COCAINE ERADICATION EFFORTS COULD BACKFIRE

LIMA, PERU -- The good news on the Andean coca-war front: The price of coca
leaf, the raw material used to make cocaine, is soaring, as buyers fear that
a coming crackdown in neighboring Colombia will cause shortages.

The bad news: Higher coca prices are likely to tempt some Peruvian farmers
to turn away from such substitute crops as specialty coffee and pineapples
and return to the illicit but more profitable coca. That would be a serious
setback to the U.S.-led Andean drug war, in which a reduction in Peru's coca
growing is considered the biggest victory.

Sources familiar with the coca trade say the price for what Peruvians call
an ``arroba'' of coca leaves -- a 25-pound sack -- has jumped in recent
weeks to as much as $35 from $20.

``Price, more than anything, is what interests us,'' said a farmer from the
Aguaytia Valley, a hilly central Peruvian growing region where people often
grow both coca plants and cacao beans, used to make chocolate.

The farmer, who spoke on the condition that he not be identified, said that
during the cocaine boom of the of the late 1980s, small planes landed daily
on local roads to pick up coca paste and fly it to Colombia for processing
into cocaine. Then Peruvian President Alberto Fujimori ordered the military
to pursue and shoot down such aircraft. In response, farmers grew more
cacao, and more coca growing shifted across the border into Colombia.

However, ``Plan Colombia,'' a $7.5 billion anti-drug and military aid
package to which President Clinton contributed $1.3 billion on July 13, is
driving up prices for coca leaves again.

``These first impacts are the result of Plan Colombia; the first sign is
this price hike,'' said Roger Rumrill, a Peruvian specialist on the Amazon
and drug trade in the vast, sparsely populated jungle where several South
American borders meet.

In Bolivia, the Andes' other big coca-producing country, 17 days of
countrywide protests have left 10 dead in recent days. Among the issues:
Farmers want the government to pay them more for not growing coca. As prices
rise, U.S.-backed crop eradication efforts in Bolivia's southern Chapare
region are certain to suffer -- perhaps violently.

Until now, Peru has been the star of Washington's counter-narcotics efforts.
It led South America in coca production in the 1980s. Then land devoted to
the crop dropped to 96,000 acres in 1999 from 319,000 acres in 1992. Police
made 15,577 trafficking arrests in 1999, up from 3,664 in 1991.

The plant is attractive to farmers because they can grow four crops a year.
If Plan Colombia seriously disrupts coca cultivation in Colombia -- the
world's leading manufacturer of cocaine -- prices for coca leaves elsewhere
could return to their peak late-1980s price of $80 per 25-pound bag.

``Why won't production pop back up in Peru and Bolivia? There is a
fundamental failure to look at the cocaine market as a global commodities
market,'' said Ethan Nadelmann, director of the Lindesmith Center-Drug
Policy Foundation, a New York-based policy think tank.

Lima drug-trade economist Hugo Cabieses agrees.

``If Plan Colombia suppresses southern Colombia, where about 70 percent of
Colombia's coca crop is grown, then there will be a dispersion of the
crops,'' Cabieses predicts, ``to Peru or Ecuador.''

To cope with spillover problems, Plan Colombia will offer Bolivia $110
million in aid; Peru, $32 million; and Ecuador $20 million. The money is for
drug interdiction, education, alternative crop programs and other measures.

``Concerns over narcotics industry relocation are the reason why the
supplemental package includes funds to support Colombia's neighbors,'' said
a State Department official who asked not to be identified. ``We are
focusing a significant portion of our $1.3 billion Plan Colombia upon
Colombia's neighbors as we seek to stem cultivation and trafficking
throughout the region.''

Peru and Bolivia are weathering political crises that could make them more
vulnerable to exploitation by drug traffickers. Peru's Fujimori shocked his
nation Sept. 16, announcing that he would call new elections, would not run
in them and would step down next year. The announcement came two days after
his spymaster and top drug warrior, Vladimiro Montesinos, was shown on
videotape allegedly bribing a lawmaker.

Reports suggest that Montesinos and loyalists in Peru's military may have
been involved in trafficking arms to Colombian guerrillas who protect and
tax that country's cocaine producers. Now the intelligence network
Montesinos built, in part to track narcotics, is being dismantled as part of
an effort to restore Peru's democracy. Fujimori and the military, both
weakened, are vying for power. ``The signs of crisis could have a
psychological impact on the farmers'' that leads them to return to coca
production, said Amazon region analyst Rumrill.