Drug trade

The situation is further complicated by the fact that the farmer who follows this methodology finds himself or herself in a better position financially, compared to the farmer who follows regular farming. In addition to the above situation, the Colombian coffee farms are devoid of the ability to switch from one crop planting to another, or the ability to diversify crops. Following these underpinnings, it is now easy to see how this leaves the farmers in Colombia susceptible to falling coffee prices. Coffee farms are normally made up of small patches of of land, in which one million people work.

On the other hand, the illegal drug trade is controlled by a few who employ a smaller number of people (Livingstone and Pearce, 2004 pp. 232). This means that the workers in the illegal drug farms are paid more due to the fact that these farms have very limited cases or levels of employee turnover. It is also unfortunate that the problem is further compounded by the fact that the farmers in the legitimate crops such as coffee access very little incentives to actualize a competitive and modernized agricultural sector that is very competitive.

The illegal drugs may be indeed cheap, but they still remain easier to plant. The same case applies to maintaining them and transporting them. There has also been the reallocation of the crop land that were being used to grow legitimate crops for the illegal drug land use. It is on this backdrop that land improvement and proper product distribution have not been made, thus making it very hard for the production and the selling of the legit cash crops.

The United Nations Drugs Control (UNDCP) also lists the opportunity costs of the unlawful drug trade as touching on the forfeiting of the legit entrepreneurship, as farmers opt for drug cultivation and production in order to widen their profit, There is also the loosing of human resource investments due to the fact that even children are also used in the production and selling of the illegal drugs. These glaring facts are further confirmed by the fact that the UNDCP in 1994, out of research said that there was a 21.

98% increase of the coca cultivation, while the production of legitimate cash crops and agriculture plummeted by 2% (Aviles, 2006 pp. 121). This indicates clearly the overthrowing of the legitimate crops by the illegal crops. The problem also translates to soil pollution since, attempts to eradicate the production of illegal crops are always carried out through the use of chemicals. These chemicals destroy the humus, making it impossible for the legitimate crops to grow on this land.

Effects of the drug trade through money laundering. The illegitimate drug trade also brings another impact through money laundering. and the effects that come with money laundering. The most adopted form of money laundering is done by the trafficking contraband. This takes place when the drug trafficker procures goods and services in a foreign country through the use of dirty money. The trafficker then smuggles the goods and services into Colombia, after which he will sell the merchandise very cheaply.

This type of undertaking makes money for the trafficker, but unfortunately, it hampers legitimate businesses due to the fact that the trafficker sells the merchandise at a very minimal rate, given the fact that the same had already accrued profit even prior to the sales. In the Colombian case, the driving point to this expedition is the conversion of other currencies (normally the dollar) into the Colombian pesos via the importation of goods and services. Triumphing cases of money laundering are reliant on huge volumes, the product’s quick turnover, and the plummeting of the incentives so as to sell the products at the market price.

The business sectors and the industrial sectors that are mostly affected by smuggling include clothing, footwear and textiles, household appliances, beverages and cigarettes. The main auxiliary to smuggling is the liberalization of the the markets or the imports, a cause that has ushered in many problems to the clothing and textiles sector due to the fact that the drug traffickers flood in cheap imports in order to launder the drug money. Furthermore, trafficked items also overthrow legitimate products which are always labor intensive on the unspecialized economic departments in which local Colombian products should have advantage.