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Opium poppy cultivation and drug trafficking have become significant factors in Afghanistan's fragile political and economic order over the last 25 years. In 2005, Afghanistan remained the source of 87% of the world's illicit opium, in spite of ongoing efforts by the Afghan government, the United States, and their international partners to combat poppy cultivation and drug trafficking. U.N. officials estimate that in-country illicit profits from the 2005 opium poppy crop were equivalent in value to 50% of the country's legitimate GDP, sustaining fears that Afghanistan's economic recovery continues to be underwritten by drug profits. Across Afghanistan, regional militia commanders, criminal organizations, and corrupt government officials have exploited opium production and drug trafficking as reliable sources of revenue and patronage, which has perpetuated the threat these groups pose to the country's fragile internal security and the legitimacy of its embryonic democratic government. The trafficking of Afghan drugs also appears to provide financial and logistical support to a range of extremist groups that continue to operate in and around Afghanistan, including remnants of the Taliban regime and some Al Qaeda operatives. Although coalition forces may be less frequently relying on figures involved with narcotics for intelligence and security support, many observers have warned that drug related corruption among appointed and newly elected Afghan officials may create new political obstacles to further progress. The initial failure of U.S. and international counternarcotics efforts to disrupt the Afghan opium trade or sever its links to warlordism and corruption after the fall of the Taliban led some observers to warn that without redoubled multilateral action, Afghanistan would succumb to a state of lawlessness and reemerge as a sanctuary for terrorists. Following his election in late 2004, Afghan president Hamid Karzai identified counternarcotics as the top priority for his administration and since has stated his belief that "the fight against drugs is the fight for Afghanistan." In 2005, U.S. and Afghan officials implemented a new strategy to provide viable economic alternatives to poppy cultivation and to disrupt corruption and narco-terrorist linkages. According to a U.N. survey, these new initiatives contributed to a 21% decrease in the amount of opium poppy cultivation across Afghanistan in the 2004- 2005 growing season. However, better weather and higher crop yields ensured that overall opium output remained nearly static at 4,100 metric tons. Survey results and official opinions suggest output may rise again in 2006. In addition to describing the structure and development of the Afghan narcotics trade, this report provides current statistical information, profiles the trade's various participants, explores alleged narco-terrorist linkages, and reviews U.S. and international policy responses since late 2001. The report also considers current policy debates regarding the role of the U.S. military in counternarcotics operations, opium poppy eradication, alternative livelihood development, and funding issues for Congress. The report will be updated to reflect major developments. For more information on Afghanistan, see CRS Report RL30588, Afghanistan: Post-War Governance, Security, and U.S. Policy. and CRS Report RS21922, Afghanistan: Presidential and Parliamentary Elections.