Thursday, May 13, 2010

Economics Gone Crazy: Poppy Scurge In Afghanistan

http://www.nytimes.com/2010/05/13/world/asia/13opium.html?hp

I loved reading this article from an economics point of view. In short, what is happening is that for some mysterious reason, poppy crops have been dying. They don't know why.

But, the farmers are blaming the US and Nato because they have been politically trying to disuade them from farming poppy overall.

However, the unintended consequence is that prices are skyrocketing for opium. So, in turn, it is likely that the farmers will want to keep growing the crops and will be encouraged to do so again next year.

So, potential policy take away? Grow massive amounts of poppy to drive prices down?

No comments: