Contrary to official claims, northern Shan State which has been under a stringent opium ban since the 2001-2002 season, has had a bumper crop in the latest season ending last month, according to sources coming to the border.

Most of the opium production, they say, was in areas under the control of the Burma Army and pro-Burma Army militia.

Hundreds of poppy farmers from the United Wa State Army controlled territory along the Chinese border reportedly moved into the Mawfa area under the Burma Army command, southwest of Panghsang, following the zero-production declaration by the Wa leadership in June 2005.

West of the Salween, farmers continued cultivation under firm supervision of pro-junta militia forces. "We had to either acquire permits from the local authorities or work in joint ventures with them," said a 60 year ethnic Chinese farmer with two adult children from Mongyaw, Lashio Township. He recently returned from "a joint venture" with the Mongha-Mongheng militia in the neighbouring Tangyan Township. "We were also required to grow it in deep forests and mountain areas."

One of his Shan neighbours meanwhile revealed he had been working as a tenant to a local official from the Kachin Defence Army (KDA), a ceasefire group favoured by the Burma Army. The group is active in Namkham, Muse, Kutkhai, Hsenwi and Lashio Townships.

The product is purchased by agents authorized by the local militia groups. "Due to extra costs and security measures, prices have certainly gone up," said a businessman from Lashio.

"Last year, it was Kyat 700,000 ($560) per viss (1.6 kg). But now it's going up to as much as Kyat 1 million ($ 800) in some areas."

He refuted official claims that opium in circulation is essentially from last year's production. "That is simply not true," he said. "Everyone who is a little opium savvy can see that it's from the latest harvest."

Sources also agree that apart from the rising prices, the traders are facing very little problems running their business. "The results of course are more abuses, addictions and social problems among the population, especially among the youth, the future of our country", complained a local resident of Muse on the Sino-Burma border.

In eastern Shan State , opium production is said to be as much as in the last season, despite "some show case destructions" in Mongton. However, in southern Shan State, the output appeared to have dropped in some places. "Nothing to do with official crackdown, mind you," said a Shan businessman who has a home in Thailand. "It's the drought. The rain didn't fall when the fields needed it."

As a result, opium prices have climbed significantly. In Kunhing, southern Shan State, it is Kyat 800,000 ($650) per viss, while in Mongton, eastern Shan State, it has already increased from 20,000 Baht ($570) per viss last month to 25,000 Baht ($714).