closely observed the autumn planting season and the buzz around
markets where opium is traded.

The dynamics of the opium market pointed up the problems American and
NATO forces face as they try to tamp down the narcotics trade.
Eradication itself can drive up the price and put more money into the
hands of the Taliban, while alienating poor Afghans who depend on the
crop for their livelihoods. "We've got to find a way to keep the
prices down and the cultivation down," Mr. Costa said.

He has suggested an emphasis not on eradication of poppy crops once
they are planted, but on disrupting the trade by hitting the open-air
markets where opium is bought and sold, the convoys that transport it
and the labs where it is processed into more potent drugs, primarily
heroin.

NATO countries agreed to the logic of such an approach at a meeting in
Budapest in October, Mr. Costa said, but he added that for many years,
"The international community has undervalued the role of narcotics in
creating the conditions for insurgency in Afghanistan."

Despite the still-high opium output, he was encouraged that an
estimated one million fewer Afghans were involved in opium cultivation
this year. The reasons varied and included drought in some provinces
beyond the south.

But it also appeared to reflect some progress among provincial
governors and shuras, or local councils, in persuading farmers not to
plant poppy, Mr. Costa said.

Part of the incentive for farmers was the expectation of government
assistance if they planted legal crops, he said. But higher prices for
food crops also helped. The revenue from wheat, for instance, has
tripled since 2007, the United Nations said.

But without better economic opportunities, poppy will remain an
attractive alternative for many in Afghanistan, the source of more
than 90 percent of the world's opium. Growth has lagged so badly, Mr.
Costa noted, that the drug trade still accounts for a third of the
Afghan economy. Other estimates put it at as much as one-half.

Any progress this year remained vulnerable, he warned. The biggest
threat was if insecurity continued to spread to previously stable
parts of Afghanistan, as it has in recent months.

Could the United Nations, NATO and American forces keep up the
declines in opium cultivation in the face of decreased security? "The
answer is no," Mr. Costa said. "I don't think we can."