ANTIDRUG EFFORT IS FEARFUL OF HIGH COCA PRICES IN PERU

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 increased in recent weeks
from $20 to as much as $35.

"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.

During the cocaine boom of the late 1980s, said the farmer, who spoke on
condition he not be identified, small airplanes 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 antidrug 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, another major Andean coca-producing country, recent protests
have left 10 people dead. 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 likely to
suffer.

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

The coca 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 level 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 think tank.

Lima drug-trade economist Hugo Cabieses agreed. "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 . . . to Peru or Ecuador," he
said.

To cope with spillover problems, Plan Colombia will offer $110 million in
aid to Bolivia, $32 million to Peru, and $20 million to Ecuador. 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."

Kevin G. Hall's e-mail address is khall@krwashington.com