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Cablegate: Unodc: Afghan Opium Stabilizing: What Is International

VZCZCXRO2122
PP RUEHDBU RUEHKW
DE RUEHUNV #0050/01 0430755
ZNR UUUUU ZZH
P 120755Z FEB 10
FM USMISSION UNVIE VIENNA
TO RUEHC/SECSTATE WASHDC PRIORITY 0574
INFO RUEHKO/AMEMBASSY TOKYO 0824
RUCNNAR/VIENNA NARCOTICS COLLECTIVE

UNCLAS SECTION 01 OF 03 UNVIE VIENNA 000050

KABUL FOR ANDREW QUINN
STATE FOR S/SRAP MATTHEW STIGLITZ
STATE FOR INL/AP MICHAEL OVERBY

SIPDIS


E.O. 12958: N/A
TAGS: SNAR AF UN JP
SUBJECT: UNODC: Afghan Opium Stabilizing: What is International
Community Going to Do About It?

-------
SUMMARY
-------

1. Summary. Fresh off his trip to the January 28 London Conference,
and with the UN Office of Drugs and Crime (UNODC) "Winter
Afghanistan Opium Assessment Survey" in hand, Executive Director
Costa predicted that after two years of significant decline (36
percent overall), opium cultivation in Afghanistan will stabilize in
2010. Along with this "positive development," Costa predicted that
lower agricultural yields can be expected in the country due to the
current drought. As a result, Costa believes that up to twenty-five
provinces could be "poppy free" by summer of 2010, and called upon
the international community to direct its development assistance to
those "swing provinces" where poppy cultivation is marginal but
vulnerable to increases. More worrisome, he argued, is the
simultaneous decline in agricultural commodity prices, which could
reduce the incentives for farmers to turn away from poppy. Costa's
briefing underscores the importance of integrated UNODC benchmarks
to assess counter narcotics progress in Afghanistan as well as the
need for an integrated UNODC strategy which includes alternative
development assistance. UNODC is already working on both; when the
strategic country program is ready for consideration, as early as
the end of next month, we should be ready to seriously consider
funding support in order to maximize some of UNODC's comparative
advantages in Afghanistan. End Summary.

-------------
The Good News
-------------

2. On February 3 and 4, Costa briefed major donor and Central Asian
regional ambassadors on his preliminary conclusions based on the
annual "Winter Afghanistan Opium Result Survey." (Note. This annual
assessment is based on a nation-wide survey of villagers and farmers
to better understand their current and future intentions with regard
to cultivating opium poppy. Costa and his statistical team are
increasingly confident that the winter assessment, while only
indicative, is a strong predictor of the country's future
cultivation and production results. End note.)

3. Costa predicted an opium crop consistent with last year's
numbers. Such an outcome would end two years of substantial
declines, but also indicates that "poppy free" provinces (i.e. those
with less than 100 hectares of cultivation) are increasingly stable
and less likely to return to large numbers. Costa therefore asked
delegations to target their development assistance to those
provinces where cultivation is currently minimal, but which could be
trending in the wrong direction,specifically, Baghlan, Frayab and
Sari Pul, but also Kunar, Nanharhar, Kabul, Laghman and Badakhshan.
If development assistance and community-inspired measures like
shura-driven campaigns and governor-led eradication are effectively
targeted and implemented, Costa said up to twenty-five provinces
could achieve "poppy free" status; and if so, would prove Costa's
current thesis that "Afghanistan doesn't have an opium poppy
problem. A few districts in a few provinces have an opium poppy
problem."

4. Along with a stable and increasingly localized cultivation
problem, Costa also predicted an overall decrease in the yield of
opium due to ongoing drought conditions and lower than average
snowfall. With these conditions unfortunately hitting the licit
agricultural sector as well, Costa nevertheless believes that this
is a promising omen for the counter-narcotics situation in
Afghanistan.

5. Finally, Costa noted that opium prices, even after calculating
for inflation, are at Taliban-era levels, currently standing at US
$48/kilo for fresh opium. Costa attributed the crash of opium prices
to increasing international pressure on drug traffickers and
interdiction, and a consistent cultivation decrease over the past
few years. Costa also noted the current opium glut (resulting from
the boom years of 2004-2007) has flooded the market and has helped
to lower prices as well.

---------------------
But the Bad News, Too
---------------------

6. On the other hand, Costa warned that licit agricultural prices
are falling at a much faster rate than opium, which could induce
farmers to switch back to opium poppy. Costa pointed to wheat prices
(43 percent decline since 2009) and maize (38 percent decline) as
examples of this worrying trend. In comparison, fresh opium prices
have only decreased 13 percent and dry opium just 6 percent. Costa
attributed some of this to the already "rock-bottom" price of opium,

UNVIE VIEN 00000050 002 OF 003


but encouraged member states to increasingly focus their support
towards licit agricultural activities and markets. Indeed, Costa
noted, opinion surveys in the south and west showed that the number
two and three reasons for not cultivating opium poppy was its low
yield and sale price (Note: That it was banned by the government
was the number one reason cited. End Note.) Such opinion results,
Costa asserted, should reinforce international efforts to take
advantage of the window of opportunity offered by the current
relatively low opium prices and increase alternative development
assistance as a means to more permanently incentivize farmers to
move away from poppy cultivation. Separately, UNODC officials noted
their eagerness to work with other partners, including bilateral
assistance agencies and other UN bodies (for example the World Food
Program and UNIDO) to promote alternative development. (Note.
UNODC is reinvigorating its own alternative livelihood program,
potentially including such elements as pest management, canal clean
up, improving produce hygiene, and organic pistachio cultivation.
UNVIE will send the updated project proposal separately, as soon as
it is ready. End Note).

7. Costa stressed the strong correlation UNODC sees between
"insecurity" and cultivation. The better the security situation, the
less likely a village would plant opium poppy. Costa highlighted the
promise that receiving some kind of agricultural assistance (for
example, provision of seeds, fertilizer, irrigation) seems to have a
positive effect on a farmer's decision to forego cultivating poppy.
Indeed, the UNODC has incorporated in its currently small
alternative livelihood program, the conditionality that no
cultivation, trafficking, or migrant harvesting of opium is
undertaken by recipients.

-----------------------
Measuring Success
------------------------

8. Expressing U.S. support for the excellent UNODC reports on the
Afghanistan opium situation, DCM Pyatt queried Costa on how UNODC is
measuring whether Afghan and international counter-narcotics efforts
are succeeding. As in his separate briefing to Ambassadors the
previous day, Costa acknowledged the need for integrated benchmarks
and reported that UNODC was currently working on these benchmarks in
cooperation with the Afghan Ministry of Counter-Narcotics. He added
that UNODC hoped to have something to share by early summer 2010
(Note. U.S. has provided funding for this initiative. End note.)
Costa referenced several possible benchmarks in addition to the
current opium cultivation one: price trends, the tally-board of
"poppy free" provinces, analyses of precursor chemical
use/importation, corruption, cannabis cultivation, and Afghan drug
addiction. Costa also opined that a proper understanding of the
Afghanistan drugs problem would be better served by an analysis that
focused on individual provinces and villages in addition to the
general national results.

--------------------------
Japan Offers UNODC US $7
Million
---------------------------

9. During the meeting, Japan DCM announced that his government, in
recognition of the strategic threat posed by Afghan opium production
and trafficking, is preparing to pledge USD $7 million to UNODC
during its FY2010. Currently, USD $3.9 million is slated for UNODC's
Afghanistan program projects and USD $3.1 million would be dedicated
to a variety of country projects in neighboring countries including
Iran.

--------
Comment
--------

10. Costa clearly sees an Afghanistan at a crossroads and is in the
process of positioning UNODC as a partner in an integrated
Afghanistan counter narcotics strategy, including border control,
anti-corruption measures, criminal justice capacity building, and
demand reduction (Note. The country program is slated to also
contain a counter terrorism component. End Note). Now, UNODC is
taking steps to mainstream these objectives in the wider
reconstruction and development context, and is reinvigorating its
alternative livelihood program, particularly focusing on western
Afghanistan. UNODC is already taking a regional approach in its
Afghanistan programs, including through its Central Asian Regional
Information and Coordination Center (CARICC), and the Triangular
Initiative on border enforcement among Pakistan, Afghanistan and
Iran. With regard to alternative development, UNODC is taking steps
to identify international partners to maximize efficiencies. While
UNODC's current estimated Afghanistan budget of US $89 million is

UNVIE VIEN 00000050 003 OF 003


tiny compared to our bilateral efforts, we believe UNODC is a
valuable international partner and we should be ready to look
closely at the integrated country strategic program when it is ready
(we hope by the end of next month) in order pinpoint programs we can
fund (for an amount that would actually be very small compared to
our overall Afghanistan counter narcotics budget) and that, as an
internationally-backed effort, would complement and reinforce our
own national strategy. END COMMENT.


DAVIES

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