The British government for sure knows how to do one thing. It knows how to help farmers in need. Since it arrived in Afghanistan in 2001 and was put in charge of the staple poppy crop, ministers have spent hundreds of millions of pounds on promoting it. On Monday the UN announced the result. Poppy production in Afghanistan has soared since the invasion, this year alone by 34%. The harvest in the British-occupied protectorate of Helmand rose by 50% in 12 months. This is a dazzling triumph for agricultural intervention.

Ministers may deny this was their policy, but they cannot be that inept. They faced a heroin epidemic at home. Suddenly finding themselves charged with controlling almost all the world’s opium production, they must have known what they were doing. By alienating farmers and forcing them into the arms of the Taliban, they would drive up illicit production and encourage oversupply. While that would increase heroin consumption in Britain in the short term, as it has done, oversupply would eventually cause prices to collapse. At that point, the British policy of “poppy substitution” with wheat and other crops would start to bite and supply would be stifled. What happened when that stifling drove prices back up again was someone else’s concern.

I cannot think of any less daft explanation for a policy that otherwise defies every law of economics. Kim Howells, the Foreign Office minister responsible for flooding British streets with cheap heroin, may squabble with his American colleagues over whether poppy eradication is better than substitution, but one thing is certain. Since Nato arrived in Afghanistan, opium has become to the local economy what oil is to a Gulf state. It is roughly 60% of the domestic product and 90% of exports, with productivity per hectare rising by the year.

Afghanistan now enjoys a global opium monopoly, supplying an estimated 93% of total consumption. This relatively sophisticated consumer business has developed in conditions of near anarchy, with the country under military occupation and a government impotent outside its capital. Nor has it depended on any trade agreement, aid or price cartel. Traders enjoy no regulation, red tape or export controls, other than a need to bribe Afghan officials. They have even started to bring within Afghanistan’s borders some of the added value in opium processing that previously went to factories and dealers in Iran and Pakistan. This offers the hope of more money and jobs trickling down to local towns. The free market is working.

Without curbing demand, stemming one supply route would merely increase price and stimulate substitute supply from elsewhere. Growing, processing, transporting, protecting and selling opium dominates the Afghan economy. Over three million people and hundreds of towns depend on it. Half Hamid Karzai’s cabinet is said to be involved to some degree in the opium trade, not to mention the network of corrupt provincial governors and police chiefs. There is now a huge vested interested in what is overwhelmingly Afghanistan’s most successful business.

If Britons want to stop Afghans growing poppies they must stop using heroin. But the government is as bad at reducing drug demand at home as it is good at increasing supply abroad. At every level, its policy is a disaster. — The Guardian