A diversified local economy is the key to longer term, sustainable development and lasting security in Afghanistan. Currently, illegal poppy cultivation is a necessity for many farmers, not a choice: farmers are exposed to risks most would never willingly undertake, if given viable economic alternatives. As such, progressive economic diversification is ultimately in the interest of Afghan farming communities, representing an opportunity to move into less risky and more lucrative economic activities. A cornerstone of the Poppy for Medicine projects initiative is ensuring that this economic diversification takes place.

Compulsory Economic Diversification a key element in Poppy for Medicine counter-narcotics model

Poppy for Medicine projects would help to end Afghan farming communities’ reliance on illegal poppy cultivation, by providing them with access to the strategic assets necessary to sustainably diversify their economic activities. The strategic assets to which Poppy for Medicine project communities would have access include competitive legal incomes from employment as project participants; expert development advice from the representatives of international development agencies included in the project’s Integrated Control System; and the economic infrastructure established by the project’s cooperative association. This economic infrastructure would include a fund for economic diversification, established during the project planning phase.

These strategic assets would provide project communities with two complementary routes to phasing out their reliance on poppy: direct investment in community-level development projects; and indirect investment in individual community members’ economic diversification activities.

A community development project One of the most important principles in the increasingly important concept of “fair trade” is the use of part of the profits from fairly traded goods for the improvement of the local socioeconomic situation. By making Afghan-made morphine available to foreign states at accessible prices, and by providing for the funding of projects that improve the project community’s socio-economic situation, Poppy for Medicine projects share a number of similarities with other fair trade community development projects.

Direct investment in community-level diversification projects

During the planning phase of a Poppy for Medicine project, the shura would allocate a proportion of the future revenues from sales of locally-produced medicines to be channelled into development projects for the benefit of the entire village.51 During the diversification phase of the project, the shura would fund community-level projects to facilitate the diversification of the community’s business opportunities. For example, the shura could use the diversification fund to invest in a pump to improve irrigation to the whole village, allowing locals to begin cultivating more water-intensive crops. The shura could also invest in the development of non-agricultural industries, or even in infrastructure that would enable the addition of value to other locally-produced agricultural products.

Microcredit for individual economic diversification activities

As well funding community-level diversification-enabling projects, the project diversification fund would be used to grant small microcredit loans to finance individual villagers’ efforts to diversify their economic activities. Microfinance is a sustainable and cost-effective way for Poppy for Medicine projects to fund local entrepreneurial initiatives to increase local prosperity and economic diversity.52 To access microcredit from the economic diversification fund, entrepreneurs would need to first establish a co-guarantor relationship with another village member, and then prove to the shura their capacity to successfully develop their new economic activity, and to repay their debt.

P4M project micro-credit criteria Microcredit is an efficient development tool when used by those who have identified an economic opportunity and simply need access to a small amount of cash to be able to capitalise on that opportunity.