Source: Chicago Tribune, page 1.
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Peru's cocain harvet withering: U.S. dollars, Peru's war in the air coax
coca farmers into growing other crops

By Laurie Goering
Tribune Staff Writer

Guayquil, Peru Two years ago, everyone in this tiny village of adobe homes
deep in the hills of the Apurimac Valley grew coca leaf.

Coca, loaded on mules and broght down the mountains, sold for $40 an arroba
about 25 pounds to processors who in turn sold cocaine past to Columbians.

No traditional crop, from coffee to cocoa, could compete.

Today, however, growing numbers of the fields of bright green coca that
cover the hills around Guayaquil lie abaondoned, strangled in weeds and
gnawed by insects.

Farmers such as Cristina Flores are weeding and pruning formerly neglected
coffe bushes under the hot tropical sun, tending cocoa trees and digging
yucca roots and peanuts.

"In this whole area everyone worked a little coca," remembers Flores, a
48yearold mother of five. "Now we hardly have any."

The U.S. war on drugs sometimes seems a losing battle, but in the remote
jungle valleys of Peru, longtime terrorist strongholds where the majority of
the world's coca is grown, a small and important victory is taking shape.

Last year, as coca production grew in neighboring Columbia and remained
stable in Bolivia, Peru's total coca acreage drop [sic] 18 percent. This
year the country expects a drop of an additional 10 percent.

In 10 years, with enough foreign assistance, Peruvian officials say, the
farming of coca for cocaine could virtually halt in the country that
currently is the world's leading producer.

What' behind the dramatic turnaround? It is a unique carrotandstick
approach that has sent coca production plummeting not by the eradication
of coca, a staple in Columbia and Bolivia but by cutting off buyers from
growers and then racing to offer hungry farmers alternative crops and markets.

"This is working because we've broken the chain, at least temporarily," said
a State Department narcotics offeicer touring U.S. Agency for International
Development projects in the Apurimac Valley. "What we have here is a window
of opportunity that won't last forever."

Peru for 15 years had been a narcotraffickers paradise. Peasants farmers,
eager to grow anything that brought a high price, found a ready market for
coca amoung Columbian buyers, who buzzed in the valleys in small planes.

Terrorist groups such as the Tupac Amaru Revolutionary Movement and the
Shining Path, which five years ago seemd poised to overthrow the government,
guaranteed traffickers safe passage for share of the profits. Soldiers, sent
into remote areas to combat terrorists, quickly were corrupted.

All that changed in April, 1995, whe President Alberto Fujimori gave the
order to shoot down planes that violated Peruvian airspace and failed to
identify themselves.

Within months dozens of small planes had be downed and terrified pilots
began refusing to make the trip from Columbia. Within weeks prices for coca
collapsed from $40 per arroba to less than $8, well below the production
cost of $17.50.

Farmers began starving. A February 1996 study of children in the Apurimac
Valley showed that 38 percent were underweight. Farmers who had once pulled
in $3,000 a year from coca, 10 times the average per capita income in the
valley, had almost no income.

In late 1995, USAID stepped in with a $45 million alternative development
program to help farmers abandon coca and produce new crops for alternative
markets.

The agency, with the help of a variety of Peruvian subsidiaries, began
improving roads and building bridges in remote valleys such as the Apurimac
to create local condidence and open routes for transport of new crops. The
agency also built schools, health posts and water systems, helped more than
8,000 farmers get clear title to land and launched a $4 million credit
program for small loans to farmer.

IN exchange, the agency asked communiities to commit to abandoning a
percentage of their coca fields by the 2001.

So far, 239 Peruvian communities, including 71 in the Apurimac valley, have
signed such agreements. The deals call for coca reductions averaging 25
percent, a figure already expected to be met and surpassed this year.

"No farmer grows something he can't sell," explained Don Boyd, head of the USAID
offices in Lima, Peru's capital. "With the prices down, alternative
development can compete. I think we have the right chemistry going."

In the Apurimac Valley, USAID officers are introducing new varieties of
coffee, rehabilitating more than a thousand acres of abandoned coffee bushes
and teaching management techniques to increase production of cocoa, an
increasingly valuable traditional crop threatened internationally by disease
problems.

The agency also has worked to contract buyers for the new products,
including Elan coffee of San Francisco. Maxwell House, owned by
PhilipMorris, already buys $55 million worth of Peruvian coffee a year, or
26 percent of the country's production, said Mike Maxey, a USAID coffee expert.

IN Guayquil, where Flores and fer neighbors farm, "we grow whatever brings
the highest price, and right now that's coffee," she said. "The future is
coffee, cocoa and livestock."

Over the last few months, workers using $1 million worth of USAID heavy road
equipment jave turned the perpetually washedout dirt trail that once ran to
Guayquil into a passable road. Farmers who once paid $7.50 per mule load to
send their crops to the valley below can hire a truck fo $2 for a similar load.

"The road is importissimo to us," Flores said. "It has changed everything.
Now we can sell oranges, bananas, yucca."

Coca, with its constant price fluctuations, "always brought us problems,"
she said. "We got thugs, gangsters, everything you can think of."

Shaning Path terrorists murdered farmers in neighboring towns, she said, and
a selfdefense committee formed in Guayquil remains armed and watchful.

Even if coca prices rise again, "I don't think it's worth the trouble it
brings," she said.

State Department officials aren't so sure of the commitment. Visitors tell
tales of finding fresh fertilizer in remote parts of socalled abandoned
coca fields, something they say makes clear that farmers are keeping their
options open.

"If coca goes back to five times the price, nothing will stop people from
growing it," a narcotics officer said. "That's why we have to keep prices down."

Keeping prices down, by keeping buyers out of Peru, is an ongoing struggle.
Foild by Peru's shootdown policy, Columbian buyers have taken to flying
along Brazil's Amazon border with Peru and making lighting hops into the
country, or to stashing cocaine on boats that ply the region's maze of
jungle rivers.

In the last four months, Peru's military has shot down four planes in the
Purimac Valley alone, and officers have found cocaine stashed beneath piles
of bananas on riverboats.

"As soon as they find some hole in our coverage the take advantage of it,"
said a State Department narcotics official. "We have to keep altering what
we are doing."

So far, Peru's commitment to the toughest drug interdiction on the continent
remains firm, officials say. While coca prices have crept back up, they
remain short of the breakeven point.

USAID officials say that abandoned coco fields need 18 months to reach a
point where they cannot be repaired and returned to production. Much of the
pledged coca reduction acreage in the Apurimac Valley, the Peruvian drug
valley farthest from Columbia, is approacing that point of no return.

"We live or die in the Apurimac," Maxey said. "It's the most important area
in Peru for alternative development."

To continue and expand the program to more major druggrowing regions of
Peru, WSAID officials say they need and additional $62 million through 2001.
The overall U.S. antinarcotics budget is more than $14 billion this year.

With ongoing cutbacks in USAID funding, officials feat the extra money may
not come through.

"The U.S. ought to see this not as a giveaway to Peru but as an investment
in something mutally benefial," argues Alejandro Vassiliaqui, executive
director of CEDRO, a top Peruvian antidrug agency.