Monday, January 31, 2011

Does marijuana matter?

There's been a lot of debate over how much marijuana contributes to the Mexican cartels' profits. New White House Drug Czar Gil Kerkowski said late last year that the figure often cited – 58% to 60% of cartel revenues come from marijuana — was introduced by the White House Office of Drug Control Policy in 2006, and based on research from 1997. He said it's too outdated to use.

Clearly. Kerkowski is right to suggest not using that data. "Everyone that recognizes these cartels clearly understands that their revenues have changed a lot since 1997," Kerkowski argues. "We strongly believe we see significantly less than the numbers cited from 14 years ago."

Really? According to the National Drug Threat Assessment 2010, the latest data available from the best law enforcement sources possible, "the amount of marijuana produced in Mexico has increased an estimated 59 percent overall since 2003... Contributing to the increased production in Mexico is a decrease in cannabis eradication, which has resulted in significantly more marijuana being smuggled into the United States from Mexico, as evidenced by a sharp rise in border seizures."

Ok, it is possible that because the amount of marijuana coming into the US from Mexico has increased since 2003, the price has actually declined, therefore actually giving less profits to the cartels. Possible. But it's highly unlikely.

The phrase "as evidenced by a sharp rise in border seizures" is important here. An increase in seizures should be regarded as evidence of an increase in production, according to the standard law enforcement argument in both the US and Mexico, (this is often contradicted by congratulatory diplomatic statements. The US loves to praise Mexico for its increased seizures, which everyone on the ground knows is not a success at all.)

Let's look at Mexico's own numbers for eradication and seizures of marijuana during the Calderon administration:

In 2007, 590,765 kg of marijuana were seized by the Mexican military
In 2008, 477,286 kg of marijuana were seized by the Mexican military
In 2009, 715,383 kg of marijuana were seized by the Mexican military
In 2010, 866,340 kg of marijuana were seized by the Mexican military

In 2007, 22,952.5220 hectares of marijuana eradicated in Mexico
In 2008, 18,394.4770 hectares of marijuana eradicated in Mexico
In 2009, 16,029.1848 hectares of marijuana eradicated in Mexico
In 2010, 17,998.7162 hectares of marijuana eradicated in Mexico

Indeed, the numbers do suggest that marijuana eradication is down in Mexico, while seizures are up. The Mexican military is not eradicating fast enough.

But marijuana is not the primary source of income for the cartels?

A recent and widely-cited RAND corporation study calculated that "Mexican drug trafficking organizations generate only $1 billion to $2 billion annually from exporting marijuana to the United States and selling it to wholesalers, far below existing estimates by the government and other groups."

RAND also found that "the often-cited claim that marijuana accounts for 60 percent of gross drug export revenues of Mexican drug trafficking organizations is not credible. RAND's exploratory analysis on this point suggests that 15 percent to 26 percent is a more credible range."

According to my calculations, the Mexican military seized about $2 million in marijuana last year (based on a roughly estimated US street value that US authorities often use). That means that by RAND's calculations, they seized 0.2-0.4 percent of the total marijuana produced in Mexico. (I'm not including US authorities' seizures of Mexican marijuana, and I'm sort of using apples and oranges to make a nice salad, but I think it's enough for these purposes.)

Above, I quoted Kerkowski as saying the cartel "revenues have changed a lot since 1997."

Are they getting rich off other drugs?

According to the National Drug Threat Assessment, cocaine availability has decreased sharply in the United States since 2006. So prices have gone up, and the Mexicans are increasingly taking a lead role from the Colombians, so they're making more money off it themselves rather than having to share.

Heroin, according to the National Drug Threat Assessment, "remains widely available and that availability is increasing in some areas..."

Seizures of opium gum and poppy fields have increased in Mexico, indicating an increase in production. Ok, so heroin might be making some more money for the Mexicans.

According to the National Drug Threat Assessment, methamphetamine is increasingly available in the United States. The Mexican military seized 22 meth labs in 2007; it seized 146 in 2010. Clearly the Mexicans are making more meth. Chapo and his Sinaloa cronies went into the meth business around 2003; they saw an opportunity and given their business savvy, they were right.

There has also been a "resurgence in MDMA (ecstasy) availability" in the US, according to the National Drug Threat Assessment. But it's Asian drug trafficking organizations who are responsible for the so-called resurgence, the authorities say, not the Mexicans. So no profit from that.

Something doesn't add up. Is Kerkowski right and I don't know something? Probably, but what he knows that I don't know is a complete unknown.

The timing in all this has been particularly interesting. For instance, the RAND study came out shortly before Californians voted on the pro-legalization of marijuana PROP 19. I highly respect RAND, and trust their objectivity, but for them to come out right before such a monumental vote struck me as odd; their widely reported data certainly weakened the argument that legalization might help quell the violence in Mexico. After the RAND study, the sympathy vote was lost and the legalization argument became a "moral America" one once again. Ie, all drugs are bad.

The shift away from marijuana's importance to the cartels could also be a justification for the authorities' pressure on La Familia (which has now apparently disbanded – I'll believe that when I see it). La Familia is a meth producer, and highlighting meth as a major source of income could better justify cracking down on that group.

Incidentally, who is the biggest marijuana grower in Mexico? Chapo and his Sinaloa cronies. And the battle over Guerrero right now, which has left dozens decapitated, is over the state's marijuana and poppy fields, as well as its vast coastline along which smugglers can drop cocaine from Colombia. Not meth labs.

I'm not sure what to make of all this really. It's all interesting, and doesn't all add up, and makes me think that everyone is pushing their own numbers without a clear agenda. I welcome thoughts.

For what it's worth, former Mexican Attorney General Eduardo Medina Mora told me in September 2010 that he firmly believes the 60 percent marijuana figure. And he called for a bigger push than PROP 19 on the US side. "If you are effectively legalizing [consumption] but not legalizing production," he said, "you are fostering production in Mexico [and] fostering violence and illegality in Mexico."

Lastly, I find it appalling that the White House Office of Drug Control is using 2006 data. Another factsheet on the web site, concerning drug use in the US, is dated 2003. Surely, out of the several billion dollars being used to fight the drug war each year, a few million could be spent on researching this stuff and updating the info?

TOMORROW: Kerkowski and the use of the word "cartels."

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