Damir Sagolj / Reuters A policeman uses a grass cutter to destroy a poppy field above the village of Tar-Pu, in the mountains of Shan state, Burma, on Jan. 27, 2012

Opium production in Southeast Asia has hit record levels, thanks in large part to increased poppy cultivation in Burma’s impoverished, war-torn north.

According to a report published by the U.N. Office on Drugs and Crime (UNODC) on Wednesday, the production of opium in Burma (known officially as Myanmar) increased for the seventh consecutive year, this time by approximately 26%. Some 870 tons of the narcotic was produced — the highest figure recorded by the U.N. agency and Burmese government since they started monitoring output in 2002.

Burma is second only to Afghanistan in terms of global opium production, and experts believe higher prices for narcotics in the region — in tandem with a drop in the price of cash crops — may push more farmers into the trade.

“These numbers are probably going to continue to increase year on year as we go through next year, and the year after, unless there’s concerted effort from the international community to invest in development solutions in these poppy-growing areas,” the UNODC’s Jason Eligh tells TIME.

In the past two years, Burma has succeed in transitioning from global pariah to investment hot spot sitting at the crossroads of Asia, but decades of strife and incompetent leadership from military strongmen has placed the country far behind its neighbors. The country’s poppy-growing region is located primarily in Shan state in the northeast — an area that has been wracked by the world’s longest-running civil war and devastating poverty. After years of all too many military offensives, but very little investment in infrastructure by the central government, farmers have little access to markets, education and health care.

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The reformist quasi-civilian government at the country’s helm has brought tentative peace by signing cease-fires with a majority of Burma’s ethnic rebel armies, and it appears that farmers and traffickers are cashing in, to some extent, on the new peace. But the main factors leading to an increase in poppy cultivation are poverty and an increase in regional demand for narcotics, primarily heroin and methamphetamines, both of which are produced inside Burma.

In May, officials pushed back a deadline set in 1999 of eliminating drug production within the country’s borders by 2014. The concession was part of what Eligh claims is a more realistic approach from the government as it begins to both recognize the systemic issues behind soaring opium and narcotics production, and acknowledge the failure of eradication campaigns that make for good PR but strip income from the country’s poorest. In March, the government sent its first high-level delegation to the U.N. Commission on Narcotic Drugs in Vienna, where officials admitted that eradication alone was not a solution for Burma.

A five-year plan for economic development in Burma’s drug-producing regions has now been drawn up. However, as Eligh says, “What they don’t have is enough money or technical expertise.”

Tom Kramer from Transnational Institute (TNI) says blanket development projects may even be pushing more farmers into the trade, because industrial projects lead to landgrabs, which in turn push farmers off their holdings and leave them no choice but to turn to poppy growing for subsistence. Much of the impetus for big developments comes from China, Burma’s neighbor and biggest investor.

“There’s an enormous amount of pressure from China on the Myanmar government to do all sorts of things, including eradication and law enforcement and also on the development side,” Kramer tells TIME. “From TNI’s perspective, the development model of China is not development. It’s business as usual.”

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