Three small districts have control over Afghan opium poppy cultivation market

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Afghan opium poppy cultivation market throws up a surprise. Lanchester analytic techniques offer an explanation. 

  1. Key findings.

  2. Statement of the problem.

  3. Description of the analytic method.

  4. Applying the method to the problem.

  5. A Fotnote.

Researchers and business analysts have studied Afghan opium poppy cultivation for several decades. But they mostly stayed in the academic domain.  Use of Lanchester analytic techniques focuses on providing ACTIONABLE results.

AuthorAlexei Kuvshinnikov (Austria) is an expert in the use of structured analytical techniques for strategic threat assessment and foreign policy analysis.

For more than a decade (1992-2001; 2008-2009), he served UNODC both at HQ and in the field.

During the past decade, he worked as Resident Advisor and short-term expert on EC-funded drug control projects in Latin America.

This updated post includes detailed data about Afghan opium poppy cultivation in 2018.

Detailed data for 2019 is not available. For the first time since 1994, UNODC did not publish its annual Afghanistan Opium Poppy Survey. They did not give a clear reason for this omission.

In 2017, Afghan opium poppy cultivation reached a historic high. Since then, market forces have pushed the areas under cultivation a bit down. What remains, however, is a stronger grip on the market by Helmand province.

In 2018, it achieved a monopoly control of the Southern region. And a controlling influence over the national Afghan opium poppy cultivation market.

Satisficing analytics based on discourse failed to provide a warning about the unfolding of this scenario. Or to explain the importance of terraforming shifts that are being caused by it. This analytic fiasco calls for an application of a different set of analytic techniques.


Helmand province – In 2018, Nad Ali+Nowzad+Naher-i-Saraj districts had control of the provincial market.

Nad Ali ranked at the top for 9 consecutive years. Naher-i-Saraj was the runner-up until 2018 when it was overtaken by Nowzad district.

In 2018, Nowzad district  showed particularly impressive growth dynamics. It ended within 0,76% of the market leader. Amidst overall decline in cultivation areas, these increased in Nowzad by 20%.

Opium poppy cultivation areas in the six top-ranking districts are all within 1.41-1.05 range. It creates a dynamic Polyopoly market (Type 5) with a low barrier to entry into the leading trio.

Southern region – In 2018, this market completed its decade-long evolution towards a monopoly.

During 2009-2016 it was an upper-range Premium market (Type 2) controlled by Helmand province.

In 2017, a transition to Monopoly market (Type 1) began with Helmand province coming only 0,85% short of the threshold.

And in 2018, Helmand province achieved 75.08%, which is 1,21% over the monopoly threshold.

In conditions of unprecedented draught, Helmand province displayed a remarkable antifragility based on irrigated land.

National level – The national market appears to be in transition from upper-range Premium market (Type 2) to Monopoly market (Type 1).

Starting from 2016, the market share held by the Southern region showed stable growth reaching 69.38% in 2018. The Southern region fell thus only 4.49% short of acquiring a monopoly control of the Afghan opium poppy cultivation.

Accelerated growth of cultivation areas in other regions recorded in 2017

  • doubling in the Western region
  • a 20-fold increase in the Eastern region
  • and a 40-fold increase in the Northern region

was annulled by the 2018 draught.

Key inference

Since 2006 (with the exception of 2016), Helmand province holds > 41,7% of the national Afghan opium poppy cultivation market (in 2018 – 52.09%). Accordingly, Helmand province has a stable and growing controlling influence over the NATIONAL market.

Within Helmand province, first, second and third-ranking districts together have a stable controlling share > 41,7% (in 2018 – 43.67%).

Thus, in 2018 Nad Ali, Nowzad and Naher-i-Saraj districts with their combined 22,75% share of the national Afghan opium poppy cultivation market had it under their de-facto control.

Satisficing discoursive analytics failed to provide a warning about the unfolding of this scenario. This analytic fiasco calls for an application of a different set of analytic techniques.

Lanchester analytic techniques belong to the subdomain of econometric methods.

They originate in Lanchester models of warfare and Lanchester market share strategy.

Despite a long record of amazing successes, the heritage of Lanchester  remains little-known. That is, except in Japan. There, the New Lanchester Strategy of Sales Battles and Market Combat has achieved a cult status.

Afghan opium poppy cultivation is one of international problems that have defied solution for decades.

This conundrum has a baffling complexity. Despite best efforts of scores of wise men, dynamics of this problem retain for us (Westerners) a high degree of opacity.

Efforts to resolve the issue of Afghan opium poppy cultivation command great attention and draw in big-time funding. But only modest short-term reductions in the areas under opium poppy cultivation could be recorded so far.

In the medium term, these have been canceled out a few times over by grave setbacks, as was the case in 2014.

Counting in the 2017 fiasco and the 2018 dip, in the long-term perspective things have only gotten worse.

Discursive analytics are of little practical help when attempting to explain such phenomena. Instead, let’s turn to some of Lanchester analytic techniques.

Why specifically Lanchester analytic techniques?


  1. they have not been applied before to the study of this phenomenon. And
  2. because those other techniques that have, failed in helping us figure out what’s going on.

For proof, keep reading.

The data used in this post are from Afghanistan Opium Poppy Surveys compiled and published annually by the UN Office on Drugs and Crime (UNODC) since 1994. It is open source data.

The extent to which it is accurate is open to debate. The method of its compilation rests on a number of assumptions and extrapolations. However, for my purposes that is irrelevant. And besides, it is universally accepted to top other estimates in authority.

What matters even more for this analysis is that UNODC data is historically consistent. And thus comparable year-on-year since the start of times. Which in this case is 2002.


Using New Lanchester Strategy of Sales Battles and Market Combat


In 2017, the area under opium poppy cultivation in Afghanistan was estimated at 328,000 hectares. That represents a 63% increase or 127,000 hectares up from 2016, reaching a new all-time high. It exceeded the record 224,000 hectares reported in 2014 by a whopping 46%.

In 2018, due to a historic draught, Afghan opium poppy cultivation went down 20.01% to 236,598 hectares. Still, it was recorded as the second all-time highest area under opium poppy cultivation. It  surpassed the area reported for 2014 by 5.62%.

More strikingly, the drop in the area under opium poppy cultivation recorded in the Southern region amounted to only 7.61%. This result further consolidated the latter´s control over the national market.

Since more than two decades, opium poppy cultivation is centred in Afghanistan’s Southern region (55-85%). And within that region, in Helmand province.


Afghan opium cultivation dynamics

Farm-gate value of the 2017 opium output was estimated at USD 1.5 billion.

Revenues obtained from sales of opium (estimated 2000 tons in 2017) sustain hundreds of thousands of Afghani farmers, opium collectors and their families. Opium moneys also fund militants, insurgencies and terrorism that every year kill and maim tens of thousands of people in a score of countries.

Criminal proceeds obtained from the trafficking of heroin (estimated 448 tons produced in 2017 worth an estimated USD 60 billion at street price) fund international criminal organizations (and terrorists) on a major scale.

Heroin addiction (estimated 17.7 million people in 2015) generates a massive volume of street crime and is a major channel for the spreading of AIDS.

During the past 30 years or so, hundreds of millions of dollars have been spent annually in bi- and multilateral cooperation programmes that aimed to stabilise and hopefully shrink opium poppy cultivation.

The record increase in the area under opium poppy cultivation observed in 2017 caught everybody by surprise. It was a perfect “black swan” event. A classic.

Hopefully, it has cast some serios doubts on discursive analytic methods used for assessing past strategy effectiveness and making predictions for the future.

3: DESCRIPTION OF THE ANALYTIC METHOD – Lanchester analytic techniques

The New Lanchester Strategy of Sales and Marketing – Historic Background and Summary of its Essentials

Lanchester analytic techniques are loosely based on Lanchester Laws, discovered by the late British aeronautical engineer, Frederick W. Lanchester (1868-1946).

At the age of 28, he built England’s first gasoline-powered automobile. At 31, he founded the Lanchester Car Company. Its innovations include disc brakes, power steering, four-wheel drive, and fuel injection.

After the outbreak of World War I, Lanchester became engrossed in the subject of air warfare. He focused on formulating the rules of its effectiveness. By doing some quantitative studies, he arrived at the Lanchester laws of combat. His findings are recorded in “Aircraft in Warfare: the Dawn of the Fourth Arm”. Lanchester published it in 1916.

The British Royal Air Force adopted Lanchester’s resulting suggestions and established the Air Ministry.

At some time after Pearl Harbour, US military researchers picked Lanchester theory up. US military applied Lanchester laws with overwhelming success in the latter stages of World War II, particularly in the Central Pacific theatre.

After World War II, Morse and Kimball transferred Lanchester laws to operations research theory intended for use in business situations (“Methods of Operations Research“). In the 1950s, W. Edward Deming introduced this concept into Japan. Here, Lanchester thinking took root like a weed.

Dr. Nobuo Taoka, a business consultant, acquired fame by developing Lanchester Laws and their derivative Operations Research strategies into a novel marketing and sales strategy (1962-1984) steeped in conflict and strategic thinking.

During the subsequent decades it grew into a cornerstone of the Japanese business philosophy.

For well over half a century, Lanchester analytic techniques have been used to define sales strategies aimed at growing market share. It remains as valid as ever. Both inside Japan and out.

New Lanchester Strategy rules for understanding markets and competitor behaviour

  • An actor with 73.88% or greater market share occupies the monopoly position.
  • The market is held by a duopoly if:
    • the combined market share for the market leader and second-ranking company (F+S) is greater than 73.88%,
    • and the first company (F) is within 1.7 times the share of the second (S).
  • If an actor has at least 41,7% market share and at least 1.71 times the market share of the next largest company, it will be able to control the market.
  • When the biggest actor in a market has between 26,12% and 41,6% market share, the market can remain stable only through a coalition of F+S.
  • If the biggest actor has less than 26.12% market share, market is fragmented and unstable with a strong possibility of abrupt shifts in market shares.

Applying these rules allows to distinguish between the following five market types (Taikobo Onoda). To grow market share, in different types of markets players will revert to different strategies.

1. Monopoly Market – the leading actor (F) has at least 73.88% of the market.

2. Premium Market – F has between 41.7-73.87% of the market, and has at least 1.71 times the market share of S.

3. Duopoly (Dual Oligopoly) Market – the combined market share for F+S is at least 73.88%, F is within 1.7 times the share of S.

4. Relative Oligopoly Market – the combined market share of F+S+T is greater than 73.88% and the combined market share of S+T is greater than that of the market leader. Market stability is achieved with 40-21-12 market share distribution – the exchange rate for all is close to 1.7.

5. Polyopoly Market – the market leader has less than 26.12% of the market and each actor is within 1.7 times the market share of its nearest rival. The number of “battles” is the only variable that can lead to the change in power relation, and with a 1-3% difference between the market leader and runners-up, the number of “battles” required to get out of the shooting range make it prohibitive. The only way out is co-operation.

afghan opium production calls for a new analytic paradigm

The above typology of markets arises from Koopman’s and Onoda’s equations and the reliance on the 3:1 law.

Of the many relationships developing during the years, none is more arcane than this 3:1 rule. It harkens back to the initial research by Lanchester. He asserted that in order to vanquish an enemy that had established a defensive position, the attacker must have three times as many troops.

In the same key, the figure of merit of 1.7 comes about as the square root of 3. In Lanchester strategy it defines the “shooting range”. To be within the shooting range infers being vulnerable to an attack from below.

First Lanchester Law – the Law of Single Battle.

When two market actors have together more than 73.88% of the market – a perfect dual oligopoly – the focus of competition moves to the concentrated competition between them. When their sales/marketing strategies are equally effective, the side with the largest sales force will win.

Second Lanchester Law – the Law of Effects of Concentration.

In markets where no actor has a clear leadership, the one with the highest market share will have an advantage.

The law of market share expansion is the law of bullying the weak.

Market share is expanded by taking over part of the market share of the weaker competitors, NOT part of the share of the market leader.

Analysis of market share and market targets is paramount to the game of business. Market share provides the capital resources with which to defend a position or attempt to expand it.

In any given industry, profitability increases in a linear relation to growth in market share.



Afgan opium cultivation market performance
At the national level, the market for Afghan opium poppy cultivation is in a transition.

  • In 2008-2011 it matched the characteristics of stable middle range Premium market (Type 2).
  • In 2012-2017, it gradually evolved into a Type 2 Upper Range market.
  • And in 2018, it reached the threshold of a Type 1 market stopping 4.49% short of it.


Opium poppy cultivation in Southern region

The above-mentioned transition of the national market has been powered by the dynamics of the Southern region market. Use of irrigated land for opium poppy cultivation reduced the effect of the 2018 record draught to a mild dip of some 7.6% only.

Helmand province as the regional market leader suffered an even smaller decline of some 5.01%. As a consequence, it acquired a monopoly control over this market with a share of 75.03%.


Opium poppy cultivation in Helmand province

In 2018, the share of the long-time market leader (Nad Ali district) experienced a mild dip. But in the generally shrinking market, Nowzad, Musa Qala and Kajaki districts performed exceptionally well.

Despite dire circumstances, they increased their respective market shares by 20.01%, 15.20 and 2.31%, respectively.

The Helmand province market has historically been highly fluid and corresponds to the Polyopoly market (Type 5). The market leader has never been able to come close to the threshold of 26.12%.  Since 2006, the five top-ranking districts were at all times within the shooting range of their chasers.

Applying Lanchester techniques to analysis of market players in Hilmand province

At the same time, a remarkably stable performance by Nad Ali and Naher-i-Saraj districts is a unique characteristic of the Helmand province market. Between them, these two districts occupied the two top positions during more than a decade.

However, to achieve market control in Helmand the combined share of the two top-ranking districts was not enough, at least since 2012.

A district that could get the third position became thus a kind of a kingmaker. Nowzad, Kajaki and Garm Ser districts rotated to take this role.

Kingmaker districts in Helmand province

Being a rather extraordinary year, 2018 saw the ascent of the Nowzad district to the second position. It missed the opportunity to end Nad Ali district´s nine-year supreme reign by a meagre 0,76%.


Evolution of market types across markets

Historically, the stable Type 2 market maintains a clearly observable prevalence at all market levels.

This market type implies presence of one very strong actor that imposes stability. In a rare case when this actor loses its supremacy, the market can be expected to quickly degenerate all the way to Type 4, at least temporarily. Longer-term outcomes of such turbulence are difficult to predict.

Because Type 2 market is so popular in Afghanistan, it is useful to take a closer look at its sub-types. There, a key difference between the market in Southern region and that in Helmand province becomes obvious.

Subtypes of markets at different levels

In Southern region, middle- and more recently, upper-range Type 2 market prevails. It reflects market consolidation around the growing supremacy of the market leader.

Regardless of the above trend, the market in Helmand province remains a highly unstable Polyopoly market (Type 5).

It is nothing short of amazing that under such turbulent conditions two districts – Nad Ali and Naher-i-Saraj – have for over a decade managed to maintain first and second places. Their role in opium production is certainly worth taking a closer look.


The present analysis focused on the market for opium poppy cultivation areas.

Arguably, it could me more useful for practical purposes to focus instead on opium production.

Ranking by opium production (2017):

  • Southern region – 57.85% (share of opium poppy cultivation area – 60,09%)
  • Northern region – 15,79% (area share 13,10%)
  • Western region – 13,57% (area share 16,57%)
  • Eastern region – 9,39% (area share 7,26)

Thus, at the level of Afghanistan´s regions their positions in the market for opium poppy cultivation area represent an acceptable proxy for shares of the opium market.

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