U.S. Pursues a New Way To Rebuild in Afghanistan
By Rajiv Chandrasekaran
Friday, June 19, 2009
The idea to transform a vacant tract near the Afghan city of Mazar-e Sharif into a sprawling commercial farm, with miles of strawberry fields and thousands of cashmere goats, began with an entreaty from President George W. Bush to the billionaire chairman of Dole Foods at a 2006 Republican Party fundraiser.
Go to Afghanistan, Bush urged David H. Murdock, "to see what you can do to help."
After a tour of the country the following April, Murdock told U.S. officials he wanted to build a 25,000-acre plantation modeled after Dole's vast holdings in the Philippines. But a few months later, he concluded that transportation and security challenges made the project unsuitable for the company.
That did not dissuade the U.S. Agency for International Development. Mindful of the president's interest in the project -- and convinced that Murdock dropped out because he did not receive a thank-you call from Bush -- USAID decided to go it alone. It allocated $40 million in reconstruction money to the venture, and it directed a contractor to hire workers and purchase equipment.
Chemonics, a for-profit development firm based in Washington, received the contract for southern Afghanistan in late 2005. It was one of many contracts won by the company, which has become a principal instrument of U.S. development policy in the country.
One of its first alternative-livelihoods projects was to build a road. And for that, it flew in 11 Bolivian engineers.
Andrew S. Natsios, the USAID administrator at the time, had recently viewed cobblestone roads in Bolivia's Chapare rainforest that were built under a U.S.-funded alternative-livelihoods program to discourage coca planting. He figured that such roads, which are inexpensive but require extensive manual labor to build, could be a new tool in the fight against poppies in southern Afghanistan because the construction effort would result in thousands of short-term jobs. Chemonics readily agreed.
The Bolivians trained 46 Afghans in the art of placing fist-size river stones on the ground. Then they set about constructing a road from the capital of Helmand to an archaeological site on the outskirts of the city. Once a sixth of a mile was complete, Chemonics held a celebration that featured speeches from local officials and the U.S. ambassador to Afghanistan.
Chemonics had plans to build additional cobblestone roads across southern Afghanistan, but local Afghan leaders objected. They said that they were willing to humor the Americans with the path to the ruins, but that what they really wanted were gravel and asphalt roads. They complained that the cobblestones hurt their camels' hooves.
"It wound up being a huge waste of time and money," said one person who worked on the project. "Nobody did the due diligence."
Natsios maintains that the cobblestone roads were a good idea, but he said he could not comment on the implementation because it occurred after he left the agency. A Chemonics spokeswoman said the company "can't comment on the decision-making process that took place before the work began." A senior USAID official, speaking on the condition of anonymity, said Afghan officials initially supported the project but then changed their minds because they believed they could extract kickbacks from gravel and asphalt construction.
After the cobblestone venture, Chemonics shifted to other cash-for-work projects, including cleaning irrigation canals, that were more palatable to local officials. Although it allowed USAID to claim that it had generated hundreds of thousands of days of labor, the overall impact was the development equivalent of a sugar rush: It didn't last. Poppy farmers always managed to find enough help -- largely because unemployment is so acute -- and cultivation in southern Afghanistan reached all-time highs.
In 2007, the poppies grown in Helmand province alone could have more than met the world's demand for opium. And when U.S. funding for short-term labor dried up, many participants went to fight for the Taliban, according to some Chemonics specialists who worked on the cash-for-work projects.
Several Afghan development experts advising the Obama administration believe the fundamental mistake with the U.S. alternative-livelihoods approach is that it did not concentrate on agriculture. The Chemonics contract, which USAID increased to $166 million in 2007, included money for the construction of a business park, a women's center, an Internet cafe and a recreational facility designed to demonstrate, according to a USAID report, that Chemonics was "a good neighbor within the municipality."
What the U.S. strategy should have addressed, the experts maintain, were the basic reasons why poppy is so attractive to poor Afghan farmers.
Drug middlemen often provide farmers with a cash advance at the beginning of the planting season, and they routinely promise to buy the crop at a set price. Some merchants even offer technical assistance to help farmers increase their yields. For subsistence farmers, such aid is vital, and it leads them to plant poppy even when other crops -- including pomegranates, grapes and almonds -- can fetch higher prices.
"Our whole concept of alternative livelihoods is conceptually flawed," said Barnett R. Rubin, an Afghanistan expert at New York University and a consultant to Holbrooke. "Poppy is not a crop, it's an industry. You're not going to compete with it with day-labor projects."
But USAID declined to include agricultural credit and price supports in the alternative-livelihoods program for southern Afghanistan. Agency managers regarded price supports, which exist for some crops in the United States, as unsustainable for the Afghan government over the long term. The agency did decide to offer credit, but it did so through a separate program that would seek to establish private credit unions and small lending institutions. That program was not focused on agriculture, and security concerns have limited its operation in southern poppy-growing areas.
The few farm-related activities that USAID funded through the alternative-livelihoods program sometimes generated results counter to what the agency wanted. Several former Chemonics specialists involved with the project said that some of the farmers who accepted U.S.-sponsored wheat seed and fertilizer handouts simply sold the seeds in Pakistan, or ground them to make flour, and they used the fertilizer to nourish their poppy fields.
But the specialists contend that their superiors at Chemonics, which has received more than $430 million worth of Afghanistan reconstruction contracts from USAID since 2003, did not complain about it to USAID project managers because of concerns it might jeopardize future work with the agency.
Michelle Millard, a Chemonics spokeswoman, called the allegation "simply not accurate." She said the firm "has worked closely with USAID to refine the design and scope of programs to ensure their effectiveness." Agency officials say they rarely find out about problems in the field, unless the contractor informs them, because agency managers seldom leave their fortified compound in Kabul to independently assess projects.
"We're all sitting in this bubble," said one agency official stationed in the Kabul headquarters. "We have no idea what's really happening out in the rest of the country."
Soon after the cobblestone-road project, Yosuf Mir, an Afghan American who lives in Fairfax County, approached Chemonics with what he thought was a no-lose solution to wean thousands of farmers off poppy cultivation: cotton, a crop widely grown in southern Afghanistan until the Soviet invasion in 1979.
When he asked farmers why they were growing poppies instead, he said, "They told me, 'What else can I do? We don't have the seeds. We don't have the fertilizer. We don't have anyone to sell to. There's nobody to give us credit except for the drug dealers.' "
The solution seemed obvious to Mir. The Afghan government was seeking to sell the state-run cotton ginning factory in Kandahar. He would buy it.
He consummated the transaction in 2005, pledging $1 million of his family's land in exchange for a 20-year lease. With that investment -- and with USAID's help in distributing cotton seeds -- he estimated that 35,000 farmers would resume growing cotton, and his factory could employ as many as 12,000 people. "We would," he said, "create a real alternative livelihood for the Afghan people."
When Mir approached Chemonics, leaders of the alternative-livelihoods program expressed support for his proposal. Charles Grader, a former senior manager of a USAID agriculture project run by Chemonics, said a study commissioned by the firm deemed cotton "one of the better alternate crops." But for cotton to be economically viable, he said, USAID or the Afghan government would have to provide a subsidy to the farmers, in much the same way the U.S. government aids domestic cotton producers.
In April 2006, Chemonics asked USAID for authority to help rehabilitate Mir's cotton factory. USAID rejected the request within weeks -- the notion of agriculture subsidies was anathema to free-marketers at the agency.
Mir eventually received a fuller explanation for the decision: U.S. law prevents the government from aiding foreign cotton producers because doing so could help them compete against American growers.
Several U.S. officials familiar with the matter said that USAID could have asked the White House to issue an exemption, given the national security importance of stabilizing Afghanistan, but that senior officials at the agency opposed funding a program to promote a crop in which Afghanistan did not have a comparative advantage on world markets.
"Their thinking is all about free trade -- that Afghanistan is better suited to produce pomegranates and raisins than bales of cotton," said one USAID official who disagrees with the agency's stance. "But what about the goal of keeping people from shooting at our troops?"
Late last year, Mir had to let go of the last 200 employees of the cotton factory, several of whom had worked there through the Soviet occupation and the Taliban years.
Most of them, Mir said, have since joined the Taliban.
"Even the Taliban knew the value of keeping the factory open," he added.
Sales and Marketing
In late 2006, Chemonics won another USAID contract, initially worth $102 million, for an initiative called the Accelerating Sustainable Agriculture Program. Agriculture experts recruited by the firm to work under the contract figured it would be a chance to implement the sorts of assistance projects that Afghanistan badly needed but that USAID did not want under the alternative-livelihoods program.
They proposed setting up a commercial poultry operation that would employ women in 50 villages and produce as many as 45 million eggs a year, reducing the country's reliance on imports from Pakistan and Iran. And they urged extending a project that had been set up under an earlier USAID contract to establish and restore vineyards.
"It would have produced real change in the lives of hundreds of thousands of Afghans," said Gary Kuhn, the executive director of Roots of Peace, a nonprofit organization that would have done the vineyard work for Chemonics.
But Loren Stoddard, director of USAID's Afghan agriculture and alternative-livelihoods programs, believed the contract should concentrate on promoting "buyer-led development." That meant sales and marketing activities, not field-level work to help farmers increase production.
The grapevine project was killed. So, too, was the egg venture.
Stoddard had worked as a produce salesman before joining USAID in 2002. Before arriving in Kabul in 2006, he spent four years with the agency in Guatemala, where he earned plaudits from his superiors for helping to facilitate business deals between local farmers and Wal-Mart.
He wanted to do more of the same in Afghanistan. The key to resuscitating the economy, in his view, is for farmers to specialize not in wheat, which is a staple of the local diet, but in what the country grows best -- and what buyers in other nations want to import: pomegranates, almonds, pistachios, raisins and fruits such as apricots that can be dried or turned into juice. He is fond of noting that Afghanistan was one of the world's largest exporters of dried fruits and nuts before the Soviet invasion. But the first step in making that happen, he believes, is to line up purchasers, not focus on farmers.
"Rich farmers sell first and then grow," Stoddard said in an interview. "Poor farmers grow first and then hope somebody will buy it."
To implement his vision, Stoddard ordered Chemonics to use the contract money to hold a series of agriculture fairs that would give Afghan farmers a chance to display their wares to foreign buyers, to organize promotional shipments of pomegranates to supermarkets in the Persian Gulf region, and to establish "agribusiness brokerage centers" to facilitate business deals.
"In 2006, nobody had heard of an Afghan pomegranate," he said. "We've put the light on the fact that there's a lot of great stuff here to sell."
The 25,000-acre farm Murdock envisioned at then-President Bush's behest was going to be Stoddard's flagship project. He was convinced it would "help Afghans realize there was a bright future ahead of them" by demonstrating modern agricultural techniques and generating an appetite around the world for Afghan-grown products.
Stoddard said Murdock wanted the farm built on a vacant parcel because he feared tenant disputes. After Dole exited, USAID decided to stick with the empty-land strategy, despite concerns from some at Chemonics that the site might not be suitable for commercial agriculture.
USAID had planned to rely on underground aquifers to irrigate the farm. But every well that was drilled brought up water that was too salty.
The agency is using the remaining money allotted for the project to help develop private agricultural projects in the province.
Even if there had been enough water to run the farm, several agriculture specialists familiar with the venture contend it would have been out of place in a country where most people grow crops on small plots of land.
"It was one man's pipe dream," said another specialist who worked on the project for Chemonics. "It made no sense."
Until recently, Stoddard had relatively free rein to design and implement agriculture projects as he wished, according to several U.S. officials. That was because "nobody -- nobody at the White House, nobody at USAID headquarters, nobody at [the] State [Department] -- really understood agriculture in Afghanistan. And USDA was almost never at the table," said Ward, the former senior USAID official. "Loren had a vision for what would work. We may not agree with it, but at least he had a plan. Nobody else had one."
At USAID, which once had dozens of agronomists and agriculture economists on staff, only a handful of people with specialized training in agriculture development remain. Although the agency does not provide an exact count, most of its scientific and technical experts were sent packing in the 1980s and 1990s as budgets were cut and the workforce shrank.
"This is what happens when you eviscerate a federal agency," Ward said. "There's a consequence. You may not see it right away. In this case, we're seeing it a generation later, when we need AID to help us win a war -- and it can't."
Late last year, when Mohammad Asif Rahimi, Afghanistan's newly appointed agriculture minister, visited his office for the first time, he was shocked by what he found -- or, rather, what he didn't. There was no phone. No Internet connection. No secretary.
"It looked like the Taliban left a week ago," he said.
To Rahimi, the reason was obvious: USAID had focused its money and attention on its own programs instead of helping Afghans assume responsibility for their own affairs. Agency officials said they did not provide more assistance to the ministry because they regarded Rahimi's predecessor as an ineffective leader.
As Rahimi learned more about the U.S. agriculture strategy, he said he became increasingly angry.
"This 'leave it to the hands of the private-sector' approach -- it's absolutely unrealistic," he said. "The agriculture sector needs a lot of support from the government."
Another one from David Rohde, covering some of the same territory as Adam Curtis' "Kabul: City Number One"