Opium poppies will soon be grown commercially in Victoria after a bill decriminalising the narcotic crop passed Victoria’s parliament last week.

Approved farmers will begin growing poppies under strict regulations as early as this year, creating an industry that Victoria’s agriculture minister, Peter Walsh, said could contribute $100m a year to the state’s economy.

“This would be a totally new addition to Victoria’s cropping sector and it is a very exciting opportunity for our farmers,” he said.

Under the Victorian poppy regime, growers and processors will have to register their contracts, keep extensive records and grow and dispose of their crops under tight security, subject to regular inspection by police and government inspectors.

Only a handful of countries, including Australia, Spain, France and India, are permitted by the UN to grow poppies, which are rich in morphine, thebaine and codeine, the primary ingredients of a host of pain-relieving medicines – as well as heroin.

Cultivation in Australia has for half a century been restricted to Tasmania, generating $120m a year for the island state, which produces 49% of the world’s legal supply.

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