Abstract

Currently, little is known about the structure of the farmgate trade in illicit drug crops. It is apparent from work in other drug crop producing areas that prices for coca and opium can be quite localised. However, it is unclear what influence traders have in determining the farmgate price of illicit crops and, consequently, the relative profitability of alternative sources of livelihood and the ultimate success of alternative development interventions.

The market power of traders to set opium and coca prices will largely depend on the degree of competition that exists in the illicit drugs trade in the local area at the different levels in the trading chain. Experience would certainly suggest that the illegal nature of the drug trade and associated violence and intimidation, limits the degree of competition at the wholesale level, resulting in a small number of large traders dominating the trade in bulk purchases of drug crops. However, at the level of the farmgate the degree of competition is less well known. Yet, it is at this point in the chain where household decision making over cropping patterns is informed.

This study explores the market structure of the farmgate opium trade, including the degree of competition, barriers to entry, profit margins, credit, the socio-economic profile of sellers, both pre and post-harvest, and the geographic mobility of traders. The strategies traders envisage undertaking in response to UNDCP?s Afghanistan Programme are also examined.

The Study seeks to follow-up on a number of interviews conducted by the Drug Monitoring & Evaluation Specialist in 1997 with opium traders in Khakrez. In total 38 interviews were conducted with opium traders in the provinces of Nangarhar, Qandahar, and Helmand between 14 June and 19 August 1998. Of these 38 interviews, 12 were undertaken in the districts of Shinwar and Achin, Nangarhar province, between 14 and 18 June 1998. To identify possible commonalities and differences between the opium trade in the eastern and southern regions, 26 interviews were conducted in the provinces of Helmand and Qandahar between 9 and 19 August 1998. Eighteen of these interviews were undertaken in Helmand in the districts of Kajaki, Musa Qala, Nowzad, Sarban Qala , with a further 8 interviews in the district of Maiwand in Qandahar. To verify the findings a number of key informants with in-depth knowledge of the opium trade were also interviewed in both the eastern and southern regions.

Interviews were semi-structured, focusing on a number of key issues in a conversational manner. A questionnaire was not used and notes were taken after the interview had been completed and the team had departed from the respondent.