DRUG WAR SENDING COCA-LEAF PRICES UPWARD IN THE ANDES

Lure Of Money Might Attract More Growers

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 recently jumped 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.

In the cocaine boom of the late 1980s, the farmer explained on condition
that he not be identified, 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 into Colombia.

Plan 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 drug trafficking arrests in 1999, up from 3,664 in
1991.

Attractive Plant

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 crops 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. "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.''