Insecurity and rising opium prices drove Afghan farmers to increase cultivation of the illicit opium poppy by 7% in 2011 despite a major push by the Afghan government and international allies to wean the country off the lucrative crop, according to a new UN report.

Afghanistan is the world's largest producer of opium - the raw ingredient used to make heroin - providing about 80% of the world's crop.

Revenue from the drug has helped fund insurgents and the number of people invested in the underground opium economy has made it difficult for the Afghan government to establish its presence in opium-heavy regions.

The report also shows that opium cultivation is spreading to new parts of the country, a troubling trend as international troops are trying to stabilise Afghanistan so they can hand over security responsibilities to the government.

Farmers cultivated 131,000 hectares of opium poppies in 2011, a 7% increase over the previous year, the UN Office on Drugs and Crime (UNODC) said in its periodic Afghan opium survey. Farmers said they turned to the illegal opium poppy because of "economic hardship and lucrative prices", according to the report.

The jump came even though the Afghan government increased crop eradication by 65% and made significant seizures in recent months.

There are now 17 provinces in Afghanistan affected by poppy cultivation, up from 14 a year ago. And three provinces which had been declared "poppy free" - a label that brings extra development funding - have reverted to being opium producers again, the report said.

Much of this happened because farm-gate prices have soared. Dry opium costs about 43% more than it did a year ago, meaning farmers who chose to grow opium in spite of the counter-narcotics push received a windfall. The per-hectare price of opium more than doubled to 10,700 US dollars (£6,850) from 4,900 US dollars (£3,140), according to the report.

Jean-Luc Lemahieu, head of UNODC in Afghanistan, said this extra revenue is helping to fund crime.

"We cannot afford to ignore the record profits for non-farmers, such as traders and insurgents, which in turn fuel corruption, criminality and instability. This is a distressing situation," he said in a statement.