NETHERLANDS: Measuring Illegal Drugs

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NETHERLANDS: Measuring Illegal Drugs

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Bibliographic details

• Volume: 90

Introduction

• Separate estimates are made for production of drugs (cannabis and XTC/amphetamines) and trafficking of drugs for which no production in the Netherlands takes place (heroin and cocaine).
• Values for 2015:
  • Value of exports of cannabis: 3350 million euros.
  • Value of exports of XTC/amphetamine: 175 million euros.
  • Margin for the international trade in heroin and cocaine: 505 million euros.

Scope, Methodology, Compilation Practices, and Data Sources

• Estimation approach:
  • Combination of demand- and supply-side based approaches.
  • Domestic consumption estimated by combining number of users, average quantity used, and street price.
  • Distinctions by drug type: heroin/cocaine, cannabis, XTC/amphetamine.
  • For heroin/cocaine, further distinction by user type: heavy addicts and recreational users.
• Price and seizure data sources:
  • Price information for hard drugs (heroin/cocaine) from World Drug Report (UNODC).
  • Price information for cannabis and XTC from the National Drugs Monitor by the Trimbos Institute.
  • Seizure and national threat information from KLPD reports (e.g., KLPD, 2012 Nationaal dreigingsbeeld 2012).
  • Confiscation and seizure data published annually by the UN (three-year moving average applied to dampen fluctuations).
• Treatment of confiscated production capacity and sales:
  • Confiscated capacity estimated from number of confiscated plants, crop per plant, and number of crops.
  • Because confiscation occurs during the year, half of the confiscated capacity is assumed to have been sold prior to confiscation.
  • Unknown stage-at-seizure of plants: assumed that half of confiscated plants concerned market-ready cannabis.

Cannabis — estimates and cost structure

• Volume and production assumptions:
  • Total volume of domestic use estimated at 58 to 143 tons per year (KLPD, 2012).
  • National accounts consumption estimate for 2015 assumes a volume of 100 tons.
  • Of consumed volume, 90 per cent is domestically produced ‘nederwiet’ (KLPD, 2012).
  • Operators of the electricity network estimate 25.000 active plantations annually.
  • Annually 5000 plantations are dismantled giving a seizure rate of 20 per cent.
  • Seizure rate for imports assumed to be 20 per cent.
• Crop and yield parameters:
  • Average revenue per crop per plant: 28,2 grams dry cannabis.
  • A plant allows 4 crops per year.
• Price and seizure smoothing:
  • Price set equal to the most used variety (nederwiet) published annually in the National Drugs Monitor (Trimbos).
  • Three-year moving average used for seizure quantities.
• Cost structure and allocations:
  • Share of costs of production (both intermediate consumption and fixed capital formation) mainly based on expert estimates.
  • Distinction between production of cannabis and retail trade via coffee shops.
  • Costs of trade via coffee shops set at 50 per cent of the trade margin.
  • Costs of trade via other channels set at 30 per cent.
  • For re-exports a rate of 10 per cent is applied.
  • Costs for production estimated to be 40 per cent of the cost price.
  • Cost price of production set at half the street price.
• Aggregate cost estimates:
  • Total costs for cannabis estimated at 1668 million euros, of which:
  • 1137 million euros allocated to intermediate consumption.
  • 531 million euros allocated to GFCF.

Heroin and cocaine — estimates and transformations

• Data sources and user segmentation:
  • National Drug Monitor (Trimbos Institute) provides number of users distinguished between heavy addicts and recreational users.
  • Price information from World Drug Report (UNODC).
  • Confiscated amounts from World Drug Report (UN); three-year moving average applied.
• Seizure rate and derivation:
  • KLPD report does not provide seizure rates for heroin/cocaine; rate derived from a web article from Dutch broadcasting (NOS) based on criminal information and is estimated at 20 per cent.
• User numbers and consumption intensities:
  • Number of heavy addicts: 14.386.
  • Number of recreational users: 49.803.
  • Heavy addicts need 0.5 grams of heroin per day.
  • Recreational users use 1 gram per week.
  • Total estimated use: 5.22 million grams.
• Import, export, and concentration adjustments:
  • Volume of imports estimated using confiscated drugs and a seizure rate of 20 per cent.
  • Exports estimated as a residual of imports and consumption of households.
  • Adjustment for concentration: consumed heroin/cocaine is less concentrated than imported drugs; factor applied: 0.59 (to reduce imported cubic volumes).
  • Assumption: half of exported heroin/cocaine concerns (quasi) transit trade and is not part of the Dutch economy.
• Value and value added:
  • Intermediate consumption estimated as 10 per cent of trade margins, separately for domestic consumption and exports, and amounts to 44 million euros.
  • Resulting value added: 460 million euros.

XTC / amphetamines — production, users, and costs

• Production and seizure assumptions:
  • Production estimated using confiscated XTC and a seizure rate of 20 per cent.
  • Netherlands considered major producer of XTC; imports expected to be zero.
• User prevalence and overlap:
  • According to National Drugs Monitor 2015:
  • XTC users: 0,7 per cent of the population between 15 and 65 years of age.
  • Amphetamine users: 0.5 per cent of this population.
  • Assumed overlap between users of XTC and amphetamines: 60 per cent.
  • Average number of pills during a night: 1.3.
  • Street price published annually in the National Drug Monitor.
• Production costs and aggregates:
  • Production cost of one XTC/amphetamine pill estimated at 0.15 euro (based on information from a web article of the NOS).
  • Intermediate consumption estimated at 15 million euro (100.1 * 0.15).
  • Resulting value added for XTC/amphetamines: 160 million euros.

Linkages Across Statistical Domains

• Compilation and reconciliation:
  • Estimates compiled by National Accounts statisticians and shared with BoP.
  • No differences between the imports/exports according to NA and BoP, including illegal activities.

Current Challenges and Conclusions

• Main challenge: collection of data because illegal activities cannot be directly observed by statisticians.
• Some assumptions are based on older reports; preferable to update them every year.
• For detailed calculations reference is made to the GNI inventory (for the revision year 2015) starting at page 343 onward.

References

• Informal Economy Reports