SUNS4505 Wednesday 8 September 1999

Peru: Warnings of expanded Coca cultivation


Lima, Sep 6 (IPS/Zoraida Portillo) -- In Yurimaguas, a Peruvian village in the Amazon, one thousand hectares of palmetto rot waiting for the completion of a processing factory the government promised peasant farmers in order to convince them to quit growing coca, the plant used to produce cocaine.

In the Bolivian town of Chimore, a milk processing plant run by former coca farmers loses some 16,000 dollars every day because it cannot compete with the price of milk imported from New Zealand.

These two examples reveal the difficult situation of some former coca producers in Bolivia and Peru who took a chance by switching to alternative agricultural production.

This development alternative "is like sewing new patches on old trousers," said Roger Rumrill, a Peruvian expert on drug trafficking who believes the unrestricted import policies of Bolivia, Colombia and Peru conspire against the success of any alternative crop project.

Rumrill pointed to the fact that the alternative plan does not follow any kind of strategy nor does it take advantage of international legislation, such as the World Trade Organisation's (WTO) safety clause, which grants subsidies and permits special investment rates for alternative crops in coca producing areas.

Experts agree that the Peruvian government has made a large investment in alternative development since 1995, reaching nearly 500 million dollars. This is nearly double the Bolivian investment, which spent 259 million dollars on such projects, with money coming from international co-operative partners.

While the Bolivian government invested in 238 production projects, the Peruvian government spent 60 percent of its project money on road construction, schools and health centres instead of on the productive reactivation and technical assistance for the impoverished farmers.

"Alternative development has to be integral and cannot function as islands, much less in a region as poor as the Amazon, where native populations like the Huambisa-Aguarunas have a per capita income of 14 dollars per year, one of the lowest in the world," said Rumrill.

The price of palm hearts (from palmetto) - an Amazon product that is well-accepted internationally and had been successful in Peru's coca substitution programmes - fell by 50 percent over the last year, from $25 per carton of 24 stalks last October to $12 per carton, according to Rumrill.

Market saturation caused the falling prices, and seriously hurt those who chose to cultivate the crop, reflecting their lack of knowledge and forecasting in market mechanisms, Rumrill said.
Meanwhile, coca prices maintain their upward trend as reported over recent months. In Peru, the price per bag (weighing 11.5 kg) currently varies between 18 and 36 dollars, marking an important upturn relative to prices in July 1998 when the average price per bag was 10 dollars.

The lowest prices, according to the most recent official measures, are reported in the Apurimac valley, where alternative crop resources and technical co-operation are concentrated. This is not the story in the Huallaga Valley, the region traditionally known for its coca plantations.

In Huallaga there has also been a resurgence of activity by some of the Shining Path guerrilla group's dissident factions and by drug trafficking groups.

The rising price of coca is occurring just when prices are falling for alternative crops such as coffee, cacao (for chocolate), palmetto and rice. Experts fear the coca plantations that were abandoned for the alternative crop projects will return to coca growing operations.

Peru officially acknowledges that 51,000 hectares are dedicated to the illegal production of coca, a number based on measurements of U.S. satellite photos.

But Rumrill believes the number is inaccurate because the measurements were taken from areas at altitudes between 600 and 1,000 metres, without considering that coca grows well up to altitudes of 1,600 m and also below 600 m.

If these altitudes are included, the number of hectares dedicated to coca production must be approximately 70,000, and another 40,000 hectares could enter into production if the high prices continue, stated the expert.

Economist Hugo Cabieses affirmed in an article published by La Republica newspaper in Lima that the peasant farmers had begun to clear their land and that the areas in production this year grew to 65,000 hectares. New satellite measurements will not be available until October.

Even Peru's president Alberto Fujimori admitted "a slight increase" in coca production and in the price of the coca leaf during a press conference following a recent visit to Peru by Barry McCaffrey, director of U.S. National Drug Control Policy.

The U.S. official's visit led the government to renew efforts in the eradication of coca plantations in several areas of the Huallaga Valley.

The eradication goal this year is 8,000 hectares, which Cabieses considers "a stupid policy, a serious mistake and a helping hand to the Shining Path forces." He added that "the strategy change may be useful for internal United States politics, but not for ours."

Instead, Cabieses advocates an integral approach to the problem: socio-economic policies to fight coca production, punitive policies for illegal trafficking, and medical-educational solutions for problems related to drug consumption.

"If we apply an eradication-based policy, coca production just moves elsewhere. The reduction in Peru was replaced by an increase in cultivation in Colombia, and the problem continues to be unresolved," he stated.

"The cocaine demand in the United States has decreased - though since 1997 it has seen a slow but constant recovery - but consumption grew in Europe, Africa, Brazil, Mexico, Argentina and Chile," concluded Cabieses.