Credible Future - Can Micro Loans Make a Macro Difference?, Development & Aid, Environment, Headlines, Latin America & the Caribbean, Poverty & SDGs

SOUTH AMERICA: The Business of Legal Coca

María Amparo Lasso* - Tierramérica

MEXICO CITY, Jan 28 2006 (IPS) - Micro-businesses in Bolivia, Peru and Colombia that use the legendary coca leaf in manufacturing medicine, soft drinks, soaps, chewing gum and other products are staking their hopes for success on one man: Evo Morales.

These entrepreneurs of the still nascent artisanal, though legal, market for coca leaf – a crop demonized because it is also the raw material for cocaine – had resigned themselves for years to selling their products only in the local sphere.

But now they are setting their sights on the possibility of exporting their goods and giving a much-needed boost to the struggling rural Andean economy.

That is, if the controversial project for international legaliSation of coca leaf becomes reality, proposed by Morales, the 46-year-old Aymara inaugurated as Bolivia’s first indigenous president last Sunday.

The legal marketing of coca leaf seems to be a risky enterprise, given the current trends in the impoverished Andes: the traditional uses of the plant are on the decline among the younger generations, and illegal cultivation is on the rise. But there are those among the small farmers who hold on to optimism.

“We have to convince the world that coca is not cocaine, and with Morales we’re going to achieve that,” David Curtidor told Tierramérica. He is a member of the Nasa indigenous reserve in southern Colombia that manufactures Coca Sek, a sweet, yellow soft drink whose ingredients include coca leaf alkaloids.

“Our beverage is not a drug, it is a light stimulant, like coffee, but is much healthier because of the minerals and vitamins that coca has,” explained Curtidor via telephone from the remote village of Inzá, in the mountains of the Colombian department of Cauca.

Since its launch with a huge advertising campaign in December, the Nasa Indians have produced some 50,000 bottles of the soft drink, which sells at 70 cents on the dollar each – and they believe it would do very well on the international market.

Coca (Erythroxylon coca) has nutritional properties comparable to milk and beef, according to some medical studies, and indigenous peoples in the Andes have been chewing coca leaves for thousands of years for medicinal and religious purposes. These traditional uses are legal in the region.

But since the 1960s coca has been on a United Nations list of banned substances, severely limiting its legal international merchandising, while coca cultivation feeds the multi-billion-dollar illegal drug trafficking trade.

The promise to remove coca from this blacklist and to push back the U.S. policy of “zero coca”, that is, the forced eradication of coca crops, was central to Morales’s presidential campaign, and he won the December elections outright with 53.7 percent of the votes.

Morales was born in the Bolivian Andes, but later moved to the central semitropical region of Chapare in the 1980s, where he led the “cocaleros” – small coca-growing farmers – and turned them into the country’s most powerful movement, centreed around the MAS party (Movement Towards Socialism), which ultimately put him in the presidency.

Now he wants to expand the quota for legal coca crops in Bolivia, set at 12,000 hectares, and which growers say is insufficient to meet local demand for coca leaf.

The yields of the other 14,000 hectares (of the total of 26,000 planted with the crop) are believed to end up in the hands of drug traffickers.

Although Morales was quick to clarify that his proposal “is not zero coca, but is zero drug trafficking,” even U.S. analysts who support legal coca leaf production say his initiative is a “blow to the anti-drug policy” of the George W. Bush administration, and they predict a collision course for the two governments.

Bruce Bagley, a University of Miami expert on drug trafficking, said in a Tierramérica interview that the time for the legal coca market has come, and it is indeed an alternative because Bolivia grows no other agricultural products that have a major foreign market.

However, Bagley added, the U.S. government is very conservative and is highly unlikely to change its drug policy, and will not stand for Morales’s challenges to it.

Peasant farmers hit hard by years of failed development programmes for alternative crops – many sponsored by the United States – believe the Bolivian president’s proposal could have a positive domino effect in the Andes region, which would benefit everyone.

“Each kilogramme of coca leaf that goes to the legal market is one less for the drug traffickers,” said Coca Sek’s Curtidor.

That is the hope of ENACO, the national coca agency that monopolises the legal trade and merchandizing of the plant in Peru, where traditional use of coca leaf corresponds to just 9,000 of the 110,000 tonnes produced each year.

The producers of the well-known “cocalletas” (cookies) or another popular product, the energy drink Vortex, have to obtain coca leaf from ENACO. This year, the agency, which also manufactures and exports related products, will buy a record 5,000 tonnes of coca leaf from the Peruvian growers.

According to ENACO board president Lida Marín, the products are in high demand abroad. At the end of this month Peru will begin exporting for the first time to South Africa 153,000 packets of coca tea, for a sum of 85,000 dollars.

Marín told Tierramérica that ENACO also exports cocaine chlorhydrate to Japan and Belgium for medicinal purposes, and confirmed what is considered a well-known secret: her company sells coca leaf to the powerful transnational Coca Cola, through the Stepan Company, based in New Jersey, which acquires around 145,000 tonnes annually. The Coca Cola company has consistently declined to comment on this matter.

The dynamic of the legal coca business will depend on the market, not the government, according to Marín. “The consumers will be who decide if they like coca toothpaste or soap.”

But the precarious nature of production – often experimental and sporadic – condemns many artisanal and even medium-scale manufacturers to failure. Such is the case of the Lima-based Kokka Roya Food, a company with investments from Spain that produced the heavily advertised K-Drink, but closed its doors in mid-2005.

And there are many who doubt that legal coca can be a true alternative to drug trafficking. ENACO pays 1.4 dollars per kilogramme of coca leaf, compared to the five dollars per kilo the traffickers pay.

“We simply can’t compete in price,” admits ENACO director Nelson Larrea.

Across the Andes there has been a constant increase in hectares planted with illicit crops, and Colombia is the world’s leading cocaine exporter. According to the U.S. State Department, the Colombian coca crops saw no decline in 2004, even despite aggressive aerial herbicide spraying campaigns.

Cocaine production increased 35 percent in Bolivia and in Peru 23 percent from 2003 to 2004, according to UN data.

Some observers warn that the politicised Andean coca growers inflate the numbers on coca leaf destined for traditional consumption. Franklin Alcaraz, director of CELIN, the Latin American Centre for Scientific Research, says that around 5,000 hectares of coca would be more than enough to satisfy the Bolivian demand for legal uses (the law currently allows 12,000 hectares).

If the surplus is so high and continues to expand, as Morales is seeking, one has to expect the illicit drug trade to explode, given that regulation and law enforcement are difficult under the fragile institutions in the Andes region.

Despite this adverse environment, Morales will push for negotiations at the fourth meeting of the UN’s Vienna Convention in 2008 to remove coca from the list of banned substances. Experts in this area are sceptical, however, because it means achieving nothing less than global consensus.

“It won’t be possible,” says Alcaraz. “There is not even minimal agreement on the health benefits of coca leaf.”

“The possibilities are extremely remote,” says the University of Miami’s Bagley. “In 2008, President Bush will still be in power in Washington and is going to use all his leverage to prevent legalisation.”

(*María Amparo Lasso is the editorial director of Tierramérica. José Luis Alcázar contributed reporting from Bolivia. Originally published Jan. 21 by Latin American newspapers that are part of the Tierramérica network. Tierramérica is a specialised news service produced by IPS with the backing of the United Nations Development Programme and the United Nations Environment Programme.)