VZCZCXRO1893
PP RUEHIK RUEHPOD RUEHPW RUEHYG
DE RUEHBUL #3183/01 3441319
ZNR UUUUU ZZH
P 091319Z DEC 08
FM AMEMBASSY KABUL
TO RUEHC/SECSTATE WASHDC PRIORITY 6371
INFO RUEATRS/DEPT OF TREASURY WASH DC
RUCNAFG/AFGHANISTAN COLLECTIVE
RUEHZG/NATO EU COLLECTIVE
RUEKJCS/OSD WASHINGTON DC
RUEKJCS/JOINT STAFF WASHINGTON DC
RUEKJCS/SECDEF WASHINGTON DC
RUEABND/DEA HQS WASHINGTON DC
RHMFIUU/HQ USCENTCOM MACDILL AFB FL
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RUEAIIA/CIA WASHINGTON DC
RHEFDIA/DIA WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUCNDT/USMISSION USUN NEW YORK 4450

UNCLAS SECTION 01 OF 03 KABUL 003183 
 
DEPT FOR SCA/FO, SCA/RA, AND SCA/A 
DEPT PASS AID/ANE 
DEPT PASS USTR FOR GERBER AND KLEIN 
DEPT PASS OPIC FOR ZAHNISER 
DEPT PASS TDA FOR STEIN AND GREENIP 
CENTCOM FOR CG CFC-A 
NSC FOR JWOOD 
TREASURY FOR LMCDONALD, ABAUKOL, BDAHL, AND MNUGENT 
OSD FOR SHIVERS 
COMMERCE FOR HAMROCK, CHOPPIN, AND FONOVICH 
 
SENSITIVE 
 
SIPDIS 
 
E.O. 12958 N/A 
TAGS: SNAR PREL ECON ETRD KCRM EAID EINV AF
SUBJECT: AFGHANISTAN: WHAT'S REQUIRED TO MAKE ALTERNATIVE LIVELIHOOD 
PROGRAMS SUCCEED? 
 
Summary 
 
¶1. (SBU) Alternative livelihood programs are a key item in the 
counter-narcotics toolbox, but no one would contend that they are 
easy or always successful.  Even in purely economic terms, poppy has 
some advantages that licit alternative crops do not enjoy.  This 
message analyzes those advantages and seeks to identify the 
circumstances under which alternative livelihood programs can 
succeed in overcoming them.  We find that political will, especially 
the commitment of provincial governors, is an essential supporting 
factor for alternative development (AD) programs and sine qua non 
for eliminating poppy.  Successful governor-led campaigns in Balkh, 
Badakhshan, and especially Nangarhar in 2007-2008 show what can be 
accomplished when the reach of the government is expanded into the 
provinces.  In addition, success requires the development of 
adequate infrastructure, both physical and financial, to make 
growing cash crops other than poppy the wise choice for Afghan 
farmers.  Security may be the Achilles heel that can doom AD 
programs even when good governance and other supportive pieces are 
in place.  Coalition members, NGOs, the Afghan government, the UN -- 
all agree that without security, AD programs stand little chance of 
success.  End Summary. 
 
Poppy is a Commodity 
 
¶2. (SBU) Any effort to persuade Afghan farmers to grow licit 
alternatives has to contend with the economic advantages of the 
competition.  Poppy is a lucrative cash crop. Although the UNODC 
reports that in 2007-08 the ratio of gross income from a hectare of 
opium to that from a hectare of wheat declined from almost ten in 
2007 to less than three this year, the staying power of this trend 
is questionable.  Recent price increases of onions and pomegranates 
also notwithstanding, legitimate crops rarely match the 
profitability and the convenience of poppy. 
 
¶3. (SBU) The opium business is a "model" of success.  It has 
vertically integrated itself along the entire value chain within 
Afghanistan and has a well-developed international transportation 
and distribution network able to avoid many of the constraints 
confronting licit alternatives, such as delays at borders and other 
bureaucratic hindrances to trade in the region.  We see more and 
more seizures in Afghanistan of precursor chemicals and other 
materials for turning poppy into opium and heroin.  In addition, 
poppy farmers benefit from easy credit, seed, and even insurance 
that opium brokers provide.  With production up and prices down in 
recent years, isolated reports of the Taliban forbidding poppy 
production or hoarding supply in some areas - to exert an OPEC-like 
control on prices - further demonstrate that opium, like grapes and 
wool, respects the basic tenets of any commodity market. 
 
Economic Development Challenges . . . 
 
¶4. (SBU) Unfortunately, there are also significant challenges to 
bringing robust alternative livelihood programs online.  Facilities 
for collection and preservation of fresh produce require some form 
of cold storage.  Cold storage can be run - expensively and 
inefficiently - on diesel fuel, but making this economically viable 
requires both sufficiently high prices for commodities and reliable 
quality and availability of product to maximize and maintain 
profits.  Only reliable electricity generation and distribution can 
make commercial cold storag profitable, and this commodity is still 
rare in most of Afghanistan. 
 
¶5. (SBU) Official and unofficial hurdles at the borders also raise 
costs for Afghan exporters of licit farm goods and represent 
critical obstacles to sustainable and long-term growth of regional 
 
KABUL 00003183  002 OF 003 
 
 
trade.  Roads that link internal and external markets therefore are 
a critical component in alternative livelihoods.  Donors have built 
hundreds of kilometers of farm-market roads, as well as housands of 
kilometers of irrigation works and flood-control dams and canals, 
but more needs to be done. 
 
. . . And Models for Progress? 
 
¶6. (SBU) Aid agencies and the GIRoA have learned much about poppy's 
built-in advantages and other challenges and are designing 
alternative livelihood programs accordingly.  USAID's contract 
farming program steals a page from the opium brokers.  The program's 
provision of seed, credit, and guaranteeing a market for the produce 
goes a long way toward providing a real alternative to either 
growing poppy or starving. 
 
¶7. (SBU) In Helmand province, the world's leader in poppy 
production, Governor Gulbuddin Mangal's roughly USD $10 million 
"food zones" project is attempting to open an in-road into poppy 
country by combining alternative livelihoods with improved security 
and governance.  Mangal, with support from PRT Helmand and the 
Embassy, is targeting a 100-square-mile zone near Lashkar Gah in 
three phases.  It is a good example of a "carrot and stick" 
approach. 
 
¶8. (SBU) First a governor-led public information campaign used 
local shuras to enroll farmers in a program to provide 
seed/fertilizer for wheat and fodder cultivation.  Village elders 
and farmers have signed no-poppy pledges.  Breaking the pledge will 
make their fields, along with any other poppy fields in these areas, 
liable to eradication.  Second, in early October, the governor's 
officials distributed seed and fertilizer (or ouchers for them), 
renewing the no-poppy pledges from recipients. 
 
¶9. (SBU) Finally, in January through March, farmers who plant poppy 
will see their fields eradicated by the governor's police and the 
Poppy Eradication Force.  Mangal recognizes that the carrots and 
sticks are both critical elements of success, that eliminating poppy 
from farmers who can grow nothing else does nothing tosupport the 
counter-insurgency and might even be counterproductive.  In this 
case, despite significant resistance from Taliban and 
narco-interests, the public information and seed distribution phases 
in Helmand have gone well.  Few if any farmers in the food zone can 
claim they have not been offered assistance to shift to licit crops 
this season.  Response from farmers in various parts of Helmand has 
been positive.  Farmers and governors in Farah and Oruzgan have 
requested that similar initiatives be undertaken in their provinces. 
 
 
Security and Governance 
 
¶10. (SBU) We won't know until next year whether Helmand's food zones 
project will succeed in promoting alternative livelihoods.  Project 
design and strong commitment from the governor bode well.  The key 
variable and weakest link in the chain is Helmand's precarious 
security situation.  Indeed, nationwide, security is probably the 
Achilles heel of alternative livelihood programs. 
 
¶11. SBU) Nangarhar province offers a good example of how an 
adequate level of security and governance can help reduce poppy 
cultivation.  "Security" in the Afghan context does not have to mean 
a completely permissive environment.  In Nangarhar, where the local 
governor has exercised authority, economic development has occurred 
because a minimum level of security exists for governors and police 
to reach villagers in most, if not all, parts of the province.  The 
environment is hardly "permissive"; both this year and last year, 
 
KABUL 00003183  003 OF 003 
 
 
dozens of U.S. soldiers have died there.  However, the governor's 
forces and development agencies do get around and conduct business, 
and in 2008 the province became virtually poppy-free.  The risks for 
poppy farmers are great, and development opportunities in Nangarhar 
offer realistic alternatives.  Poppy may still offer a per kilo 
price advantage over other cash crops, but farmers appear to have 
decided that it is simply not worth the risk of having the poppy 
confiscated and going to jail. 
 
¶12. (SBU) Unfortunately, the insurgency's recent targeting of the 
contractors and NGOs that actually implement most development 
programs has slowed efforts supporting alternative livelihood 
programs.  The COIN strategy of "clear, hold and build" is 
addressing the security problem, but current coalition and ANA troop 
numbers as yet do not permit the aggressive and long-term 
implementation of alternative development programs everywhere they 
are needed. 
 
Lessons From What's Worked 
 
¶13. (SBU) The differing past experiences of Nangarhar and Helmand 
show that alternative livelihood pursued in the absence of a certain 
level of security and the political will to suppress poppy 
cultivation will not succeed as a counter-narcotics measure. 
However, in Helmand and elsewhere in the poppy belt, major 
alternative livelihood and infrastructure projects are underway. 
These have the potential to anchor a prosperous licit agricultural 
economy if security and governance create an environment in which 
law enforcement can compel farmers to turn away from poppy 
cultivation.  Only then can economic development give real 
sustainable alternatives to poppy. 
DELL