US-BOLIVIA SUCCESS STORY MAY END

Friction Between Morales and Washington Threatens Program That Aids Farmers

TOMOYO, Bolivia -- When Jacinto Garnica talks about farm management,
Spanish creeps into his native Quechua language. The Bolivian Indian
is dealing with new concepts for which his ancient Inca vocabulary
has no words: "credit," "financing," "marketing."

He and his neighbors don't just talk the talk. Their community has
embraced an innovative U.S.-backed aid program that tutors the
farmers in free-market capitalism -- and is greatly improving their
living standards. But politics could keep the experiment from
spreading to other desperately poor regions of Bolivia: Socialist
President Evo Morales is determined to centralize control of the
country's economic activity, making Washington reluctant to keep
sending aid to a nation that is embracing policies at odds with U.S. policy.

For centuries, subsistence farming was the norm in this rubble-strewn
valley in southern Bolivia, where a mineral-rich geology has produced
a spectacular, multicolored landscape but poor soil. Now, after four
years of aid by Food for the Hungry International, a Christian
development group whose funding comes mostly from the U.S.
government, the farmers have been transformed into budding
entrepreneurs. The result: The average income for Tomoyo's 2,000
inhabitants has leapt to $1,069 a year from $287 in 2002.

Despite the gains, the future is in doubt for the Tomoyo project and
800 others in Bolivia that depend on U.S. Agency for International
Development backing, because of deteriorating relations between La
Paz and Washington. Mr. Morales opposes U.S.-backed policies of
market liberalization, and his moves toward central planning may
leave little room for local market-driven projects such as Tomoyo's.

Bush administration officials and lawmakers in Washington, meanwhile,
are also dismayed that Mr. Morales -- a former coca-grower activist
- -- is championing "traditional" coca consumption. Coca cultivation in
Bolivia has grown to more than double the 29,640 acres the government
reserves for nonnarcotic uses, said U.S. officials, who worry that
much of that production will be siphoned off to make cocaine.
Although USAID is championing "alternative development" projects, in
which farmers grow bananas instead of coca, for example, U.S.
officials say such efforts are often hindered by Bolivian
coca-growing syndicates that put pressure on communities not to participate.

The Tomoyo farmers' most important asset is an irrigation canal
completed in 2002 after FHI spent $1.2 million, mostly in USAID
money, to blast away 10 miles of iron-rich rock. Continued funding is
needed, however, to pay for FHI advice to villages in how to use the
canal wisely for commercial ventures.

With irrigation, farmers have been able to produce two harvests,
instead of one, and can sometimes manage three plantings a year. To
exploit this productivity gain, the farmers had to master Capitalism
101. The farmers had to "learn to produce what they sell, not sell
what they produce," said Roberto Loayza Mayan, the regional head of
commercialization program at FHI, which is based in Geneva.

For the past four years, FHI economists, engineers and agronomists
have operated out of a small settlement called Sirojchi -- "altitude
sickness" in Quechua -- where they teach agricultural techniques,
provide small loans and introduce local farmers to distant buyers.
Each year, the team escorts a few farmers to an agricultural expo in
Santa Cruz, a modern city with amenities such as telephones and
plumbing that most of the farmers had never seen. Few of the city
dwellers had ever met indigenous Bolivians from such remote
communities either. Nevertheless, they struck deals.

During the most recent Santa Cruz expo, in September, FHI organized
radio and television appearances for two of the Tomoyo farmers, and
even staged a photo op with two "Magnificas," Bolivia's version of
Victoria's Secret models. The picture of the dark, leathery skinned
Indians in traditional garb alongside two leggy blondes in pink
feathers and miniskirts offered a compelling image of Bolivia's deep
ethnic and wealth divisions; it also introduced the farmers to
U.S.-style publicity. [Combo]

Before the irrigation project, Tomoyo farmers grew little more than
potatoes for their own consumption and sold the excess to outsiders.
Now, their fields are filled with 26 vegetable varieties, all
targeted at outside markets where they fetch much higher prices than
potatoes do. One farmer runs a forestry nursery; others grow
amaranth, oregano and fava beans.

With the added revenue, farmers can afford to feed their families a
healthier diet. Infant malnutrition rates have dropped to 42% from
59% in 2002. Mr. Garnica said his children are no longer falling
asleep at school.

FHI and other agencies are eager to replicate the Tomoyo model
elsewhere in the country. But Bolivian government support for their
plans has been lukewarm at best, even though Vice President Alvaro
Garcia Linera has come out in favor of continuing to accept U.S. aid.

U.S. support is questionable, too, given Bolivia's leftward tilt, and
its alliance with Venezuelan President Hugo Chavez and Cuban leader
Fidel Castro. Mr. Morales is helping "move the entire continent down
there to the left," said Republican Rep. Dan Burton of Indiana, a
senior member of the House International Relations Committee. "A lot
of Congress will not be inclined to vote for further aid for Bolivia."