PERU'S DRUG SUCCESSES ERODE AS TRAFFICKERS ADAPT

ALMAPAMPA, Peru -- The days when drug dealers flew freely in and out of this
little tropical town in the Apurimac Valley with thick wads of cash ended
four years ago, right after President Alberto K. Fujimori ordered the armed
forces to shoot down planes suspected of trafficking. Once the "air bridge"
was broken, the demand for coca leaf plummeted, and the price dropped by
more than 60 percent between April 1995 and August 1995. Farmers began
abandoning coca growing, giving U.S. and Peruvian officials the chance to
teach them how to grow legitimate crops like premium coffee and cacao and
build roads to take their new produce to market. But the price of coca leaf
has shot back up over the last year -- two-thirds of the way to its 1995
highs. The reason, officials say, is that traffickers have found ways to
reopen some air routes and to replace others with river, road and sea
channels, making coca profitable once again. The change underscores the
cyclical nature of a drug war in Peru that is unavoidably tied to the
appetite for cocaine in America and Europe and to the impossibility of
choking all the trafficking routes that shift nimbly through South American
countries.

Developments in nearby countries, whether they are gains or setbacks for the
drug trade, have opened the way for a resurgence of trafficking in Peru,
with smugglers testing the limits of the resources that the United States
and regional governments can deploy in a vast shell game that spans the
continent. Four years after Peru had seemingly demolished its reputation as
the world's biggest producer of coca leaf, the hillsides here are again
teeming with newly pruned coca fields and with workers -- as young as 5 --
picking them within sight of the Peruvian police. Local authorities now
speak of Peruvian, Colombian and Brazilian traffickers plying rivers and
traveling jungle paths on mules to avoid the police.

"In Peru, the drug control situation is deteriorating," Gen. Barry R.
McCaffrey, director of the Office of National Drug Control Policy, told a
House subcommittee on Aug. 6. "Peruvian coca prices have been rising since
March 1998, making alternative development and eradication more difficult.
Some farmers are returning to abandoned fields and the central growing areas
are rejuvenating."

"Clearly," he said, "rebounding cultivation in Peru would be a setback to
U.S. interests."

McCaffrey's remarks received little notice in the United States, buried as
they were within long testimony on the worsening drug and security situation
in Colombia and his urgings for more United States aid there. But they got
banner headlines in Peru and brought a heated reaction from Fujimori, who
criticized the United States for not doing enough to control domestic
consumption of illegal drugs.

The brief dispute came as a rare exception to years of praise from U.S.
officials, who have trumpeted Peru as a success story for driving most
cocaine trafficking from its borders. But that slack in the trafficking was
quickly taken up by smugglers in other countries. With the air bridge down,
the Colombians began growing more of the crop for themselves, and Colombia
replaced Peru as the premier producer of coca leaf.

After Fujimori made his threat, the Peruvian air force shot down about 25
planes it suspected of being used by traffickers and forced down many more.
At the same time, Peru began an aggressive eradication effort, reducing the
total coca acreage in the country by 56 percent -- from 287,500 acres to
125,000 acres -- between 1995 and 1998, CIA satellite intelligence
photography shows. Peru is continuing its eradication pace, nearly reaching
its goal of destroying 20,000 more acres this year.

U.S. and Peruvian officials say the steep increase in coca prices is a
result of several developments. Drug use in Peru itself is rising, offering
a more lucrative local market. As Bolivia makes headway in eradicating its
coca fields, demand to replace Bolivian leaves for local consumption and
shipment to Europe is growing. Meanwhile, the fighting between rebels and
the government in Colombia may be interrupting shipments from fields there.
But more than anything else, analysts say, the prices are going up here
because international traffickers have again found ways to get their coca
crop out of the country.

New Peruvian organizations are shipping cocaine to Europe, where street
prices are often twice as high as in the United States, law-enforcement
officials say. There are reports of increased trafficking of unrefined coca
base and cocaine up the coastal Pan-American Highway to Colombian-controlled
laboratories in Ecuador, eventual shipment to Colombia and finally to the
United States.

Several organizations are reportedly moving drugs by road south to Chile and
then by container ship to Europe and the United States. Juan Gil, the
executive secretary of Contradrogas, the main civilian antidrug agency in
Peru, said traffickers were also resuming some flights. He said Peru was
pressing the Clinton administration to resume the Awacs and P-3 Orion
surveillance flights that helped the Peruvian air force intercept smuggling
planes. The flights were halted in May 1998 to increase aerial spying over
Colombia as more trafficking shifted there. After months of pleading by the
U.S. Embassy in Lima, the Clinton administration says it will resume P-3
flights over Peru later in August. "Of course we're worried," Gil said. "The
basis of our program is bringing the price of coca down so legitimate crops
can compete." Peruvian police officials say their guard was left down when
El Nino hit early last year, forcing the security forces to transfer
helicopters and planes used in antidrug operations to the flooded Pacific
coast for emergency aid duty. At the same time, U.S. officials said, the
Peruvian military sent some planes to the border with Ecuador when tensions
between the countries rose.

"I'm concerned," said Capt. Vicente Rossi Malaga, commander of the Peruvian
National Police in the Apurimac Valley. "We took their plane routes, but now
they use boats, mules and people willing to carry the stuff 10 to 15 days in
the jungle. We need helicopters, boats and more people." Still, U.S. and
Peruvian officials said, the amount of cocaine moving out of Peru into
international markets is nowhere near the levels reached in 1995. But
several said that if they could not drive the price down in the next year,
trafficking would almost certainly creep up to past levels. They noted that
in some areas, fields that had been abandoned are now in use again and
peasants flush with cash are increasing yields with herbicides and
fertilizers.

The Peruvians have stepped up their interdiction efforts -- which lagged
badly in 1998 -- with seizures this year already exceeding last year's
totals largely because of several large seizures in ports in recent months.
Meanwhile, the United States is increasing antidrug aid, from $56.3 million
in 1998 to $87 million in 1999. The aid includes more U.S. training of
Peruvian customs officials and navy personnel patrolling suspected Amazon
River trafficking routes.

Here in Palmapampa, U.S. money went into lengthening and improving an
airstrip, once used by drug traffickers and now used to ferry in supplies
for civilian projects and law-enforcement efforts. A police base with
helicopter pads will be built by the strip with dormitories for up to 60
police officers.

The base, which is supposed to be up and running by September, will be used
for police sweeps, drug intelligence operations and airborne operations
intended to shut down cocaine refining pits.

"If we drive the narcos out of this valley, we'll drive the price down
again," said a U.S. official. "I'm still optimistic." Such optimism is
partly based on hundreds of peasants who have sworn off coca growing over
the last three years and found new occupations. Felix Gutierrez, 37, who
transports cacao down a local river to a U.S.-financed production project
for about $200 a month, said he gave up coca growing in 1995 when his
earnings fell to only $3 a day. "Now I don't care what the price rises to,"
he said. "Growing coca is too dangerous and not worth all the trouble."

But Juan Mucha Condemayta, 24, has another story. When the price of coca
began to rise last year and the prices of legal commodities went down, he
began to grow coca bushes on a one-acre plot he rents overlooking
Palmapampa.

"Coca is the only resource we have to make a living," he said. "There just
isn't enough work for all of us."