KABUL, Oct 11: The poppy economy in Afghanistan has grown significantly this year with soaring prices and expanded cultivation, a report said on Tuesday.

Three provinces in the north and east of the country that had been declared “poppy-free” had returned to production and the increase came even though crop eradication was 65 per cent higher than a year ago, and took place in 18 provinces, up from 11 in 2010, it said.

Jean-Luc Lemahieu, the country head for the United Nations Office on Drugs and Crime (UNODC), estimated that militants might rake in up to $700 million from opium during the year. That compares to an annual $200 million over the previous 10 years.

“In 2011, farmers made $1.4 billion, so, potentially, insurgents this year are receiving $700 million,” Lemahieu told a news conference. “I will let you calculate how much will go to corruption within the economy.”

The figure is based on the profit-share model of the last decade in which insurgents got 10 per cent and farmers 20 per cent of profits in Afghanistan. The rest is unaccounted for.

If the initial numbers are right, the size of the poppy economy in the country would be about $7 billion.

Afghanistan's gross domestic product (GDP), excluding the poppy economy, is likely to be $16 billion in the year, according to official data.

Opium prices in the country more than doubled last year after production was cut due to the unexplained disease and farmers netted $10,700 per hectare of poppies cultivated, surging 118 per cent from $4,900 a year earlier.

About 95 per cent of poppy growth was concentrated in the south and west, the country's most insecure regions, confirming a “direct link” between poppy cultivation and the Taliban-led insurgency, according to the report.

“In spite of all our hopes, the predictions did confirm what we were all afraid of,” Staffan De Mistura, a special representative of the UN secretary general, told reporters.

“The speculation has raised prices and it in turn raised production and profits – that's bad news.”

He said the UN would try to convince all parties, including the militants, that they needed to tackle poppy cultivation.

“Opium consumption is against every religion, including Islam,” he added.

Afghanistan's total cultivation area after eradication was estimated at 131,000 hectares, up from 123,000, the UNODC said. The figure was still lower than in 2009 and a third less than the record 193,000 hectares in 2007.

Afghanistan has long been the world's leading supplier of opium -- providing about 90 per cent of the global output -- and in recent years has produced thousands of tons more than the entire global demand for the drug.

“We still have around one million Afghans, that is one million Afghan families, who are being affected by drug addition, and in a poor country like Afghanistan, this is very sad,” De Mistura said.

“And we have implications of around 100,000 young men and women all over the world who were confirmed as dying due to, also, abuse of opium that originated from Afghanistan.”—Reuters