NOTES ON THE SHAN OPIUM PROPOSALS
The first Shan opium proposals were rejected by the U.S. government in August 1973.
The present proposals were drawn up after a meeting between 3 Chan leaders and U.S. Congressmen Lester Wolff and Morgan Murphy in January, 1975.
1.
The three Shan groups. The leaders who signed these proposals represent, or can speak for, virtually every Shan cpium traling group except the KMT and their satellites. The Shan nited Army is at present the largest organization in the opium business; the Shan State Army Eastern includes all non-Communist Shan forces east of the Salween; and the Shan State Army will almost certainly be followed in these negotiations by the Kachin, Karen and Ba-0.
2.
The Communists. The 3 groups participating in these proposals buy a large percentage of their opium in Communist-held territory, and through the SSA we expect to get tacit though not specific CPB consent. The Communist areas of Hokang and Wah State are largely dependent on opium, and a sale through Shan middlemen to some international body would remove the CPB's embarrassment over their idealogical objections to, but de facto dependence on, the narcotics trade.
3.
The Price. When the first Shan proposals were delivered to the U.S. Marcotics Bureau in July 1973, the border price wosunder 1,000 baht per viss of opium. Since then there has been a bad harvest, a world shortage of opium, and currently prices are high because of the seasonal price rise before the new crop is harvested. According to our sources amongst the Thai hill tribes ( i.e. sources not dependant on the Shans), the opium price in mid-January 1975 in Hueh Krai was 3,600 baht per viss. Wolff's Thailand visit - and therefore these proposals
This means that Congressman unfortunately coincided with the highest price that opium has ever
have reached. In recognition of this, the Commander of the Shan United Army has offered 1 ton of opium at 3,100 baht per viss. guarantees that if the border price is higher than this at the time of purchase, he will hold to his 3,100 baht figure, but if the border price falls below this, he will as come down to meet it.
a gesture of goodwill
4. Timing a.
b.
C.
Le
The Commander of the SUA is now holding 1 ton of opium available for the first stare in the negotiations. This step is intended to prove that there will be no adulteration similar to the 1972 LMT sale, and to ectablish a minimum of negotiating confilence on both sides.
The second purchase of 5 tons is necessary to attract leaders from the interior of Shan State to the opium ccnference. For many this will mean a 3 month round trip involving 100-200 soldiers. The sale of 5 tons would cover their costs and provide a valuable reasonable profit.
At the 3rd stage the SUA lave guaranteed 50 tons of opium. But if the proposals wer should be accepted in March so they could buy during the harvest, they believe their trading area alone could provide 200 ton. An early decision before the stated deadline would therefore be very advantageous. The longer the delay, the greater the percentage of the 1975 crop that will have been disposed of on the black market.