Saturday February 21 2009
“Seven hundred British troops seized four Taliban narcotics factories containing £50m of drugs” said the Guardian on Wednesday. “Troops recovered more than 400kg of raw opium in one drug factory and nearly 800kg of heroin in another.” Lordy that is good. In the Telegraph, British forces had seized “£50 million of heroin and killed at least 20 Taliban fighters in a daring raid that dealt a significant blow to the insurgents in Afghanistan.” Everyone carried the good news. “John Hutton, defence secretary, said the seizure of £50m of narcotics would ‘starve the Taliban of funding preventing the proliferation of drugs and terror in the UK’.”
First up, almost every paper got both the quantities and the substances wrong, which always feels a bit disappointing from the people we pay to take facts from sources and precis them into a readable and convenient portable paper format. From the MoD press release (which is quite a romping read) three batches of opium were captured, but no heroin: “over 60kg of wet opium”, “over 400kg of raw opium” and “the largest find of opium on the operation, nearly 800kg”.
So the army captured 1260kg of opium. Opium is not heroin, and it takes about 10kg of opium to make 1kg of heroin.. They also found some chemicals and vats. The opium was enough to make roughly 130kg of heroin.
How much was this haul worth to the Taliban, and exactly how much of a blow will it strike? Heroin is not very valuable in itself, because opium is easy to grow and you can turn it into heroin over the course of three simple steps using some school science class chemicals in your kitchen (or if you prefer, a muddy barn in rural Afghanistan). Heroin becomes expensive because it is illegal, and because there are risks to be taken and incentivised for its production and distribution.
The “farm gate” price of 1kg of opium in Afghanistan is $100 at best. I will do this all in dollars, since the best figures are from the UN drugs control programme 2008 world report, and you can watch with amusement as the sub-editors convert my dollar estimates into spuriously precise sterling equivalent figures. Therefore the 1260kg of opium captured on this raid, in Afghanistan, is worth somewhere near $126,000 (not £50 million).
What if it had been converted to heroin? The price of 1kg of heroin in Afghanistan is not much greater than than the cost of the 10kg of opium you will need to make it, because heroin was invented over 100 years ago, and making it, as I said, really isn’t that difficult. We could be generous and say that heroin is worth $2000 per kg in Afghanistan. So fine: this would make the army’s (potential) 130kg of heroin worth about $250,000.
That’s still not £50m. Where did this number come from? Perhaps everyone was trying to calculate it by using the wholesale price in the UK, assuming that the Taleban ran the entire operation from “farm gate” to “warehouse in Essex”. This is a stretch of our generosity but we can give it a go: the wholesale price of heroin in the UK has fallen dramatically over the past two decades, from $54,000 per kilo in 1990 to $28,000 in 2006. That would make our 130kg of (potential) heroin worth $3.6 million.
We’re still nowhere near £50 million. Wait: maybe these people seriously think that every sweaty tyke with missing teeth in King’s Cross selling £10 bags is secretly an agent for the Taleban, passing profits on – in full – to Taleban HQ, several thousand miles away. Even then, UK heroin is $71 per gram at retail prices (down from $157 a gram in 1990), so the value of our 130kg is $9 million. Okay, it’s only 30-50% pure, so we’ll be generous: this haul is worth $30 million on the streets, or £20 million, at absolute best, using individual street level UK retail prices on the gram. That’s not £50 million.
But the most important thing about figures – once you’ve actually got them right – is to put them in their appropriate context. Even if we were generous, would 130kg less heroin make any difference to the UK market? No. We consume tons and tons of heroin every year, and the heroin in Afghanistan, in any case, is going anywhere and everywhere in the world, not just here.
More importantly, would this seizure make much difference to the Taleban, whichever figure you use: $126,000, or $3.6 million, or $30 million, or £50 million? I doubt it. There are 157,000 hectares (100 metres squared) of opium fields in Afghanistan producing 7,700 tons (not kilos) of opium, netting farmers throughout the country about $730 million, and that’s real money in their pocket, not made-up UK street prices on the diluted gram. The export value of opium, morphine and heroin at border prices in neighbouring countries for Afghan traffickers was worth $3.4 billion last year.
Just to remind you: John Hutton is the defence secretary, and he said that the seizure of £50m of narcotics would “starve the Taliban of funding preventing the proliferation of drugs and terror in the UK”. That frightens me, because I trust him to know what’s going on in a war, and you didn’t even need to do the maths on his figure: this seizure was a tiny drop of theatre in a very, very big ocean.
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More joy on the same subject with zillions of references from my mate Steve here.