The destitute country produces around 90 per cent of the world's opium, used to make heroin sold on the streets of Europe and Central Asia, with profits feeding a resurgent Taliban in an eight-year war.
"The bottom is starting to fall out of the Afghan opium market," UN Office on Drugs and Crime executive director Antonio Maria Costa said in the report, to which the Afghan government contributed.
"For the second year in a row, cultivation, production, workforce, prices, revenues, exports and its GDP share are all down, while the number of poppy-free provinces and drug seizures continue to rise," the report said.
The report said opium cultivation in Afghanistan fell by 22 per cent to 123,000 hectares (304,000 acres), from 157,000 hectares in 2008 with the number of poppy-free provinces up to 20 from 18 - out of the total 34.
Wiping out the crop has been a key component of Western efforts to stabilise Afghanistan - labelled a "narco state" by US Secretary of State Hillary Clinton - since the 2001 US-led invasion removed the Taliban regime.
Most Afghan opium is processed into heroin inside the war-torn country, where it feeds rampant government corruption before being smuggled to Central Asia, Europe and the Middle East.
The United Nations puts the potential export value of Afghan narcotics at about $US3.4 billion ($4.1 billion) a year, and Afghan officials have said drug profits provide the Taliban with as much as $US100 million ($121 million) a year.
Source: The Australian