Peru

Peru, located in western South America along the Pacific Ocean between Chile and Ecuador and bordering Brazil, Bolivia, and Colombia, is ideally located for coca cultivation, cocaine production, and cocaine distribution. Not surprisingly, Peru is a center for the production and transportation of coca leaves, coca paste, and cocaine. Coca is an indigenous plant to Peru. Coca benefits from the high-alkaloid content in Peru's soil and is grown at altitudes between 2,600 and 3,600 feet in Peru's Andean highlands. Now the second-largest coca leaf-producing nation in the world, Peru was the world's largest coca leaf producer until 1996. It is also the second-largest producer of cocaine, estimated at 210 metric tons of potential pure cocaine in 2007. Although the United Nations (UN) estimates that rates of cocaine use are relatively low in Peru at approximately 0.6 percent of the population age 12 to 64, domestic consumption of cocaine appears to be increasing.

Peru is an original signatory of the 1961 UN Single Convention on Narcotic Drugs, which required that all signatories limit the production of controlled substances including coca. Regulated by the state-run Empresa Nacional de la Coca (ENACO), the Peruvian government permits 18,000 hectares of coca to be grown legally for cultural and economic purposes. For Peru's Quechua and Aymara indigenous population, coca is used for physical sustenance and for religious ceremonies. Legal coca production occurs primarily within the department of Cuzco. Illicit coca production occurs in the Departments of San Martìn, Huanuco, Ucayali, and Ayachucho, and increasingly in the Department of Loreto along Peru's Colombian border.

Initially, Peru acted as a transitory route for contraband and heroin smuggling into the United States. As worldwide demand for cocaine increased during the 1970s, coca production in Peru increased. In the Peruvian highlands, coca leaves were processed into coca paste, which was then shipped to Lima and converted into cocaine where it was shipped to the United States.

In 1982 Peru's economy collapsed, which in turn stimulated a coca boom in Peru. In 1985 Alan Garcìa was elected president to solve the crisis. However, owing to the heterodox macroeconomic policies implemented by Garcìa, Peru experienced severe hyperinflation. Peruvian campesinos (country people) increased their dependence on coca production as a way to substitute the declining value of the Sol with U.S. narco-dollars. Colombian crime syndicates such as the Medellìn and Cali cartels, needing coca paste, purchased paste with U.S. dollars from Peruvian traffickers who paid the campesinos in kind. The Colombian cartels then transported the Peruvian paste back to Colombia to process it into cocaine. Between 1982 and 1995, [Page 640]Peruvian coca production increased from an estimated 46,000 hectares to 115,000 hectares.

A Peruvian man selling fresh coca leaves at a tourist market. Peru is the world's second-largest coca leaf-producing nation.

The Upper Huallaga Valley (UHV) located in Peru's Department of San Martìn became a center of illicit coca production. To counter coca production, the Peruvian government, in accordance with their international obligations, attempted to develop crop substitution, eradication, and interdiction programs. To wean coca growers off of coca, the Peruvian government, with the help of the U.S. Agency for International Development and International Narcotics Matters, created the Proyetco Especial Alto Huallaga (PEAH) program, which was designed to coordinate alternate development projects. This program encountered several problems such as the inability of coca farmers to earn credit to develop alternate crops. The failure of the crop substitution program accompanied by the enforcement of U.S.-backed supply-side eradication and interdiction programs alienated the coca-growing population and stirred up acts of violence against the Peruvian government.

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