deadly business. Furthermore, the areas inside Burma and Thailand where most of the poppies are grown, refined and stockpiled are not in the control of the central governments of Burma and Thailand. Instead, these areas are controlled by the drug traffickers.

The Thai and Burmese government efforts to subdue the traffickers have not been successful in curtailing the production or distribution of opium to any significant extent. What the pressure has accomplished is interruption of the regular refining and the fear of interdiction in the trafficking patterns. There no longer is a safe route to travel. We must repeat, however, that the same amount of opium still reaches the worldwide illicit market. It is clear to us that solutions to the problems created by Golden Triangle poppy cultivation must be sought at the international level and, at present, the organizational infrastructure and cooperation are inadequate.

United States and international law enforcement officials have been forced to focus their efforts on interdicting the flow of narcotics once the poppy is harvested and is in the pipeline. They have no control over the growing fields or the trafficking organizations who collect the opium gum from the farmers. Law enforcement agents are aware that they can only intercept 5 or 10 percent of the narcotics once they leave the field.

This leads us to believe that it would be far more in our interest to either eliminate poppy cultivation or institute control over the supply in its early stages after harvesting.

In 1973, while Congressman Wolff was in Southeast Asia, he received a proposal from the major trafficker in the area; for the United States or an international consortium to purchase a majority of the illicit Golden Triangle opium crop at a price approximating the illicit Thai-Burma border price. This proposal would have enabled the purchaser to divert a major portion of the illicit opium from the illicit market into licit channels, thus creating control over the opium supply at its early trafficking stages. Mr. Wolff passed the proposal along to the State Department where a decision was made to reject the offer, as it related to U.S. participation.

We feel that the State Department peremptorily ruled out the Shan offer without giving it adequate consideration.

After the Shan proposal was brought to the public's attention, the State Department reconsidered the proposal more seriously in light of the destructive effect Southeast Asian opium was having on our youth. They investigated the offer further, yet still concluded that the United States was not interested. We feel their evaluation was biased by their desire to substantiate a predetermined conclusion. The central reason the offer was rejected, according to officers at the State Department, was the lack of confidence that this trafficking consortium could produce the quantity of opium promised. Furthermore, it was said that any dealing between the United States and the narcotics traffickers, who oppose the central government of Burma, would jeopardize relations between our government and the Burmese government.

The traffickers and their several-thousand-man armies, a representative of whom approached Representative Wolff with the above proposal, are involved in opposition to domination by the Burmese Government and seek the autonomy that was promised t. em in the

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Burmese Constitution which was in force until it was suspended by the Ne Win government at the time of the military takeover (see appendix for constitution).

Today, the Shans, Kachins, Karens and other hill peoples use opium as a cash crop and use the money secured from illicit narcotics sales to the traffickers to purchase their necessities. Opium, as the only cash crop in the area, feeds not only the hill peoples literally, but also feeds the political motivations of the traffickers.

When we were in Southeast Asia on this recent trip, Mr. Wolff was handed an unsigned proposal by U.S. Embassy officials in Thailand. The proposal, Operation Tara, was "presented" to the Embassy, it was said, by a Latin American middleman who claimed to speak for the Shan peoples and the associated traffickers who operate_in_the Golden Triangle. The proposal included a deal to exchange hundreds of tons of opium for arms and ammunition. The deal was purely mercenary, and for arms and ammunition. It contained no discussion of a permanent termination of opium growing in the region.

Operation Tara has been disavowed as fraudulent by the representatives of the Shans with whom we met. The Tara proposal they said was clearly designed by someone to undermine or neutralize the integrity of any genuine proposal which might be delivered to Mr. Wolff concerning the purchase of a majority of the illicit Golden Triangle opium crop.

After the delegation returned to the United States, Congressman Wolff received a signed original of a proposal from representatives of the Shan State Army, and the Shan United Army. The full text and accompanying note appear at the end of this section. These groups are also able to represent the views of the Kachin and Karen peoples, and as they control the territory through which most KMT and Triangle narcotics pass. They are in control of the merchants who currently are maintaining large opium stockpiles in the hill country.1 This trafficking consortium is able to control 80-90 percent of all opium which leaves the highland region for consumption in the rest of Southeast Asia and for worldwide distribution.

The Shans have offered in their proposal to provide the United States or an international body with their entire illicit opium crop at a price below the current illicit Thai-Burmese border price, in return for funds and expertise to help them modify their agricultural and economic system which is now based on opium production. The Shans are also interested in gaining the autonomy which they were promised in the 1947 Burmese Constitution which allowed them to secede after 10 years. In this we take no position.

According to the recent proposal the Shan signatories to the proposal agree to terminate all opium production after an agreed upon transition period during which a regional agro-economic development program would be implemented.

During the transition period, the signatories will (1) sell their crop to any international or recognized governmental body, (2) gain the cooperation of any traffickers operating in the region, (3) permit the

1 One should realize that opium gum can be stored for years without losing potency:

inspection of the Shan States, and (4) help all outside parties to perform the agricultural, ecological, and sociological research which must be done to support the design of a workable regional development plan. The proposal then outlines a step by step approach for the purchase of the opium crop. In return, in addition to the necessary funds and expertise, the Shans ask that the participating international body not interfere with their efforts to achieve autonomy.

We want to make it absolutely clear that Congressman Murphy, Congressman Burke, and Congressman Wolff are not taking up the political cudgel for any of the trafficking groups. The only interest they were trying to advance by meeting with the Shans and reviewing the proposal is that of the youth of this country. We are not endorsing any of the rebels' claims but are interested in establishing a line of communication with these people to attempt to find a lasting solution to this problem. We feel that the United States in cooperation with Thai, Burmese, and U.N. authorities can be very constructive in facilitating communication among all of the involved groups and governments, and hopefully, we can benefit all those countries which are affected by the evils associated with narcotics abuse. We do not feel the United States should become the negotiator in this complex and delicate situation. We can, however, be helpful in communicating the interest of the traffickers and the people from whom they buy the opium to authorities who are in a position to set in motion the process of ending opium traffic. Our interest in the Shan proposal stems solely from our concern over what we feel is clearly in the national interest of the United States-the protection of our young people from the tragedy of drug abuse.

We have an opportunity, which may not be repeated, to take a constructive step toward reducing the illicit supply of opium. We have been forced up to this time to deal with opium trafficking as a strictly conventional law enforcement problem, and our success has been limited. Opium is far more to the Shan people than an illicit narcotic. Opium gum is one of the world's only consummable currencies and is a foundation of the entire Golden Triangle economy. For this reason, the only constructive way to modify cultivation is by providing the farmers with an alternate source of income, commonly referred to as income substitution. This is the reason for the infusion of aid and expertise discussed in the proposal. Law enforcement efforts will never terminate the opium trade even with total international cooperation because it is not simply a law enforcement problem.

We have been offered a unique opportunity to deal not only with the traffickers who control the flow of a majority of the Golden Triangle opium, but also with the political groups who represent the farmers and thus control opium production. This proposal would enable us to treat the problem in an overall economic and sociological context, and not merely as a law enforcement problem.

We feel that the Shan proposal can work to the advantage of all participants. This belief was reaffirmed by a visit we made to one pilot crop substitution project which is being administered by the U.N. in a combined effort with the Thai Government in Chaing Mai.

We reached this remote development after a rough ride in four-wheel drive vehicles, one of which went off the road and almost fell some 2,500 feet. We were received in a very cordial fashion by the highly professional director, Mr. Dick Mann, who informed us that this project was only an experimental one, specifically designed and suited for the particular location. This was an extremely important point because, while the Chaing Mai project was a successful one, it proved that crop substitution could be implemented effectively only if it was tailored to each individual location. This reaffirmed the Shans' statement that regional agricultural reorganization can be successfully instituted if the proper research, planning and attention to local conditions is made. Widespread development would have to include the building of roads and the planning of planting and marketing which has never before been done in the Golden Triangle region. The Shan proposal gives us the opportunity to research this area which has previously been inaccessible for political and geographic

reasons.

Let us turn now to a more detailed discussion of the Shan proposal. At the present time, a sizable portion of the heroin consumed in the United States comes from Southeast Asia and the proportion will probably increase if our efforts in Mexico are successful. We spend billions of dollars each year to protect our citizens from drug-related crime. Billions of dollars of merchandise is stolen each year to support heroin habits. Billions of dollars are invested annually in drug prevention, treatment and rehabilitation programs. Many innocent people are physically assaulted and some even killed in connection with drug-related crimes. Hundreds of thousands of otherwise productive lives are lost to the destructive and often endless cycle of heroin addiction. Add to this the fact that the United States was willing to spend $37.5 million to end the production in Turkey, a producer of relatively minor proportion, and the fact that the United States was willing to provide $1 million for a preemptive buy of 26 tons of opium from CIF traffickers under the guise of a resettlement plan, and the desirability of the Shan proposal by which we could eliminate a major source of illicit opium, increases significantly.

Some critics of preemptive buying from the Shans have observed that the United States will be locked into a purchase arrangement, and the cost will increase each year. The reasoning is that the hill people who plant poppies will increase poppy production once they know the United States will purchase any opium they can deliver. This logic is questionable for two major reasons. First of all, the illicit narcotics middlemen will presently buy any and all opium which the farmers offer for sale. In essence, there already is a guaranteed market for their opium. In addition, the cultural mores and the physical demands involved in poppy cultivation are the real checks on an increase in poppy production. The poppy is a very fragile plant, and there are many natural events which can wipe out an entire harvest. Rain at the wrong time or a prolonged drought can kill the whole crop. Even without major disasters, the return from opium varies widely from year to year. For these reasons, poppies are almost always grown as a supplementary crop to others which have a more predictable return. The second point is that the United States will not be locked into an annual buying arrangement because the Shan proposal would

ultimately end widespread opium cultivation and trafficking in the region. The Shans who drew up the proposal are pledged to a program to phase out opium production for export as rapidly as an alternate source of income for the farmers can be implemented. This substitution process will require several years, but we feel confident that, if the Shan proposal were adopted and the production cutbacks established, there would be a major reduction of the annual supply of opium destined for export.

In simple terms, as it is now, the farmers can sell all of the opium they grow, the traffickers are able to sell all they can get hold of and the result is substantial quantities of heroin are available worldwide. The traffickers today, without any deals, use the funds from the sale of their opium to purchase the weapons or fill any other of their needs. If the United States buys the opium the rebels will still purchase their weapons but the drug-affected countries will no longer be hurt. If the United States does not buy the crop, it will end up in the illicit pipeline and the results are depressingly predictable. Our central concern is not the political question nor the licit opium shortage, but the protection of the youth of our country who are vulnerable to the narcotics which. will continue to flow into this country as long as we focus on conventional law enforcement techniques.

Our meetings in Southeast Asia have made it clear that the supply aspect of opium production must be the focus of our narcotics efforts. This may mean dealing with opium production as a social and economic aspect of Shan life and not just as an illegal action to be dealt with in conventional law enforcement terms. At present, interception and disruption efforts are only skimming the surface of the narcotics trafficking operation. The Shan proposal presents the possibility of relieving what might be a licit opium shortage in the United States and more importantly, disrupting the illicit flow. We have now presented the proposal to the State Department and to DEA and we hope they will give it the serious consideration it merits. [The Shan proposal and the notes which relate to it follow:]

As representatives of the Shan peoples, the signatories to these proposals are concerned by the misery caused by narcotic addiction throughout the world and increasingly inside Shan State. However, as the opium trade thrives on anarchy, and as many Shan peoples depend on opium for their livelihood, its cultivation will never cease until Shan State has a democratic and representative government, supported by a majority of the Shan peoples, capable of carrying out a long term agro-economic programme to replace opium with equally viable crops. The signatories to these proposals guarantee that as soon as a democratic Shan government is elected, a treaty will be negotiated whereby opium is abolished after an agreed transition period in return for international aid and expertise.