By YOCHI J. DREAZEN

QALAI BOST VILLAGE, Afghanistan -- The Obama administration is overhauling its strategy for eliminating Afghanistan's flourishing drug trade, a key source of funds for the Taliban. Its plan hinges on persuading farmers like Mohammed Walid to grow something other than poppies.

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Associated Press

A Marine in a dried-up poppy field during a mission in Dahaneh, Helmand province, on Thursday. The U.S. has been pushing farmers to switch to other crops.

Mr. Walid's tidy fields here in southern Afghanistan once were full of poppy bulbs, the core ingredient in opium. He replaced the poppy with wheat and corn after receiving free seed from a U.S. government program, starting about two years ago. Today, he grows enough of both crops to feed his family and sell the remainder at a nearby bazaar.

"I tell my friends that I've gone into a different business," he says, looking out at his farm. "It's the same fields, but everything else has changed."

Obama administration officials say the U.S. will largely leave the eradication business and instead focus on giving Afghan farmers other ways of earning a living.

The new $300 million effort will give micro-grants to Afghan food-processing and food-storage businesses, fund the construction of new roads and irrigation channels, and sell Afghan farmers fruit seed and livestock at a heavy discount. The U.S. is spending six times as much on the push this year as the $50 million it spent in 2008.

"We're trying to give the farmers alternatives so they can move away from the poppy culture without suffering massive unemployment and poverty," says Rory Donohoe, the U.S. Agency for International Development official leading the drive. "The idea is to make it easier for farmers to make the right choice."

Still, building a viable alternative to Afghanistan's opium economy will be challenging. Corn and wheat can be less profitable than opium. Taliban fighters, who are closely allied with the traffickers, have threatened farmers who drop poppies for other crops. When U.S. officials opened a new distribution center for the seed program last year, Taliban militants promptly rocketed it.

The new U.S. push comes alongside a stepped-up military effort to crack down on Afghanistan's drug lords. A Senate Foreign Relations Committee report this week disclosed that the Pentagon had begun hunting 50 drug traffickers suspected of ties to the Taliban. The military is trying to capture or kill each of the men, according to the report.

On Thursday, U.S. aircraft and missiles pounded Taliban mountainside positions around Dahaneh, in Helmand province, the heart of Afghanistan's drug trade, according to the Associated Press.

Senior Obama administration officials say bluntly that earlier U.S. efforts to eradicate Afghanistan's poppy fields have failed. The Bush administration initially envisioned spraying herbicide on the poppies from planes or tractors, but that was vetoed by the Afghan government. Instead, Washington paid American contractors and Afghan security personnel hundreds of millions of dollars to slash and burn individual poppy fields.

The eradication effort has been widely unpopular in Afghanistan and hasn't discernibly hurt the drug industry here. Afghanistan accounted for 12% of the world's opium production in 2001, according to the United Nations. By 2008, it accounted for 93%.

Richard Holbrooke, the administration's special envoy for Afghanistan and Pakistan, told reporters in Washington late last month that the U.S. "wasted hundreds of millions of dollars" on eradication. "All we did was alienate poppy farmers," he said. "We were driving people into the hands of the Taliban."

Michèle Flournoy, the Pentagon's undersecretary of defense for policy, said in a recent interview that the U.S. was focusing on crop substitution as a way of taking advantage of Afghanistan's fertile soil and long history of growing fruit, wheat and other exportable crops.

U.S. officials note that a similar USAID program in eastern Nangarhar province has helped that region go poppy-free. According to U.N. figures, Nangarhar had 18,731 hectares, or about 46,000 acres, of poppy fields in 2007. In 2008, it had none.

U.S. and Afghan officials also argue that the plunging price of opium -- which has dropped from $225 per kilogram of dried opium in January 2005 to $75 per kilo in April -- means many farmers could make more money selling wheat or corn.

"The farmers don't get rich on poppy," said Gen. Stanley McChrystal, the top American commander in Afghanistan, in a recent interview. "If you can protect the farmer and give him the ability to get to market he's going to do fine with other crops."

It's easy for poppy farmers to earn a living: Opium traffickers show up at their farms and pay cash for entire harvests. Wheat and corn farmers have to process and store their crops, drive the harvest to the nearest market, and find their own buyers. Local corn and wheat prices have fluctuated wildly in recent months, whipsawing many farmers.

Mr. Walid says converting his fields to corn and wheat has required significant expenditures on equipment, field laborers, and fertilizer. The current price for corn is so low that he is barely covering his costs, he says.

Mr. Walid owns his own tractor, so he can ferry crops to nearby towns. But most of his neighbors have no way of bringing their wares to the markets, he says, adding "With poppy, the buyers come to you."

Mr. Donohoe of USAID sees the antidrug push in both economic and moral terms. "The narcotics industry has completely distorted the local economy," he says.

Mr. Donohoe travels around Helmand province with a notebook full of statistics detailing the potential financial benefits of converting farms to corn and wheat from poppy. At the same time, he says, his work is fueled by the knowledge that drug proceeds help fund an insurgency that is regularly killing U.S. and British soldiers stationed at his small base in nearby Lashkar Gah. "I want to see the drug trade here go down to zero," he says flatly.

Helmand long grew more wheat than any other part of Afghanistan. The widespread cultivation of poppy fields is a relatively recent innovation, and Mr. Donohoe believes the change can be reversed. "The idea that farmers here don't know how to grow wheat is absurd," he says. "They did it for decades."

Still, the extra money in this year's $300 million effort may not be enough to turn the tide in Helmand, where Afghanistan's drug trade has deep roots. In Lashkar Gah, Helmand's most populous city, many of the biggest houses belong to narco-traffickers and poppy farmers.

For many farmers, the question of what to grow comes down to cold economics. According to a recent U.N. report, the average poppy farmer in southern Afghanistan earned $6,194 in 2008. Farmers in the south who grew other crops earned just $3,382. The U.N. and U.S. estimate that $500 million of opium is grown each year in Helmand alone.

Mr. Walid supports 23 people with his agricultural earnings. Corn and wheat prices are so low he will have to plow over his fields and replace them with poppy if market conditions don't improve: "I won't have a choice," he says.

As he spoke, he took a small bag of hashish and a thin box of rolling paper out of his front pocket and began making himself a cigarette.

"For later," he said, winking.

Write to Yochi J. Dreazen at yochi.dreazen@wsj.com