A CROP THAT REFUSES TO DIE

Drug-Fighters Claim That A Combination Of Repression And Social Engineering
Can Eliminate Coca Cultivation, And So Cocaine. It Has Not Happened Yet

PALMAPAMPA, Peru - MAXIMO ROJAS'S farm lies up a steep and muddy track on a
hillside high above the Apurimac river, in eastern Peru. At this time of
year, the river is a swirling brown torrent as it cuts through a broad
tropical valley on its way to the Amazon. The track passes through a field
of glossy young coffee bushes before ending at an open-sided thatched hut.
There Mr Rojas and his family have spread soyabeans to dry on the ground.
As well as coffee and soya, Mr Rojas has planted cacao, citrus, pineapples
and maize on his eight hectares (20 acres) of land. In all this, he has
been helped by agronomists from the United Nations Drug Control Programme.
It is, he says proudly, a model farm that others can copy.

But does Mr Rojas also have any coca, the hardy Andean shrub from which
cocaine is extracted? "A little," he says, shifting awkwardly, as if a
little in fact means a lot. Even so, it is much less than it was. Until
1997, coca was Mr Rojas's only crop, as it was for most of his neighbours.

It brought in a good, reliable income, in an industry that had remained
fairly stable since the 1970s. Coca was grown by farmers in Peru's eastern
valleys and in Bolivia's Chapare lowlands. It was roughly processed into
cocaine paste, and then taken to Colombia for refining and export to the
United States and Western Europe.

By last December, however, the amount of land under coca in the Apurimac
had fallen to just 8,100 hectares, from a peak of 21,000 hectares (52,000
acres) in 1995. The fall is part of a trend that has spread rapidly over
the past four years. The State Department's annual report on international
narcotics control, released this week, and unusually upbeat in tone, shows
that land in coca production in Peru has fallen to 38,700 hectares,
one-third of what it was in 1995. In Bolivia, there are now fewer than
10,000 hectares of coca left (excluding some 12,000 hectares planted with
legal coca for traditional use, such as chewing and coca tea). Overall, the
total amount of land under coca in the Andes has fallen by 15% since 1995.

Figures like these have emboldened officials in the United States and at
the United Nations to talk seriously about the near-total eradication of
coca, or at least its reduction to "residual" levels. One such optimist is
John Hamilton, the United States' ambassador in Lima. "When I flew over the
Upper Huallaga in 1986 for the first time and saw coca fields like Iowa
corn fields, it was a sight for despair," he says. "Now, I'm becoming
convinced that getting rid of it altogether is not a pipedream." In Peru,
the government of Alberto Fujimori says that it hopes to achieve complete
eradication by 2003. In Bolivia, President Hugo Banzer's administration is
pledged to remove Bolivia from the cocaine trade by the end of its term in
mid-2002.

For anti-drug warriors in the United States, all this is proof that the
"war" on Andean cocaine declared by President George Bush in 1989 is at
last starting to be won. So far, it has been a relatively cheap strategy,
too. Action aimed at cutting the supply of drugs in producer countries
accounted for only around 13% of the United States' $18 billion anti-drug
budget last year.

The cost is higher in diplomatic terms. Critics complain that the United
States has sacrificed more important policy goals in Latin America, such as
support for democracy and human rights, to its drug crusade. Both the
United States and European countries have more time these days for the
Latin American argument that the cocaine industry would not exist without
their demand for drugs and their supply of chemicals, firearms and
money-laundering facilities. But Americans still cling to their
heavy-handed and often unilateral strategy, symbolised by this week's
"certification" ritual, an annual exercise mandated by law in which the
United States delivers judgment on its neighbours' anti-drug efforts. On
March 1st, as expected, the Clinton administration announced that all the
Andean countries and Mexico were fully co-operating.

Has certification produced results? The figures for declining production,
drawn up by the CIA on the basis of satellite monitoring and selected field
visits, are not above challenge. Although they do not dispute the trend,
some responsible drug-watchers believe the figures overstate the fall in
coca production in Peru and Bolivia. And meanwhile the Andean drug industry
has continued to diversify. Cultivation of opium poppies, unknown in
Colombia in 1990, has risen sharply, to more than 6,000 hectares last year;
now it has begun in Peru's northern Andes. Although the Andean countries
supply less than 10% of world opium output, their share is rising, and
their product, being extra-pure, is especially attractive.

There is also one notable exception to the trend of coca decline. Having
previously underestimated the yield and potency of Colombian coca, the CIA
said last month that it had more than doubled its estimate of that
country's potential output of cocaine. Well it might. The amount of land
under coca in Colombia has more than doubled since 1995, to 122,500
hectares. In other words, much of the coca has merely migrated north.

The Colombian Exception

"Colombia is a drug disaster," says General Barry McCaffrey, the United
States' director of national drug policy. Most of the new coca is in the
departments of Putumayo and Caqueta, in southern Colombia, in areas
controlled by the FARC, the country's main leftist guerrillas-just as, a
decade ago, coca flourished in Peru's Huallaga and Apurimac valleys under
the protection of the now-defeated Maoist guerrillas of the Shining Path.
Whereas, in Peru, coca is typically grown on small plots, in Putumayo there
are plantations of up to 10,000 hectares, divided into blocks and carefully
managed, according to an American official.

As a result of these shifts, the supply of cocaine remains more than
adequate to meet demand. The wholesale price of cocaine in Miami and other
entry points in the United States has remained broadly constant in nominal
terms for more than a decade. By moving coca cultivation to Colombia, the
drug makers have cut their costs and risks and increased their efficiency
to "extraordinary levels", according to the State Department report. Those
new large coca plantations are the ostensible reason for the Clinton
administration's proposal, now before Congress, to give Colombia $1.6
billion in extra military aid over the next two years.

The FARC is not the only violent group in Colombia to be involved with the
drug trade. General McCaffrey concedes that some right-wing paramilitaries
own and operate cocaine-processing laboratories, whereas the FARC does no
more than tax and protect the industry. But from that alone it earns
perhaps $500m a year. This income has helped the FARC to grow. It now has
17,000 men under arms, giving it a military power which far outweighs its
political support.

The main purpose of the proposed American aid is to train and equip three
new army battalions to wrest military control of the southern coca-growing
areas from the FARC. Once that is done, the Colombian police should be able
to eradicate the coca fields by dumping herbicide on them from low-flying
aircraft. The Colombian police already claim to spray some 50,000 hectares
of coca a year, as well as 5,000 hectares of opium poppies. Critics doubt
whether this has much effect. But General Rosso Jose Serrano, Colombia's
police chief, says that without spraying, Colombia would have up to three
times more coca. "If it weren't effective, they wouldn't have shot down
five helicopters and four aircraft," he argues.

Ironically, the FARC's current strength owes much to the United States'
decision to "decertify" Colombia two years running during the government of
Ernesto Samper (1994-98), whose election campaign was alleged to have been
boosted by drug money. That spurred Mr Samper into tougher action against
the drug trade. But, thus distracted, his weakened government stood
helpless as the FARC drove the armed forces from several bases in the south.

The United States' anti-drug warriors are now intent on helping the
Colombian government to regain military control of its territory. Once that
is done, they believe, coca production can be cut in Colombia just as it
has been elsewhere. This assumes, however, that one set of policies fits
sharply differing countries. It also raises the question of where coca will
migrate to next.

Home-Grown Solutions

The steep fall in coca production in Peru and Bolivia has come about not
only because of heavy-handed intervention from the United States. It has
also been helped by changing policies and attitudes within those countries
themselves. In recent years, a certain amount of give-and-take has been
going on. At the urging of the United States, the present governments of
the Andean countries have adopted far tougher measures than their
predecessors tried. In return, the United States has been persuaded--often
with difficulty--to give more money to help coca growers find other ways of
earning a living.

This shift in attitudes among the Andean governments partly reflects a
desire to avoid decertification. They have seen what it did to Mr Samper.
His successor, Andres Pastrana, is working closely with the United States
in his efforts to pull Colombia out of its quagmire. In Peru, Mr Fujimori's
co-operation over drugs makes the Americans reluctant to criticise his
autocratic rule. Bolivia's government began forcible coca eradication in
1995, only after being warned that it would otherwise be
decertified. American officials had become fed up with Bolivia. After a
decade of alternative development and voluntary eradication, in which
farmers were paid to pull up their coca, the overall amount of the crop had
not diminished at all; the farmers were simply planting new coca elsewhere.

In addition, public opinion in the Andean countries is more hostile to the
drug industry than in the past. That is partly because consumption has
risen, though it remains low: drug abuse is no longer something that hurts
only Americans and Europeans. But it is also because of public weariness at
the violence and corruption that come with the cocaine industry.

In both Peru and Bolivia, the policy is to wield bigger sticks and bigger
carrots than in the past. But the details vary. In Peru in the mid-1990s,
Mr Fujimori ordered his air force to shoot down suspicious planes flying
towards Colombia, and stepped up harassment of coca-processing points. This
caused--or at least coincided with--a steep fall in the price of coca in
Peruvian fields, as Colombian buyers stayed away. As prices fell below the
cost of production, many growers abandoned their fields. Last year the
government also began forcible eradication, chopping down some 15,000
hectares of coca. This reversed a policy under which coca cultivation had
been judged to be legal, lest coca farmers should be driven into the arms
of the Shining Path.

In Bolivia, President Banzer, now a democrat but a military dictator in the
1970s, has cracked down on the powerful coca growers' unions in the
Chapare. In 1998, 12 farmers were killed when troops and police cleared
road blocks thrown up by the coca farmers' unions in protest at the
government's decision to make eradication compulsory. The government is now
using 2,000 troops and police to eradicate coca in the Chapare. It is also
trying to stop the import of chemicals needed for processing cocaine. This
reduces the drug's purity, and therefore its market value.

Repressive measures, however, are only part of the solution. Unless
government and aid donors can also deter farmers from planting coca by
offering economic alternatives, there is no chance of lasting success. But
this is by far the trickiest part of the strategy.

First, it is all but impossible for any legal alternative crops to match
the income that coca can provide in normal market conditions. At December's
price of $1.40 per kilo (2.2lb) of leaf, a well-run coca farm in the
Apurimac can give a net annual profit of more than $2,000 per hectare: less
than in the past, but almost double the profit from coffee.

In Bolivia, a hectare of coca may yield up to three times the income of a
hectare of bananas. So trying to drive down the coca price by harassing the
traffickers is essential, if alternative development is to work.

Better, But Poorer

Officials in charge of alternative development stress that they do not
promise the farmer the same kind of income as coca offers. They can claim,
perhaps, to offer a better quality of life. "We can give a decent income to
the farmer, put in infrastructure, integrate these areas into the national
economy. The trafficker brings credit and cash, but also violence,
corruption, prostitution and disorder," says Patrice Vandenberghe, the UN's
anti-drug man in Lima.

But even providing a decent income is hard. Consider Bolivia's Chapare. If
alternative development is ever to work, it will be there. The Chapare is a
fairly compact, socially cohesive area; its farmers have decent-sized
plots, of which coca used to occupy only a part; and it has seen nearly two
decades of outside investment. Much of the money has gone on
infrastructure: a (mainly) asphalted highway now runs through the area,
linking it to the cities of Cochabamba and Santa Cruz. A network of
secondary roads and bridges, and packing and storage plants, gives farmers
"better access to markets than in any other part of the country," says Jose
Deckers, the deputy minister for alternative development. An electricity
grid provides power for processing plants.

In 1980 Villa Tunari, the area's small administrative centre, was a
roadside slum. Now it is neat and prosperous, with several good hotels
(though the guests are mainly aid workers, and a big new golf resort being
built across the river seems heroically ambitious). Where once coca
reigned, legal commercial crops are taking over: they cover some 108,000
hectares now, almost three times as much as in 1986, and generated sales of
$87m last year. One group of former coca farmers has begun exporting
bananas to Buenos Aires, now only three days away by refrigerated truck;
two local investors have set up plants to process hearts of palm. Some
farmers are successfully growing black pepper, pineapples and passion fruit.

Yet there are plenty of problems. Coca is sturdy, easy to grow and to
transport. Many of the alternatives are more demanding, and may be
vulnerable to disease or local market gluts. The UN is now promoting
"integrated agro-forestry", a scheme under which farmers hedge their bets
(not least against mistakes by the aid agencies' army of well-meaning
agronomists) by planting a bit of everything, as well as doing some
selective and, it is hoped, sustainable, logging. Even so, one experienced
aid official reckons that only 20% of the Chapare's cocaleros will become
successful farmers; another 20% will leave the area, and the rest will
scrape along, mixing odd jobs with marginal farming. The Chapare's
population has already fallen: perhaps by as much as 50,000 people, to
around 100,000.

In Peru, alternative development is less advanced; the United States has
spent some $60m on it since 1995. Again, much has gone on infrastructure.

In the Apurimac valley, which accounts for a third of the investment, roads
have been improved and villages have big new schools. Aid workers have high
hopes for cacao and especially coffee; they are working on quality and
marketing. The United States Agency for International Development has
persuaded Nestle and a rival maker of instant coffee to set up buying
offices in the valley, and has arranged trial shipments to M&M Mars and
Seattle's Best Coffee, two American companies. Already, some Apurimac
coffee is exported through "fair trade" companies; more could be marketed
as "bird-friendly", since the groves still have their shade trees.

Yet it all seems very fragile. In the Apurimac, the price of coca leaf has
tripled since mid-1998, to around $1.50 per kilo (the price has also risen
elsewhere in Peru and in Bolivia).

Traffickers have found new smuggling routes, to Brazil among other places,
and are hoofing it over the Andes with mules to Lima, according to Colonel
Oscar Oquendo, who commands a police anti-drug base newly installed in
Palmapampa. Peruvian drug enterprises have emerged that are refining their
own cocaine, rather than simply exporting coca paste to Colombia. "There's
a lot of other possibilities, but unfortunately people here cling to coca.
They think they have a right to it," says Colonel Oquendo.

They are not alone in thinking that. In Bolivia, the Chapare is split
uneasily between those who have embraced the new ways and those who still
follow the cocalero unions.

Hugo Cabieses, an adviser to farmers in Peru's coca areas, argues that
alternative development can work only if it is linked to government price
supports and subsidised credit. The vagaries of agricultural markets are
hard to cope with unaided, even for far better equipped farmers in richer
parts of the world.

At the least, alternative development will require much more donor
money--unless and until far more private investment can be attracted to
often remote and difficult farming areas to make the process self-
sustaining. American aid for the Chapare is due to end in 2002; in Peru, a
year later. Expect the coca to be back in force if it does.