COCA INVADES COLOMBIA'S COFFEE FIELDS

Falling Prices Push Farmers to Plant Illegal Crops, Threatening U.S. Drug War.

Coffee shrubs the color of army fatigues cover the hills above this
village, which is set in a deep valley cut by the River Samana. But near
the peaks, the bright green stripes of another crop can be seen between the
coffee, spelling trouble for Colombia's most renowned industry and the
United States' drug war.

No one here will claim the brilliant fields of coca, the key ingredient in
cocaine. But farmers acknowledge that some among them have yanked up coffee
plants in the past year and replaced them with crops that have a more
profitable and reliable, if illegal, market. Along mountain roads, pickup
trucks with beds filled with coca seedlings now pass buses stuffed with
burlap sacks of coffee.

"Coffee has been fundamental to our economy," said a storeowner in this
village of 1,000, about 90 miles northwest of the capital, Bogota. "We all
rely on it. But right now a coffee farmer can't even pay for the basics.
Coca is new to us here, so we don't know what it will bring. So far it has
been only a grain of salt for our economy."

What is squeezing the coffee farmers are the caprices of economic
globalization. Years of good growing weather worldwide and a rising number
of countries planting the beans have increased supplies and sent world
prices tumbling. As income flowing back to villages like this falls,
farmers find themselves pushed away from Colombia's most renowned crop
toward its most notorious.

The coffee crisis, as it is called here, has helped create a countrywide
recession. Unemployment is near 20 percent, and higher in the countryside
where war and scant public resources make poverty nearly inescapable. That,
in turn, has given the country's various armed groups -- Marxist rebels on
one side, a counter-guerrilla paramilitary force on the other -- a larger
pool of idle young men and women from which to fill their ranks. Recruiting
has never been easier.

It is all bad news for the United States' $1.3 billion contribution to the
anti-drug program known as Plan Colombia.

Part of that mostly military package pays coca farmers to uproot their
crops in favor of legal ones, an "alternative development" strategy
unfolding slowly far to the south where drug crops are most bountiful. But
here in rugged southeastern Antioquia and across its river border in Caldas
province, the switch is working in reverse.

It would be a reach to say that Juan Valdez, the iconic Colombian coffee
farmer of television advertising, has turned to drugs. Although hard
numbers are impossible to come by, evidence and informed estimates suggest
that only about 1,000 of the country's 560,000 coffee farms have scrapped
coffee plants in favor of coca or opium poppies. But just about all coffee
farmers wonder how they are going to survive at the current prices.

Archangel Cifuentes, picking beans in the town of Chinchina one recent
morning, said his weekly salary had fallen from $50 to half that within a
year. "Even with a good crop, the prices are so low we make nothing," he
said, his hands darting from the bright red beans to the yellow bucket
around his waist. "You Americans have to drink a lot more."

The switch is occurring mostly on the remote edges of the country's coffee
heartland, where there is little state presence. Most of those who have
changed over maintain tiny illegal plots alongside larger coffee fields in
hopes that prices will rise again.

But international counter-narcotics officials here warn that things are
likely to get worse. Klaus Nyholm, head of the U.N. Drug Control program in
Colombia, said opium poppies are appearing on what was once traditional
coffee land in the mountains of southwestern Tolima and southern Huila
provinces.

In the old days, Nyholm said, "Colombian hearts would beat faster at the
sight of a coffee bush. Now we are going to have to start looking at
alternatives within the coffee zone itself. But people are going to have to
accept that legal alternatives to coffee may never yield as much money as
coca, although they will not have the violence that goes with the drug
trade. There is no magic solution."

Coffee beans arrived here with proselytizing Jesuit priests almost three
centuries ago. Like oil in the Middle East, coffee was the fuel for much of
Colombia's economic and political development.

Roads and railroads were built to move coffee from the cool slopes of
Antioquia and its southern neighbors to the Pacific coast, where ports were
built to ship it out. Coffee proceeds financed the development of such
other exports as bananas, cotton and sugar, not to mention rural schools
and health clinics. Colombia's coffee belt became one of the richest and
most stable regions of the country.

Production was dominated by small farms, in contrast to other Latin
American and Caribbean countries where large plantations controlled the
growing of such commodities as sugar and pineapples. Today, 96 percent of
the country's coffee farmers tend plots smaller than seven acres. These
farmers were the model for Juan Valdez.

The broad participation in the nation's chief industry helped foster
democratic participation in politics, as well. It was the driving force
behind Colombia's decentralized system of government, one that was once
widely admired but recently has shown weakness in dealing with a civil
conflict that thrives on proceeds from drug crops.

The bonanza years of the 1960s and 1970s, when shrewdly marketed Colombian
coffee traded on commodities markets near $3 a pound, have ended in a
supply glut. Colombian coffee now sells for about 62 cents a pound on the
New York commodities exchange, generating just 10 percent of the country's
legal export income. It once accounted for more than half.

A big reason for the glut is Vietnam. With the soil and altitude in which
coffee shrubs thrive, it was a major exporter before the Vietnam War and
reentered the world market in about 1980. Today, it is exporting more
coffee than Colombia, and though its beans are generally of a lower quality
than Colombia's, they are helping drag down prices. A pound of Vietnamese
coffee sells for about 16 cents.

"Vietnam is dumping," said Jorge Cardenas, head of the National Federation
of Colombian Coffee Growers, using a term that means selling on world
markets at prices that are illegally low under trade law. He said
Colombia's labor regulations make it impossible to produce coffee for less
than 50 cents a pound. "We cannot compete," he said.

To export Colombian coffee, a farmer or company must receive federation
approval. Only 30 companies have that stamp, and together they control 70
percent of all coffee exports. The remaining 30 percent is controlled by
the federation, which keeps a portion of its revenues for social
development and has channeled about $1 billion over the past decade into
building schools, clinics and roads in coffee-growing regions.

Cardenas said the rules ensure that Colombian coffee sells for more than
other types overseas, even during a crisis, but that allowing any farmer to
sell abroad would "confuse the markets and lessen quality."

Maria Teresa Londono, who owns a small factory that husks and sorts coffee
beans in Chinchina, blames the federation for the current crisis. "They are
killing us with paperwork," said Londono, whose father was the first coffee
buyer in Chinchina. "If the rules are not changed to allow us to sell
directly to the buyer, I don't know what is going to happen to this industry."

The federation and international development groups are trying to encourage
Colombian farmers to go "up market" and grow gourmet beans that will fetch
higher prices. But here on the distant margins of coffee country, many
farmers are simply getting out of the business.

Moving northeast from Manizales, the capital of Caldas province and one of
the world's most fertile coffee regions, abandoned coffee farms abound.
Pasture covers hillsides that for decades had been coffee land, and prime
coffee farms are rented out for parties and weekend getaways to help the
owners make ends meet.

Rural banks, long the chief source of loans in farming areas, have stopped
lending to an industry in which it costs $15 to produce a 27.5-pound bag of
coffee that sells abroad for $12.

The Revolutionary Armed Forces of Colombia (FARC), the country's main rebel
group, controls much of this region, although farmers say the guerrillas
are not profiting from the new crops as they do in other areas. But local
officials fear that the social unrest that has traditionally accompanied
falling standards of living will sharply increase in the months ahead,
fueling guerrilla recruitment in the region.

In the town of Pensilvania, in eastern Caldas, Mayor Jose Oscar Gonzales
said coffee has been uprooted in favor of coca in the nearby towns of El
Verdal, Playa Rica, Pueblo Nuevo and La Ceba. In all, he said, about 440
acres of coca have replaced coffee. The plots are tiny -- 1,000 to 2,000
plants each, enough to cover only a fraction of an acre.

But Gonzales predicted that the 100 or so farmers who have made the change
to coca, which can be harvested three times a year to coffee's one, are
just the vanguard. "This isn't pressure from the guerrillas," he said.
"This is poverty. Look, coca brings in 10 times the amount as coffee right
now. This is the heart of the crisis."