March 1 (Bloomberg) -- Afghanistan produced three-quarters of the world's opium last year as poppy cultivation neared a record level, the U.S. State Department said.

Regions growing the opium poppy expanded from 28 to 32 last year, Robert Charles, the assistant secretary of state for international narcotics and law enforcement, said in Washington. The crop size last year was an estimated 61,000 hectares (150,600 acres), almost double the area in 2002, Charles said.

``Given the profound destruction brought about by more than 20 years of conflict, the lack of many viable alternative crops to opium, and the limited enforcement capacity of the central government, poppy cultivation this year approached the highest levels ever registered,'' the State Department said in its 2003 report on international narcotics control.

The United Nations is organizing a $25 million five-year project aimed at ending the dependence of Afghan farmers on cultivating the opium poppy, the raw ingredient in heroin. The UN estimates 1.7 million Afghans, out of a population of 28 million, are directly involved in poppy cultivation.

Afghanistan is evolving ``to an environment in which counternarcotics, including eradication, becomes one of the two primary missions in terms of security,'' Charles said.

The Afghan government, led by President Hamid Karzai and supported by countries such as the U.S. and the U.K., has begun taking steps to counter the drug trade, he said.

``You cannot build a castle on sand, and you cannot build a lasting democracy on a heroin economy,'' Charles said. The Afghan government and some local leaders are ``really dedicated to the proposition that this does not work for them over the long haul,'' he said.

Terrorism Funding

Afghanistan last month hosted an international conference on combating drug trafficking, which United Nations officials said is helping to fund terrorism.

``The fight against terrorism will be more effective if drug trafficking is interrupted,'' Antonio Maria Costa, executive director of the UN Office on Drugs and Crime, said at the time.

Afghanistan's Taliban enforced a ban on cultivating the opium poppy from July 2000 until the regime was overthrown. The country's opium production fell to 185 tons in 2001 from a peak of 4,565 tons in 1999, a UN report said at the time.

Karzai's government last week announced plans to destroy opium poppy fields nationwide before elections are held this year, Deutsche Presse-Agentur cited Interior Minister Ali Ahmad Jalali as saying in Kabul.

Afghanistan and Myanmar are responsible for 90 percent of the world's opium gum production, with Afghanistan accounting for almost 80 percent of the output, Charles said.

To contact the reporter on this story: Paul Tighe in Sydney at ptighe@bloomberg.net

Last Updated: March 1, 2004 19:25 EST