Q+A: Opium and Afghanistan's insurgency

By Jonathon Burch

KABUL (Reuters) - Controlling the opium trade in Afghanistan, the world's leading producer of the drug, is a key element in the fight against Taliban militants.

With thousands of U.S. Marines launching a major new offensive against the Taliban-led insurgency in southern Helmand province, the epicenter of world opium production, the U.S. envoy to Pakistan and Afghanistan, Richard Holbrooke, has also foreshadowed a new approach to controlling the trade.

Following are questions and answers about Afghanistan's poppy production, its role in the insurgency and efforts to combat it.

HOW MUCH POPPY IS GROWN?

Afghanistan produces 93 percent of the world's opium, a thick paste made from the poppies that is processed to make heroin, according to United Nations figures.

In 2008, 157,000 hectares of opium were cultivated, down 19 percent from 193,000 hectares in 2007. Opium production only declined 6 percent to 7,700 tonnes because of record high yields.

Helmand cultivated 103,000 hectares in 2008.

In the same period, prices fell by about 20 percent, meaning the value of the opium to Afghan farmers fell by about a quarter from roughly $1 billion to about $730 million.

The export value of opium, morphine and heroin at border prices in neighboring countries fell to $3.4 billion in 2008 from $4 billion in 2007, according to the U.N. Office on Drugs and Crime (UNODC) 2008 Afghan Opium Survey.

WHAT IS THE LINK BETWEEN OPIUM AND THE TALIBAN?

The Taliban are mainly funded by the opium trade.

Despite the drop in cultivation, production and prices, the UNODC says the Taliban and other "anti-government forces" still make "massive amounts of money from the drug business." Their take, mainly from levies on processing and trafficking, has been put at between $200 million and $400 million, with up to $70 million more from "ushr," or charges on economic activity.

UNODC executive director Antonio Maria Costa has also pointed to the danger of opium stocks held by the Taliban. "For a number of years, Afghan opium production has exceeded world demand. The bottom should have fallen out of the opium market, but it hasn't," he said in the UNODC's 2008 Afghan Opium Survey.

"So where is the missing opium? Lack of price response in the opium market can only be the result of stock build-ups, and all evidence points to the Taliban."

HOW DOES IT AFFECT MILITARY STRATEGY?