Monday, November 12, 2007

A Better Approach to the War on Drugs/GWOT in Afghanistan?

Libby at the Impolitic argues for a new approach to the narco-state problem in Afghanistan: subsidies for poppy farmers to encourage them to produce other crops. This would certainly represent a major departure from the current approach of literally fighting two wars at once in Afghanistan (and losing both in the process), essentially saying "If you can't beat them...."

Now, there are all sorts of problems with subsidies in general. For instance, it will hurt competition in the suddenly subsidized crops on an international level, does nothing to change the inelastic demand for heroin/opium, and to the extent it is successful will mostly just move poppy production to areas where subsidies are not existent (thanks to the inelastic demand problem where the decreased supply of poppy will primarily just increase poppy prices, making it even more lucrative).

Still, if opium production must remain illegal, a subsidy for producing other crops- especially in Afghanistan- strikes me as a sensible approach. At the very least, it would be a more effective use of resources than the current allocation. The money saved on enforcement alone would probably be sufficient to pay for most of the subsidy, so I don't think higher overall spending is as much a concern as it usually is with subsidies.

As for the usual concerns about subsidies, I think there would be a lot of mitigating factors here. Since Afghanistan is already dirt poor, is a tiny country population-wise, and is quite inefficient at production thanks to being dirt poor, a subsidy is unlikely to have much of a negative effect on global markets for the foreseeable future. Even though the subsidy will have little or no effect on global demand, this is no better or worse than the current approach. As for just shifting poppy production to another place, well, this is definitely an important consequence. But, given Afghanistan's importance in the GWOT, which I think most would agree is more important than the War on Drugs, shifting poppy production to an area less important to the GWOT is I think an acceptable outcome in the short run. We just need to keep in mind that we are eventually going to have to deal with the long run consequence of pushing poppy production to another country.