THE PERUVIAN COCAINE INDUSTRY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP04T00447R000100080001-5
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 26
• Document Creation Date: December 22, 2016
• Document Release Date: September 15, 2010
• Sequence Number: 1
• Publication Date: March 1, 1985
• Content Type: REPORT

Directorate of 25X1 Secret
The Peruvian
Cocaine Industry
Secret
GI 85-10080
ALA 85-10035
IA 85-10028
March 1985
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 Directorate of I qPerpt
Intelligence
The Peruvian
Cocaine Industry
Division, OGI, on
Comments and queries are welcome and may be
directed to the Chief TPrrnr;cm /Narcotics Analysis
Secret
GI 85-10080
ALA 85-10035
IA 85-10028
March 1985
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This paper was prepared byl Office of
Global Issues; Office of African and Latin
25X1 American Analysis; ffice of
Imagery Analysis. It was coordinated with the
Directorate of OperationsF--]
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25X1 Secret
Summary
Information available
as of 28 February 1985
was used in this report.
The Peruvian
Cocaine Industry
and increasing sophistication within the industry
The Peruvian drug trade is a dynamic industry that exerts a powerful
economic and political influence throughout the country, The adaptable
nature of the trade and the Peruvian trafficker's ability to respond quickly
to changing market conditions have contributed to Peru's steady growth
into the world's leading producer and exporter of illicit coca products. We
estimate that in 1984 some 130,000 to 180,000 hectares were planted to
coca, and all indications point to continued expansion of coca cultivation
growers would be politically unacceptable
The Peruvian Government faces formidable obstacles in controlling the
drug trade. Together, these obstacles act to dampen government fervor and
foster a negative, defeatist attitude among government officials. Among
the more significant barriers to drug control are:
? The hardiness of the coca bush.
? The power of the traffickers.
? The difficulty in enforcing drug laws in remote and inaccessible areas.
? Lack of strong public support. 25X1
? Institutionalized corruption.
? Military reluctance to participate in drug enforcement.
? Limited resources available for drug control.
? The perception among some officials that strong action against coca
Although imposing, these hurdles are not insurmountable. There are a
number of low-risk and inexpensive steps the government could take that
would bring a measure of success, such as organizational and personnel
changes, legal and judicial reform, and increased training and upgrading of
police personnel. The United States supports Peruvian drug control efforts,
which combine eradication, interdiction, and economic development into a
comprehensive and coordinated program. The focus is on the Upper
Huallaga River Valley, a major coca-producing region. The program has
made some progress despite initial logistic problems, poor planning,
mismanagement, and recent violence by traffickers against counternarco-
tics personnel
Any real chances for curbing the drug trade will lie with the successor to
the Belaunde administration. The front-running candidate, Alan Garcia of
the center-left American Popular Revolutionary Alliance, has assured US
officials that if elected he will continue bilateral cooperation in narcotics
control. Garcia plans to launch an investigation of government antinarco-
tics organizations and projects and to seek a new law providing stiffer
Secret
GI 85-10080
ALA 85-10035
IA 85-10028
March 1985
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penalties for use and trafficking. He has also proposed an approach to the
coca problem that emphasizes land reform and crop substitution rather
than eradication and enforcement
As long as the government faces serious economic and insurgent chal-
lenges, we believe that, despite good intentions, narcotics control will
continue to receive low priority in Lima. This could change if drug abuse
among the elite increases, if traffickers attack more and higher level
government narcotics control officials, and particularly if the government
suspected that traffickers had entered cooperative arrangements with the
insurgent Sendero Luminoso. Although Sendero Luminoso leader Guzman
says he opposes such arrangements, lower level leaders may find them an
attractive way to obtain money for guns and operation
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The Nature of the Problem: A Dynamic Industry
1
Trafficking Organizations
4
Trafficking Infrastructure
6
Drug Control Programs
6
Obstacles to Effective Control '
10
Military Reluctance
12
Outlook
12
Impetus for Change
13
A Realistic Approach
14
A. Estimating Peruvian Coca: Implications for Control
B. Opium Cultivation: The Next Step?
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The Peruvian
Cocaine Industry
harvested in South America.
Introduction
Peru has emerged during the last decade as a leading
producer and exporter of illicit coca products. Once a
small legal industry that supplied coca for domestic
leaf chewers, coca production and processing have
grown into a major illegal business that employs
thousands of Peruvians in cultivation, production, and
trafficking of coca leaf and its derivatives-paste,
base, and cocaine hydrochloride. We estimate that
Peru produces about 70 percent of the coca leaf
130,000 to 180,000 hectares. This estimate,
Coca cultivation in Peru has expanded rapidly since
the mid-1970s, and we estimate it now totals some
epre-
sents a two- to three-fold increase over 1 3-84
official US estimates of Peru's coca cultivation. At
present, processing inefficiencies limit the cocaine
produced from this large hectarage to about 100
metric tons a year. Traffickers, however, are develop-
ing techniques to overcome these problems. Continued
development in the processing and trafficking sectors
of the Peruvian coca industry, combined with sus-
tained crackdowns in Colombia, could make Peru the
new hub for South America's cocaine trade)
The Nature of the Problem: A Dynamic Industry
Peru's coca industry is a dynamic and growing busi-
ness that adapts easily to change and exerts strong
political and economic influence throughout the coun-
try. In some towns and villages the coca industry is
the dominant employer, and drug traffickers possess
the economic clout to mobilize farmers and laborers
quickly to increase supplies of basic coca products.
Analysis of recent aerial photography indicates that
substantial land-clearing operations are under way in
the Upper Huallaga River Valley, a major coca-
growing region. We conclude that most of the newly
cleared land will be used for coca cultivation. We also
see signs that Peru's drug traffickers are expanding
their operations beyond the primary coca production
phase to include cocaine processing and distribution
outside Peru. The industry is changing rapidly, and,
as a result, present drug control progr25X1 ay be
ineffective.
Cultivation. Coca is a perennial bush whose cultiva-
tion has spread from a few traditional growing areas
into virtually every administrative department in
Peru. Formerly limited to the Cusco and Puno De-
partments, cultivation has spread in response to the
rapid growth of an export market for cocaine. Ap-
proximately 80 percent of the coca is grown in four
departments; Cusco, Huanuco, Ayacucho, and San
Martin. In addition to the profitability, the toughness
and adaptability of the coca bush contribute to its 25X1
attractiveness to farmers and compound the problem
for counternarcotics programs. Coca will grow in
rugged areas with poor soils and does not require
fertilizers or pesticides to produce a good crop. Once
established, it is relatively maintenance free. Coca is
grown by a variety of farmers and laborers, including:
? Independent campesinos (peasants) who work fam-
ily-owned plots.
? Campesinos hired to work in trafficker-owned
fields.
? Migrant campesinos who have occupied vacant,
undeveloped public and private land.
? Tenant farmers who grow coca in return for a place
to live and the use of the land.
Field observations indicate that campesinos in the
traditional growing areas use their better land for
legitimate agriculture such as coffee, tea, citrus, corn,
and yucca and their marginal land for coca. In the
newer cultivation zones, coca is grown as the principal
crop, and food crops are grown to feed the workers.
Although the prevalent cultivation practice is to plant
coca in separate fields, some intercropping of coca
with legitimate crops takes place.
0 percent of Peru's coca is
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Figure 1. Upper Huallaga
River Valley Cultivation
Upper left: Coca field ri-
ous stages o(maturit,
Lower left: Well-tended coca
,helms
Upper middle: Recently har-
vested coca
Upper right: Peasant drying
coca leaves
Lower r rared photo of
coca lie 25X1
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grown under jungle canopy-as much as 50 percent in
some regions. Both intercropping and growing under
canopy make detection by drug enforcement officials
more diffic 25X1
In the traditional cultivation method, coca seeds are
sown in a seedbed, and the young bushes are trans-
planted after two to four months into fields that
average about .5 hectare in size. In the Upper Hualla-
ga River Valley, farmers have developed a new propa-
gation method using cuttings from established
plants-a technique that substantially shortens the
time to harvest. Coca can be harvested three to four
times a year, beginning as early as three months if the
plant is from a cutting or 14 months if it was raised
from seed. The plant's leaves, which contain the
cocaine alkaloid, are stripped from the bushes by
hand. Bushes survive for as long as 20 ears but yield
and alkaloid content diminish with ag
Processing. Coca growers have developed a number of
uncomplicated techniques and equipment to prepare
their harvests for market. Leaves are placed in a bin,
screened, and spread out to dry, reducing their weight
and making them easier to transport. The drying
surface can be anything-a cement patio, a tin roof,
the side of a paved road, or a tarpaulin. The more
sophisticated organizations now use elaborate drying
barns to assure more even curing of the leaf, which
cuts the loss of the cocaine alkaloid. The dried leaves
are pressed into bales for transport to markets, collec-
tion points, or processing sites. At the processing site,
the leaves are converted into a chalk colored paste
using a rudimentary method and readily available
ingredients such as kerosene. Conversion of the paste
to cocaine base and cocaine hydrochloride (HCL) is
somewhat more complicated and requires industrial
chemicals such as ether, acetone, and hydrochloric
acid. At this stage, the process ceases to be a cottage
industry, and outside organizations become more im-
portantF____1 25X1
Marketing. Economic interplay between trafficker
and grower has drawn entire communities into the
netherworld of the international drug trade. The
independent campesinos and traffickers have devel-
oped a variety of marketing arrangements for coca
leaf. Among the more common are:
? The growers bring the coca to local collection points
where it is sold to the highest bidder.
? A broker purchases the coca crop in advance and
arranges for transportation and delivery.
? Traffickers who own their own fields hire laborers to
plant, cultivate, protect, and harvest the crop and
then process the product on site.
? Brokers provide the farmers with the seeds, fertiliz-
ers, and tools to grow the crop in return for a
percentage of the harvesr--] 25X1
In southern Peru along the shores of Lake Titicaca,
drug traffickers have co-opted numerous small, isolat-
ed villages to the extent that the villagers are almost
totally dependent upon the drug trade for their liveli-
hood. By giving the villagers a stake in preserving the
illicit trade, traffickers enhance their operational se-
curity and greatly complicate local enforcement ef-
forts. In one community, lookouts were posted outside
the village and traffickers were warned of approach-
ing strangers or police through a system of coded
whistle blasts and flagsF_~ 25X1
Trafficking Organizations. What little we know
about the Peruvian trafficking organizations leads us
to conclude that they are formidable adversaries-
better organized, better funded, more tightly con-
trolled, and can command more obedience from their
members than the government forces arrayed against
them. The available information suggests the Peruvi-
an organizations resemble the Colombian crime fam-
ilies-extended family networks with numerous com-
partmented sections devoted to carrying out specific
functions, such as transportation, security, false docu-
mentation, supervision and hiring of couriers, and
laboratory operations. Loose associations between
trafficking groups exist, and territories are staked out
and grudgingly respected. By Colombian standards,
the Peruvian organizations, although growing stron-
ger and more sophisticated, are still in their infancy.
As a result, they are unable to compete head to head
with the more violent and powerful Colombian and
Bolivian networks. 25X1
Some Peruvian narcotics organizations nonetheless
are developing their own cocaine hydrochloride refin-
ing, transportation, and marketing structures. Several
cocaine trafficking networks run by Peruvians now
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Figure 2
Cocaine Marketing Structure
Ecuadorean
networks
l
Bolivian
/ networks
Coca growers Coca growers Coca growers Coca growers Coca growers Fields owned
operate in the United States and Western Europe. In
mid-April 1984, Peruvian Investigative Police cooper-
t
D
ti
ith th
io11
a
rug L111 V1 VV111 Vl11 -1-1110-k-11
a
ng w
e VS
(DEA), Interpol, and Scotland Yard broke up a
cocaine hydrochloride operation in Callao, Peru's e recent seizure eruvi -
largest port. The Peruvians arrested several couriers re ne cocaine y rochloride in Florida is further
who confessed that the group ran a worldwide opera- evidence that Peru's traffickers have developed co-
tion o local Cuban refugees to carr came processing and marketing network
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Trafficking Infrastructure. The traffickers have a
clear operational advantage over the government. In
areas with little or no government presence, they have
integrated the rivers, roads, trails, and airfields into
an intricate and operationally secure transportation
network. Major trafficking organizations can acquire
any kind or quantity of aircraft, boat, or other
equipment, including arms, needed to protect their
trafficking infrastructure. Financially strapped Peru-
vian enforcement officials, by contrast, have virtually
no capability to monitor air activity and few boats or
aircraft for surveillance or interdictio
In southern Peru, traffickers use both land and air
routes to move the coca paste and coca base to
collection points at Lake Titicaca from where the
products move via traditional smuggling routes across
the lake in boats and hydroplanes to Bolivia. The
Madre de Dios River, another traditional smuggling
route, is also used by the drug traffickers to move coca
products from southern Peru to Bolivia. The coca
products produced from leaves grown in central Peru's
San Martin, Huanuco, and Pasco Departments typi-
cally are flown out, often from clandestine airfields, to
the northeastern Peruvian city of Yurimaguas or to
the border towns of Tabatinga, Brazil, and Leticia,
Colombia. Coca products from this region are also
carried on the thousands of kilometers of navigable
tributaries of the Amazon River. The products are
smuggled from the processing areas to the river ports
of Iquitos, Pucallpa, Yurimaguas, and Tingo Maria,
where they either continue downriver or are loaded on
aircraft for shipment to processing countries. Most of
the coca products from Peru's Cajamarca and La
Libertad Departments in northwest Peru are trans-
ported to coastal ports for shinmPnt to processing
countries.) 25X1
Drug traffickers operating in Peru commonly use
aircraft to carry coca products from the growing areas
to cocaine-processing facilities. A search of Peru's
illicit coca-growing areas
ocated 64 previously
unidentified airfields (see foldout map at end). Avail-
able information indicates 34 of these airfields are
unregistered, and we believe they are used exclusively
by drug traffickers. The other 30 airfields are proba-
bly used for both local commerce and drug smuggling.
Embassy reports indicate that drug traffickers have
constructed numerous additional airfield
recent survey of
the Upper Huallaga River Valley by the Peruvian
Government identified about 60 clandestine airfields
used by drug traffickers. Such clandestine airfields
are relatively easy to construct. They usually have
graded earth or sod surfaces and vary in length from
350 to 1,250 meters. Coca products may also be
carried as cargo or by couriers at some of the
registered 227 civil airfields
We have not identified any clandestine drug trans-
shipment points along Peru's rugged coast. The coast
typically has rocky shores backed by cliffs, and waves
and breakers common to the area make loading ships
outside of ports or protected harbors hazardous. Traf-
fickers do, however, smuggle coca products aboard
small vessels at ports along Peru's La Libertad and
Ancash coasts and then transfer these products to
oceangoing vessels at the Peruvian port of Salaverry.
25X1
Drug Control Programs
The United States has supported Peruvian drug con-
trol efforts since 1978. Peruvian drug control policy
seeks to combine eradication, interdiction, and eco-
nomic development into one comprehensive and coor-
dinated program. This strategy is being tested in
the Upper Huallaga River Valley where three US-
financed projects are under way
The eradication aspect of the strategy has been
delegated to the Coca Eradication and Control Orga-
nization for the Upper Huallaga River Valley
(CORAH). CORAH was established in 1982 and is
administered by the Ministry of Agriculture.
CORAH selects fields for eradication on the basis of
government records identifying illegal cultivation but
also eradicates coca for farmers when requested. At
first CORAH officials had to eradicate the coca
manually-a difficult and time-consuming task that
takes 30 to 40 workers one day per hectare. In late
1983, CORAH workers started using the herbicide
2-4-D, which eased the physical demand on the
workers and reduced manpower needs to eight work-
ers per day per hectare. CORAH eradicated about
700 hectares of coca in 1983, 3,100 hectares in 1984,
and hopes to eradicate 6,000 hectares in 1985
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Figure 3
Coca Cultivation Areas and Trafficking Routes
- - Departamento boundary
0 150 Kilometers
0 1
150 Miles
Iquitos.
.- Iombia
Boundary re presen-aron is
nm aecess.rny aummnat-
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Working closely with CORAH is the USAID-admin-
istered Special Project for the Upper Huallaga
(PEAH) located in the town of Aucayacu. The $18
million program was signed in September 1981 and is
an agricultural and rural development project specifi-
cally designed to complement the government's coca
control programs. PEAH is working with Peru's
National Institute for Agrarian Research and the
National University of the Jungle to make the re-
gion's economic structure less dependent upon coca.
Among the project's activities are:
? Implementation of a program of agricultural re-
search to determine the agronomic, economic, and
socioagricultural feasibility of agricultural technol-
ogy packages.
? Expansion and upgrading of existing extension ser-
vices by the National University of the Jungle.
? Improvement of the valley's transportation infra-
structure and provision of potable water and sanita-
tion systems to selected rural communities within
the project area.
? Encouragement of private-sector investment in in-
dustries important to the valley's agricultural devel-
opment, such as cotton gins, milk-processii25X1 its,
--ills
and rice
Interdiction and enforcement are run by an elite unit
of Peru's Civil Guard established in March 1981 and
headquartered in Tingo Maria. The Mobile Rural
Patrol Unit (UMOPAR) has a planned complement of
300 men and is responsible for the control of coca
production and trafficking and the provision of securi-
ty for CORAH and PEAH workers
These programs have made some progress in the
valley despite a number of imposing hurdles, includ-
ing logistic problems caused by the region's difficult
terrain; climate-especially heavy rainfall-and poor
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The Upper Huallaga River Valley:
Showcase of the Coca Boom
The Upper Huallaga River Valley, located in the
Departments of Huanuco and San Martin in central
Peru, is the source of about half of Peru's coca leaf.
Almost all of the 50,000 tons of leaf grown there is
destined for illicit use. Coca's profitability, the re-
gion's isolation and economic underdevelopment, a
weak government presence, and an ideal climate for
growing coca-humid, with temperatures in the 18-
to 20-degrees centigrade range-all have contributed
to the valley's rapid development as the country's
principal source of illicit coca. The valley is conve-
niently located as a source of quality coca leaf for
many Ecuadorean and Colombian trafficker
The town of Tingo Maria personifies the coca boom.
Once a sleepy jungle village, the town bursts with
energy and exhibits all the characteristics of a town
enjoying newfound wealth. All kinds of consumer
goods are available in the market, from motorcycles
and electrical appliances to stereos and cars. New
hotels have sprung up, businesses have expanded, and
foreign tourists have made Tingo a stop on their
itinerary. Almost everyone benefits from the illicit
coca trade farmers, businessmen, bankers, shop-
keepers, even the Civil Guard's special antinarcotics
force, all of whom participate in the town's coca-
based prosperity.
The valley's inhabitants take good care of their
primary source of wealth. Coca fields are well tended,
and the use of fertilizers, herbicides, and pesticides is
common. Farmers have developed better propagation
and cultivation methods, taking cuttings from two-
to the programs by some coca growers
infrastructure; increasing insurgent- and trafficker-
related violence; poor planning and mismanagement
in the early days of the programs' existence; and
trafficker-inspired, anti-US sentiment and resistance
year-old plants and planting them in rows only 1
meter apart. The new technique shortens the coca
plant's growing cycle, permitting harvesting after
three months rather than the usual 14 to 16 months,
without any apparent loss in quality. This cultivation
method also can be used by the farmer if he decides
to plant the coca under a jungle canopy to avoid
detection of his activities from the road, river, or air
by government forces
The valley's dependence on the coca trade is likely to
endure, given the region's economic underdevelop-
ment. Some legitimate crops-tea, yucca, citrus-are
cultivated in the valley, but soil and climatic condi-
tions generally are not favorable to the cultivation of
marketable crops. The region has only one major
road-the Carretera Marginal-which is sufficient
for the traffickers' transport purposes, but cannot
adequately serve the needs of any possible competi25X 1
tive export economy. Legitimate crops cannot com-
pete with the economic benefits gained from coca
cultivation.
farmers in the Upper Huallaga region currently earn
up to $100 from a hectare of coca compared with $10
from a hectare planted in rice or corn. Other impedi-
ments to the development of a legitimate agricultural
economy are the outdated agricultural techniques
used by many farmers in cultivating traditional cash
crops, the lack of adequate farm credits, financing
and development assistance for the region, and the
flight of technically qualified personnel from the area
to the cities. 25X1
difficulty in attracting qualified personnel to work in
the region, and UMOPAR suffers from a lack of
material resources-such as aircraft, river patrol
boats, and spare parts-and mechanics to keep their
equipment in good repair. Increased violence by traf-
fickers will corn ound the problems of all counternar-
25X1 Personnel changes and increased experience have cotics program
taken care of many of the initial problems of poor
planning, incompetence, and lack of cooperation
among the agencies involved. There is still some
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Two fundamental problems continue to bedevil Peru's
enforcement effort in the Upper Huallaga River
Valley:
? Coca's ability to thrive on marginal land, in contrast
to most licit crops, will be a major obstacle to the
agricultural development of the valley. PEAH esti-
mates that 80 percent of the valley's coca is grown
on land unsuitable for key agricultural crops (cacao,
corn, rice, and soya), making it difficult for PEAH
and the Agrarian Bank to stimulate crop substitu-
tion through financial assistance and agricultural
credits to farmers. Although the marginal land
could be used for fruit trees and pasturelands, it will
require extensive effort to survey the areas and to
develop their agricultural potential.
? Tension between Peruvian military units operating
in the emergency zone z and the Civil Guard has
'An area placed under military control in Au ust 1984 to curtail
activities of the Sendero Luminoso insurgents
resume drug interdiction operation
affected drug enforcement in the valley. According
to the US Embassy, the military is permitting the
Civil Guard to provide protection for coca eradica-
tion teams but has only recently allowed them to
Obstacles to Effective Control
The Peruvian Government is at a distinct disadvan-
tage vis-a-vis the coca industry both in resources and
public support. Although the Belaunde government
has frequently asserted its determination to address
the problem, resource allocations indicate narcotics
control in terms of the current national priorities
consistently ranks well behind consideration of wors-
ening economic problems and the growing insurgent
threat. In addition, previous administrations' efforts
have been directed more at interdiction than eradica-
tion and control, in deference to the latter's potential-
ly greater economic and political consequences. Any
future progress on the antinarcotics front ultimately
will depend on government willingness and ability to
commit scarce resources to the fight, implement
unpopular control tackle the obstacles
discussed belo
Resource Constraints. Serious financial difficulties
have limited government antinarcotics efforts and
probably will continue to do so regardless of the
commitment of the next administration. For example,
the central government debt service will require 40
percent of the national budget in 1985, leaving little
for anything but military and core social programs.
Peru's economic ills not only limit the government's
financial ability to wage a war on drug traffickers, but
also contrast sharply with the perceived economic
benefits of the coca trade. Large amounts of money
from the local drug trade are reported to be entering
the Peruvian banking system;
Peru has become a money laundering center for
both foreign and domestic traffickers. Although the
exact amount of drug money that annually flows into
the Peruvian economy is unknown, we believe it is
probably significant enough to make at least some
government officials think twice before cracking down
on the illicit industry while the country is in the midst
of a major economic depression
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backlash that would resul
The depressed Peruvian economy also contributes to
the dominance of the coca trade in local and regional
economies, reinforcing the government's caution
about pursuing a vigorous antinarcotics strategy in
the country's coca-growing areas. The thriving nar-
cotics trade is bringing unprecedented prosperity to
many heretofore poverty-stricken campesinos. We es-
timate that more than 100,000 peasant families are
cultivating the coca plant, which gives them profits
that substantially raise their standard of living and
allows them to become economic consumers for the
first time. Government leaders know they lack the
resources to cushion the economic impact of a shut-
down of the coca trade and therefore would be
especially vulnerable to the almost certain political
Societal Attitudes. The tendency of many Peruvians
to discount the seriousness of the drug problem works
to the traffickers' advantage. Coca cultivation and
consumption have deep-seated cultural and legal roots
in Peruvian society. Archeological investigations indi-
cate that the coca bush has been systematically
cultivated for more than 3,000 years. Native laborers
chew the coca leaf or brew it into tea to ward off cold,
hunger, and fatigue. Use of the leaf also is a normal
part of many important ceremonial events, such as
weddings and religious festivals, where it is considered
courteous to offer visitors coca leaf to chew. The US
Embassy reports that more than 3 million Peruvians
chew coca leaves daily, and we estimate that they
consume some 44,000 tons in this manner each year.
The custom is legal and received official government
sanction in 1969 with the creation of a state entity to
regulate the production, processing, and marketing of
coca.
Public acceptance of the traditional use of coca fosters
a similar attitude toward the country's illicit drug
industry, according to the US Embassy.' Many Peru-
vians contend that the illegal drug trade is primarily
the result of US consumer demand and that Washing-
ton should focus on eliminating the cocaine market in
the United States rather than "persecuting" Peruvian
coca farmers.
Despite Peruvian perceptions, increasing domestic
drug use is contributing to the growth of the country's
illicit cocaine industry. Although drug addiction has
only become a problem in Peru over the last 10 years,
the US Embassy reports it is fast approaching epi-
demic proportions. Smoking of coca paste probably is
the most popular method currently employed.
as many as
100,000 people in Lima alone, including some 14,000
schoolchildren, may regularly smoke cigarettes laced
with paste. The Embassy notes, however, that many
educated Peruvians still consider drug addiction a
lower-class problem and do little to support systematic
drug control and rehabilitation programs. This atti-
tude helps account for the absence of a sense of public
outrage, which is essential to create a climate in
which thorough and s control .14gined govern programs are possible7 M7
Trafficker Power. Peru's illicit drug dealers use a
combination of violence and corruption to blunt gov-
ernment initiatives against them. For example, in-
creasing violence in the Upper Huallaga River Valley
area over the last several months has led to the
resignation of large numbers of local officials and
created a virtual vacuum of effective authority. At-
tacks on USAID facilities and personnel have forced
many of the projects to suspend operations. The most
serious of these actions occurred in November 1984,
when 19 workers involved in government coca control
programs were killed, and in February 1985, when 16
peasants were killed in the Upper Huallaga River
Valley. In both cases, the assailants tried to make the
assault look like an insurgent-inspired incident. Army
officers stationed in the area are convinced the No-
vember killings were the work of narcotics traffickers.
The second incident coincided with a visit to the
region by US Embassy officers and Peruvian drug
enforcement officials. In both cases, coca eradication
efforts were suspended.F___1 25X1
The drug traffickers routinely use their profits to
purchase official protection for their operations. The
US Embassy notes that such narcotics-related corrup-
tion is widespread and reaches to high levels of
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25X1
Peruvian public and private institutions. Persons ar-
rested for complicity in drug trafficking in recent
years have included doctors, senior police officials, a
prominent member of the Chamber of Deputies, and
the president of the Board of Directors of the national
airline. Embassy informants have implicated more
than a dozen senators and deputies in some aspect of
the illegal drug busines~
Drug graft probably is greatest among low- to middle-
range public functionaries. Traffickers have been
especially successful in suborning officials in the
judiciary and law enforcement agencies where low
pay and prestige, coupled with a longstanding suscep-
tibility to influence peddling, make judges and police
officers prime targets
t some corrupt police officials have
tampered with evidence or "lost" arrest reports to aid
traffickers. Others have directly participated in the
industry by extorting money from coca growers or b
selling confiscated coca past
The US Embassy reports that drug offenders are
seldom arrested and are convicted even less frequent-
ly. It is too soon to tell if the recent conviction and
harsh sentence handed down against Carlos Langberg
for his drug trafficking activity signal a change in the
pattern appoint-
ments of drug traffickers' lawyers to the bench in the
provincial court system. Narcotics-related corruption
also benefits those few criminals who are convicted
and sent to prison. According to press accounts, major
dealers often live in luxury, moving freely in and out
of jail while continuing to conduc125X1 business
Military Reluctance. Peru's military, the only institu-
tion with the resources and capability to combat drug
traffickers and seriously disrupt their operations,
steadfastly has refused to play a significant role in the
antinarcotics struggle, preferring to concentrate on its
traditional military role. The military high command
fears that poorly paid enlisted men and officers will
fall prey to the payoffs and corruption that usually
accompany involvement in narcotics enforcement.
This concern is apparently well founded; incidents of
drug-related military graft already routinely occur
even though the military has not been actively com-
bating the drug industry.
the unit assigned to the 5th military region in Iqui-
tos-a major trafficking area-is famous for its high-
level involvement in drug gra
The armed forces had to send more than 1,200 troops
to the Upper Huallaga River Valley coca-producing
region last August when the insurgent Sendero Lu-
minoso opened a new operational front there. For the
first time, the military dealt simultaneously with both
guerrillas and trafficker
the military decided
25X1
early in the campaign to concentrate its operations
exclusively against the insurgents. Further underscor-
25X1
ing the military's reluctance to assume a major role in
the antinarcotics effort, the high comman~
25X1
wanted to begin a phased
25X1
withdrawal of troops from the Uppe
Valley area by the end of Novembe
The November attack on the CORAH camp upset the
withdrawal timetable. Apparently stung by intima-
tions that Army restrictions on UMOPAR left the
CORAH workers unprotected, the three service chiefs
recently decided, according to the US defense atta-
che, to send troops against the traffickers
the command-
er of the region has postponed indefinitely any troop 25X1
drawdowns. We conclude these actions are a short-
term response to the furor generated by the CORAH
incident. When public attention fades, we expect the
military to reduce its forces in the region to battalion
size and return the antinarcotics fight to the police.
25X1
Outlook
In our view, it is unlikely that President Belaunde will
implement any major, new antinarcotics initiatives-
such as an aerial herbicidal spray campaign against
coca plants-or reduce current government efforts
before he leaves office in July. Although the latest
polls give the President's party little chance of win-
ning the contest, the administration will want to avoid
any controversial moves that might further weaken its
candidate's prospects. Any real ch n of curbing the
drug trade lie with the successor.
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licit narcotics problem, according to the US Embassy.
Garcia already has called for a national campaign
The Next Administration. The current front-runner
to succeed Belaunde in office-Alan Garcia of the
center-left American Popular Revolutionary Alliance
(APRA)-appears genuinely concerned about the il-
against drugs and urged university and secondary
school students to abstain from drug use.
Garcia has threatened to
the drug industry and has exhorted party members to
use the campaign to emphasize APRA's opposition to
the production, sale, or use of illicit narcotics.
disqualify party candidates found to be involved with
education, and rehabilitation
Garcia has assured US officials that if elected he
would continue bilateral cooperation in narcotics con-
trol. Despite stiff opposition from traffickers, we
expect Garcia could successfully implement two new
counternarcotics measures he has proposed:
? An immediate investigation of all government anti-
narcotics organizations and projects, which Garcia
believes are the principal factors hampering the
government's war on drugs.
? A law containing harsher penalties for use and
trafficking, as well as provisions for drug prevention,
The third part of Garcia's proposed narcotics control
program is designed to deemphasize crop eradication
and enforcement in favor of land reform and crop
substitution. This policy will be more difficult to
implement. Under this plan, the government would
try to entice coca farmers to migrate to areas more
suited to the cultivation of legal crops by offering to
supply financial and technical assistance through
local farm cooperatives. This ambitious undertaking
would require substantial funds and other assistance
from international agencies or foreign governments.
In addition to the problem of obtaining the financial
and organizational resources required, we judge that
few farmers would participate in such a program
without the t breat of strong enforcement and eradica-
tion measure
Other areas where Garcia might be willing to launch
new initiatives include efforts to reduce some of the
bureaucratic rivalries that impede the effectiveness of
government-sponsored antinarcotics efforts. He might
also be amenable to inaugurating a public relations
program depicting the negative consequences of a"-
mestic drug abus 25X1
Garcia's strongest challenger for the presidency-
Alfonso Barrantes of the Marxist-dominated United
Left (IU) coalition-has devoted less attention to the
drug issue. Representatives of his coalition have asked
the US Embassy in Lima for materials on addiction
and drug trafficking, and an IU-supported newspaper
has published editorials stressing that coca-paste
smoking is injurious to Peruvian youth. We conclude,
however, that a Barrantes administration would be far
less cooperative on bilateral antinarcotics projects
than a Garcia government. In our view, the extreme
leftist orientation of the United Left would probably
cause it to reject all but the most innocuous US
suggestions on the grounds of "imperialist meddling"
in Peru's internal affairs 25X1
Regardless of which candidate wins the election,
Lima will look to Washington for financial assistance
in combating the traffickers. Without foreign assis-
tance Peru will be hard pressed to make any headway
against the entrenched narcotics industry. APRA
leaders already have asked the US Embassy about aid
levels for narcotics control for 1985 and 1986. The
narcotics issue will continue to loom large in US-
Peruvian relations, and we agree with the US Embas-
sy's assessment that Washington's response to pleas
for increased financial aid will help set the tone for
bilateral ties to whatever government takes power ;-
July. 25X1
Impetus for Change. We believe that only a dramatic
development could force Lima to reorder its priorities
and commit substantial resources to narcotics control.
Peruvian leaders and the public are not yet persuaded
that the narcotics industry poses a serious domestic
threat, particularly when compared with the insurgent
challenge and deepening economic difficulties. The
antinarcotics effort would become a higher priority
for Peruvian leaders if drug abuse among the children
of the elite intensifies or if traffickers begin to gain
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control of provincial administrative and financial in-
stitutions. Another-and probably more likely-cata-
lyst, in the near term, would be increased violence by
traffickers against civilian government officials. As in
Colombia, the assassination of a public figure closely
identified with a struggle against narcotics could
harden public perceptions-and government determi-
nation-overnight. At present, however, no such pub-
lic crusaders exist, and most violence is directed at
low-level workers or law enforcement personnelF__-]
Another development that could quickly cause both
the government and military to move strongly against
the drug trade would be discovery of a working
arrangement between the traffickers and the Senedro
Luminoso guerrillas. Available evidence indicates that
such links do not currently exist. The commander of
the second military region-whose area of responsi-
bility includes the emergency zone in the Upper
Huallaga River Valley region-told the US defense
attache that, although both groups are active in the
same territory, they op25X1- n a noni25X1 ence
This lack of contact between the guerrillas and the
traffickers does not preclude future cooperation.
Sendero Luminoso leader
Abimael Guzman last year instructed his subordi-
nates to avoid any involvement with the illicit narcot-
ics trade but refused to discount completely the
possibility of future cooperation. He reportedly ac-
knowledged that the drug dealers and the insurgents
have a common enemy in the police and that Sendero
Luminoso might someda25X1 firms from the traffick-
Guzman's ability to dictate Sendero Luminoso policy
toward the drug trade depends on his ability to
maintain tight authority over the guerrilla organiza-
tion. Lower level insurgent leaders who want to
improve the organization's armament and logistic
shortcomings may be willing to enter into private
arrangements with drug traffickers in their operation-
al areas without Guzman's approval. ~
u ure insurgent involvement drug trafficking
could be direct-cultivating, processing, and traffick-
ing of coca-or indirect-protecting trafficking oper-
ations in exchange for arms or money. We believe
that, as the Sendero Luminoso expands its member-
ship and base of operations, the chances will grow f"
its participation in such activi(___-]
In our view, evidence of Sendero Luminoso's complic-
ity in large-scale drug trafficking would force the
government to respond forcefully by expanding the
antinarcotics effort and by involving the military
directly. At a minimum, the government probably
would implement a major interdiction and eradication
campaign to disrupt the traffickers' most profitable
operations and deny funds to the terrorists. The
military-fearful that an alliance between the insur-
gents and the traffickers would fund a major upgrade
of Sendero Luminoso's weapons arsenal-probably
would willingly take the lead in a stepped-"' -^tinar-
cotics push. F___1 25X1
A Realistic Approach. The Peruvian Government
could take a number of low-risk and inexpensive steps
that would result in some meaningful progress in
curtailing the drug trade. Experience in the adminis-
tration of other drug control programs indicates that
the following programs might help Peru keep the
traffickers off balance25X1 conditions permit a more
intensive effort:
? Additional resources, such as communications
equipment, four-wheel-drive vehicles, helicopters,
aircraft, and an increased radar capability-coupled
with better training and more efficient use of exist-
ing equipment-would greatly enhance government
enforcement efforts. Much of this equipment could
be obtained from property and funds confiscated
from drug traffickers.
? The creation of additional UMOPAR units sta-
tioned throughout the major growing regions would
increase the risk of interdiction to traffickers, pre-
vent traffickers from establishing permanent and
secure facilities-keeping them from getting the
time needed to develop more efficient processing
procedures-and provide the permanent police pres-
ence essential to drug control. The assignment of
drug abuse information specialists to these units
would give them an added dimension.
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? The government could mitigate the bureaucratic
rivalries and lessen the police-military tension that
has plagued Peru's drug control programs through
judicious appointments, some organizational re-
structuring, and strong presidential leadership. Se-
lection of personnel from nongrowing areas to head
the drug control agencies would reduce the risk of
corruption. Creation of a joint police-military task
force on drugs would foster greater interservice
cooperation and break down traditional barriers.
The President also could establish a national com-
mission on drugs made up of influential members of
Peruvian society to act as an advisory body on drug
policy.
? More aggressive and selective enforcement opera-
tions by Peruvian authorities, such as targeting
major traffickers and periodically conducting inten-
sive sweep operations in areas of heavy trafficking
activity, could better use limited resources and
achieve greater results than a blanket approach.
Assigning US drug enforcement personnel as advi-
sors to police field units would raise the profession-
alism of the units and ensure a uniform approach to
drug investigations. A higher pay scale and faster
promotions for police assigned to drug enforcement
duties would help attract more qualified personnel
and increase morale
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Appendix A
Estimating Peruvian Coca:
Implications for Control
25X1
25X1
25X1
25X1
Past analyses of Peru's coca crop were based on
estimates of 40,000 to 60,000 hectares under coca
cultivation. The data for these estimates were ob-
tained through random field observations conducted
by various US and Peruvian officials. We now con-
clude that these previous estimates vastly understate
the extent of coca cultivation in Peru and that
cultivation has been steadily expanding for several
years, undoubtedly in res onse to the r~ --owth in
11 , , 1 . ip 25X1
In 1984 the Peruvian Government officially recog-
nized the increase in cultivati raised its own
estimate to 130 000 ectares.
total hectarage is at least 150,000. Our estimate is
based on analysis of aerial photography acquired in
fall 1984, which clearly shows a dramatic expansion
Little good data are available on coca leaf yields,
primarily because the plant is a perennial that can be
harvested up to four times a year.
coca fields throughout eru an es tma
e ~ yields obtained in each department.
average nationwide about 1 ton per hectare per year,
about the same as the leaf yields used in the past to
calculate Peruvian coca estimates.
Using 150,000 hectares as a convenient midpoint for
total coca hectarage and a 1-ton-per-hectare yield,
Peru's annual coca leaf crop would be about 150,000
tons. An annual harvest of this size would, under ideal
conditions, yield about 340 tons of pure cocaine
hydrochloride. We have no indication that this
amount of cocaine enters the world market nor can we
find any indications within Peru that this much
cocaine is being processed. F_~
We conclude that Peru's coca harvest probably nets
about 100 tons of cocaine because Peruvian traffick-
ers use inefficient methods of drying and storing
leaf-the most important steps in determining the
quality and quantity of cocaine. Leaves should be
dried in the sun and stored under low humidity at
temperatures less than 18 degrees centigrade to retain
maximum cocaine content. In many parts of Peru,
leaves are not dried properly and are stored in crude
facilities under high humidity, conditions that could
cause loss of the leaves' entire cocaine content within
two months after harvesting. Most coca paste, the
next product in the cocaine chain, is also refined and
stored under crude conditions, and we believe equally
high loss rates occur during this stage. Our expert
source, on the basis of his observations throughout
Peru, believes 60 to 80 percent of the cocaine content
in Peru's coca harvest is lost by the time processing
from leaf to base is complete. Using a 70-percent loss
rate as an average, and after reductions for domestic
leaf consumption and interdiction losses, we estimate
Peru's leaf harvest ultimately yields about 10f) -- of
cocaine hydrochloride. 25X1
This analysis of Peru's coca cultivation and cocaine
production is based on a limited amount of imagery
and on information provided by only one source. We
hope to increase our knowledge of conditions next
year through a more systematic use of imagery, field
observations, and research on processing losses.
Analysis thus far, however, highlights two important
aspects of Peru's coca industry. First, cultivation is far
more extensive than previously believed and is spread-
ing rapidly. Land clearing in coca-growing areas is
proceeding at an alarmingly high rate and this land,
when cleared, is almost certainly destined for coca
planting. Second, inefficient processing by Peruvian
growers and traffickers has mitigated the conse-
quences of the rapid growth of cultivation. Peru's coca
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growers are already demonstrating a facility to im-
prove rapidly their cultivation techniques-better va-
rieties, faster growth through improved propogation
methods, and cultivation under canopy. If similar
improvements are made in storage and processing,
Peru could flood the market with cocain
The implications of this analysis suggest that, given
Peru's resource limitations, manual eradication and
crop substitution programs may not be the most
effective methods of controlling the coca trade. Culti-
vation is too extensive and spreading too rapidly; a
large number of fields must be eradicated before there
is any significant impact on cocaine production. An
aerial spray program offers the only hope of eradicat-
ing the amount of leaf necessary to s inific25X1
reduce Peruvian cocaine productio
Peru's interdiction efforts, on the other hand, may be
having more of an impact on cocaine output than
previously believe fear of interdic-
tion as one of the major reasons Peruvian growers
resort to such hasty and inefficient storage and pro-
cessing techniques. Stepped-up interdiction could also
prevent growers from successfully incorporating the
more efficient processing technologies that could re-
duce the current high rates of cocaine loss. The
Peruvians should continue to focus their interdiction
efforts during the dry season-when storage and
processing losses are lower and cocaine content high-
er-and concentrate on the paste rather than on the
leaf. Seizure of even small amounts of paste, because
of its higher cocaine content, could significantly re-
duce cocaine availability; the 40 tons of leaf seized
last year reduced cocaine availability by only 26
kilograms
Peru: Cocaine Production, 1984 Metric tons
25X1
Coca leaf produced
130,000
150,000
180,000
Domestic consumption
(40 grams per day for
3 million users)
44,000
44,000
44,000
Maximum potential paste
production (100 to 1 conversion
ratio)
820
1,020
1,320
Net paste available for
conversion to cocaine 25X1
hydrochloride
Maximum potential base 270 340 440
(3 to I conversion ratio)
Cocaine content lost due to 190 240 310
inefficient processing (70 percent)
Net cocaine hydrochloride
available after losses
Cocaine seized by Peruvian NEGL NEGL NEGL
authorities, cocaine
consumed in Peru
Net cocaine available for
world market from Peru
Note: There are no statistics on the amount of paste converted to
cocaine in Peru.
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 cultivating the opium poppy. During the mid-1970s,
descendants of oriental immigrants smoked opium
reportedly produced from nonnies Brown in Caiamar
21 hectares of opium poppy
were identified in an area of the middle Huallaga
River Valley of San Martin Department. These fields
may be a remnant of earlier cultivation established to
supply Peru's domestic opium market. We are con-
cerned, however, that they could represent an experi-
ment initiated by Colombian trafficking organizations
known to possess opium seeds-to test the market and
profitability of opium cultivation.
Entering the opium or heroin trade is a logical move
for established South American trafficking organiza-
tions. Environmental conditions in the Andes are
suitable for cultivation-opium poppies were grown in
Ecuador and Colombia during the 1940s to produce
morphine after Turkish sources were disrupted by
World War II. The physical infrastructure and mar-
keting networks needed to move opiates to foreign
markets is in place, and opiates represent a potentially
profitable addition to the drug traffickers' marijuana
and cocaine activities. Colombian cocaine trafficking
syndicates, who have vertically integrated their opera-
tions and established distribution networks in foreign
markets, show indications of wanting to move into the
opium trade. In 1984 Colombian police discovered
35,000 opium poppy plants in two remote valleys. The
recent increase by Colombians in cocaine trafficking
through Mexico could provide access to Mexican
knowledge on cultivation and processing of heroin.
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Appendix B
Opium Cultivation:
The Next Step?
We do not expect Peru or other countries in the Andes
to become significant suppliers of opium to the wor125X1
market. Peruvian farmers know little about cultivat-
ing poppies and even less about the extraction and
processing of the opium gum.
are having difficulty establishing an effective collec-25X1
tion and purchasing system, causing the cash-poor
farmers to store their crop of opium for excessive
periods of time. Even if cultivation and processing
techniques improve dramatically, South American
traffickers would face a long struggle to carve a niche
in the marketplac
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Figure 6
Peruvian Airfields and Ports
Guayaqui
Pura
-i Dual purpose-used by local
commerce and traffickers
-- Clandestine-built and used
exclusively by traffickers
Military
QUITO
1 `
.Cac., 'Y `-- !i
UCq
f him t
South
Pa chic
Ocean
Civil
Ocean port facility
River port facility
?- Departamento boundary
- Railroad
- Road
Airfields
Identified
identified from imagery
prior to 1982 dated 1982-83
5O Miles
Huanuco
Callao is the capital of the Provincia
Constitucional del Callao which has
the status of a departamento but is
too small to be shown on this map.
Boundary representation is
not necessarily authoritative.
ybu
Iquitos ,
[uuliac LagoAr
~'7iricar~
TA NA. ,zirr
21
Secret
~.. ~~~Farryt
P
uno
~h r Arequ a4 t.. ?,. v-.
LA PAZ
Secret
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Secret
Secret
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