Biofuels in Afghanistan to combat opium farming?

Quicknote bioenergy economics
The QanDo Blog raises an interesting question: citing a Michael Yon aticle at NRO on opium production in Afghanistan, Greg Polliwitz has what seems to be a "good idea":
Why not send a little cash toward Afghanistan to allow them to develop an ethanol industry? Farmers in Afghanistan are growing opium because it pays the most. This is one instance where throwing money at the problem will solve it. Pay the Afghan farmers more for a different crop.
We're already paying our US farmers to grow crops for ethanol production, why not pay the Afghan farmers as well? Additionally, we could cut any duties on imported ethanol from Afghanistan and make it instantly competitive with US producers. There are two potential hurdles I can think of: 1. Will ethanol-producing crops — e.g., switchgrass and sugarcane — grow in Afghanistan? 2. Can those crops be competitive with opium for the Afghan farmers? (bear in mind, there would be a much lower risk premium).
QanDo Blog replies: "I have no idea whether it's ultimately plausible, but that's a fascinating suggestion, and potentially helpful in the war on terrorism."

We have given this a minute's thought a few years ago (see Poppydiesel Blog) and rapidly came to the conclusion that the idea will never work, unless, as is suggested, we pump a lot of money into subsidies for Afghan farmers and keep doing so for decades. Let's have a look at opium farming economics: according to the United Nations Office on Drugs and Crime, which carries out opium cultivation surveys on a regular basis, for each hectare of opium poppy, an Afghan farmer makes around US$138 per kilo of raw opium (farmgate price for dry opium). An average hectare yields 39 kilos. This comes down to an average of US$ 5382 per hectare. [UNODC:Summary Findings of Opium Trends in Afghanistan, 2005 - *pdf].

It's one of the world's most profitable crops. Moreover, since the US invasion of Afghanistan, opium production has been increasing rapidly and prices have been steadily rising. Afghanistan is now a total narco-state, more than ever. Poppy cultivation in Afghanistan is expected to soar by 59% this year, after it already soared more than 160% the previous year. [BBCNews: UN warns of soaring Afghan opium - sept. 2, 2006.] Around 2.3 million Afghans (356,000 households) are involved in poppy cultivation. It's their only way of making a living. Moreover, a huge logistical chain consisting of dealers, traders, truckers and traffickers depends on it, involving several hundred thousand extra people.

Now let's look at energy crops suitable for Afghanistan: wheat, alkaloid-free non-narcotic opium (which was developed recently and which would make the best seed oil crop for biodiesel) and potatoes (a good ethanol feedstock). Sorghum might be feasible as well.

Wheat: The average world market price (i.e. not the farmgate price) for wheat is around US$ 150 per ton. In 2005, Afghanistan's average yield for wheat was a low 1.3 tons per hectare (compare to the US: 2.8 tons, or Belgium: 8.2 tons). Were the average opium farmer to switch to wheat for ethanol, without subsidies he would make US$195 per hectare. So you would have to hand out US$5187 per hectare to make up for the loss.

Non-alkaloid opium seeds: Fetches around US$600 per ton in India. Yields around 2 tons per hectare. Were the average opium farmer to switch to non-alkaloid poppy for biodiesel, without subsidies he would make US$1200 per hectare. So you would have to hand out US$4181 per hectare to make up for the loss.

Potato: The average world market price for potato is around US$180 per ton. In 2005, Afghanistan's potato fields yielded an average of 16.7 tons per hectare (compare to the US: 43.4 tons). Were the average opium farmer to switch to non-alkaloid poppy for biodiesel, without subsidies he would make US$3006 per hectare. So you would have to hand out US$2367 per hectare to make up for the loss.

Now if you want to replace the entire poppy hectarage in Afghanistan (104,000 hectares), you would face a bill of between US$ 247 million and US$ 539 million per year. Each year. You would also have to spend a few hundred million on extension services and into getting Afghan energy farmers to increase yields. Let's say you spend US$600 million per year on the program. Is that feasible? It might be. How much has the "war on terror" cost so far? Several billions. The war in Iraq reportedly cost a trillion US dollars. That would give you several decades to subsidise Afghan farmers... Afghanistan would cease to be a narco-state. On the other hand, the American war economy thrives on wars and occupations. The US military-industrial complex employs millions of American citizens. It can't live without war. So ultimately, you have to make a choice between reducing the trillion dollar American military-industrial complex's massive war profits, and the Afghan farmer. Which American politician would dare to speak in such terms? Not many.

But concretely, alternative livelihoods projects are extremely difficult to implement in Afghanistan, because of these cruel economics of opium. Moreover, many farmers are directly controlled by local Big Men and drug lords, and they would never consider disobeying them. Their lives are at risk. Opium might be good business for them, but not because they freely choose to engage it in. They have to, to survive and to obey their warlord. The only real way to stop Afghanistan's deadly and sad fate is to tell European and American heroin addicts that they are not only killing themselves but many others as well. Better still, invest in creating inclusive societies where people do not feel the need to become drug addicts [entry ends here].
ethanol :: biodiesel :: biomass :: bioenergy :: biofuels :: energy :: sustainability :: opium ::Afghanistan ::