A mysterious blight is devouring Afghanistan's southern poppy crop, with the United Nations predicting that the 2010 opium yield may be down by as much as one-third.

At first glance, this might seem like good news. An enormous drop in the opium yield means drug traffickers, corrupt officials, and the Taliban, who tax and protect the poppy trade, make less money … right?

Wrong. When supply goes down, prices go up. Farm-gate values for raw opium, which had been dropping after years of overproduction, have shot up more than 60 percent, according to the U.N. Office on Drugs and Crime (UNODC), which tracks yield and values across Afghanistan.

And that's good news for everyone holding large stockpiles of opium or processed narcotics -- the Taliban, drug traffickers, and other power brokers who smuggle narcotics. The UNODC has estimated that more than 11,000 metric tons are stockpiled around Afghanistan and the region. If opium yields are down this year, those stockpiles will gain in value.

Another problem is that poppy farmers are convinced that NATO is behind the blight, which seems to be linked to an infestation of aphids. It's not enough that the fruit-eating bugs are munching through regular crops, too, or that USAID is trying to help farmers save their orchards. In conspiracy-theory-prone Afghanistan, many suspect a Western plot.

NATO troops in the south are trying to build rapport in local communities as part of Gen. Stanley McChrystal's population-centric strategy. This bug infestation could breed mistrust instead.

Perhaps worst of all, such a sharp decline in farm output has the potential to cause widespread economic despair in Afghan farm communities, where most people already scrape by at very slim margins. Poppy farmers who depend on loans from opium traffickers may find themselves buried in debt.

History and experience indicates that shifting poor farm communities off narcotics takes time. A report out this month from an Afghan research center has already questioned the sustainability of current levels of reduction.

That said, there may be an opportunity here -- but only if the international community positions itself swiftly to help Afghan farmers. Antonio Maria Costa, the UNODC's executive director, is in New York this week, hoping to get U.N. members states to pledge emergency funds to subsidize poor farm families through the coming winter, as long as they pledge not to plant opium next season.

"My strong wish is for the international community to support the farmers who give a pledge to not grow opium," he told me.

That won't be at all simple to administer or regulate, as Costa himself admits, and there could be opportunities for deception and corruption, particularly in remote areas.

But not helping the farmers is an even less palatable option because financial desperation could drive them into the arms of the traffickers and the Taliban.

Right now many Afghan farmers suspect the international community has secretly caused this blight. The challenge for NATO and the West is to shift perceptions so that Afghan farmers see them as part of the solution, not part of the problem.

Gretchen Peters is the author of Seeds of Terror, How Drugs, Thugs and Crime are Reshaping the Afghan War.

Editor's note: This article has been updated to better reflect the nuances of the mysterious blight.

By Gretchen Peters

There has been too much focus on troop numbers. Debating whether to send 20,000 troops to Afghanistan, or 40,000, or to bring some home, misses the point entirely: The key is deciding the strategy and then determining what resources will be needed to support that strategy. The U.S. could deploy five million soldiers to Afghanistan, but they will fail if the end goal is not clearly defined, if they are not trained to support the strategy necessary to reach that goal, and if the numerous government agencies taking part in the mission are not unified in how to reach it. That, unfortunately, is the current state of affairs.

The two main strategies being bandied about now -- counterinsurgency and counterterrorism -- are quite distinct, both in terms of the end goal, and how you go about reaching it. One is about state building, the other about containing a problem. What won't work is trying to split the two strategies down the middle.

I support the idea of a properly resourced COIN strategy, but I am pessimistic about the chances of success in Afghanistan unless certain key factors start changing.

One. The military effort must be supported by an intensive diplomatic effort to ease regional tensions that contribute, in a variety of ways, to violence, corruption and instability inside Afghanistan. These include the India/Pakistan divide and the ongoing tensions between the U.S. and Iran. Obama could set an example for India and Pakistan by sitting down with Iranian leaders.

Two. Washington must clean up its own house before it can expect the Afghans and Pakistanis to weed out corruption. That means not keeping alleged drug smugglers on the CIA payroll. It means not allowing U.S. contractors to skim off huge percentages of the contracts they win by subcontracting (depending on whom you ask, somewhere between 40 and 90 percent of the aid US taxpayers send to Afghanistan never reaches the Afghan people). It means stopping contracts with firms who pay off the insurgents for protection (Coalition troops, working with local communities, should protect projects that the communities themselves have requested).

Three. Define how the various factions of the enemy, as well as corrupt state actors, victimize the local population, and start protecting them against those activities. Across the battle space, insurgents engage in drug smuggling, kidnapping, extortion, banditry, and the central victims are the villagers who live in the places they operate. U.S. officials (and the Taliban) claim the insurgents get money from donations, but last time I checked, it's not called a donation when someone has got a gun to your head. I am fairly sure the Marines currently deployed to Helmand did not join the Marines because they wanted to be a policeman in Helmand, but there are basic law enforcement strategies that could help them clean up the communities where they are deployed, where factions of the Taliban behave more like criminal gangs than a military force.

I'm not suggesting any of this will be simple, and it won't happen fast. But eventually Obama -- or someone else -- is going to have to get serious about cleaning up this region.

Gretchen Peters is the author of Seeds of Terror, How Heroin is Bankrolling the Taliban and al Qaeda.

By Gretchen Peters

A Taliban fighter killed this spring by NATO troops in southern Afghanistan was found to have a tattoo from the Aston Villa Football Club, indicating he may have grown up in Britain's West Midlands. It was the latest evidence that British Muslims of South Asian origin have joined the fight in Afghanistan. (Read the full report here.)

For some time, Royal Air Force spy planes have picked up radio communication between Taliban fighters who speak with thick accents from Manchester, Birmingham, West Bromwich and Bradford, all cities with large populations of British Muslims of South Asian origin.

"But it was a shock to hear that the guys we were fighting against supported the same football clubs as us, and maybe even grew up on the same streets as us," the Telegraph newspaper quoted an unnamed British military official as saying. 

Some law enforcement officials believe the British Taliban fighters may have links to criminal gangs in Britain whose members are Muslim and who have been connected to selling heroin on British streets. At least one other captured Taliban fighter was found to have British gang tattoos on his arms, according to a western law enforcement advisor to the U.S. military, and there is evidence that various British Muslim gangs have sent fighters to Afghanistan, or sell Afghan heroin on British streets. Roughly 90 percent of the heroin sold in Britain comes from Afghanistan. 

The Gambinos, gangsters of Pakistani origin who take their name from the New York crime family, have been linked to selling Afghan heroin in north London and Luton.  So have the South Man Syndicate (SMS) and the Muslim Boys (who are also known as the PDC, or Poverty Driven Children).

"The big bosses have Taliban and al Qaeda connections and we're often told only to deal it to non-Muslims. They call it chemical jihad and hope to ruin lives while getting massive payouts at the same time," said a street dealer quoted in this British tabloid.

Members of the Muslim Boys, a gang of Afro-Caribbean Muslim converts (many of who converted to Islam in prison) have boasted to the British media of their links to to al Qaeda, although British officials admit it is hard to tell how much is bravado and how much is a sign of a concrete relationship between extremists in South Asia and the Muslim gangs of the U.K.

But some British law enforcement officials believe the link is there - and a cause for serious worry. Lee Jasper, the chair of the Lambeth police consultative group has expressed concerns that "the leaders of the Muslim Boys could be a criminalized front for terrorist extremists" in Britain.

Although the DEA says less than 5% of the heroin sold on U.S. streets comes from Southwest Asia, some U.S. law enforcement authorities nonetheless fear that Afghan heroin could be headed this way. Currently the vast majority of criminal gangs tied to smuggling heroin into the U.S. are Latin American, not South Asian, in origin. That said, Canada's Royal Mounted Police recently warned that more than 60 percent of the heroin sold in Canada now comes from Afghanistan and links have been established between Indian crime rings and that emerging trend. 

John Moore/Getty Images

Most discussion of Afghanistan's mammoth opium trade treats the problem as if it were Afghanistan's alone. Pundits blame corruption in the Karzai government. Aid workers want to help poppy farmers grow alternative crops. The military wants to kill or capture 50 traffickers who collaborate with the Taliban.

But too few take note of the fact that the vast majority of profits are actually earned outside Afghanistan. Addiction, Crime and Insurgency, a new report from the United Nation's Office on Drugs and Crime (UNODC), pulls together some eye-popping statistics in an attempt to refocus attention on the broader consequences -- and reach -- of the trade. 

The report notes, for example, that Afghan farmers earn an estimated $1 billion annually off the country's 7,000 metric ton opium crop. Sounds like a lot, right? Not really: By the time they reach their final destinations, global sales of Afghan opiates are now believed to top $58 billion, according to the report. "We take three percent of the revenue," President Karzai is quoted as saying, "and 100 percent of the blame."

I'm not letting the Afghan leader off the hook for his reluctance to investigate corruption claims within his government and his own family. But it's fair to say he's not alone in the region. About 40 percent of the opiates produced in Afghanistan get smuggled out through Pakistan, now designated a major trafficking country by the U.S. government, and about one third passes into Iran, which consumes 42 percent of the world's opium. The rest appears to leave through Central Asian states and possibly India, the report says. But there has been little media attention on drug-related corruption in neighboring states, although it's widely known to be a significant problem across the region. There have been no public inquiries.

There is also widening evidence that extremist groups in the wider region -- some of them linked to al Qaeda -- are protecting drug shipments once they leave Afghanistan, precisely the point when they multiply in value. Recent seizures, like the Aug. 23 operation in Karachi that linked the Pakistani extremist group Lashkar e Jhangvi to smuggling heroin, prove that it's not just the Taliban tied to dope. The U.N. reports the problem is heading north as well: "The perfect storm of drugs, crime and insurgency that has swirled around the Afghanistan/Pakistan border for years, is heading for Central Asia," the report says.

But there's a broader issue that often gets ignored about the narcotics trade: The real money isn't in smuggling drugs, it's in laundering the dirty money. As UNODC Executive Director Antonio Maria Costa puts it: "The Afghan drug economy generates several hundred million dollars per year into evil hands -- some with black turbans, others with white collars."

This is an issue that remains misunderstood in Washington. Recent reports by the Washington Post and the New York Times indicate that the military and intelligence community continue to label the money flowing to insurgents and extremist groups in the AfPak region as "donations." I'm not suggesting the Taliban and al Qaeda get no money from ideological sympathizers, but it's clear from my research that some of these funds represent balance of payments for drugs shipments and other smuggled commodities. As I argued in my book, Seeds of Terror, insurgents (and corrupt officials) don't just protect and profit off illicit drug shipments leaving Afghanistan, they collect money on all sorts of commodities making their way into the country as well.

And if you compare what's happening in AfPak to Latin America, it becomes clear.

Traffickers don't just smuggle drugs out, they also bring legal commodities back in (providing themselves not only a legal "front" but a way to launder cash). Additionally, large sums of money flow through informal money transfer networks (in Southwest Asia and the Middle East it's called Hawala, in Latin America, the Black Market Peso Exchange). This is how dirty money makes its way back to Colombian and Mexican drug cartels as well as the smugglers in Southwest Asia.

Of course it's incredibly complicated to untangle the good money from the bad, and the problem in Southwest Asia is that law enforcement officials only recently started trying. In the eight years since the war began in Afghanistan, there has been far too little effort to regulate commerce and informal money flows in the region. But doing so will be critical, not just to reducing crime, but also to widening the tax base for Afghanistan and Pakistan, in order to make both countries less dependent on aid.

The U.N. report makes the dramatic claim that as much as 75 percent of the heroin sold in the United States and Canada could now be coming from Afghanistan, extrapolating this figure from the amount of heroin consumed in North America, and subtracting the sum of opiates produced in Latin America. This claim is backed up by recent media reports from Canada, where the Mounties say as much as 60 percent of the dope they are seizing is Afghan in origin. But a spokeswoman for the U.S. Drug Enforcement Agency says that less than 5 percent by weight of the heroin found on U.S. streets is of Southwest Asian origin. More investigation is probably needed.

Meanwhile, it's quite clear that European countries and Russia, which have contributed considerably less to the cause of stemming the flow of narcotics from Afghanistan, consume a stunning 47 percent of the heroin produced globally, the report says. The U.N. report puts the toll in perspective:

• The number of people who die from heroin overdoses in NATO nations is five times higher than the number of NATO soldiers killed since military operations began in 2001.  
• More Russians die every year from drug overdoses (an estimated 30,000-40,000 annually) than the total number of Soviet soldiers who died during their seven-year occupation of Afghanistan.

By Gretchen Peters

A new report to the Senate Foreign Relations Committee gives a concise breakdown of the dramatic change, both in terms of U.S. military strategy and counternarcotics policy, toward Afghanistan since the Obama administration took office.

It's worth a read, since it zeroes in on the "fruits of neglect" and the culture of impunity that created the problem, and because it pieces together various new intelligence and policy initiatives taking place to fight it. It also argues, correctly, for a new metric for measuring success in the counternarcotics fight and encourages the kind of rigorous debate the United States needs to be having about Afghanistan:

How much can any amount of effort by the United States and its allies transform the politics and society of Afghanistan? Why is the United States becoming more deeply involved in Afghanistan nearly eight years after the invasion? Does the American public understand and support the sacrifices that will be required to finish the job? Even defining success remains elusive: Is it to build a nation or just to keep the jihadists from using a nation as a sanctuary?

The report examines critical weak points in the new strategy, asking important questions:

Is it possible to slow the flow of drug money to the insurgency, particularly in a country where most transactions are conducted in cash and hidden behind an ancient and secretive money transfer system? Does the U.S. Government have the capacity and the will to provide the hundreds more civilians required to carry out the second step in the counter-narcotics program and transform a poppy-dominated economy into one where legitimate agriculture can thrive?

Can our NATO allies be counted on to step up their contributions on the military and civilian sides at a time when support for the war is waning in most European countries and Canada?

However on one critical issue, the report falls short.

It fails to answer -- nor does it provide policy recommendations to suggest -- how the Obama administration will counter high-level drug corruption among state actors in Afghanistan and Pakistan. There's no doubt the narco-insurgency link must be severed, but the flip side of the COIN, not to make a pun, will be cleaning up government on both sides of the Durand Line. Insurgencies exist where good governance does not.

Noting that the vast majority of drug-related arrests in AfPak have been low-level smugglers or drug users, the Senate report says that senior officials at the U.S. Embassy in Kabul have declared that there is "no red line" for going after senior officials proven to be earning off narcotics.

"Our long-term approach," the report quotes an American military officer as saying, "is to identify the regional drug figures and corrupt government officials and persuade them to choose legitimacy or remove them from the battlefield."

But the Senate report doesn't say how the Obama administration plans to deal with those who resist going clean. Classified rules of engagement (ROE) have been modified to put "drug traffickers with proven links to the insurgency on a kill list," which is now said to include 50 traffickers.

Corrupt state actors won't be targeted by the military under the new ROE, the Senate report says. And the ongoing wrangle over an extradition treaty between Kabul and Washington means senior Afghan officials could face little more threat than having to go through the country's court system, which is itself riddled by graft.

Just this week, the German Magazine Stern reported that elite British troops seized tons of opium on land belonging to Hamid Karzai's half-brother Ahmed Wali Karzai. He told Reuters that the timing of the story was meant to hurt his brother, coming as it did just a week ahead of the elections. No doubt the timing of the report is politically explosive. But British and American officials have remained curiously circumspect about the alleged drug bust, neither confirming nor denying it.

The Senate report offers no advice for how Congress can support anticorruption efforts and there has been little evidence thus far of political will in Washington to go after the big fish. Unfortunately, until that attitude changes, not much will change in Kabul either.

Gretchen Peters is the author of Seeds of Terror, How Heroin is Bankrolling the Taliban and al Qaeda.

By Gretchen Peters

In June, I met with Ambassador Richard Holbrooke to discuss how the drug trade benefits the Afghan Taliban. I urged him to pay close attention to the two history chapters of my book, Seeds of Terror, warning that Washington has a habit of making the same mistakes over and over in Afghanistan.

He assured me the Obama team had consulted with a raft of experts and historians, adding with a laugh: "We plan to make new mistakes."

I am not entirely sure, however.

Broadly speaking, the Obama administration's counternarcotics strategy in Afghanistan is a huge step in the right direction. Thousands more western troops have poured into the Taliban-dominated southern poppy belt to provide security, and to train local security forces or replace those who were themselves tied to the drug trade. Efforts have intensified to interdict drug traffickers, destroy opium stockpiles and confiscate precursor chemicals. The Good Performance Initiative, co-funded with the UK, provides development assistance to communities that eliminate or significantly reduce narcotics cultivation. And there is greater focus on helping farmers find viable alternative crops to poppy and cannabis.

There is no doubt the Bush administration's proposal to launch a wide-scale aerial spraying campaign to wipe out Afghanistan's poppy fields was wildly misguided. It would have not only created a humanitarian disaster, and sent tens of thousands of poor villagers running to the arms of the insurgents, it would have actually benefitted the Taliban, drug traffickers and corrupt officials by driving up the farm-gate price of opium poppy.

Recent ground eradication efforts also were a costly flop. As Ambassador Holbrooke himself explained, they were wildly expensive -- estimated to cost as much as $44,000 a hectare -- and dangerous for the local eradicators, who died by the dozens in attacks by the Taliban and traffickers. Meanwhile, wealthy landowners and the politically well connected were able to bribe eradication teams not to cut down their poppy fields, meaning poor farmers became the predominant targets.

Ambassador Holbrooke is wise to phase out the misguided Bush-era eradication policy, however stopping eradication entirely would also be a mistake.

Counternarcotics strategy is like a four-legged table, supported by interdiction, alternative livelihoods, public education and eradication. Just as a table will wobble if its legs are uneven, there must be balance between the four pillars for a counternarcotics strategy to succeed.

It's the basic carrot and stick approach: Raise incentives for people to function within the law, while simultaneously raising the risks of operating outside of it.

If you remove the threat of the stick, the strategy fails. It's not a matter of being tough, but persistent.

I don't expect a need for wide-scale eradication in Afghanistan. According to my research and a separate survey by the Asia Foundation, more than 80 percent of Afghans oppose poppy cultivation, meaning that the majority of poppy farmers will switch to other crops without complaint once security, trade and market conditions allow it.

Ironically, it will probably be large landowners who will be most resistant to change. Those who earn hundreds of thousands of dollars each year off this lucrative cash crop will likely respond only when the level of risk for doing so is elevated.

The British funded a carrot-only approach in 2002, offering to pay farmers not to harvest opium. It was hastily cancelled a year later, after drug cultivation spread to new regions and thousands more Afghan farmers planted poppy just to get their hands on the easy cash. Now that failed policy is again being promoted in some Washington circles.

U.S. policy has typically swung like a pendulum with regards to the opium trade in Afghanistan, ranging from ignore it, to destroy it, to throw money at it.

But just as there are a variety of circumstances that induce Afghan farmers to plant opium poppy, it will take a blend of policies to get them to stop.

The Obama administration and Ambassador Holbrooke have taken important steps towards a coherent counternarcotics strategy in Afghanistan. But if they want to avoid the mistakes of history, they should seek a balanced approach, and avoid the pitfalls of simply doing the opposite of those who came before them.

Gretchen Peters is the author of Seeds of Terror, How Heroin is Bankrolling the Taliban and al Qaeda.

MASSOUD HOSSAINI/AFP/Getty Images