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P4M Business Model

Summary

1. The economics of Poppy for Medicine Projects: production and sale of medicines

2. Pilot P4M Projects



3. The economic vehicle of Poppy for Medicine projects: cooperative associations

4. Economic Diversification through Poppy for Medicine projects


The local production of finished poppy-based medicines in Poppy for Medicine project villages would represent for project participants an increase in the village’s total revenue, and a move up the poppy value chain. This makes the business model of the Poppy for Medicine projects essentially different from both the illegal and the Indian legal opium systems, in which the farmers sell raw opium at the farm gate, having added very little added value. The local production of medicines under a licensed Poppy for Medicine project would ensure that Afghan farming communities truly benefit from the mark-up between the production costs and retail prices of morphine.

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The local processing of raw poppy material into finished poppy-based medicines such as morphine would bring enough additional value to farming communities to provide incentives for these communities to switch from illegal cultivation to participation in a Poppy for Medicine project. Moreover, the significant economic benefits generated by the local production and sale of medicines would be sufficient to accommodate all local stakeholders, including middle-men and local power-holders. In conjunction with law enforcement efforts, economic independence would allow farmers to cut their links with major drug traffickers.

Redistributing the profits from sales of medicines in ways similar to those used in fair trade initiatives, the business model of the Poppy for Medicine project is economically viable. Afghan village based projects could provide reliable poppybased medicines to emerging countries well below their current market price, thus contributing to an easing of the global pain crisis.

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Poppy for Medicine projects are the key to surpassing Afghanistan’s reliance on illegal poppy cultivation. The sales of locally-produced medicines would generate significant revenues, enabling economic development through direct investment and microfinance services. The local production of morphine medicines would also benefit the Afghan government, enhancing its capacity to strengthen the rule of law and provide public services, further improving the economic climate. In turn, economic diversification and expansion would ultimately make possible the sustainable phasing out of poppy cultivation.