The Dynamics of the Farmgate Opium Trade and the Coping Strategi

Strategic Study 2: The Dynamics of Farmgate Opium Trade and the Coping Strategies of Opium Traders

Objective: To further UNDCP's understanding of the market structure of the farmgate trade in opium and identify the possible responses of traders to a reduction in the supply of opium.

Summary: This study will consist of a number of semi-structured interviews with farmgate opium traders in the target districts. Particular attention will be given to the market structure of the farmgate opium trade, including the degree of competition, profit margins, profile of sellers (pre and post harvest) and intra- and inter-provincial mobility. The strategies traders envisage undertaking in response to UNDCP's Afghanistan Programme will also be explored.

Methodology: This study seeks to follow-up on a number of interviews conducted by the Drug Monitoring & Evaluation Specialist with opium traders in Khakrez in 1997. Due to the sensitivities associated with interviewing opium traders and the problems of access, emphasis will be given to conducting a limited number of in-depth semi structured interviews. However, in order to verify findings and distinguish between generic patterns and localised issues, in-depth interviews will be conducted over a wide geographical area. This Study will be undertaken in close consultation with ?Strategic Study 2: The Role of Opium as a Source of Informal Credit and the Feasibility of Alternative Options'.

UNDCP programme staff and in particular the C28 Community Mobilisers will act as key entry points to farmgate opium traders. The fieldwork will be undertaken over a four week period focusing on the target districts of C28, including Khakrez, Ghorak, Maiwand and Shinwar. If security conditions permits interviews with wholesale traders in Ghani Khel and Sangin will also be undertaken.

Interviews will focus on a number of key issues discussed in a conversational manner. Notes will not be taken during the interview but written up once the interview has finished and the interviewer has departed.

Motivation
i.�� What prompted the trader to begin buying and selling opium?
ii.�� How many years has he been trading in opium?
iii.�� Does the trader have other sources of income other than opium?
iv.�� Are there any restrictions for an individual wishing to start buying and selling opium? Examples?
v.�� Has the trader ever considered trading in other products?

Profits
vi.�� What price did the trader buy opium for at harvest time?
vii.�� What price did the trader sell opium bought at harvest time?
viii.�� How are these prices determined?
ix.�� Are there differences in prices for opium between districts and provinces?
x.�� If so why? ie Quality of opium?
xi.�� What was the average yield of opium per jerib in his area?
xii.�� What conditions produce the best quality opium?
xiii.�� What amounts of opium does the trader buy sell (a) each month (b) and over one year?
xiv.�� What type of financial costs does the trader incur in his work? ie tax, transportation?
xv.�� How much are these costs over a one month period?
xvi.�� Does the trader offer advances?
xvii.�� What rate does he offer?
xviii.�� In what form is the debt repaid?
xix.�� What happened if the farmer cannot repay this year?

Mobility
xx.�� In which districts/provinces does the trader buy his opium?
xxi.�� How many other traders does he think are operating within his geographical area?
xxii.�� Where does the trader sell his opium?
xxiii.�� Has the trader considered traveling to further districts/provinces to buy and sell opium?
xxiv.�� If not, why not?
xxv.�� What risks does the trader face in his work? Arrest? Robbery? Violence from other traders

Duration
xxvi.�� Does the trader purchase opium throughout the year?
xxvii.�� If so, what are the differences between those farmers who sell (a) in advance, (b) wet opium at harvest, (c) and dry opium towards the end of the year?

Coping strategies
xxviii.�� Will the trader find another source of trade if the taliban ban the cultivation and trade of opium?
xxix.�� If not, what will the trader do to stay in business?
xxx.�� What is the trader's perception of UNDCP?

	Illustrative Diagram of the Opium Trade in the Eastern Region (Click on picture to enlarge)
Illustrative Diagram of the Opium Trade in the Southern Region (Click on picture to enlarge)
	Table showing the price of opium per kilogramme in Ghani Khel (Click on table to enlarge)
Table showing the price of opium per kilogramme in Qandahar (Click on table to enlarge)

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The Dynamics of the Farmgate Opium Trade and the Coping Strategies of Opium Traders

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STRATEGIC STUDY #2

Final Report October 1998