WASHINGTON (CNN) -- Poppy production in Afghanistan is at record levels and is threatening the government and security there, the U.S. State Department said in a report on worldwide drug sales and production.
In a photo from last year, villagers tend to opium poppies in southern Afghanistan.
"Although President [Hamid] Karzai has strongly attacked narco-trafficking as the greatest threat to Afghanistan, one-third of the Afghan economy remains opium-based," the International Narcotics Control Strategy Report says.
"The government at all levels must be held accountable to deter and eradicate poppy cultivation, remove and prosecute corrupt officials."
Poppy production soared last year in southern provinces controlled by insurgents, Assistant Secretary of State David Johnson told reporters.
"There is incontrovertible evidence that the Taliban use drug trafficking proceeds to fund insurgent activities," he said.
He said the United Nations is predicting that opium production in Afghanistan will fall slightly this year, after recent years of double-digit growth.
The two-volume report contains more than 1,100 pages with details of drug sales and production.
Twenty nations, including some major U.S. allies, were designated as major drug-producing or drug-transit countries. Burma (also known as Myanmar) and Venezuela were singled out as having "failed demonstrably" to live up to their obligations under anti-drug agreements.
Also on the list are Afghanistan, the Bahamas, Bolivia, Brazil, Colombia, Dominican Republic, Ecuador, Guatemala, Haiti, India, Jamaica, Laos, Mexico, Nigeria, Pakistan, Panama, Paraguay and Peru.
Canada was criticized in the report for an increasingly sophisticated marijuana industry. "We remain concerned that the production of high-potency indoor grown marijuana for export to the United States continues to thrive in Canada in part because growers do not consistently face strict legal punishment," the report said.
Journalists were briefed on the report by Johnson, assistant secretary of state for international narcotics and law enforcement affairs. E-mail to a friend 
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