PERU DECLARES ITS COCA CUTBACKS ARE OVER

U.S. Goal in Andes Dealt a Setback

LIMA - The Peruvian government has abruptly halted forced eradication of
coca plants and suspended crop substitution programs in coca-growing
valleys, dealing a major blow to U.S. efforts to halt cocaine production in
the Andes. As a result, the U.S. operation to control illegal drug crops in
Peru -- heretofore considered an unqualified success -- is nearly paralyzed
as farmers and government officials question its effectiveness and demand
changes.

The sudden development cast doubts over the future of U.S. efforts to stop
the cultivation of coca plants and cocaine production throughout the region.

In Colombia, the anti-drug effort is tied to an intensifying guerrilla war,
while in neighboring Bolivia a determined anti-eradication candidate, Evo
Morales, made a strong showing in Sunday's presidential election.

U.S. officials were apparently caught off-guard by the Peruvian
government's move last week, since it follows by only three months a visit
by President Bush, who promised to triple anti-drug aid to Peru by raising
it to $195 million.

"President Toledo recognized last week the necessity of eradicating at
least 54,000 acres of Peruvian coca to end that country's role in the narco
trade and he set this as a goal of his administration," said one baffled
U.S. official.

"The manual eradication of coca is essential to reach this goal, along with
interdiction and alternative development, and agreement with coca growers
to halt eradication of their illegal crop makes it impossible to achieve
this any time soon," the official added.

The Peruvian decision follows criticism of the U.S. effort to eradicate the
coca plant -- from which cocaine is made -- by coca farmers and government
officials.

"We want to completely change the way programs have been operating because
they are too bureaucratic and have not worked," says Hugo Cabieses, an
official at Devida, the Peruvian anti-narcotics agency.

There are currently about 86,000 acres of coca under production in Peru,
but the number has been rising in recent months. The newest agreements with
coca growers probably will generate an increase in coca production.

The agreements were reached Friday, when Devida suspended all
coca-eradication programs in the Upper Huallaga Valley, where most drug
crops are grown, after farmers threatened to lay siege to major cities.

The following day, Devida reached an agreement with coca growers in the
Apurimac Valley, to the south, where the government accepted farmers'
demands to suspend the activities of CARE, an Atlanta-based
non-governmental agency that acts as the contractor for the U.S. Agency for
International Development, or USAID.

The 10-point agreement calls for CARE to immediately stop all activities in
the Apurimac Valley, where it recently completed the first year of a
three-year contract for alternative development strategies to replace the
coca economy.

The agreement also calls on the U.S. Embassy to work with Devida on
evaluating the viability of present drug strategy.

"Everything that CARE has said is an absolute lie. They have done nothing
to help coca farmers or address the problems of the valley," Cabieses said.
"All the funds for alternative development stay with the middlemen."

The agreements reached between the farmers and government authorities are a
major setback to U.S. policies in Peru, which was touted as one of the few
examples of success in the war on drugs.

But the programs have never been popular with farmers. Last week, coca
farmers called strikes to protest anti-narcotics policies, such as crop
eradication and the alternative development plans that accompany them.

Authorities from Devida have basically agreed with the protesters,
accepting the demands of farmers and putting a stop to most programs.

"We don't want eradication. They've eradicated our crops for 18 years and
what have we gotten? Nothing. All this talk about other crops and markets
for our products is just lies," says Lucy Macera, who owns a small coca
plot deep in the Upper Huallaga Valley.

The U.S. government financially supports and trains Peruvian
coca-eradication brigades, which are supposed to rip up at least 13,000
acres of coca plants in the Upper Huallaga Valley this year.

The U.S. government budgeted $65 million this year for alternative
development programs in Peru. The program is supposed to substitute crops,
find markets for products and build infrastructure in areas where drug
crops are grown.

Accusations that alternative development strategies have failed were part
of a confidential report prepared by Peru's Comptroller General's Office
last year.

The report criticized the effectiveness of most programs, offering as an
example a project to substitute coca for bananas. Instead of costing $300
an acre to plant bananas, the project ended up costing $4,000 an acre, the
report said.

The fight over how best to run the anti-drug programs comes at a tough time
for Peru, which is beginning to see the tide change after years of
successfully reducing drug crops.

Once the world's principal source of coca, Peru lost its title to
neighboring Colombia in the late 1990s after crop substitution programs
began to take effect.

A number of factors, including eradication, a drop in price and the
decision of Colombian traffickers to grow coca at home, helped Peru reduce
the overall amount of land used for coca by 70 percent since 1995.

For many farmers, however, growing coca is a simple economic equation. The
price of a 25-pound sack of coca leaves has jumped to $45 recently, close
to the all-time high of $50 registered in the early 1990s. Even if the
price were to fall by half, it would still bring in more than three times
as much money as any other viable crop.