NATO is planning a surge of troops and a refocus on Afghan drug lords, some of whom are protected by the Karzai Government. But to avoid tragically counterproductive consequences it is essential that Afghan farmers be offered a new incentive structure to eliminate the need to turn to the Taliban for crop protection.

One of the authors of this article observed as United States ambassador to Turkey how farmers can be enlisted through economic incentives to eschew heroin dealers. Before 1974, 80 per cent of the heroin flooding into the US originated in Turkey, but after 1974 no seizures of opium derived from Turkish poppies have been reported anywhere. The Turkish solution turning poppy into painkillers for export is not available and we therefore need to establish an alternative micro-financing system that will provide a market and a guaranteed income for Afghan farmers.

Simple technology can transform biomass into biofuels (ethanol, from any plant residues, then added to petrol; biodiesel from rapeseed or other plant oils, then blended with traditional diesel). Processing could easily be scaled to family or village dimensions (continuous processing units exist that can be mounted in a small trailer attached to the back of a car).

The US military is a major consumer of biodiesel and should be the buyer of first resort (for use locally and elsewhere). Equally, Afghanistan is dependent on imported fuel for electricity, heating and transport and could move towards energy independence. Most of the trucks in South Asia run on increasingly expensive imported diesel, another potential market. Biodiesel-powered irrigation pumps would enhance farm productivity and cheaper transport would reduce costs.

India, a country anxious about energy supplies, imports more than 40 per cent of its vegetable-oil biofuel requirements and would also be a logical buyer (possibly as a diplomatic quid pro quo for agreeing to exclude Afghanistan from the rigged market that restricts access to the US painkiller market).

Last year Afghan poppies provided an estimated $US500million ($A700million) to farmers and seven times that amount to narco traffickers. Every dollar removed from the bottom of that inverted pyramid deprives our enemies of $7 worth of resources. But farmers who switch from poppy to biomass must be guaranteed an adequate replacement income to prevent a relapse into Taliban-dependency.

The US, the European Union and Canada spent $A24.6billion in 2006 subsidising biofuels, including crops that are part of the food chain. According to the World Bank, biofuels were responsible for 75 per cent of the 140 per cent rise in food prices between 2002 and February 2008. Falling food supplies have pushed 100million people below the poverty line. Afghan biofuels produced from crops with no food value can show others how to take pressure off world food supplies.

Afghanistan has received about $A21billion in aid assistance (some devoted to crop substitution schemes) in the past seven years. We must find a funding and delivery mechanism that will work where other crop substitution attempts have failed. A proportion of future aid funds should be channelled to an Afghan Biomass Marketing Board.

Farmers should be provided with the optimal microclimate-specific non-food seed that will produce the highest-yielding biomass and offered a forward delivery contract plus a one-twelfth monthly advance as a bank deposit. This micro finance initiative would widen the cash nexus and reduce the numbers who are forced to grow poppies because of debts incurred to the Taliban.

Any farmer who declines a biomass contract would be choosing to fall under suspicion as an agent of the Taliban (voluntary or otherwise). If farmers were being coerced to grow poppies, they would have an incentive to provide our troops with information about their harassers.

Locally produced, non-food biodiesel could transform the lives of the world's rural poor, have a positive impact on global warming and reduce acid rain (biodiesel contains no sulphur). Other countries, such as Pakistan or Colombia, might also be encouraged to adopt the process, reducing drug production, creating jobs and promoting more sustainable environmental outcomes.

Biofuels could generate permanent jobs in Afghanistan (an alternative to the traditional seasonal occupation of mercenary fighting) and provide a legal source of income and exports for farmers who are now deemed to be criminals: a collaborative product in the war on both narcodollars and petrodollars that could help arrest that country's descent into narco-state darkness. Marc Grossman is a vice-chairman of the Cohen Group and was US ambassador to Turkey from 1994-97, and under-secretary of state for political affairs from 2001-05. Robert Leeson is a visiting fellow at Stanford University and adjunct professor of economics at Murdoch and Notre Dame Australia universities.