1: Summary, Issues, and Congressional Policy Options

Summary, Issues, and Congressional Policy Options 1

or at least 80 years, control and abuse of imported narcotic substances, in general, have been public policy concerns. International treaties have been largely inef- fective in controlling production and trafficking of illegalF drugs. The human “search for the high” fuels demand, and supply control has been nearly impossible. Cocaine abuse and its social and economic consequences have followed this legacy and reached disturbing proportions in the last decade.

INTRODUCTION Narcotics control strategies commonly are divided into demand- and supply-reduction programs. Although controversy exists over which of the two is the most critical, a comprehensive narcotics control strategy includes education, treatment and rehabilitation, development assistance, interdiction, and enforcement components (figure l-l). No single approach wilI solve the international narcotics problem, yet the proper mix of supply-and demand-control programs has yet to be identified. Although most coca currently is produced in the Andean region of Peru and Bolivia (87 percent) and Colombia (13 percent) (59), it also has been produced in other South American countries (e.g., Ecuador, Brazil) and Central America. If coca production is reduced in the Andean region, new production areas would likely arise as long as cocaine and its derivatives remain attractive narcotics. Nonetheless, supply reduction could have a valuable role in an overall narcotics control strategy. The temporary disruption of supply could increase street prices and reduce accessibility. The time investment to re-establish a production and cartel system is likely to be large and could have a debilitating effect on the overall industry (10).

1 2 I Alternative Coca Reduction Strategies in the Andean Region

Figure l-l—Components of a Comprehensive International Drug Control Strategy

International Drug Control Policy

Education Enforcement 1 1

Treatment) Rehabilitatlon

Development Aid

SOURCE: Office of Technology Assessment, 1993.

One potential strategy for reducing the flow of I Cultural Context cocaine into the United States is to identify and Coca is a traditional Andean crop, with evi- support the development of alternative economic dence of cultural significance dating from 2100 options for Andean producers of coca leaves and B.C. (11). Different coca-leaf varieties and asso- illegal coca-leaf products. This development- ciated chewing paraphernalia from succeeding oriented strategy for supply reduction shows centuries have been excavated in such varied promise, but is unlikely to solve the cocaine areas as northern Chile and Costa Rica (40). Coca problem without concomitant efforts in other leaves are a critical element in the traditional areas such as drug law enforcement, interdiction, Andean patterns of production and exchange and education and rehabilitation of drug users. between highlands and lowlands. Community Methods for coca eradication also are of and political solidarity were long maintained interest in supply reduction strategies. Although through these exchanges. eradication technologies focus on herbicide use, Chewing coca leaves has been practiced for there is increasing interest in applying biological thousands of years in the Andes and is still a control methods to narcotic crop control. Some pervasive cultural activity. Coca leaves are used experts believe eradication must precede alterna- to relieve fatigue, hunger, and a variety of human tive development in the Andean nations. Others ailments (e.g., 87 percent of Bolivia’s small town view coca eradication as futile and a threat to the and rural population use coca leaf for health culture and traditions of native Andean popula- reasons (28)). Coca leaves figure symbolically in tions. Although key requirements, host country cultural and religious rituals and are an integral consent and cooperation currently are unlikely part of many daily social routines. (57,58). Today, transformation of this resource into a high-profit cash crop and its resulting steep price The economic, environmental, and sociocultu- constitute a cultural threat and personal hardship ra1 features of coca-producing countries pro- for many indigenous Andeans. This situation may foundly influence supply reduction efforts. De- be exacerbated if coca eradication or substitution veloping suitable and effective approaches will programs further restrict the availability of coca require significant cooperative and coordinated leaf for traditional use. Coca reduction efforts, effort among all concerned parties. thus, will involve providing for traditional needs, while precluding illegal use (43). l-Summary, Issues, and Congressional Policy Options I 3

The Andean nations are increasingly concerned over the adverse impacts of cocaine on their societies. Pasta básica—an intermediate product of cocaine processing-generates effects similar to ‘‘crack’ and consumption increases have been noted in some Andean countries. Further, pasta básica contains significant impuri- ties (e.g., lead, sulfuric acid, kerosene) com- pounding adverse effects on users. In 1987, Colombia’s Health Ministry estimated that 2 percent of the population were regular users and a United Nations report estimated Colombia may have one of the world’s worst drug problems (14). Recent surveys indicate similar figures may apply Steep topography characteristic of the Andes gives rise to Bolivia. Within this heightened awareness of to significant climatic variations over short distances. the adverse effects of illegal narcotics, alternative development may find greater acceptance. heavy pesticide use, and subsequent movement of these chemicals to soil and surface and ground- 1 Environmental Context water resources (3,22,29). Chemical wastes from cocaine processing (e.g., The Andean region is complex in terms of its kerosene, sulfuric acid, lime, calcium carbide, geology, ecology, and cultural history. This acetone, toluene, ethyl ether, and hydrochloric complexity precludes simple or broadly applica- acid) also may impair terrestrial and riverine ble coca substitution or eradication approaches. systems. These wastes can increase water pH, The natural environmental diversity results largely reduce oxygen availability, and lead to acute and ii-em abrupt aptitudinal changes common in the chronic poisoning of fish (e.g., liver, heart, Andes. The region consists of a vertical succes- kidney, and brain lesions, and possible genetic sion of ecozones, ranging from rainforest and mutations). An estimated 150 Peruvian streams desert at the lowest levels to mountain tundra, and rivers have pollution levels exceeding the snow, and ice at the highest. The Andes enormous safety standards set by the World Health Organi- latitudinal and longitudinal range also makes for considerable variations in climate, soil, vegeta- zation (32). tion, and landuse (l). Proposals for coca eradication using herbicides The primary zones of illegal coca cultivation have been criticized for environmental reasons. include the Chapare in Bolivia, the Alto Huallaga Environmental reviews elaborating the potential in Peru, and a variety of areas around the Cauca environmental effects of chemicals have been Valley in Colombia (figure 1-2). These areas are prepared for specific herbicides identified as characterized by high rainfall, acidic soils, and effective at eradicating coca species. However, altitudes ranging between 200 and 1,500 meters the process has been less rigorous than that above sea level (masl). Many of these areas are required for domestic activities under the Na- inappropriate for agriculture, much less for char- tional Environment Policy Act (NEPA). Substan- acteristic coca cultivation (22). There are a tial Peruvian opposition to the use of herbicides in number of environmental concerns arising from the Amazon Basin resulted in cessation of U. S.- coca production: deforestation to establish coca sponsored herbicide testing and data gathering in fields, soil erosion and associated fertility losses, Peru (45). As a result, a complete analysis of the 4 I Alternative Coca Reduction Strategies in the Andean Region

Figure l-2—Primary Coca-Producing Zones in Bolivia, Peru, and Colombia — Guajira Region — Cartagenad ~

UY w n z a z u u x 1- U g

—

Region &-&-., y [

LLl(n B (3 z a -J < Region m 1- $ (J

SOURCE: Office of Technology Assessment, 1993. l-Summary, Issues, and Congressional Policy Options I 5

potential impacts of herbicide use on future land national governments face in drug crop control and aquatic productivity is not available. efforts. As one analyst suggests: Biological control (biocontrol) has been identi- . . .[the U.S. is] asking a country [Peru] that’s fied as an alternative to chemical control of coca. fighting the Civil War and going through the The United Nations International Drug Control Great Depression at the same time to suddenly Programme identified biocontrol as a possible take on Prohibition as well (4). eradication method for narcotic crops nearly a decade ago, and interest continues in investigat- BOLIVIA ing the potential for this technology to control a The progressive impoverishment of Bolivia’s variety of narcotic crops (54). Biocontrol relies on rural upland population, dating from the colonial the use of biological agents to prey on an period, was accelerated in the 1980s by severe identified target and reduce its prevalence in the drought and by agricultural and trade policies treatment area. However, some disagree about the unfavorable to subsistence farmers. Many peas- potential for biocontrol techniques to achieve ants were forced to migrate to other areas, eradication. Biocontrol may provide an environ- including the Chapare--a center for coca cultiva- mentally benign way to reduce coca cultivation, tion. This influx of labor, and a general economic yet there are considerable social and political decline, affecting even middle-class Bolivians, constraints to its implementation. helped spur a surge in coca-leaf production and processing as the only economic alternative for many financially-desperate Bolivians. B Social, Political, and Economic Context However, estimates of the population involved Long-term social inequities and political and in the coca trade vary widely. For example, 20 economic unrest contribute to coca’s dominant percent of the Bolivian workforce was estimated role in the economies of Bolivia and Peru, the to be involved in the coca economy in the late world’s leading producers of coca leaf. Colombia, 1980s (24) whereas a 1990 report estimates only where a large cocaine trafficking industry has 7 percent (19). Nevertheless, the Bolivian coca emerged, also exhibits extreme social and politi- economy annually generates as much foreign cal instability. It is in this unsettled milieu that exchange (roughly U.S. $600 million) as all other coca-dominated economies have flowered. How- exports combined (5). ever, each country has a unique set of contributing Social and political inequities persist in Bo- circumstances. livia, such that peasant populations have meager The cocaine economy—including production, educational and development opportunities, while processing, and transport-is extensive in Bo- an agrarian elite wields considerable political livia, Peru, and Colombia. The continuum from power and monopolizes the country’s financial coca production to cocaine marketing involves resources. This situation seriously constrains different actors, with different values; their com- possibilities for the country’s broad-based socio- monality is that each finds coca a ready cash economic development (27,30). source (35). Individuals deriving the greatest Although Bolivia operates under a democrati- economic benefits from coca production (i.e., cally elected civilian rule, and is somewhat more narcotics traffickers) have gained political power stable politically than Peru or Colombia, the through a variety of mechanisms (e.g., bribery, political situation is tenuous. Many national land acquisition, farmer/cattlemen associations, institutions, including judicial and law enforce- assassinations) (14). The strong presence of ment agencies, are weak, and the government has numerous insurgency and terrorist groups com- not been able to lift the majority of Bolivians out pounds the difficulties Peruvian and Colombian of poverty. 6 I Alternative Coca Reduction Strategies in the Andean Region

PERU because State presence traditionally has been Recent peasant migrations from the Peruvian weak; guerrilla movements are strong, and politi- highlands to the coca-growing Alto Huallaga is cal “clientelism” rampant, with increasing con- the latest chapter in a long history of economically- centration of land, capital, and credit in the hands induced migrations. Land shortages and/or lack of an elite minority. As the gap between rich and of work in the highlands, as well as rapid poor has widened, so has that between written law population growth (beginning in the 1940s), have and the economic behavior of the underground fueled the latest population movements into the cocaine economy. Drug-related violence and eastern valley systems. corruption have undermined the country’s courts, Coca cultivation has expanded in the Alto and police and customs service, as well as the Huallaga, in part as a result of these migrations military (8). and in part due to the country’s failing economy Colombia has enjoyed positive economic and severe international debt crisis. Coca produc- growth overall in the past four decades, but drug tion expanded considerably as economic condi- money now spreads corruption throughout the tions worsened in the late 1980s, softening the country’s economy. Real estate and construction most profound economic and employment crisis have been particularly heavily infiltrated by in the republic’s history. The coca economy narcotics investors, who have had technologically continues to increase proportionally to the decline modernizing g but socially regressive impacts. For of the nation’s legal economy (31). example, although they have introduced and Attempts at economic reform by the Fujimori financed new technologies for increasing eco- Administration are undermined by pervasive nomic productivity, they have also established political unrest, poverty, and an uncertain busi- paramilitary groups, discouraged peasant partici- ness environment. Alberto Fujimori ended 12 pation in the political process, concentrated land years of democratic rule in Peru when, supported ownership, and laundered capital in investments by the army and police, he seized political power with fast turnover rather than higher long-term in a “pseudo-coup’ (23). Peru’s current state of yields (51). extreme economic and political instability consti- Colombia’s growth record was much better in tutes a domestic crisis that overshadows the the pre-cocaine era than it has been in the importance of counternarcotic efforts in the post-cocaine era. The trend today is toward minds of most Peruvians. Moreover, strong guer- declining economic productivity and reduced rilla movements in Peru’s coca-producing areas growth. Domestic drug violence and terrorism make any counternarcotics initiatives extremely further undermine the country politically and hazardous. In recent years, 10 workers for the economically. Today, Colombia is one of the U.S. Agency for International Development (AID) most violent countries in the hemisphere. Strength- have been killed here (34). ening and redefining the role of the State in Colombian society is central to the success of any COLOMBIA drug-control policy. Coca production has not been as widespread in Colombia as in Peru and Bolivia. Coca production, banned in 1947 after lengthy public debate, I Development Assistance and has re-emerged, however, paralleling the devel- Coca Reduction opment of a large and lucrative criminal-run Development assistance seeks to create and cocaine manufacturing industry, with exports extend alternative livelihoods, build local institu- netting close to U.S. $3 billion a year. The illegal tions, provide education and training, promote drug industry has flourished in Colombia in part infrastructure improvements, and provide social l-Summary, Issues, and Congressional Policy Options I 7

services. The development goal in coca substitution programs is to assist countries dependent on a black-market economy to move toward legitimate markets. In the coca-producing countries, the focus largely has been on developing alternative agricultural systems incorporating high- value or multipurpose crops. However, existing national agricultural policies do not favor smallholders—those most commonly involved in coca production.1 Fiscal realities result in focusing resources on areas of high population density. Conversely, coca-producing regions tend to be remote and sparsely populated and, within this environment, few opportunities exist for smallholders to be profitable in the legitimate agricul- Small, remote landholdings characterize many coca- tural market (2,27,34). growing areas. Production units often are less than 2 Early U.S. coca substitution efforts focused on hectares in size, such as this minifundia. producing regions in the Andean countries (i.e., alternative crops, demonstration and extension of Alto Huallaga in Peru, Chapare in Bolivia). Initial promising technologies to farmers, agroprocess- substitution efforts in Bolivia concentrated solely ing, and infrastructure development. Crop substi- on farmers in the Chapare region through the tution approaches sponsored through the United Agricultural Development in the Coca Zones Nations International Drug Control Programme Project (ADCZP) and later under the Chapare are built on the concept of rural development that Regional Development Project (CRDP). How- complements substitution efforts. While crop ever, it became apparent the combination of an easily produced crop, stable market and market- diversification alone may provide greater security ing charnels, and an abundant labor supply as a for farmers compared with drug-crop monocul- result of population migration were all fundamen- ture, the transition to legal crops also requires tal to the increase of Chapare coca production. concerted efforts in development of production Thus, the CRDP was redesigned to include practices, infrastructure, and markets (36). development in emigration zones through the The economics of coca is often seen as the Associated High Valleys component. This effort primary constraint to widespread adoption of has been expanded further to encompass inte- alternative crops. Coca profits are nearly twice grated regional development under the Coch- that of identified high-value crops (e.g., peach abamba Regional Development Project (COR- palm) and at least four times greater than other DEP) (figure 1-3). Similarly broad development traditional crops such as pineapple or citrus (61). efforts are likely to be needed in other coca- However, declining prices at the producer level producing areas as well. suggest coca may no longer be the most lucrative Numerous national and international organiza- crop (18). Furthermore, such comparisons may be tions have been actively involved in coca substi- meaningless: the nature of coca production defies tution projects in South America. Their activities traditional methods of estimating profitability include basic and applied research on potential

1 There are exceptions to this statement, most notably the long-range Colombian coffee policy designed to stabilize the national production system in light of the effects of the international market on prices and thus on producer earnings (18). 8 I Alternative Coca Reduction Strategies in the Andean Region

Figure 1-3-Evolution of the Cochabamba Regional Development Project (CORDEP)

Bolivia Cochabamba Department

Punata

Santa Cruz ~Arani/ Carrasco I ~

(Bolivar’ ~.

\’0’0’’l=2-bwJi-‘‘ - ‘‘ -~ .Capinota

Areas with coca n Areas covered under In Areas covered under ~ Additional areas to be the Chapare Regional the High Valley Component covered under the Development Project of the CRDP Cochabamba Regional (CRDP) Development Project (CORDEP)

SOURCE: Office of Technology Assessment adapted from Development Alternatives, Inc., Cochabamba Regional Development Project (CORDEP)--Bolivia, technical proposal (Bethesda, MD: DAI, 1992).

because of its dependence on unpaid family labor on certain commodities and tariff reductions on (38). value-added products could complement the goal A combination of legitimate crops suitable to of the ATI. the environmental and sociocultural features of In the past few years, crop substitution has the production region, market assurance, access become a subset of alternative development in the to affordable credit, and a suite of social/human Andean countries as attention to industrial and services (e.g., rural justice, school systems, health marketing aspects has increased. Nevertheless, care) could be sufficient incentives for coca the focus remains on agriculture and related producers to adopt alternative systems (box l-A). industries. The alternative development problem Removal of U.S. trade barriers for certain South is complex, requiring attention to numerous American exports, for example, could promote variables, and not adequately addressed by any crop substitution and development of value- single approach. Long-term programs are needed -added industry (9,3). To some extent, this has that provide a range of options for potential been accomplished under the recent Andean participants. Trade Initiative (ATI). Revision of import quotas l-Summary, Issues, and Congressional Policy Options 19

Box I-A=High-Value Legal Alternatives to Coca: Sericulture in Colombia The economics of coca prochtion has been perhap6 the single most widely articulated obstacle to successful crop substitution efforts. However, some disagree over the need for a doiiar-for-ddiar equivalent to coca or if an integrated alternative development package based on legitimate crops, deveiopmentofproduction and marketing infrastructure, and social service amenities is sufficient, However, combining a high-value, iow-voiume crop with dear market potential into an integrated development package may offer the greatest benefits. Sencuiture (siikproduction) in Cofombiagrew in 1970 as part ofadiversification program sponsored by the Colombian Coffee Grwers Federation (FEDERCAFE). By 1987, siik production was in progress in the Departments of Caidas, Risarak@ Vafie, and Cauq with a totai production area of 124 hectares. A piiot plant was established in Timbio (Cauca) to process highquaiity -ns into export products, however, the piant subsequently dosed due to technical difficulties (15). The Colombian sericuiture activities have been sponsored through a blend of national and international funding sources, primarifythe Colombian Government and private sources and Korean investors. Currently, five siik-producing ventures exist in Colombia (i.e., COSEDA and COKOSiLK, joint ventures between Colombia and Korea; COSiLK, 100-percent Korean investment; and CAPULLOS and PROSEDA, 100-percent Colombian investrmnt). The Colombian Government promotes sericuiture by finandng aii technical assistance and providing credit opportunities at 28 percent interest. in addition, credit is avaiiabie through FEDERCAFE and the Export Promotion Fund (PROEXPO) at 18 and 32 percent interest respectively (15). The availability of sericuiture technologies, technicai assistance, credit, and markets suggests siik production couid become an attractive alternative crop for some areas (15, 41). A prqect currently underway in Colombia’s Cauca Department is attempting to promote sericuiture as an alternative to coca production for nearly 300 farm famiiies in two smafi towns (Pan de Azucar and Santa Cruz). The project~iikfor Life-is sponsored by the Wisconsin Farmers Foundation, inc. and works with iocai farmers and siik weaving grwps and a weaving cooperative in Miiwaukee, Wisconsin. The project site is characterized by smafi farms (about 8 hectares) and a iack of transportation and electrification systems. For at ieast a decade, coca has been incorporated in farmer’s prtiuction schemes as a cash source. Nevertheless, today 40 piiot siik farms are operating under the Siik for Life prqect (16). The prqect approach is based on basic rural economic development with goals of reducing coca production in the region and reviving the associated rurai communities. The Siik for Life project offers a blend of technicai assistance, credit and marketing opportunities to support the producers: ● Trah@-Two modei farms exist in the are% one in Timbio and one in Santa Cruz, to demonstrate sericuiture techniques for potentiai adopters. ● Technology-Technical assistance is offered in basic sericuitureteohniques, energy systems, and organic farming. ● &farkef@-Centrai marketing is organized for iocaiiy-produced cocoons. ● Credi+tdateriais for sericuiture startup are avaiiabie thrwgh the project on a ‘barter’ basis whereby the borrower repays the ioan with cocoons after production has begun. in addition to focusing on an economically attractive crop, this project has blended a variety of additional features into a singie package to promote sericuiture in Pan de Azucar and Santa Cruz, Cauca. The package indudes generating support from iocai community ieaders and incorporating community development features (e.g., electrification, transportation) that may have benefits beyond sericuiture (16). SOURCE: office of Technology Aseeeement, 1993. 10 I Alternative Coca Reduction Strategies in the Andean Region

Opportunities exist to promote alternative development in the Andean region. Many of these are technically based, as in developing sustainable forestry practices suitable to current coca production regions. However, broad opportunities also exist for influencing the viability of coca reduction efforts more generally. These overarch- ing issues include creating national incentives for participation in alternative development, gathering and making available information needed to support alternative development, coordinating donor activities, and pursuing integrated national development.

CREATING NATIONAL INCENTIVES Coca retains its cultural and social significance for FOR COCA REDUCTION many Andeans today. Here, coca leaf (hoja de coca) is Technical feasibility alone will not guarantee being prepared for transport to legitimate markets to be sold for traditional use. success for coca reduction efforts. The political will of Andean nations is critical, as is the including provision of basic human services, rural acceptance and support of Andean peoples. The justice, and other needed institutions. Local Andean nations (Bolivia, Peru, and Colombia) governments with leaders elected directly and operate with differing political agendas, and held accountable by rural constituents could driving social, cultural, and economic forces. increase rural participation in the political proc- Also complicating substitution efforts is the fact ess. Such efforts could reduce the environment that coca cultivation has enormous cultural and where insurgency and lawlessness flourish. economic significance for Andeans. The chewing Local grassroots organizations have played a of coca leaves for social, medicinal, and religious/ large role in rural politics, particularly in Bolivia spiritual purposes is an important and long- where local unions--sindicatos-have provided standing tradition that may inhibit acceptance of a means for rural inhabitants to voice their coca substitution programs. concerns and desires to a centralist national Existing economic conditions in the Andean government. Nevertheless, assistance activities countries profoundly influence national ability to often do not make use of these local avenues of undertake coca reduction programs, including leadership and community cooperation. Accep- crop substitution and eradication components. tance of programs to reduce coca production Coca production contributes heavily to the na- could be enhanced through efforts to incorporate tional economies-in most cases comprising the local groups in planning and implementation greatest share of export income. Developing (27). mechanisms to improve national economies could Support for U.S.-bilateral efforts in the Andean contribute to greater ability to enter into coca region is poor. Many Andeans perceive U.S. reduction programs. Such an effort is likely to activities as heavy-handed attempts to solve our require short-term economic relief and long-term domestic narcotics problem on foreign soil. A key economic development (58). concern is that without commensurate demand Another constraint to reduction efforts is the reduction efforts, supply reduction merely in- lack of governmental presence in rural areas, creases costs to the Andean countries. Yet, U.S. l-Summary, Issues, and Congressional Policy Options I 11

Table l-l—Federal Drug Control Budget Authority cally, potential for effective alternative develop- (billions of dollars) ment programs is greatly reduced (57,58). Percent demand Option: Congress could create “debt-for-drugs” Supply Demand of total swap opportunities for the Andean countries. 1981 ...... $ 800 $ 350 30 % 1983...... 1,250 350 22.6 Providing bilateral debt relief in exchange for 1985 ...... 1,700 400 19 coca reduction achievements—“debt-for-drugs’ 1987. , ... , . . . 2,900 900 24 swaps—has been suggested as an opportunity for 1989 ...... 4,000 1,600 29 improving supply reduction efforts, yet specific SOURCE: M. Collett, “The Cocaine Connection: Drug Trafficking and Inter-American Relations,” Headline Series, Foreign Policy Associa- legislative action has not been taken. Examples of tion, No. 290, Fall, 1989. successful debt swaps suggest similar actions could be useful for coca reduction. The United Federal expenditures focus on supply reduction States recently eliminated $371 million of Boliv- (table l-l). Analysts suggest that under these ian debt under the Enterprise for the Americas circumstances, multilateral activities are more Initiative (EAI) (25). The EAI debt reduction likely to be publicly acceptable. In addition, component could serve as a model to develop public outreach and education efforts and greater “debt-for-drugs” swaps. National policy actions coordination and cooperation with host countries promoting preconditions for successful alterna- could support these activities (57,58). tive development could serve as “collateral” for Issue: Lack of economic incentives at the debt relief. national level hinders active participation in Conversely, if lessons from related activities coca reduction programs. involving national economic incentives are re- The ability to carry out programs is inextrica- viewed, possibilities for dramatic results from a bly linked to economic conditions. Some poorly “debt-for-drugs” program may seem less likely. paid public officials can be bribed to ignore For example, certification for U.S. development illegal activities, poorly supported research and assistance funding has been used as a mechanism extension systems are unable to provide high- to motivate compliance with coca reduction goals quality technical assistance to producers, and and although it has elicited short-term reduction scarce alternative employment opportunities lead efforts, it has yielded little in overall supply to participation in the coca trade. The level of reduction. Nevertheless, debt relief could provide bilateral debt owed by the Andean countries to the a double service by increasing political will to United States alone is significant and far outstrips undertake supply reduction and improving the their annual gross national products (GNPs) fiscal ability of national governments to finance (table 1-2). Debt servicing hinders national gov- needed national projects. ernment investment in needed development activities. Issue: Andean eligibility for U.S. development Generating political will to undertake coca assistance is closely linked to coca reduc- reduction might be enhanced by providing gen- tion. eral economic incentives to national govern- Eligibility for development aid is in part based ments. The current political and economic condi- on narcotics reduction achievements. Thus, at the tions of the Andean countries significantly reduce national government level, the development goal the ability of national governments to undertake may become secondary to a counternarcotics coca reduction programs. Yet, without national agenda-i. e., success may be measured by hec- commitment to improving opportunities for rural tares of coca reduced rather than hectares of communities in general, and coca farmers specifi- legitimate crops produced. Further complicating 12 I Alternative Coca Reduction Strategies in the Andean Region

Table 1-2—Andean Bilateral Debt With the United States (In millions of dollars, as of 9/30/90)

Debt:GNP GNP ratio AID PL-480 ccc EXIM Total Bolivia ...... $46.0 11:1 $ 331 $141 $0 $33 $ 505 Colombia ...... 354.0 3:1 499 2 0 497 998 Peru ...... 189.0 4:1 318 221 95 54 688 Totals ...... 1,149 95 2,191 AlD-U.S. Agency for International Development PL-480-Agricultural Trade Development and Assistance Act of 1954 as Amended, “Food aid” CCC--Commodity Credit Corporation EXIM--Export-lmport Bank SOURCE: U.S. Department of the Treasury, “Enterprise for the Americas Fact Sheet,” Washington, DC, September 30, 1990.

this situation is the reliance on narcotics data of Issue: Lack of rural governmental presence questionable accuracy to support reduction hinders adoption of coca reduction pro- claims. grams. Option: Congress could refocus certification Government presence generally is weak in requirements for development funding to in- rural Peru, Bolivia, and Colombia. National clude specific development objectives in addi- governments could choose to address this condition to satisfying “coca clauses.” tion through policies that establish effective local The basis of alternative development is to governments and state control within the frame- assist recipient nations to enter the international work of the legitimate judicial system. An im- legitimate economy. Preconditions for achieving proved judicial system could facilitate develop- this goal have been identified and are part of many ment activities and offer increased human rights donor activities. However, some conditions can protection. only partly be fulfilled by donors and require the Rural government presence encompasses ac- firm commitment of host countries. For example, countability to local political authorities by police increasing local government presence, promoting and security forces, legitimizes support of the rural justice, and providing social services for democratic process, and strengthens the judicial rural populations will depend largely on national system. Administration of rural justice and con- government efforts, yet are critical for improving trol of national territory are critical for imple- development opportunities. Refocusing assist- menting development programs and development ance certification criteria on the achievement of of popular support for substitution efforts. Com- these development goals could increase interest mon development assistance goals-institution on the part of the host country. building, providing social services, and improving However, placing additional burdens on na- standards of living-may contribute to increasing tional governments to achieve development goals security in rural areas. to qualify for U.S. assistance might be unrealistic The U.S. Department of Justice and AID offer given economic and political conditions in the Andean region. Conversely, certification could assistance to judicial institutions in the Andean highlight development objectives to the exclusion countries through several programs intended to of coca reduction. Such an act is likely to require improve the administration, operation, and effec- a significant increase in U.S. domestic enforce- tiveness of the country’s judicial system. How- ment, interdiction, and education to prevent ever, this assistance is a small part of the overall increased narcotics abuse in the short term. assistance budget. l-Summary, Issues, and Congressional Policy Options I 13

Option: Congress could direct AID to increase its support to judicial institutions in the Andean nations through Justice Sector and Strengthen- ing Democracy projects. Greater presence of rural justice in current coca-producing areas could yield benefits in increasing stability by assuring those breaking laws would be properly adjudicated in an established legal system. AID justice-sector programs have been implemented since the mid- to late 1980s in Bolivia and Peru. Achieving increased rural justice in the current social and political climates of the Andean region is likely to be difficult. A concerted effort is likely to require additional fiscal resources, and in areas Coca farmers receive the lowest percentage of profit where violence is significant, security needs in the cocaine industry-perhaps as little as 1 percent. would be paramount. Increasing military and Here, a coca farmer in the Chapare is spreading the harvested leaves to dry them in preparation for sale. police presence in some areas may not be perceived as a benefit at a time when militariza- However, diverse political parties may influ- tion components of the “drug war” are unpopu- ence grassroot organization activities, and politi- lar. cal conflicts between the state and these organizations may create difficulties for the organizations Alternative Option: Congress couId direct AID to as development vectors. These features should be increase the level of coordination/cooperation considered in project plarming and approaches to with local grassroots organizations. deal with them identified to reduce any potential Local community groups have and continue to adverse impact on project effectiveness. play an important role in Andean rural politics. Grassroots organizations typically have strong INFORMATION NEEDED TO SUPPORT support from local populations and understand ALTERNATIVE DEVELOPMENT PROJECTS local cultures, aspirations, and priorities. Groups Setting realistic goals for coca reduction pro- such as the Bolivian sindicatos provide a mobiliz- grams will depend, in part, on availability and ing force for rural change and expression of accuracy of basic information on coca farmers concerns to the national governments. and others linked to the cocaine economy. Identi- Incorporating existing community groups and fication of key targets for alternative development other grassroots organizations in planning and activities will be integral to increased effective- implementing alternative development programs ness of U.S. development assistance. Several could yield benefits in adoption rates. Bolivian initial questions need to be addressed: What is the crop substitution programs might work coopera- current and potential areal extent of coca produc- tively with sindicatos to promote peaceful crop tion? Who and where are the populations eco- substitution and alternative development efforts. nomically linked to production? What are the Such cooperative efforts would ensure local appropriate levels of development (e.g., subsis- concerns were identified in project planning and tence, semi-commercial, commercial) for these encourage local understanding of the project areas and populations? Additional decisions might process. further refine target groups (e.g., identifying what 14 I Alternative Coca Reduction Strategies in the Andean Region

economic population should receive priority— identify populations and economic sectors poorest, borderline, or entrepreneurial). Informa- directly and indirectly linked to coca production needed to support alternative development/ tion and their relative level of dependence and coca reduction programs includes: use this information to direct development projects to high priority targets. ● Extent of the coca economy (including direct and indirect participants), Profiles could be developed using existing . Comparison of coca and alternatives, and information gathered through activities of both agencies. AID and its contractors have accumul- . Centralized and easily accessed source of ated a wide array of information on coca produc- information related to ongoing activities. ers and farm laborers. The U.S. Department of Issue: Inadequate information on the true State has focused more on those involved in the extent of the coca economy hinders develop- additional aspects of transport, processing, pro- ment of programs to reduce dependence. viding precursor chemicals, etc. This information Studies of the extent of the coca/cocaine could be pulled together to create a comprehen- economy are lacking and likely to be difficult to sive profile of the breadth of the coca economy conduct. While estimates of the relative size and and provide an outline of key populations/sectors importance of coca to national economies exists, that ultimately will be affected by coca reduction little information is available that identifies the programs. Such an outline could provide an subsectors dependent on coca/cocaine produc- agenda for future international development plan- tion, nor their level of dependence. Yet, such ning as well as a resource for a national develop- information could provide insights for development strategy. ment projects and improve opportunities for Additional funding could be made available to integrated development. allow profile development without adding the Collecting information that accurately identi- burden on agency staff. In addition, some activi- fies populations involved directly in coca produc- ties and populations may be more transient than tion (through production, labor, transport), in- can be incorporated readily into such analysis. cluding the extent of dependence (i.e., part-time, The segments of the coca trade that are likely to seasonal, full-time), and survival strategies dur- be excluded or insufficiently described also could ing low coca prices, is likely to be difficult. be identified in the overall effort. Mechanisms to Existing information sources might provide an assure the profile information is used in future alternative to new information-gathering activi- project plarming also would be needed. ties. Information on coca farmers in the Chapare Issue: Lack of accurate economic studies com- exists through the Cooperative Agreement on paring coca with other potential alterna- Human Settlements and Natural Research System tives hinder efforts to promote adoption of Analysis (SARSA). Although somewhat dated, renewable resource-based alternatives to similar information exists for farmers in the Alto coca. Huallaga. This resource could be reviewed and Coca is a traditional Andean crop, relatively evaluated within the context of improving identi- easy to produce and sell, and provides a good fication of target populations for alternative return on investment. Although coca prices fluc- development programs. tuate, traditional economic analyses suggest they Option: Congress could direct the U.S. Depart- are high relative to legitimate agricultural comment of State, Bureau of International Narcot- modities that are more visibly affected by global ics Matters, and AID, cooperatively, to develop markets. These conditions make identifying and comprehensive coca industry profiles that promoting alternative crops difficult. l-Summary, Issues, and Congressional Policy Options I 15

Although alternative crops, products, and ac- hinders improved project planning and tivities exist, information on the market potential implementation. of many of them is lacking. However, such A lack of institutional memory within AID, and information could facilitate identifying priorities other bureaucratic constraints, work against incor- for alternative development efforts. Additionally, porating lessons learned from past activities into economic analyses of other alternatives such as new project plans. The AID project approach forest products, wildlife, and fisheries as com- incorporates numerous technical and contract pared with coca and alternative crops could be groups and information gathered by these groups used to identify additional opportunities for may or may not reach CDIE files. Thus, potential specific regions. lessons learned from early activities may not be Option: Congress could direct AID, coopera- used to improve current projects or the design of tively with the U.S. Department of Agriculture, future projects. Stringent requirements for filing Economic Research Service, to undertake eco- project studies and reviews along with improved nomic studies of renewable resource-based training of AID personnel, emphasizing area alternatives environmentally suitable to coca- history, could promote use of “lessons learned” producing areas that have not been evaluated materials. Additional requirements for contrac- economically to date. tors to generate logs of activities and results from Alternatives to be evaluated economically their efforts could be useful in future program (e.g., agroforestry, forestry, extractive reserves, planning. AID could strengthen its requirements alternative crop plants, animals, etc.) could be for filing contractor reports and other project- identified by AID, along with regional characteri- related information with CDIE to assure that this zations describing existing production opportuni- resource is easily available for future project ties and constraints. For example, if tropical development. hardwood production provides an environmentally suitable and high-value opportunity in cer- Option: Congress could direct AID to establish tain regions, but is constrained by lack of and maintain an interpretive database on processing or harvest mechanisms, these features institutional experiences and development could then become development priorities. project evaluations in the Andean region. Studies would be prepared and filed with A large body of information exists on develop- AID’s Office of Evaluation, Center for Develop ment in the Andean region, but much of this ment Information and Evaluation (CDIE) and information is “gray literature” and can be available to prioritize activities in the Andean difficult to access. AID currently is developing a region. The information could be made freely management information system (MIS) database available to international development assistance on AID alternative development projects in the groups and used to promote adoption and assist in Andean region to improve its ability to measure developing appropriate incentives for adopters. the impact of these efforts. The system will be However, the fluctuation of global markets updated semi-annually and will include a variety may complicate such analyses. Thus, opportuni- of economic and project data. This effort could be ties and analyses may only be accurate for short expanded to incorporate the activities of other periods, making rapid turnaround a high priority. donor groups operating in the Andean region, Additional pressures on staff time could result in thereby supporting improved donor coordination. reduced attention to ongoing priorities. Once established, project planning could require Issue: Lack of a centralized information a database search to identify potential cooperative source on alternative development activities opportunities. 16 I Alternative Coca Reduction Strategies in the Andean Region

However, by incorporating the broad array of Option: Congress could direct the U.S. Depart- activities, database development and mainte- ment of State to establish a coordinating nance tasks would be increased dramatically. committee comprised of U.S. development Additional financial resources might be needed agencies, those receiving U. S. funds for devel- and without additional appropriations could come opment activities, and national government at the expense of more applied activities. In counterparts to improve coordination of develop- addition, the ongoing United Nations effort to ment programs. develop a Sustainable Development Network A variety of U.S. agencies and international (SDN) could complement AID’s MIS effort. The institutions, and multilateral banks receive U.S. SDN effort is intended to assist less developed funding for development activities in the Andean countries to develop and maintain data on domes- region (e.g., AID, InterAmerican Foundation, tic development activities with an ultimate goal of World Bank, InterAmerican Development Bank, developing a global network. United Nations). A committee composed of representatives of these organizations could be DONOR COORDINATION created to develop a unified alternative development approach for the United States and ensure The narcotics problem is immense, and the that activities complement one another or at least impact of one donor is likely to be small. Many do not work against each other. Such a committee bilateral and multilateral groups are actively could be responsible for setting a development working toward a variety of development and agenda, prioritizing needs, and linking similar coca control goals. Coordination of the numerous activities among cooperating groups. organizations involved in the Andean countries However, coordination by committee can be poses a difficult problem, yet it could yield large time-consumin g. Scheduling meetings and pre- benefits in achieving comprehensive counternar- paring committee reports would add to staff cotic and development goals. The Organization of duties. Further, authority would be needed to American States identified the need for a coordi- ensure committee findings and recommendations nating body for early development efforts in the were adequately considered by individual imple- Chapare to coordinate the activities of nearly 54 menting agencies. Such additional bureaucratic donor organizations. The need for such coordina- processes are unlikely to be popular among tion throughout the Andean region remains. implementing agencies. Issue: Lack of donor coordination has reduced Issue: Coordination between enforcement and the effectiveness of rural development and development activities is inadequate. crop substitution efforts in Andean drug- Diverse or conflicting goals and operations of producing nations. the numerous agencies (e.g., U.S. Department of Uncoordinated donor activities can result in State, Drug Enforcement Administration) active duplicative or counterproductive efforts. Devel- in the Andean nations have adversely affected opment funds may be spent on similar projects local response to development activities. For without incorporation of ‘lessons learned. ’ Simi- example, nondevelopment operations have led to larly, lack of coordination can reduce opportuni- some distrust of development personnel in certain ties for efforts aimed at solving mutually identi- locales. Thus, coordination of all agency activi- fied problems and preclude potential for ex- ties may be required to improve acceptance of panded efforts or building on current activities. U.S. development groups. Enforcement typically ‘‘Reinventing the wheel’ may have high costs in is dependent on maintaining a certain level of overall terms of donor funding. secrecy and, possibly, coordination with develop- l-Summary, Issues, and Congressional Policy Options I 17

ment activities would be seen as potential ‘leaks. ’ fulfill a broad number of needs concomitantly. Nevertheless, these two activities necessarily For example, whereas the crop substitution efforts complement one another and, without coordina- in the Chapare region concentrated on identifying tion, have the potential to detract from each high-value crops, little effort was invested in other’s effectiveness. Coordination of enforce- developing processing, transport, and marketing ment and development activities should occur at mechanisms. This has changed under the current high levels, with clear separation at the field project (i.e., CORDEP), however, and a regional application level. development approach has been embraced. Option: Congress could create an interagency Alternative development programs could be coordinating body composed of representa- enhanced further through integrated development tives of the agencies involved in development strategies that expand options for those involved and enforcement in the Andean countries (e.g., in the coca economy. Development, agricultural AID, InterAmerican Foundation, U.S. Depart- or otherwise, in the Andean countries might best ment of State, Drug Enforcement Administra- be approached in terms of economic diversification). tion. Diversification of local and regional economies could include agricultural options, light A coordinating group with representatives industry, and service operations. from the agencies involved in development and Should efforts continue to focus on narrowly supply control activities in the Andean region circumscribed regions and solely agricultural could promote unified direction for U.S. efforts. opportunities, the chances for coca reduction Congress could choose to create a separate task success will be similarly narrow and circum- force or place the responsibility under an existing scribed. Rural development alone may be insuffi- agency. The Office of National Drug Control cient to extricate these countries from their Policy currently coordinates agency activities economic dependence on coca production. In- related to international and domestic demand creasingly, urban poor have become involved in control, interdiction, and financial systems, and the coca economy as farmworkers, processors, thus may be an appropriate entity to coordinate and transporters. the broader picture of narcotics-related activities. However, as an executive branch office, congres- Issue: Short-term project cycles reduce the sional investigation and oversight of committee potential for effective, integrated alternative activities could be curtailed. development efforts. Alternative development is not a short-term INTEGRATED NATIONAL problem nor likely to be solved with short-term DEVELOPMENT solutions. The transition time from coca to The extent and importance of the coca econ- alternative production systems is likely to be omy in the Andean nations strongly influences lengthy and programs or projects must consider the ability of narrowly focused, short-term efforts this investment time. Moreover, incremental sub- to achieve promising results in coca substitution. stitution programs are likely to be more attractive Development groups have identified a variety of to potential participants. Efforts likely will need goals ranging from the highly specific (e.g., to be long-term irrespective of the approach taken building agroprocessing plants) to more general to promote alternative crops or livelihoods. Nev- (e.g., increasing rural incomes), but all are based ertheless, short-term project cycles are standard in on general rural development. Achieving this U.S. development activities, in part, driven by goal, however, requires development activities to financial management requirements. 18 I Alternative Coca Reduction Strategies in the Andean Region

Option: Congress could expressly identify “no nations. The group would serve as a long-term year’ funding status for AID crop substitution inclusive coordinating organization unencum- projects to remove the current constraints bered by U.S. programs, but including NGOS, associated with fiscal year spending and private-sector, and grassroots and stakeholder short-term project deadlines. organimations to oversee long-term development Long-term project cycles could contribute to a programs. The commission could address practi- sense of continuity for program participants and cal technical needs for successful development recipient countries. Such stability could contrib- and be responsible for oversight of impacts of ute to reducing the perceived risks associated with development activities. adoption of alternative systems. Long-term pro- Congress could create a similar commission ject cycles could also assure efforts are not composed of domestic agencies and U.S. repre- redirected based on political changes. sentatives of the Multilateral Development Banks However, cross-year funding could complicate (i.e., InterAmerican Development Bank, World bureaucratic requirements and increase budgeting Bank, etc.). However, such a commission may difficulties. Such a change would also require appear strictly bilateral, which is already unpopu- concomitant changes in project reporting, evalua- lar in host countries. Further, it may be no more tion, and review to ensure that despite longer able to solve development problems without a timeframes, project difficulties are noted and significant Andean presence. resolved expeditiously. Issue: Development activities designed to re- IMPROVING CROP SUBSTITUTION duce coca production have been created EFFORTS with insufficient understanding of the existing sociopolitical, economic, and environ- The importance of coca in the national econo- mental conditions of recipient countries. mies of the Andean countries suggests development efforts narrowly focused on improving Alternative development programs largely have agricultural opportunities alone are unlikely to been developed by U.S. agency personnel. Yet, achieve broad coca reduction goals. The Cocha- the existing sociopolitical, economic, and envi- bamba Regional Development Project (COR- ronmental conditions of the Andean countries DEP) has expanded crop substitution efforts in significantly influence whether or not these pro- the Chapare region to diversified agricultural grams will succeed. Program components may be development throughout the Cochabamba De- based on counternarcotics goals, rather than the partment. However, the current effort does not underlying development needs to shift black- adequately address alternative development for market economies to legitimate markets. In large participants in the coca trade in nearby depart- part, this might be addressed by increasing the ments also involved through cocaine elaboration level of host nation participation in program and as migrant workers. development. Existing information on the extent of the Option: Congress could create an International economy, populations, and sectors dependent on Andean Commission responsible for develop- coca indicate it is broadly distributed. Over the ing an integrated strategy to reduce economic long term, single-sector development is unlikely dependence on coca. to create stable national development of the kind This commission would be interdisciplinary, needed to shift economies to legitimate enter- composed of technical experts from the United prises nor fulfill the economic diversification goal States, Andean, and other concerned foreign of alternative development. Thus, alternative 1--Summary, Issues, and Congressional Policy Options 119

agriculture. For example, in the Alto Huallaga, most coca is produced on steep slopes where agriculture is environmentally, if not economically, unsuitable. In the Chapare region of Bolivia, logging was the primary economic activity until the mid-1970s when coca expansion eclipsed the industry (39). However, the existing development thrust is largely agricultural. Pro- jects that focus on forest, wildlife, and aquatic resources, integrated resource use, and related industries are likely to require an expertise- building period prior to implementation. Issue: Agricultural alternatives have focused on export markets to the exclusion of domestic market opportunities. The value of smallholder agricultural production in the Andean countries is low relative to Developing value-added industries, such as this textile factory in Meellín, is one mechanism to diversify other sectors. To some degree this is the result of economies and increase the value of locally produced national food policies that maintain low-cost food raw materials. for urban areas (6). In addition, some analysts suggest competition with P.L. 480 (The Agricul- development efforts for Andean countries need to tural Trade and Assistance Act of 1954, as incorporate options for nonagriculturists as well. amended) food imports may also contribute to This thinkm“ g has already been articulated in this condition (26,58). Increasing the value of AID documents (55), although not yet demon- domestic agriculture through domestic policy strated through implementation. Opportunities adjustment could have larger beneficial effects on may exist in developing mineral resources, light national agriculture generally and rural econo- industry, etc. to diversify economies, particularly mies and crop substitution specifically. for the urban populations currently involved in Import substitution may offer an opportunity to the coca chain. This issue is beyond the scope of diversify markets for some producers involved in the present study, yet is likely to be critical for substitution programs and contribute to increas- achieving coca reduction goals. This might be ing national food supply. This approach has addressed in part by expanding the range of generated some success in a cooperative project resource-based alternatives and undertaking ac- among the Food and Agriculture Organization, tions to ease the transition from coca-based to the United Nations International Drug Control legal livelihoods. Programme, and the Pakistani Government in developing alternative employment for opium M Expanding the Range of Alternatives cultivators. Similar activities could be undertaken in the Andean region with long-term goals of The Andean countries have a wide range of increasing the value of agriculture domestically renewable resources that could be developed to as well as internationally. increase economic opportunities for producers. Indeed, many coca-growing areas are more suita- Option: Congress could direct AID to increase ble to some of these options than traditional attention to import substitution opportunities 20 I Alternative Coca Reduction Strategies in the Andean Region

in crop substitution to meet local and national market needs. Although cropping systems incorporating staple crops exist, most effort seems to be placed on developing export agriculture. International agricultural research centers (IARCS) in the Andean region (Centro International de la Papa, Centro de Investigación y Mejoramiento de Maíz y Trigo, Centro de Investigación de Agricultural Tropical) have developed improved cultivars and production practices for several staple crops (e.g., potato, corn, rice) and could provide a valuable technical resource for development activities. However, increased attention to local and national markets could come at the expense of Access to external markets is highly dependent attention to possibly higher-priced export mar- on adequate transport infrastructure. Largely, kets, if an appropriate balance is not defined. agricultural commodities produced in coca-growing regions are sold at the farm gate or in local markets Further, without concomitant agricultural policy such as this one in Peru. reforms that increase the value of domestic agriculture, available national markets may be (33). One Consultative Group on International inadequate incentive for producers to shift to Agricultural Research institute focuses primarily legitimate crops. on agroforestry--the International Council for Research on Agroforestry (ICRAF), however, it is Issue: Greater investment in Andean agricul- located in Kenya, hundreds of kilometers distant tural research and extension is needed. from tropical wet forests ecologically similar to Enhancing agricultural profitability in the An- those of the eastern Andean foothills. Agro- dean nations will require a continuing and signifi- forestry research previously carried out in Peru by cant investment in research and extension to North Carolina State University largely was an develop alternatives and demonstrate techniques offshoot of traditional agricultural research, yet and technologies to potential adopters (12). Re- highlighted the importance of perennial tree crops search and extension activities were large compo- in tropical agriculture. These efforts have ceased, nents of early crop substitution efforts in Bolivia however; largely due to violence in the area. and led to numerous alternatives for coca farmers. However, this effort has declined and continued Option: Congress could authorize funding devotion of funding to long-term research and through AID for development of an integrated extension activities is hampered by pressure to farming system research center (IFSRC) in the produce immediate results. Small-scale farms are Andean region. largely the rule in coca-producing zones and An IFSRC could support efforts to develop opportunities to intensify their production are improved traditional agriculture systems. Several needed. IARCS in Latin America could provide a valuable Although several IARCS conduct research on resource in development of an IFSRC in the crop improvements directly applicable to the Andean region. IFSRC research could focus on Andean region, there are no similar institutions highly productive crop combinations, improved focusing on integrated farming systems such as water and nutrient management, cultivar im- polyculture and tree crop research (agroforestry) provements, and agronomic research to identify 1--Summary, Issues, and Congressional Policy Options I 21

appropriate production practices to assure quality “chemical prospecting’ in tropical forests to products to meet market requirements. identify compounds with commercial potential. Research and extension activities could em- Sustainable timber exploitation technologies also phasize the local and national research centers to exist and have been demonstrated in the Palcazu promote institution building and skill develop- Valley in Peru. Such innovative operations could ment, thereby improving the potential for activi- be tested and adapted to other forest areas. ties to continue after direct assistance is with- Despite these potential opportunities, efforts will drawn. Agronomic management research could be needed to increase the understanding of be oriented to on-farm, farmer-participation pro- tropical forest management, specifically in the duction trials, involving the local farm population Andean region (33). in direct participatory research. Extension activi- Forestry opportunities have now taken a more ties could emphasize on-farm demonstration and prominent position in U.S. alternative develop- farming systems to maximize the diffusion of new ment efforts in Bolivia (21) and would be technologies and practices to rural adopting appropriate for other coca-producing areas as populations. well. Full-scale research centers in relevant An- Development of a full-scale research center is dean forests are needed, however, to promote likely to be costly. Yet opportunities to pool forestry activities. Initial activities could focus on resources of many donors could alleviate the existing forest management technologies that financial burden and contribute to a larger effort seem successful, such as those at the experimental and wider use and acceptance of the institution. level in the Palcazu Valley, Peru (52). Such an Alternatively, financia1 investment in the Insti- effort, however, would require significant finan- tuto Boliviano de Tecnología Agropecuario- cial investment over a 10-to 20-year period. Chapare (IBTA-Chapare) could be increased. Option: Congress could authorize finding This institution has undertaken alternative crop through AID to establish a full-scale, state-of- research for nearly a decade and already contains the-art, tropical forest research experiment substantial expertise. However, since IBTA- station in the Andean countries. Chapare is a Bolivian institution, it may be difficult for practioners in other areas to access. While a number of tropical forest research stations exist worldwide, none are in the humid Issue: Insufficient attention has been placed on tropical Andean region. Given increasing concern developing forest resource exploitation op- over conservation of the Amazonian rainforest, tions. this would seem to be an appropriate site. A major The importance of sustaining tropical forest tropical forest research center could be located in resources has been highlighted in the last two a humid tropical Andean region and several decades and recently was underscored by the sub-centers could be located in other places to United Nations Conference on Environment and conduct site specific activities and adaptation of Development. Bolivia, Colombia, and Peru have identified technologies. These experiment sta- substantial areas of remaining natural forests with tions could concentrate on conservation and potential for biodiversity conservation and forest forest management technologies that use forests management (33). For example, the value of and species native to the coca-producing regions. forest products (e.g., nuts, fruits, latex) harvested The U.S. Forest Service, Institute for Tropical from an extractive reserve can be longer-term and Forestry in Puerto Rico could provide a valuable significantly higher than that offered by one-time resource for research station development. logging operations or conversion to agricultural Concomitant with on-site research efforts, production (48). Opportunities also exist for education and training opportunities could be 22 I Alternative Coca Reduction Strategies in the Andean Region

made available for conservation, forest, and conservation to support such development. Mar- protected area scientists from tropical countries. ket identification and logistical needs to meet Professionals trained at those stations could fulfill markets will be critical for industry development. necessary roles in development and extension of Existing programs have tended to be production- forest management systems to local populations. oriented, as were the initial crop substitution Issue: Insufficient attention has been placed on efforts. examining potential wildlife and wildland Coordination with other donors in the Andean resource use options. region could contribute to developing an adequate support structure to handle transport and market- Wildlife-centered economic development has ing opportunities for producers. Further, areas become more acceptable and research efforts are suitable for wildlife production may lie outside being undertaken to dete rmine sustainable yields the current region of AID focus, yet are of interest and appropriate husbandry practices. Techniques to other donors. for raising/producing certain wildlife species have been developed and are easily incorporated Option: Congress could direct the US. General in rural communities with little capital invest- Accounting Office to review current U.S. trade ment. For example, experimental programs for regulations affecting wildlife and wildlife prod- ranching of green iguanas have now spread from uct imports in light of changing production Panama to other neotropical countries (7,62). methods. Licensing and protection mechanisms that make Current regulations on wildlife imports have farming and ranching of wildlife more profitable been based primarily on wild-gathering as op- than taking from the wild are being implemented posed to established ranching and farming sys- in the region (46). The International Union for the tems. Size and quantity restrictions suitable under Conservation of Nature and Natural Resources these conditions may not be appropriate when and other international resource organizations are trade is not affecting wild populations. A review working to create viable legal markets for wildlife of existing trade regulations on wildlife and and wildlife products in conjunction with protect- wildlife products could evaluate potential adverse ing habitats and wild populations. effects of existing regulations on developing Wildlife-based tourism has grown at least 20 wildlife industries. percent annually since 1980 (58,99), and has been Option: Congress could direct the U.S. Park described as a reasonable approach for sustain- Service, U.S. Forest Service, and U.S. Fish and able wildland development. Tourism offers an Wildlife Service to give priority to Andean opportunity to earn foreign exchange and provide participants in their respective international employment for local communities. Where tour- nature tourism training programs. ism is developed properly, it may have a greater potential for generating local income than most Training programs offered by the U.S. Park traditional farming or ranching activities. Service and the U.S. Forest Service to foreign government officials currently focus on cultural Option: Congress could direct AID to provide and nature-based tourism and buffer zone man- assistance for wildlife industry development in agement. Programs might be expanded to include the Andean countries. training opportunities for professional guides, Efforts could include extension of production operators, and protected area staff to promote techniques, development of educational materia- sustainable development of wildlands. Training ls, and programs on potential benefits from should include land-use planning, environmental farming or ranching and the needs for resource impact analysis, and tourism monitoring system l-Summary, Issues, and Congressional Policy Options I 23

development to improve the abilities of national for other coca-producing zones. A cooperative governments to determine optimum tourism effort involving AID, the U.S. National Oceanic growth and sustainable tourism industries. With- and Atmospheric Administration, International out these capabilities, the tourism industry is Sea-Grant Program, and the Andean countries likely to be short-lived or encounter significant could inventory existing aquatic resources and problems (7). identify potential for improving production and harvest opportunities. Issue: Aquatic resource development has re- Alternatively, the Andean countries could take ceived little attention in development ef- advantage of existing international expertise in forts. aquatic resource management and development. Potential exists to expand fishery production in International research organizations, such as the the Andean region to offer an alternative to coca International Center for Living Aquatic Resource production and provide additional protein sources Management (ICLARM) that conducts research for national populations. The numerous lake and on tropical fishery management and production, river systems contain a variety of harvestable could be tapped to assist in fishery development. organisms and, with application of appropriate Congress could promote such support through technology, their productivity could be enhanced funding to ICLARM and increased collaboration (47). Past fishery development projects have with U.S. and Andean universities to conduct focused on high-value species and have for the applied research on aquiculture development most part been unsuccessful (37). Efforts to appropriate to the Andean countries. promote subsistence aquiculture in Bolivia were similarly unsuccessful. Nevertheless, international efforts could focus on artisanal fishermen to I Easing Transition to maximize occupational opportunities. Although Alternative Livelihoods fisheries may not be significant in some coca Strategies to enhance coca-substitution efforts production regions, they could increase in impor- must address a wide variety of constraints from tance within the context of national development. production to marketing. Producers are unlikely Constraints to developing Andean fisheries are to cease coca production in favor of alternative largely due to a lack of information on the extent crops or activities if they cannot be assured that a and quality of the various resource systems, level market exists and that the mechanisms for pro- of resource extraction, and fishermen themselves. duction, harvest, processing, and transport are in Significant postharvest losses characterize exist- place. Nevertheless, the current support structure ing artisanal fisheries due to shortfalls in han- to sustain alternative livelihoods is lacking or dling, processing, and storage technologies and inadequate in several areas: insufficient technol- transport infrastructure (47). ogy and technology transfer, lack of markets and marketing assistance, unavailable or unaffordable Option: Congress could direct AID to conduct an credit, and inadequate agroprocessing facilities aquatic resource inventory for the Andean and transportation systems (20,49). countries to complement ongoing alternative A guaranteed sufficient quantity and quality of development programs. product must be available to interest international An aquatic resource inventory was contracted markets. This has been a difficulty to date, by AID in 1983. Although the survey focused on although efforts to expand production areas and the Chapare region, it could be updated within the increase use of modern production technology are context of alternative development opportunities underway. Promoting producer organizations of- in general and similar efforts could be undertaken fers an opportunity for smallholders to combine 24 I Alternative Coca Reduction Strategies in the Andean Region

products to reach the necessary threshold level repayment schedules seem unrealistic for resource- and, thereby, enter a market. Contract farming poor farmers. Credit availability and affordability may provide a long-range prospect for assuring could be further attenuated under alternative sufficient product quantity. While this approach development programs that expand the range of can be very successful, it requires firm commit- resources exploited, processed, and marketed. ment on the part of agroprocessors and advanced Option: Congress could direct AID to amend the agronomic understanding of crop requirements to current credit Grant Agreement process to achieve standard product quality. require the private voluntary organization Revision of credit programs could improve the (PVO) selected to include host country partici- opportunities for smallholders to obtain financing pation in developing credit terms. for entering legitimate production systems. Credit revisions could mimic current U.S. subsidy pro- Credit components of development projects are grams, providing loans to farmers at lower rates intended to improve opportunities for the target than those currently available in the Andean population to participate in the planned interven- countries. Such an effort, with planned obsoles- tion. However, in some cases, credit terms restrict cence as a goal, could be relatively short term, the ability of individuals to participate. For provide appropriate grace periods prior to repay- example, existing credit under CORDEP is made ment (i.e., allow for real production to occur), and available through a grant agreement between AID perhaps augment or replace current coca eradica- and a private voluntary organization. However, tion payments as a method of inducing change. the terms of credit are so high that credit is essentially unavailable for most smallholders Issue: Existing terms for agricultural credit (49). The existing Grant Agreement process used reduce its availability and discourage farmer by AID could be amended to ensure host coun- investment in improved legitimate systems. tries are adequately involved in development of There are a number of disincentives to invest- credit eligibility requirements, loan rates, and ment in agricultural production improvements in repayment schedules. the Andean region; these stem largely from Credit could be made available on a “suspen- national economic and political conditions (e.g., sory loan’ basis. This would allow a proportion rural poverty, risks to personal security). Yet, one of the capital sum normally repayable to be mechanism open to U.S. and multilateral organi- written off over 5 years, or some other term zations to improve investment opportunities is to depending on the activity. The scheme could increase the availability and affordability of replace the current ‘‘payment” for coca eradica- agricultural credit. Coca farmers tend to be tion in the production phase and might also smallholders, often without land title, few per- promote full private-sector involvement in the sonal capital resources and, thus, little access to region’s development. The cost to AID or na- normal routes of credit. Recent actions by national governments would be unchanged, but tional governments have improved the outlook funds would be guaranteed to go into productive for gaining land title, but, bureaucratic constraints development, which is not assured under the make the process slow. present system (49). Within the context of coca-substitution programs, opportunities for credit exist; however, Issue: Additional effort is needed to promote evidence suggests insufficient attention has been private investment in value-added process- paid to developing appropriate credit packages ing. for coca farmers. Loan rates are high, in some Increased agricultural productivity is likely to cases collateral terms are difficult to meet, and do little for producers’ economic well-being if l-Summary, Issues, and Congressional Policy Options I 25

they cannot effectively and efficiently apply Raw materials tend to be less valuable than postharvest technologies. Such applications will processed materials, and processing activities can be necessary for alternative crops to become increase national employment opportunities. Typ- significant in terms of total agricultural exports. ically, tariffs increase as products move through Success, in part, depends on establishing cost- the processing chain (i.e., raw materials generally effective postharvest processing, enhancing pro- are subject to lower tariffs whereas processed ducer efficiency through reduced production costs items have higher tariffs). This aspect of U.S. and increased yields, and improving access to trade policy has been suggested to reduce incen- markets. The United States has provided support tive for development of value-added industry in for processing facilities with respect to crop exporting nations. An examination of tariff poli- substitution efforts (table 1-3). Creating incen- cies on value-added products that might be tives for marketing these products could comple- exported by the Andean Nations is needed to ment this investment. Loans to the private sector determine if this policy adversely affects develop- at realistic interest rates could promote entrepre- ment of processing industries. neurial activity, and ultimately replace the need Value-added processing provides a multiplier for AID and other contributing institutions to opportunity for economic improvement. The maintain the present high level of investment in United States could foster development of such infrastructure and agroindustry. industries by providing preferential treatment for Option: Congress could direct the Overseas value-added products associated with alternative Private Investment Corporation (OPIC) to development programs under the authority of the make the Andean region a priority. Andean Trade Preference Act. Such an action could be given a specified lifetime, long enough OPIC promotes U.S. investment in developing to allow industrial development and stabilization. countries by providing insurance against numer- As capability increases with experience, opportu- ous risks, financing investment projects, and providing investment counseling. OPIC could nities for Andean extension into other national develop a portfolio of opportunities in the Andean and international markets could improve. Other region to make available during counseling to countries that currently participate in alternative encourage investment in the Andean region. development might be induced to provide similar Increased investment could expand the array of preferential opportunities. employment opportunities in the Andean coun- Issue: Lack of infrastructure hinders success tries. However, if approached without sufficient of alternative development efforts. planning, it could lead to haphazard growth and Inadequate infrastructure exists to support potentially complicate national economic devel- alternative development (e.g., paved roads, post- opment. Mechanisms for coordinating investment harvest handling, storage facilities, agroprocessing and development efforts could address this poten- plants). Yet, infrastructure development tends to tial problem. For example, investments for agro- be approached slowly because of the potential processing of alternative crops could be coordi- benefits that might accrue to coca transporters nated with AID and national governments to (i.e., roads are seen as potential landing strips for ensure the production, processing, and trans- narcotics traffickers). Despite the fact that infra- portation components are synchronized. structure development might initially contribute Option: Congress could reduce tariffs on value- to the coca economy, alternative development -added products from the Andean countries for and production cannot occur without the availa- 10 years to promote development of the proc- bility of adequate transportation and marketing essing industry. routes. 26 I Alternative Coca Reduction Strategies in the Andean Region

Table 1-3--Value-Added Processing Investment in the Chapare Region

Industry Source of finance Dollar value capital Comment Coffee pre-processing...... AID Project 412 $ 73,835 Started in 1980; Project 412 in 1990. Latex pre-processing ...... INC - AID 32,900 Started in 1970; Project 412 in 1990. Tea processing ...... China -1984 108,000 In production. AID Project 412 166,728 Glucose plant ...... Universidad Mayor de 307,174 installation now underway. San Simon/UNDCP Vinegar plant ...... , ...... Universidad Mayor de 175,298 Installation now underway. San Simon/UNDCP Yuca and banana drying ...... AID Project 412 73,897 Not yet in operation. Banana and kudzu drying ...... Universidad Mayor de 105,572 Starting production. San Simon Mint oil extraction ...... AID Project 412 Starting production. Lemon balm plant ...... AID Project 412 103,200 Working; low oil return per hectare. Milk plant ...... Public Law 480 3,200,000 Project incorporates health UNDCP aspects. SOURCE: B. McD. Stevenson, “Post-Harvest Technologies to Improve Agricultural Profitability,” contractor report prepared for the Office of Technology Assessment, May 1992.

However, significant fault has been linked to This is likely to be a long-term and costly the methods and approaches used by U.S. and endeavor, requiring a substantial increase in multinational development groups to develop financial resources for assistance projects. Addi- land transportation routes in the tropics. Adverse tional burdens on staff time could reduce efforts environmental impacts associated with road- on production-related activities. Nevertheless, building in South America are highly visible (e.g., without ability to move products effectively and increased erosion, forest loss, poaching). In- economically, alternative products are likely to creased attention to developing mechanisms to remain at a disadvantage relative to coca. mitigate such impacts should be included in Issue: Meeting food quality and safety require- project design and planning. ments for agricultural exports can pose Option: Congress could direct AID to increase difficulties for some alternative crop pro- support for improving rural-urban trade net- ducers. works, including roads, trucking, communications, Increased share in the international market can and postharvest handling facilities. contribute to improving the economies of the Primary constraints to marketing alternative Andean countries. Although crop substitution crops and products largely are linked to inade- components of alternative development programs quacy or lack of infrastructure. Increasing capa- have focused on export markets, additional effort bility to handle, process, and transport products to is needed to assist producers and processes to domestic and international markets could imp- meet the quality and safety criteria required in the rove the ability of alternative resource exploita- international marketplace (53). tion activities to compete with coca. Increased The United States maintains a broad range of attention would be needed to address the potential trade policies, ranging from import quotas and environmental impacts of infrastructure develop- tariffs to complex food safety, sanitary, and ment, particularly road systems. phytosanitary requirements. Meeting these re- l-Summary, Issues, and Congressional Policy Options I 27

quirements is often difficult for developing na- !2 tions. Assistance in developing capacity for meeting these standards could contribute to increased competiveness of Andean products. Assisting the Andean countries in improving their competitiveness in international markets could yield additional benefits by increasing their range of trading partners, encouraging foreign investment, and improving national food systems. Option: Congress could direct the U.S. Depart- ment of Agriculture, Animal and Plant Health Inspection Service (APHIS) and Food Safety Inspection Service (FSIS) and the U.S. Depart- ment of Health and Human Services, Food and Drug Administration (FDA) to assist the An- dean countries to improve the quality and safety of agricultural export products. Authority for entering into international coop- Steep topography and difficult road conditions in many rural areas may hinder expanded production of erative work exists primarily for APHIS, although renewable resource products by limiting easy access FDA and FSIS possess limited authority for to inputs and markets. providing assistance. Current APHIS cooperative efforts are designed to assist developing countries of numerous smallholders. Strong producer or- meet U.S. inspection standards and quality re- ganizations could overcome the problem small quirements and thereby facilitate imports to the individual producers have in negotiating just United States. Similar activities among FDA, prices for their product. FSIS, and the Andean countries could address Option: Congress could direct AID to increase other processing and marketing areas. efforts to encourage producer organizations in However, increasing agency responsibility with- the Andean region in order to reach product out a commensurate increase in fiscal resources quantity thresholds for international market- could come at the expense of the primary mission. ing. Funding and responsibilities could be increased Lack of sufficient product quantity has con- for a specified period to provide training and strained international marketing of some products development of expertise in the Andean countries of ongoing substitution programs. Producer or- with periodic reports to Congress that evaluate the ganizations can provide an opportunity for groups program’s progress. of smallholders to consolidate production quan- Issue: Lack of product quantity hinders small- tity to meet the needs of larger markets. For holders from entering large, high-value example, cocoa cooperatively produced and proc- agricultural markets. essed in the Alto Beni, Bolivia has been success- Despite the existence of alternative crops, ful in competing in the international cocoa production remains at low levels that inhibits market. Ongoing alternative development efforts entrance into lucrative markets. Opportunities are could be required to increase the focus on needed to expand the production base to increase supporting producer groups for other alternative product availability or aggregate the production crops as well. However, increasing product quan-

331-054 - 93 - 2 28 I Alternative Coca Reduction Strategies in the Andean Region

tity must be accompanied by ability to move these pact Statement (EIS) or a less rigorous Concise products quickly and efficiently to markets to Environmental Review (CER). However, the realize benefits from such an effort. choice of document is at the agency’s discretion. Alternative Option: Congress could increase Experience with herbicide testing in Peru sug- funding for the InterAmerican Foundation to gests significant sociopolitical constraints will be expand efforts in grassroots development in difficult to overcome without increased attention the Andean region. to rigorous testing and safety features for candidate coca control agents (13). The InterAmerican Foundation (IAF) has exten- Several key technology factors hinder develop- sive experience in grassroots development in ment of biocontrol agents: lack of inventories of South America and many of its projects have potential agents, incomplete understanding of the demonstrated success (e.g., El Ceibo, see chapter efficacy of biocontrol (i.e., what level of reduc- 4). IAF has provided assistance for a broad range tion might be achieved through deployment of an of cooperative activities including agricultural, agent), lack of understanding of what level of textile, and handicrafts and such economic diversifi- control is required to achieve ‘success,’ and lack cation could generate benefits beyond increasing of containment mechanisms. These needs could product quantity for outside markets. be addressed through a highly focused research and development effort, but, such an effort would BIOLOGICAL CONTROL OF COCA be conditional on host country cooperation. Coca eradication is seen by some as a necessary precursor to successful alternative development I Coordination and Cooperation (57), whereas others view it as a futile attempt to Coordination and cooperation among donor curtail cultivation of illegal narcotic crops. Re- and host countries will be critical elements for gardless, quantitative goals of a coca eradication effective research and development of a coca strategy in the Andean region do not exist. It has biocontrol program. Traditional biocontrol devel- not been determined what level of coca removal opment methodology includes search and identi- is required to achieve domestic supply-reduction fication of existing predators, screening for host- goals. specificity, and testing. The search activities Interest in the potential benefits of a biological could be undertaken in the target range and other control (biocontrol) approach to coca reduction is locations; however, efficacy testing needs to be evident. Biocontrol may offer the least environ- conducted in the implementation site or sites with mentally damaging and lengest-term means of similar environmental characteristics. reduction, although the current state of the technology suggests likely levels of reduction Issue: Insufficient coordination and coopera- will be difficult to determine. Predation levels tion with potential host countries in plan- evident in laboratory experiments do not neces- ning and design of eradication programs sarily translate into similar effects in the field. reduces support for implementation. Thus, biocontrol cannot guarantee specific results Experience with herbicide testing in Peru (47, 57). Further, as long as coca remains an suggests significant government and public par- attractive crop, it is likely farmers would take ticipation will be necessary for a successful coca measures to protect their investment. eradication effort (56). Incorporating public re- U.S. activities abroad that involve a regulated view and comment periods, broad dissemination substance, such as herbicides or biocontrol agents, of environmental impact reviews and methodolo- require an environmental analysis under Execu- gies, and coordination and cooperative efforts tive Order 12114--either an Environmental Im- with national groups will be key. l-Summary, Issues, and Congressional Policy Options I 29

The United Nations International Drug Control is also likely to be slow. Further, without host Programme (UNDCP) investigations into poten- country agreement for implementation, any re- tial narcotic crop control opportunities highlight search runs the risk of being moot even before it host country involvement and agreement. Cur- is completed. rently, UNDCP is evaluating biocontrol potential through expert group meetings. Any activities 1 Information Needs for Decisionmaking that might result from these investigations will be Information to support wise decisionmaking is conditional on host country agreement and coop- fundamental to undertake a biocontrol program. eration in all phases (50). The U.S. Department of Basic informational needs include identification State notes similar agreements would be sought of: for U.S. bilateral eradication activities in the Andean region but currently little likelihood . The level of reduction necessary to fulfill exists for obtaining them (57). supply reduction goals, . The role of coca in the Andean ecosystem, Option: Congress could create a multinational and commission, with representatives from donor . Potential environmental impacts of a bio- and host countries, that would manage the control program. research and development of a biocontrol Issue: Lack of understanding of the level of agent for coca and the implementation of any reduction necessary to achieve supply re- coca reduction program. duction goals hinders establishment of clear Creation of a multinational commission could target levels for eradication efforts. provide for substantial host country involvement The extent of coca reduction necessary to in developing a biocontrol program and perhaps achieve supply reduction goals in the United overcome public resistance that was evident in the States has not been identified and, given the earlier chemical control research. Such a commis- questionable accuracy of historical data on coca sion could be composed of U. S., Andean, and production, it is likely to be difficult to derive. other interested country scientists and narcotics Nonetheless, setting goals and identifying mecha- control policymakers. The commission could be nisms for reduction programs may require this responsible for overseeing the development and type of information. For example, biological implementation of a coca biocontrol program, control of coca, while suggested as an environ- including determining acceptable levels of risk, mentally benign alternative to chemicals, may desirable levels of control, and necessary testing only achieve low coca reduction in the short term. and screening precautions. Such an international Information on how this level of reduction would commission would serve to improve the coordi- affect overall cocaine availability could be used to nation and cooperation of the various donor and determine feasibility of such an approach. host countries. However, developing a commission could be a Option: Congress could direct the U.S. Depart- lengthy process. Competing agendas among par- ment of Energy, through its National Lab- ticipants could make agreement and direction oratory System, to conduct a supply/demand difficult. Setting a lead country or chairman could analysis to identify the relative level of coca alleviate some difficulties, yet, it could also give reduction required to achieve domestic supply the commission an appearance of being domin- reduction goals. ated by single-member concerns or motivations. The National Laboratory System has substant- Nonetheless, without such cooperation and coor- ial resources for computer modeling and could be dination, research and testing of potential agents directed to create an integrated computer model to 30 I Alternative Coca Reduction Strategies in the Andean Region

simulate the effects of several reduction scenarios on U.S. cocaine supply. Although numerous variables confound precision of such a model, resulting information could identify high-low scenarios to provide bounds for coca reduction objectives. However, such a model would likely be based on existing narcotics data, the accuracy of which is questionable. Data on coca and cocaine are notoriously suspect, leading to widely varying estimates of the area under production, area eradicated and newly planted, potential leaf yields, and conversion rates from leaf to paste and cocaine hydrochloride. Thus, existing data used in such an analysis could lead to a “garbage in-garbage out” product yielding little new in- sight. Improved data collection could address this Some fungi and lichens are natural coca pests that problem, although it would likely be a lengthy may significantly reduce the plants’ productive life. process. Alternatively, in the near term results Here, lichen covers the stem of a coca shrub. could be given a “percent confidence” rating while new data-gathering activities were under- Financial and technical support could be provided for a comprehensive study of coca in the taken. Andean environment. Cooperative efforts among Issue: Little is known of the role of coca in the U.S. and Andean scientists could identify the Andean ecology. Thus, determining poten- range of coca species of interest and the role wild tial adverse impacts of coca eradication is counterpart plays in local ecology. This informa- difficult. tion would be a logical counterpart to potential Generating support for biocontrol efforts will host screening studies on candidate agents and require placing adequate attention on addressing could further be used to determine potential areas the concerns of the potential host countries. of concern with biocontrol activities. However, Environmental concerns have been highlighted in such a study would require site visits in hazardous previous activities and are likely to continue to areas (e.g., Alto Huallaga) for observing and play an important role. Information on the role of characterizing g coca ecology. Substantial efforts coca in the complex Andean environment would would be required, in some cases, to assure be important in determining the feasibility and participant safety in such a study. appropriateness of a biocontrol program. This Issue: The current environmental assessment information could provide needed background process applied to U.S. activities in foreign information to help national government deci- countries is inadequate to identify the broad sionmakim g on the biocontrol of coca. range of potential environmental impacts Option: Congress could direct the U.S. Depart- that might be associated with biocontrol ment of Interior, Fish and Wildlife Service to efforts. conduct ecological studies of coca’s role in the Despite government agreements during the Andean environment cooperatively with host 1987 herbicide testing in Peru, local populations country counterparts. and environmental groups felt inadequate oppor- l-Summary, Issues, and Congressional Policy Options I 31

tunity existed for their input and discussion (56). array of potential impacts of a coca eradication The resulting public outcry over the potential method. However, expanding the U.S. Environ- adverse environmental effects of the tested herbi- mental Protection Agency’s responsibility to cides was significant. Similar situations are likely include international EISS, would increase agency to occur with a biocontrol program if inadequate workloads substantially and would likely require attention is given to local participation in the a concomitant increase in staff and financial environmental impact review process. resources. Further, technical expertise for outlin- Determining g potential environmental impacts ing requirements and reviewing EIS’S would be of a biocontrol program will require a rigorous needed and could create a lengthier process. assessment effort. The instrument under which Changes in the process may be necessary to these environmental reviews currently are re- account for environmental differences between quired (Executive Order 12114) allows agency U.S. and Andean environments. discretion to undertake a Concise Environmental Review rather than a more comprehensive Envi- 1 Technological Feasibility ronmental Impact Statement is as required under National Environment Policy Act (NEPA) for Biocontrol methodologies exist, but there are domestic actions (13). considerable technological constraints to rapid The legal status of NEPA with respect to the implementation. Investigations into possible her- extraterritorial environmental impacts of Federal bicides continue to be the primary focus at the programs remains in doubt. However, it is clear Federal research and development level (45). Federal agencies involved in the proposed coca Thus, if a biocontrol program is to be pursued, an eradication program will be required to prepare extensive research and development period could some kind of environmental evaluation, either be needed. Ongoing research is classified and under NEPA or Executive Order 12114. Experi- conducted by the U.S. Department of Agriculture, ence demonstrates the value of this environmental Agricultural Research Service and cooperating analysis can be enhanced if the relatively rigorous agencies. procedural requirements of NEPA are followed. Option: Congress could direct the U.S. Depart- In particular, the agency should ensure full public ment of Agriculture to balance finding re- participation throughout the assessment process, sources for crop control research between environmental assessment early in the decision- herbicides and biocontrol. making process, full discussion of alternatives Currently, biocontrol research is treated as part and mitigation techniques, consultation with ex- of an overall eradication method research pro- perts within and outside of government, and that gram. Division of funds and activities are agency- the results of the assessment are meaningfully discretionary and largely focused on chemical considered by involved decisionmakers. research. Nevertheless, balanced attention to both Option: Congress could choose to expand the opportunities could be undertaken to assure authority of the National Environment Policy neither development is disadvantaged if host Act to include U.S. coca control activities in country agreement is forthcoming. foreign countries. Alternative Option: Congress could place re- A rigorous environmental review process could sponsibility for coordinating a broad-based alleviate some of the public resistance to coca national research and development program control efforts. The Environmental Impact State- for biocontrol with the Office of National Drug ment (EIS) process required domestically could Control Policy, Counterdrug Technology As- be an appropriate process for examining the full sessment Center (ONDCP/CTAC). 32 I Alternative Coca Reduction Strategies in the Andean Region

There are numerous public and private research Library of Congress, Congressional Research resources that could be appropriate to undertake Service, Washington, DC, Feb. 14, 1990. or participate in biocontrol research. Currently, 4. Andreas, P. “Peru’s Addiction to Coca Dollars,” responsibility for development, oversight, and The Nation Ap. 16, 1990, p. 515, In: McClintoc~ coordination lies with the U.S. Department of 1992. Agriculture. Responsibility for a broad-based 5. Andreas, P., Brown, E. C., Blachman, M. J., and research and development effort could be placed Sharpe, K.E., “Dead-End Drug Wars,” Foreign with ONDCP/CTAC, which holds responsibility Policy, 1992, pp. 106-128. for counternarcotic enforcement research of which 6, Ard.ila, P., “Beyond Law Enforcement: Narcotics eradication is one aspect. Coordination with the and Development,” The Panes Institute, Febru- ary 1990, pp.1-8. numerous Federal agencies appropriate to the 7. Ashton, R.E., Jr., “Potential Use of Neotropical preconditions for development (e.g., USDA, DOE, Wildlife in Sustainable Development,” contractor DOS) could be undertaken by ONDCP/CTAC to paper prepared for the Office of Technology expedite efforts. However, recent Administration Assessment, December 1991. actions have downsized ONDCP significantly 8. Bagley, B.M., “Opportunities and Constraints to and without concomitant efforts to rebuild the Source Reduction of Coca in Colombia: The Office, such a task might not be feasible. Political Context,” contractor paper prepared for Alternatively, Congress could choose to halt the Office of Technology Assessment, April 1992. new programs for coca biocontrol research and 9. Bagley, B. M., “Dateline Drug Wars: Colombia: continue existing programs under maintenance The Wrong Strategy,” Foreign Policy, No. 77, budgets conditional on the outcome of the UNDCP pp.154-171, winter 1989-1990. efforts in biocontrol. U.S. intellectual and fina- 10. Bagley, B. M., “Colombia and the War on Drugs,’ ncial resources could be directed to assist the Foreign Affairs, fall 1988, pp. 70-92. United Nations effort if host country agreement 11. Bray, W., and Dollery, C., “Coca Chewing and were obtained. Such an approach would ensure High Altitude Stress: A Spurious Correlation,” the program was multilateral and assure the Current Anthropology 24(3):269-282, 1983, In; Andean countries of an international forum within Reeve, 1991. which their concerns or grievances over biocon- 12. Chavez, A., “Andean Agricultural Research and Extension Systems and Technology Transfer Ac- trol or coca eradication in general could be heard. tivities: Potential Mechanisms to Enhance Crop Substitution Efforts in Bolivia, Colombi~ and CHAPTER 1 REFERENCES Peru,” contractor paper prepared for the Office of 1. Alford, D., “The Geoecology and Agroecosys- Technology Assessment, December 1991. tems of the Northern and Central Andes,” con- 13. Christensen, E., “TheEnvironmentalI mpact Proc- tractor report prepared for the Office of Technol- ess and Coca Eradication Programs, ” contractor ogy Assessment, March 1991. paper prepared for the Office of Technology 2. Alvarez, E., “Opportunities and Constraints to Assessment, August 1991. Source Reduction of Coca: The Peruvian and 14. Collett, M., The Cocaine Comection: Drug Traf- Bolivian Macro-Economic Context,” contractor ficking and Inter-American Relations, Headline report prepared for the Office of Technology Series Foreign Policy Association, No. 290, fall, Assessment, March 1992. 1989. 3. Alvarez, E.H., “Reasons for the Expansion of 15. Colombia Exporta, “Colombia and the World Coca Exports in Peru,” paper presented at the Silk Market,” 1991, pp. 4449. Congressional Research Service Panel on Cocaine 16. Conway, P., “Silk for Life Project Proposal: Production, Eradication, and The Environment: Common Sense Crop Substitution in Colombi~’ Policy, Impact, and Options,” U.S. Congress, Milwaukee, Wisconsin, January 1991. l-Summary, Issues, and Congressional Policy Options 33

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