Shan State Poppy Farmers Say Raw Opium Prices in Slow Decline

By Kyaw Myo Tun 15 January 2015

TAUNGGYI, Shan State — Poppy growers in southern Shan State said prices for raw opium have fallen during the current harvest season, continuing a trend of slowly declining prices for the illicit crop in recent years.

A poppy farmer in Shan State’s Pekon Township, a well-known opium-growing region bordering Karenni State, told The Irrawaddy that farm gate prices offered by traders this season stood at around 250,000 to 280,000 kyats (US$250-280) per kilo of wet opium, the lowest prices have been in recent years.

A Pa-O poppy grower in Hsi Hseng Township said last year raw opium was sold at the farm for about 350,000 kyats ($350) per kilogram.

They said the low prices were a problem for subsistence farmers, while large poppy growers were waiting to sell their harvest when prices pick up.

The Pekon Township farmer, who declined to be identified, said prices were coming down because fewer and smaller traders were finding their way to growers. “It seems that the big dealers are banned [by authorities]. Previously, these buyers used to buy large amounts, 100 viss [about 160 kilogram]. [But] the price has not declined very sharply because there are still buyers who buy small volumes,” he said.

A report on opium cultivation in Burma and Laos, released by the UN Office on Drugs and Crime in December, said inflation-adjusted prices for raw and dry opium in Burma had remained largely stable from 2005 to 2014, although prices dipped in recent years. The UNODC recorded a drop in raw prices of around 500,000 kyats ($500) per kilo in 2011 to 400,000 in 2014.

Overall opium production has risen year-on-year since 2006 and plateaued in 2014, indicating high levels of opium production that could perhaps explain falling prices. Last year, 670 metric tons with a wholesale value of around $340 million was produced in northern Burma, mostly in Shan State, with 57,600 acres of land under poppy cultivation.

Tens of thousands of poor ethnic farmers in remote areas of Burma grow poppy, which serves as an essential cash crop that is hardy and more profitable than other crops, while it also provides seasonal jobs for many landless families. The crop is grown in the dry season and is harvested between November and December, while farmers that are able to irrigate their plots reap the opium resin from mid-December to February.

Ongoing ethnic conflict, criminal gangs, corruption among authorities and poverty in rural areas are contributing to the thriving trade, which makes Burma the second largest opium producer after Afghanistan and East and Southeast Asia’s biggest drug-production hub.

Police in southern Shan State were, nonetheless, claiming credit for the falling prices, saying that a crackdown on the illicit trade had been brought down demand and farm gate prices.

“There have been increased arrests and dealers therefore dare not come to the sites to buy the product. There have also been increased crackdowns on poppy fields, pushing the dealers into a tight corner,” said Col. Myint Thein, head of Panlong police force in Loilem Township.

Police officer Aung Soe Kyaing from anti-drug squad No. 25, based in Shan State capital Taunggyi, said, “We’ve raided opium-production sites and have been arresting dealers. Demand has therefore declined and the price will of course drop when demand has waned.”

Tom Kramer, an expert on the Burmese drug trade, said in a recent interview that, “In the past we used to see more big dealers, but as a result of law enforcement this has changed,” adding that now there are “a lot of small dealers, some Chinese dealers, and they sell to the big dealers.”

Kramer, who is with the Netherlands-based Transnational Institute, has said, however, that there were no indications that the overall drug trade was declining. His organization advocates supporting socio-economic development projects for impoverished farmers, rather than cracking down, in order to reduce the trade.

This position is shared by Col. Saw Lwin, joint general secretary-1 of the New Karen State Party, an armed Karenni ethnic group that has a bilateral ceasefire agreement with the Burmese government. “Rather than destroying the poppy fields, the government should help provide better livelihood for locals,” he said.

“They won’t grow poppy if the government supplies them with water and arranges for them to grow other crops to earn enough for their living. Most of them are growing poppy to survive, not to make profits.”

Additional reporting from Rangoon by Paul Vrieze.