The tide may have turned in the war against Afghanistan’s £2 billion drugs industry, the United Nations said today as it revealed a decline in opium cultivation and production for the first time since 2005.

An annual report from the UN Office on Drugs and Crime (UNODC) attributed the downturn less to security improvements than to factors including drought and a 198 per cent increase in wheat prices, which had encouraged some farmers to stop growing poppies.

Afghanistan produces 90 per cent of the world’s opium and the report offered a rare glimmer of hope for the country amid growing public anger about civilian casualties and the slow pace of development since US-led forces toppled the Taleban in 2001.

The report cautioned, however, that output was still growing in the south, fuelling a Taleban insurgency, and that progress elsewhere could easily be reversed without improvements in governance and infrastructure.

“The opium floodwaters in Afghanistan have started to recede,” Antonio Maria Costa, the executive director of UNODC, said in the report.

“The time to act is now. Unlike coca, opium is a seasonal plant. In a few weeks farmers will decide whether or not to plant opium for the 2008-09 harvest.”

Last year the UNODC estimated Afghanistan’s opium output at a record 8,200 tonnes and exports of the drug at $4 billion — or 53 per cent of GDP. It also said that the Taleban earned about $100 million from the trade.

The report said the country was expected to produce 7,700 tonnes of opium — a decline of 6 per cent — but did not give a figure for exports or profits reaped by the Taleban. The area under cultivation had dropped by a larger margin of 19 per cent, to 157,000 hectares (388,000 acres), because of higher yields per hectare.

Another positive sign was that the number of Afghanistan’s 34 provinces that were now poppy-free had increased from 13 to 18, it said.

The report attributed these successes partly to drought and to strong leadership from governors, tribal elders and religious leaders.

It also pointed to a 10 per cent decline in the price farmers receive for opium, compared with a 198 per cent increase in their income per hectare of wheat. “Farmers now recognise that the risk/reward balance is tilting against growing opium,” the report said. However, it noted that opium output had increased by 20 per cent in Afghanistan’s southern provinces, which accounted for 90 per cent of the country’s total production.

Principal among them was Helmand, where output was up by 23 per cent despite the presence of British troops. “If Helmand were a country, it would once again be the world’s biggest producer of illicit drugs,” the report said. “This geographical overlap between regions of opium and zones of insurgency shows the inextricable link between drugs and conflict.”

Christina Oguz, the UNODC’s Afghanistan representative, added that Afghan drug traders were making more money this year because they were refining more raw opium into crystal heroin inside Afghanistan.

“There is clearly a development towards climbing up the value ladder,” she told The Times.

Britain, which spent £290 million on counter-narcotics in Afghanistan between 2005 and 2008, welcomed the report but said there was no room for complacency. “This is the right place to be in a campaign that could take 20 years,” Sir Sherard Cowper-Coles, the British Ambassador to Afghanistan, told The Times. “The gains are fragile but they are gains.”

The UNODC urged the Government to take immediate steps to consolidate last year’s progress, including rewarding governors of opium-free provinces and arresting key figures in the narcotics trade.

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