‘Indian Connection’ Poppies Throw a Curve at U.S. Drug Policy

America’s drug-enforcement effort is fast becoming embroiled in another major controversy over heroin shipments. Call it, if you will, the Indian Connection.

The problem began innocently enough: U.S. pharmaceutical companies need opium and its derivatives to make morphine for painkillers. But cultivating these crops in the United States is illegal. So, to guarantee a steady supply, the federal government turned to Indian growers--and offered to guarantee them a major share of the American market. U.S. spending for Indian-grown poppies now totals more than $8 million a year.

The difficulty is, the poppy problem has blossomed well beyond anything that the let-it-grow-elsewhere lawmakers ever envisioned. Critics say the effect of the U.S.-Indian connection has been to finance an emerging heroin industry in India, which currently is the only country in which farmers may legally grow flowers that can be easily processed into heroin.

The size of the problem now is staggering: The State Department estimates that as much as half the opium now cultivated under government control in India is likely to end up as heroin, and a recent investigation by Interpol, the international police agency, found indications that India is exporting its heroin worldwide.

Indeed, a U.S. government task force last year found the developments so disturbing that it recommended in a draft report that regulations be modified to allow U.S. firms to turn to other countries to buy the opium they need for pharmaceuticals.

Predictably, at a time when anti-drug officials are warning of an explosion in the world heroin supply, the idea that the United States is subsidizing Indian heroin production has sparked growing outrage in Congress, with many lawmakers wanting to allow American pharmaceutical companies to shop elsewhere for their opium supplies.

“We’ve got some severe problems,” said Rep. William J. Hughes (D-N.J.), a member of a House subcommittee that has been considering whether to amend the old rules. “It has hardly been a success story,” Hughes added sarcastically.

But with more than a million Indians dependent on the opium industry, the Bush Administration has been put in the uncomfortable position of defending the subsidy as a source of assistance to an ally that is a “traditional” supplier of the narcotic. Overruling its own task force report, the State Department recommended that the arrangement be extended another three years.

“With all the farmers who depend on opium, the Indian government would have a hard time if this subsidy disappeared,” said a knowledgeable U.S. official. “That is what worries them--and us--the most.”

Assistant Secretary of State Melvyn R. Levitsky agreed, in testimony before Congress recently, explaining tersely that “the U.S. national interest” was involved.

The dilemma is an increasingly familiar one. More than a million farmers in Peru and Bolivia now make their livelihood by growing coca, a similarly “traditional” crop that can be processed into illegal cocaine. Millions more throughout Asia rely on opium and heroin production.

But Washington’s response has not always been consistent. In the cases of Peru, Bolivia and Asia, the Administration has been calling loudly for the governments there to move decisively to destroy the poppy crops. Only in India is Washington content to leave the crops--and the subsidies--intact.

The root of the matter--a 9-year-old Drug Enforcement Administration regulation--applies a convoluted formula to decide which countries will be suppliers for U.S. pharmaceutical firms.

The purpose was two-fold: Policy-makers first wanted to balance the need for painkilling drugs with the need to curb the spread of illegal ones. They also sought to satisfy the requirements of U.S. pharmaceutical firms so the companies could remain competitive in the world market.

At the urging of the United Nations, a U.S. government task force also set a third priority: It gave special preference to India and Turkey, where farmers had been growing poppies for centuries.

The compromise regulations, finally adopted in 1981, alloted 80% of the lucrative U.S. opium market to India and Turkey--with guaranteed purchases worth some $12 million a year--and allocated the remaining 20% among five other opium-producing countries--Australia, France, Hungary, Yugoslavia and Poland. Australia, where farming is the most technologically advanced of the five, rapidly dominated that group.

But the 80% allocation for India and Turkey was misleading. Although both still were traditional poppy-producers, opium farming in Turkey had been all but wiped out during a U.S. crackdown on cocaine in the early 1970s. When the Ankara government did sanction planting again, it turned to a safer method of cultivation that made it more difficult to squeeze opium gum drop-by-drop from poppy plants in the field. Instead, like those in Australia and other upstart producers, Turkish farmers would harvest their crops en masse, leaving it to sophisticated laboratories to extract valuable morphine.

Only in India could peasants continue to use the time-honored methods that allowed field workers to collect the opium gum themselves--and misappropriate it if they found an illegal buyer. U.S. officials now believe that up to 50% of India’s poppy-plant gum now is passed through so-called “opium gates”--crude opium labs that operate near the legal growing areas--to the heroin processors. At least three of these were seized last year. The drug-makers’ purchases of raw opium on the black market often include markups of as much as 500%.

Even with the constraints imposed by the U.S. regulations, the three American pharmaceutical firms that are licensed to handle opium still have a choice: They can buy mainly from India or mainly from Turkey. Most say that, other considerations aside, they would prefer to buy from Turkey, where there has been no sign of widespread abuse.

But the “other considerations” have proven decisive. The Indian system also produces thebaine, a valuable pharmaceutical ingredient. Turkey’s poppy growers do not. And periodic shortages and droughts often have sent Turkish prices soaring far above those of their competitors.

As a result, India has generally become the supplier of choice for Johnson & Johnson International, Penick Corp. and Malinckrodt Inc., which together purchased enough opium last year to manufacture codeine, morphine and other painkillers worth more than $300 million.

The drug manufacturers themselves are split over how rapidly the United States should move to remedy the situation. Johnson & Johnson has a special interest in seeing rapid change: Its Australian subsidiary easily could supply more than the company’s own current 20% allotment--and produce all the thebaine that Johnson & Johnson might need, to boot. The two smaller firms, fearful of the giant, have urged a go-slow approach.

But there is no disagreement that India is the sole source of the licensing program’s fast-growing heroin problem, and that it is getting worse almost by the week.

Last year, a U.S. State Department report warned of the problem, noting that Indian producers have amassed a 2,000-ton stockpile of opium--enough to satisfy world demand for heroin for at least a year--that has been harvested but not yet sold.

Although there has been no indication that any has found its way to the heroin-makers, its very existence is viewed as a threat by narcotics enforcement officials. Last year, global cultivation of opium soared a record 53%. While Myanmar (formerly Burma), Afghanistan and Laos are the major suppliers of illegal heroin around the world, officials fear that a channeling of India’s supplies to the highest bidder could exacerbate the heroin epidemic.

Even so, despite the widespread agreement about the problem, there still is little consensus on how it might be resolved. Although members of Congress recently complained vociferously about the inconsistency in U.S. policy, none of them proposed changing the current regulations.

Indeed, some U.S. officials fear that just reducing the U.S. subsidy for legal opium would force growers to sell their crops to the heroin makers. And while most want India to adopt the more modern--and more pilfer-proof--methods of poppy production that other countries use, they recognize that it might prove too costly.

One alternative--favored by the Administration--is to increase pressure on the Indian government to police the poppy crops more effectively. Levitsky, who heads the State Department’s bureau of international narcotics, concedes that U.S. officials in the past had “not had a hard enough go at the problem.” He promised lawmakers last month that the Administration would intensify its efforts.

In the meantime, the Indian Connection remains intact.