(Updates references to NSC meeting in paragraphs 12 and 14) By David Morgan WASHINGTON, Nov 8 (Reuters) - A heated debate within the Bush administration over Afghanistan's surging opium trade could lead the United States to shelve a contentious plan to spray poppy crops with herbicide from the air, officials say. Aerial spraying, used by the United States to fight cocaine production in Latin America, is championed by counternarcotics officials in the White House and State Department as the most effective way to destroy poppies in Taliban-controlled areas and cut a key source of funding for the Islamist militants. But it has run into broad resistance from Afghan officials, the U.S. Congress and Defense Department, and European allies who fear it could backfire on efforts to win over the Afghan people, according to officials and experts involved in the discussions. Critics say spraying would give the Taliban a powerful propaganda tool among villagers devastated by a Soviet campaign that destroyed food crops with aerial defoliant. "Aerial spraying would likely have a serious detrimental effect on the counterinsurgency front," said Seth Jones of the RAND Corp, a global policy think tank based in California. "It's hard to overstate how much disinformation there is among Afghan farmers. It would be fairly easy for insurgents to say: 'The U.S. is spraying chemicals to kill your crops.' And in fact, they've already started saying this." Record poppy harvests have given Afghanistan a $3 billion opium industry whose corrupting influence poses a serious threat to government authority and saddles other countries with the criminal and health problems of the heroin trade. The Afghan crop, which produces 93 percent of the world's opiates, is a major source of income for Taliban insurgents in the south who have deepened ties with farmers and traffickers, according to U.S. defense and counterterrorism officials. "It's fueling the insurgency. Removing that revenue would diminish the threat considerably," said Beth Cole of the U.S. Institute of Peace. CHEMICALS OR TRACTORS? U.S.-backed herbicide spraying proved controversial in Latin America, where its use on coca fields is blamed for anti-American sentiment that helped bring leftist Evo Morales to power in Bolivia. The U.S. House of Representatives endorsed a funding ban on Afghan herbicide spraying in its 2008 appropriations bill for foreign operations, while the Senate version declared aerial spraying as less effective than manual eradication. Final legislation is expected later this year. The U.S. National Security Council entered the debate on Thursday at a meeting that considered whether aerial spraying should be part of U.S. policy on Afghanistan. "The question is whether aerial spraying would be an option. This would be a decision by the administration as a whole as to what avenue to pursue here," said one U.S. official who spoke on condition of anonymity. Thursday's NSC discussion illustrated the divided positions of the State Department and Pentagon, according to a knowledgeable source. There was no immediate word on whether the meeting reached a resolution. Formal NSC backing could escalate U.S. efforts to persuade the Afghan government to accept a limited aerial spraying program, experts said. NSC officials declined to comment, while a State Department spokeswoman said only that the United States will implement whatever strategy the Afghan government chooses to adopt. In 2007, Afghan poppy cultivation jumped 17 percent to 477,000 acres (193,000 hectares) -- more than all of the land set aside for coca in Colombia, Peru and Bolivia combined, according to the U.N. Office on Drugs and Crime. (Additional reporting by Jonathan Hemming in Kabul and Andrew Gray and Matt Spetalnick in Washington; Editing by Kristin Roberts and Mohammad Zargham)
