Replacing Narco-usurers with Micro-lenders: Agricultural Finance Component of Opium Substitution Programs in Afghanistan
Anand, Bhuvana
2004
- Submitted in partial fulfillment of the degree Master of Arts in Law and Diplomacy at the Fletcher School of Law and Diplomacy. Abstract: Most of the focus in the opium substitution and eradication effort in Afghanistan since the fall of the Taliban has been on the development of alternative crops and enforcement of the ban issued by the interim administration. Program managers and researchers are ... read morefocusing on the price dynamic influencing farmers decisions to cultivate opium, while underemphasizing the credit arrangements developed by narco-traders to incentivize opium cultivation. In the absence of access to other credit sources, small farmers find it especially difficult to resist the possibility of obtaining advances from narco-usurers for the opium crop before planting season. This paper argues that in the absence of effective control on factors influencing demand and prices for opium, the interim administration, NGOs, and donors should focus their attention on factors that influence farmers' decisions to cultivate poppy. Primary among these factors is the availability of credit, since is integral to coping strategies especially for smaller households. Providing alternative agricultural financing mechanisms and programs can be one of the strategies employed by international organizations and NGO's to divert production away from opium, especially in newer opium-growing regions. Designing these programs involves understanding of best practices in agricultural financing, Islamic financing, and administrative constraints in the Afghan environment. This paper analyses the opium credit- relationship that narco-usurers and traders have developed by exploiting the asset insecurity of Afghan households in sustaining the cultivation of opium. In response this paper recommends that agricultural micro-financing programs can play an important role in providing incentives to farmers to switch to crops other than opium, especially in the newer opium growing provinces. It finally makes recommendations about design choices, products, and administrative concerns that organizations can use while outlining their strategy.read less
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- xs55mq77s
- Component ID:
- tufts:UA015.012.DO.00046
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