KABUL, Afghanistan - Afghan opium poppy cultivation has exploded to a new record high this year, with the multibillion dollar trade fueled by Taliban militants and corrupt officials in President Hamid Karzai's government, a U.N. report said.

The country produces nearly all the world's opium, and Taliban insurgents are profiting. Militants tax farmers and protect convoys smuggling opium into neighboring countries, said Antonio Maria Costa, executive director of the United Nations Office of Drugs and Crime.

"It is clearly documented now that insurgents actively promote or allow and then take advantage of the cultivation, refining and the trafficking of opium," Costa said.

The UNODC report casts doubt on the effectiveness of efforts by the United States and other Western countries to fight the cultivation.

It also adds pressure on Karzai to consider new ways of curbing an expansion that threatens to turn Afghanistan into a "narco-state," where some warn that groups such as al-Qaida could once again find sanctuary.

Karzai rejected U.S. offers to spray this year's crop after Afghans said herbicide could affect livestock, legal crops and water supplies.

Costa said the U.N. supports the Afghan government's position, but added that crop eradication was a key element of any strategy to combat the trade.

Afghanistan has doubled its opium production over the past two years and now accounts for 93 percent of the world's output, according to the annual UNODC survey. The southern province of Helmand alone has become the world's biggest source of illicit drugs.

The raw material for heroin grows on 477,000 acres of Afghan land, a 17 percent increase from last year's record 408,000 acres, the U.N. report said. The amount of Afghan land used for opium has surpassed the total used for coca cultivation in Colombia, Peru and Bolivia combined.

Costa said Afghanistan was on track to produce 9,000 tons of opium this year, up 34 percent from 2006.

"The situation is dramatic and getting worse by the day," Costa said in an interview in Kabul. said. "No other country in the world has ever had such a large amount of farmland used for illegal activity, beside China 100 years ago," when it was a major opium producer.

The farm value of Afghanistan's annual crop is about $1 billion, and street value of the heroin produced from it is many times higher, the U.N. report said.

While 13 northern provinces are now poppy free — up from six last year — production in the insurgency-wracked south has surged to unprecedented levels.

Helmand, with 253,944 acres under cultivation, now accounts for more than half of the national total.

"The government has lost control of this territory because of the presence of the insurgents," Costa said.

Some 3.3 million of Afghanistan's 25 million people are involved in opium production, according to the report.

Rather than trying to eradicate Afghanistan's poppies, why not buy them and make morphine