U.N. REPORTS A DECLINE IN AFGHANISTAN'S OPIUM TRADE

KABUL -- Farmers in Afghanistan are growing less opium than last year
and prices for the illicit crop have fallen to levels not seen in a
decade, according to a new report from the United Nations.

The decline in poppy growing is largely the result of years of
oversupply catching up to farmers -- cultivation climbed this decade
as earlier efforts to curb it failed -- and newly successful
interdiction efforts that have begun to discourage production, the report said.

But obstacles remain as foreign troops and aid workers try to end
opium's role as a pillar of Afghanistan's economy and a source of
revenue for the Taliban, particularly because the industry is so entrenched.

"The bottom is starting to fall out of the Afghan opium market," the
U.N. Office on Drugs and Crime said in the report, which was released
Wednesday.

To support that conclusion, the report says that Afghanistan's opium
cultivation this year has fallen 22% from 2008, the second straight
annual decline.

A persistent global glut has discouraged production and forced down
prices paid to farmers, though output continues to outstrip global
demand. The U.N. drug office's executive director, Antonio Maria
Costa, said in a statement that the stockpiling of excess opium was
likely keeping prices from crashing.

A summary of the report provided to journalists ahead of the full
report's release didn't detail methodology, and said the numbers for
2008 and 2009 weren't directly comparable because of slight
population increases. The annual survey, which seeks to measure
prices around harvest times in different parts of the country, is
consistently cited as a measure of opium production in Afghanistan.

The report appeared to offer a rare bit of welcome news in
Afghanistan for the U.S. and its allies, after a summer of setbacks.
Insurgent violence continues to spread in Afghanistan and a hotly
contested presidential election has been marred by allegations of vote-rigging.

The U.N. opium report raised several red flags that indicate the drug
trade is likely to remain a central challenge for any new Afghan
government and international security forces. The U.N. says Afghan
officials remain complicit in the illegal trade, undermining public
support for the government. Afghan officials routinely deny such allegations.

Collusion between criminal gangs and insurgents is spawning
"narco-cartels" like those seen in Colombia and Myanmar, the U.N. says.

And Afghanistan still grows far more opium than global demand, which
is steady at about 5,000 tons a year. Some of that excess crop is
probably being hoarded, the report said. "Stockpiles of illicit opium
now probably exceed 10,000 tons -- enough to satisfy two years of
world [heroin] addiction," Mr. Costa said.

The report summary didn't explain how the U.N. estimates the size of
opium stockpiles.

It was unclear whether declining cultivation and falling prices paid
to farmers are seriously hurting the bottom line of Afghanistan's
insurgents, which earn income from drug trafficking, although U.S.
officials say it isn't as important a source of funds as once thought.

The Taliban also earn revenue from taxing farmers on their opium
crops, said Doug Wankel, a former senior antinarcotics official at
the U.S. Embassy in Kabul. Mr. Wankel added that "the big money is
made in processing opium and trafficking opium or heroin or taxing
the people who do that."

In 2008, the export value of Afghanistan's opium production was $3.4
billion, according to the U.N. report. It didn't offer a figure for this year.

The amount Afghan farmers earned from opium dropped by about 40% --
from $730 million to $438 million in 2009. U.N. and Afghan officials
say falling prices could help persuade farmers to switch to legal
crops, such as wheat. Under a new $300 million program, the U.S.
Agency for International Development is encouraging farmers to pursue
other sources of agricultural income.

While a farmer still earns more growing opium than wheat, the price
gap has narrowed substantially, according to Jean-Luc Lemahieu, the
chief of the U.N. Office on Drugs and Crime's Afghanistan operation.
"We need to focus rural development on opium-growing communities so
those farmers who have just left cultivation, or are thinking of
leaving cultivation, can be kept from returning to poppies," he said.