* Land dedicated to growing poppy unchanged
* Swathes of crop decimated by disease in south
* Helmand province shows decline in cultivation
By Emma Graham-Harrison
KABUL, Sept 30 (Reuters) - Disease cut the amount of opium produced in Afghanistan in 2010 by almost half from a year earlier, but there was no fall in the number of poppy fields under cultivation, the United Nations said on Thursday.
A huge leap in opium prices also meant farmers earned far more for their crops, despite the smaller harvest, than they had in 2009, according to an annual report on drug production.
The survey findings suggested little reduction in incentives to grow poppy, a blow to officials trying to curb Afghan drug production, which they say helps fuel a raging insurgency by funding fighters and encouraging rampant corruption.
It also raises the spectre of a larger crop next year.
"The sharp decline (in production) was due to the spread of a disease that affected opium fields in the major growing provinces." the Afghanistan Opium Survey 2010 said.
"It is worrying that the current high sale price of opium in combination with a lower wheat price may encourage farmers to go back to opium cultivation," the report added.
Afghanistan has long been the producer of about 90 percent of the world&${esc.hash}39;s opium, a thick paste harvested from poppies that is processed to make heroin.
Last year wheat prices rose and poppy prices fell, giving farmers reason to reconsider their planting plans for fields harvested in 2009. This year the reverse was true, with farm-gate opium prices more than doubling from ${esc.dollar}64 per kilogramme of dry opium at harvest time in 2009 to ${esc.dollar}169 in 2010.
The number of households involved in farming poppy also rose slightly, while fields hit by eradication efforts fell by half.
Higher production was warded off largely by the unidentified disease that decimated crops in areas that grows most opium.
Plants in the west and south also produced smaller, and fewer opium capsules. So potential output was estimated at around 3,900 tonnes, compared with 6,900 tonnes last year, despite a steady 123,000 hectares under cultivation.
This was the lowest output since 2003, the report said.
Even so, opium production provided 5 percent of gross domestic product in 2010, up from 4 percent in 2009.
Foreign enforcement agencies estimate insurgents earn as much as ${esc.dollar}100 million from the opium trade annually, which is funnelled into fighting the nearly 150,000 foreign troops in Afghanistan.
This has been the bloodiest year since the Taliban were ousted in 2001, and rising violence is a deep concern in Washington, where President Barack Obama is due to conduct a strategy review of the increasingly unpopular war in December.
SUCCESS IN HELMAND?
There were some bright spots. The 20 provinces that were poppy-free in 2009, largely spread across the centre, north and east, remained poppy-free this year.
Most poppy cultivation is concentrated in southern and western Afghanistan, where the insurgency is at its strongest, making it hard to enforce anti-narcotics laws or even support farmers who are willing to grow other crops.
"Ninety eight percent of the total cultivation took place in nine provinces in the Southern and Western regions, including the most insecure provinces in the country," the report said.
But Helmand province, which grows more than half of Afghanistan&${esc.hash}39;s opium, recorded a slight reduction in the acreage devoted to growing poppy despite the strength of the insurgency. Governor Gulab Mangal&${esc.hash}39;s Food Zone programme, which provides farmers with aid to grow other crops while stepping up enforcement efforts, was given much of the credit.
"We congratulate the Governor of Helmand on this result which we believe reflects his progressive and comprehensive approach to countering narcotics," said Lindy Cameron, head of the UK-led Provincial Reconstruction Team in Helmand.
"Reducing poppy cultivation denies the insurgency an important source of funding." (Editing by Alex Richardson)
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