DATE=12/4/00

TYPE=BACKGROUND REPORT

NUMBER=5-47475

TITLE=PERU / COCA PT 1

BYLINE=BILL RODGERS

DATELINE=RIO DE JANEIRO

CONTENT=

VOICED AT:

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/// EDS: THIS IS THE FIRST OF A TWO PART SERIES. THE SPANISH ACTS ARE IN THE BUBBLE///

INTRO: The price of coca leaf, the raw material used to make cocaine, is rising in Peru. The increase is apparently in response to the impending crackdown on cocaine production in neighboring Colombia, where a U-S backed anti-drug program is underway. In the first of two reports, correspondent Bill Rodgers tells us Peruvian specialists fear the rising prices will lead to a resurgence of coca cultivation in Peru.

TEXT: Peru has been one of the success stories in the anti-narcotics war waged by Andean governments with substantial help from the United States. A U-S State Department report on drug control issued earlier this year praises Peru for making what were called enormous strides toward its goal of eliminating illegal coca cultivation.

Since 1995, coca cultivation in Peru has dropped by 66 percent. The amount of land used to grow Coca has fallen to 38-thousand hectares down from more than 100-thousand in 1995. U-S and Peruvian officials say this decline is the result of more effective eradication and anti-drug policies, as well as programs to promote alternative crops.

But the main factor may have been declining coca prices. Peruvian drug specialist Roger Rumrrill says Peruvian farmers stopped growing the illicit crop after coca leaf prices fell sharply after 1995.

///RUMRRILL SPANISH ACT WITH ENGLISH VOICEOVER///

In 1995 and 1996, the prices for coca leaves collapsed. The reason for this was due to a change in strategy by the narcotraffickers. They decided to transfer coca cultivation, to begin producing their own raw material in Colombia. This is the moment when Colombia, which had maybe only ten to 15-thousand hectares of coca in 1990, started to become the world's top coca producer and now has, according to specialists, some 150-thousand hectares of coca...This transfer of coca production caused coca prices in Peru to fall, so the drop was market driven, not the result of any policies. The farmers simply stopped planting coca.

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But prices have begun rising again. Since May, the price of a 12-kilogram sack of coca leaves, known as an arroba, has jumped from 20 to 50 dollars. Mr. Rumrrill, a Congressional advisor on Amazon drug trade issues, says demand for coca is growing as buyers fear an impending crackdown in neighboring Colombia under the U-S backed anti-drug effort known as Plan Colombia.

///RUMRRILL SPANISH ACT WITH ENGLISH VOICEOVER///

The prices are rising for one reason, and that is because of the effects of Plan Colombia. Plan Colombia, in some ways, is creating problems in the harvesting, processing and transport of coca. So, in the face of these difficulties of marketing the coca, the drug mafia is re-occupying it's old niches in Peru and Bolvia, and also opening up a new niche in Ecuador, in the province of Sucumbios.

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Other experts see the same phenomenon, including those involved in the U-S backed programs to persuade coca farmers to grow alternative crops. Alejandro Rodriguez, of the U-S company Winrock International, says he has been getting reports of steadily rising prices for coca leaf from his field workers. Mr. Rodriguez, whose company manages alternative crop projects for the U-S Agency for International Development, says these higher prices have caused some farmers to restore their old coca plots.

///RODRIGUEZ SPANISH ACT WITH ENGLISH VOICEOVER///

What's happening is that there are a lot of coca plots that were abandoned because prices were low, and there were other crops that were being promoted by the alternative crop development program. So the farmers were busy growing other crops, and they abandoned their coca plots. But now they're returning to these plots, weeding them, tending them to begin harvesting coca again.

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But the head of U-S-A-I-D's alternative crop program in Peru, Michael Maxey, disputes this, saying he sees no evidence yet that more land is being replanted with coca. Mr. Maxey believes farmers will not risk growing coca when prices for the illicit crop could again fall dramatically.

Yet the U-S official acknowledges the rise in coca leaf prices is worrisome. Others say this development seriously threatens the alternative crop programs, especially in light of the fact that coca prices are rising as prices are falling for legitimate crops such as coffee and cacao.

//OPT// Our next report will focus on the difficulties of persuading farmers to move away from coca and grow other crops.//End OPT// (Signed)

NEB/WFR/KBK