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Mark Kleiman on Mexico’s drug violence

Mark Kleiman has an interesting idea on how to fight Mexico’s drug violence.  It’s short enough to quote in full:

Drug-related violence has claimed 35,000 Mexican lives since 2006, and the level of bloodshed is still rising. With legalization not in the cards and an all-out crackdown unlikely to succeed, good options seem to be scarce.

Here’s a candidate, based on a strategy of dynamic concentration:

Mexico should, after a public and transparent process, designate one of its dealing  organizations as the most violent of the group, and Mexican and U.S. enforcement efforts should focus on destroying that organization. Once that group has been dismantled – not hard, in a competitive market – the process should be run again, with all the remaining organizations  told that finishing first in the violence race will lead to destruction. If it worked, this process would force a “race to the bottom” in violence; in effect, each organization’s drug-dealing revenues would be held hostage to its self-restraint when it comes to gunfire.

This is parallel to David Kennedy’s “pulling levers” strategy to deal with gang violence.

Would it work?  Hard to guess. But it might.  That’s more than you can say for any of the other proposals currently on the table.

It’s a nice idea, but it would probably suffer somewhat in the politics.  If, in order to ensure the downfall of the most violent gang, the government needs to divert resources from fighting other gangs, it may look to some as though they were going easy on crime in one area in order to fight it properly in another.  It could also be tainted with a brush of tacitly legalising the trade for all non-violent traffickers.  Still … cool idea.

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Farm subsidies promote terrorism

Well, maybe not directly, but it bears thinking about. It’s not a new idea, either, but I thought I’d put it out there anyway …

US and European farm subsidies artificially suppress world crop prices by causing American and European farmers to produce more than they profitably otherwise could. By the World Bank’s estimates, the prices of course grains, rice and wheat would rise by between 4% and 7% relative to other prices if all subsidies and other impediments to trade were removed (hat tip: Dani Rodrik).

That means that farmers in places like Afghanistan turn to other crops like poppies (for heroin). Since drugs are illegal, the farmers can only sell their crops through black (well, in Afghanistan, grey) markets that are controlled, America tells us, by people who support and funnel profits to the Taliban and al-Qa’ida.

Those Afghani farmers don’t really care what they grow. They just want to make a profit, like anybody else. How do we know this? Because when the price of crops goes up for other reasons, they happily started switching to planting wheat:

In parts of Helmand Afghan farmers are this year sowing wheat instead of poppy – not because they have suddenly been converted to the argument that producing heroin is not in the national interest.

Market forces have been the deciding factor – with wheat prices doubling in the past year, and the street price of heroin falling, it is now more cost effective to grow wheat.

So there you have it. If America was serious about fighting drugs and terrorism, it would cut it’s farm subsidies.

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Afghan opium production (Updated)

The UN Office on Drugs and Crime has just released their latest report, including details on opium production in Afghanistan. Here are a few of the statistics:

2006 Year-on-year difference 2007
Net opium poppy cultivation 165,000 ha +17% 193,000 ha
In per cent of agricultural land 3.65% 4.27%
Eradication 15,300 ha +24% 19,047 ha
Weighted average opium yield 37.0 kg/ha +15% 42.5 kg/ha
Potential production of opium 6,100 mt +34% 8,200 mt
In percent of global production 92% 93%
Number of households involved in opium cultivation 448,000 +14% 509,000
Afghanistan GDP US$ 6.7 billion +12% US$ 7.5 billion
Afghanistan GDP per capita US$ 290 +7% US$ 310
Total farm-gate value of opium in per cent of GDP 11% 13%
Indicative gross income from opium per ha US$ 4,600 +13% US$ 5,200
Indicative gross income from wheat per ha US$ 530 +3% US$ 546

Make sure you read that correctly: Area under cultivation is up 17% and area eradicated is up 24%. That might make you think (as it did me originally) that the total area producing is down, but you’d be wrong … the 17% was on a huge area and the 24% was on a tiny area. Net productive area went from 149,700 ha to 173,953 ha — an increase of 16%. On top of that, yield per hectare is up 15%, so overall output is up 34%.

GDP/capita is US$310 and — assuming that your crop isn’t eradicated by the US — income from growing opium poppy is US$5,200 per hectare (or $US2,100 per acre). That’s an awfully big incentive. On top of all that, I understand that one of the big appeals of growing poppy is that opium has an extremely high value per unit volume and per unit weight, which are important considerations for a farmer living in a country with very low-quality and high-cost transportation infrastructure.

I wonder how they got the yield up so quickly? Was it improved infrastructure (watering systems), the dedication of better quality land to poppy cultivation, better inputs (fertilizer) or something else? Whatever the answer, that looks to me to be fairly serious evidence of planned investment. These farmers are not just doing this on the side.

This would be a good time to point readers to this opinion piece by Willem Buiter (blog, NBER, LSE) . The discussion by other FT contributors is also well worth reading. Here’s a taster from the first paragraph so you know what he’s saying:

As an economist with a strong commitment to personal liberty and responsibility, my preference would be to see all illegal drugs legalised. The only exception would be substances whose consumption leads to behaviour likely to cause material harm to others.

Further update (30 Aug):

The Economist has produced this graph to illustrate world opium production since 1990:

[ Image removed because it was messing with my site. Click on the Economist link to see it ]