More often than not, a centralised system fails to provide the desired result. Whether it is the centralised banking system introduced by Indira Gandhi or the distribution pushed by the Bolsheviks, that is why the need for privatisation arises. Slowly, this cycle is becoming universal. Apparently, privatisation provides incentives to the labours, making the process commercially profitable. Keeping that in mind, the Modi government has set a foot towards privatising the opium market in India.
Bajaj Healthcare’s entrance into Opium
Recently, Bajaj Healthcare Limited became the first company in India to get an exclusive government contract to operate in the opium processing sector. Up until now, it was only the government that ran the rooster. Now, Bajaj Healthcare will process active Pharmaceuticals ingredients (APIs) from the processing of unlanced poppy capsules. Additionally, it will also be manufacturing concentrated poppy straw (CPS) alkaloids.
Anil Jain, the joint managing director of Bajaj Healthcare, said, “This is for the first time in the history of the nation, that the government has deregulated opiate processing to a private player and we are extremely honoured to be awarded the very first tender in this segment. The APIs will be manufactured under highly regulated conditions and under strict adherence to protocols prescribed by the Government of India. The unit is well placed to cater to all mandated quality checks and controls, with capacity enhancement capabilities.”
Legal Opium production is highly regulated in India
Currently, opium farming as a whole is highly regulated in India. This is because India is one among only 12 other nations that have granted permission to grow legal opium. Opium production all around the world is regulated by United Nations, Single Convention on Narcotic Drugs 1961. In spite of having explicit permission, the risk of spill over to black markets does not allow governments to produce it on large scale. Currently, only 3 states namely Madhya Pradesh, Rajasthan, and Uttar Pradesh produce opium.
Except for growing crops, almost everything is taken care of by the centre. The central government allots particular areas in which the cultivation can take place. To obtain a license for opium cultivation, a farmer has to go through various tedious regulatory phases. These farmers are asked to tell the government how many kilograms of the final product they can deliver in a hectare. Only if the number qualifies the minimum qualifying yield (MQY) criterion, the farmer is licensed to operate the field.
The Indian situation is more complex
In case of any unexpected failures due to unforeseen drought, rain, earthquake, floods, or any other natural causes, the farmers have to inform the nodal officer beforehand. Failure to do so invites wrath from the government and they are not even compensated for the same. Moreover, to ensure that farmers do not cross the permissible limit of production (for selling in the black market), the government uses drones and other spy mechanisms. Governments also use satellite images from ISRO to make sure no one cultivates opium poppy without a license.
The timing of Opium cultivation in India coincided with the Rabi crops. Seeds are sown during November and extraction of opium takes place in March. Though India is one of the 12 countries to cultivate gums, it is the only one to have permission to obtain opium gums. Opium gums are extracted from latex derived from the opium poppy.
Dissemination to the market
These gums contain nitrogenous alkaloids called such as morphine, strychnine, quinine, ephedrine, nicotine, Opium, Codeine, and Heroin. Every alkaloid has a property of its own. In India, these gums are extracted through lancing. This is very skilled work since it is extracted from flower-bearing pots of opium poppy plants by using sharp blades. These gums contain sometimes as high as 70 percent of morphine.
By the beginning of April, centrally appointed officers are done with Quality control and every other formality. But, farmers get their final payment only after the final product is checked in labs at the opium factory (though by then 90 per cent is already transferred to the bank accounts of farmers). As soon as labs okay the quality of products, they are sent to Government Opium and Alkaloid Factories at Neemuch and Ghazipur. It is at these factories that products like Codeine phosphate, Thebaine, Morphine sulphate, and Noscapine are produced and sold to pharma companies.
Real India never had a problem with opium
The government’s control over the full process has given birth to multitudes of issues. Until the Abrahamic waves hit India, the process was never so centralised. India’s ancient medical literature is full of textbooks elucidating the importance of opium in drugs and medicines. It is believed that the process kicked off well before the Christ era and had been used for the purpose on a mass scale.
Textbooks like Bhavaprakash, Sodal Gadanigrah, and Sharangdhar Samhita describe opium’s use in curing diseases like Diarrohea and sexual dysfunction among others. Books like Dhanwantri Nighantu, and ain-e-Akbari also describe opium as a crop and not as a socially objectionable product. Later, Dutch and British East India Company started to export it.
Corrosive trade practices led to similar results
Later when East India Company established its monopoly over trade in and out of India, the process got highly centralised. By then, the British were using it not as a medicine but as a snorter. In China, the product was particularly in high demand. On the eve of independence, the phenomenon had expanded its footprints on Indian youth as well. That is why the government decided to keep cultivation in its own hand. The idea of the welfare state was a big catalyst.
But, more often than not, farmers toiling hard on opium fields started to feel that they are at disadvantage. For instance, the government provides them anywhere between Rs 1800-Rs 2500 per kilogram for producing opium. On the other hand, in the black market, they see the same product being sold at anywhere between Rs 60,000-Rs 1,20,000 per kilogram.
Not beneficial for any stakeholder
Moreover, the government’s efforts are not paying any dividend to other stakeholders as well. Due to the low level of production, the pharma industry is importing nearly 30 per cent of its Codeine requirements from other countries. Codeine is an excellent pain reliever and is a better antidote to the additive morphine, the best pain reliever substance in the world. Moreover, we are also forced to heavily import opium from Afghanistan for other requirements.
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The problem with the low level of cultivation (500-700 metric tonnes) lies in the fact that our technique is outdated. Modi government has tried to change things with the introduction of the pilot project involving the Concentrate of poppy straw (CPS) technique. CPS technique has the potential to radically alter the number of seasons. While, currently, we produce opium only once a year the CPS technique allows for more efficiency as well as two to three seasons of crop per year.
The government believes that new changes will take production to new heights. According to the reports available in the public domain, the government seems to be in a mood to increase production by 10 times. Only Bajaj Healthcare is targeting to process more than 6000 metric tonnes of poppy straw and opium gum in the next 5 years.
With the entrance of private companies, farmers will also feel incentivised to produce more. After all, it will be a performance-based job, unlike that of license raj.
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