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Can Peru Counter Drug Trafficking by Buying All the Coca?

COCA / 17 MAY 2022 BY GABRIELLE GORDER EN

A government proposal for Peru to purchase all the country’s coca production has generated fierce debate, but experts question whether it is even feasible.

In its first year in power, the administration of President Pedro Castillo has advocated for legalizing and industrializing coca. Peru's chief of staff Aníbal Torres took a bold step recently by declaring that Peru’s government should purchase coca from legal and illegal growers alike.

“It is essential, to prevent social conflict, to buy coca leaves for at least a year from current registered producers and those who decide to participate,” Torres stated during a cabinet meeting in late April.

After Torres’ announcement, local media reported a plan for the state-owned National Coca Company (Empresa Nacional de la Coca - ENACO) to purchase coca, beyond the 2,500 tons of leaves it already buys each year from 95,000 registered growers. The coca sold by ENACO, which has commercialized coca in Peru since 1982, is for traditional uses, including leaves for chewing, teas, flour, and other products, such as liquors.  

ENACO, however, purchases just a fraction of the coca cultivated in the country. There are some 400,000 unregistered growers in Peru, which produce an estimated 160,000 tons of leaves per year, according to information reported by Peruvian media outlet Gestión, following an interview with Rubén Vargas, the former head of the National Commission for Development and Life without Drugs (Comisión Nacional para el Desarrollo y Vida sin Drogas - Devida).

While some is sold and consumed for traditional purposes, an estimated 90 percent of the coca is refined for cocaine, feeding the drug trade, according to information provided to El Comercio by Vargas. In 2020, the US White House Office of National Drug Control Policy (ONDCP) estimated cocaine production in Peru to be about 810 metric tons, making it the world’s second largest coca producer behind Colombia.

SEE ALSO: 3 Reasons Why Coca Crops Are at Record High in Peru

The purchase of illegal coca is meant to be a step toward weaning the country’s illicit growers off the crop. In exchange for investing in alternative development and social programs and other public services in coca-growing regions, cultivators in these areas must commit to not planting new coca crops or engaging in illicit activities, according to Torres. The goal is to have coca growers reduce crops by some 1,000 hectares during the first year.

The recent coca proposal comes after official statements about shifts to Peru’s anti-drug efforts in the Apurímac, Ene and Mantaro Rivers (Valle de los Ríos Apurímac, Ene y Mantaro - VRAEM), one of the country’s top coca-producing regions. Peru's Minister of the Interior Luis Barranzuela said in October that coca eradication efforts would be suspended in the VRAEM.

Meanwhile, the Castillo administration is also proposing the demilitarization of this jungle region where the Maoist guerrilla group Sendero Luminoso still maintains a presence.

In late April, Peru’s Defense Minister, José Luis Gavidia, said that the government plans to close some 40 military bases in the VRAEM. The Castillo administration has advocated for moving the troops from this area to Madre de Dios, a region in southeastern Peru plagued by illegal mining.

InSight Crime Analysis

Interviews with various stakeholders and knowledgeable parties in Peru’s coca policies and anti-drug efforts make clear that the government may struggle to put this proposal into effect.

Peru’s national coca company simply does not have the funding to buy up all of the country’s coca leaf production, according to Nicolas Zevallos Trigoso, Peru’s former vice minister of public security. A coca industrialization activist, who asked to remain anonymous for security reasons, agrees.

Depending on the quality of the leaf, ENACO reportedly pays growers between $18 and $26 for sacks of coca leaves weighing just over 11 kilograms.

If ENACO were to pay the unregistered growers the minimum of what they are currently paying registered coca growers, the state company is looking at a bill of nearly $234 million for the country’s coca crop, according to InSight Crime’s calculations.

The coca industrialization activist said that ENACO does not currently have the infrastructure to transform all the leaves into coca products and acknowledged that Peru’s domestic market is not large enough for the amount of coca being cultivated in the country. Without an international export market available, the demand would not be great enough for the plan to work as an anti-drug policy.

"What are they going to do with all this coca? Are they going to store it?" the activist asked.

Coca sold on the black market is also more profitable for growers, said the activist, who claims that ENACO pays far less than other buyers of coca destined for traditional and commercial purposes. But such purchases are illegal, the activist said, "because we buy directly from the coca grower, so it never goes to ENACO."

Traffickers also pay more than ENACO, according to the activist.

Romulo Ramos, the Secretary-General of the Federation of Peasant Producers of the Yanatile Lares-Cusco Convention (Federación Provincial de Campesinos La Convención Yanatile Lares-Cusco – FEPCACYL), which consists of traditional coca growers, told InSight Crime that ENACO currently owes money to some of its growers and is underpaying them.

Ramos said that traditional growers that sell coca leaves on the informal market, for purposes such as chewing or teas, can make up to $210 for the same quantity of leaves that ENACO purchases for $18.

Ramos added that the all-inclusive coca purchasing policy is unfair to the traditional coca growers registered with ENACO who have paid taxes on their income for years.

SEE ALSO: Peru News and Profiles

A former member of the armed forces in the VRAEM, who asked to remain anonymous, as he is not authorized to speak to the press, said that Castillo lacks the political power to push this coca-purchasing policy through. But he warned that the confluence of this kind of policy with the demilitarization of the VRAEM and the suspension of coca eradication efforts makes for a dangerous cocktail that would likely fuel drug trafficking.

Similarly, Zevallos told InSight Crime that a policy to buy coca from legally registered and unregistered growers alike may result in a coca boom, as people may start growing coca in order to receive subsidies and other benefits from the government.

Meanwhile, the government’s offhand discussions about coca cultivation have resulted in growers being "plagued by conflicting messages," Zevallos told InSight Crime. "And those who pay the consequences are the coca growers – traditional and non-traditional – whose expectations are at stake," he said.

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