Peru's latest tool in the war on drugs: land ownership

Despite torrential rains, Alfredo Flores has no qualms about dashing into his fields to show off his palm-oil trees. A few years ago, Mr. Flores and many of the other 400 farmers in Shambillo, in the deep jungle some 300 miles northeast of Lima, Peru's capital, had no interest in letting anyone see their crops. That's because they were growing coca, the raw material from which cocaine is extracted. Not only that, Flores didn't even own the land. He had cleared 34 acres of once-lush Amazon jungle and farmed it for nearly 15 years.

But in September 2002, Flores was one of the first farmers to opt for a plan financed by the United States Agency for International Development (USAID) to get coca growers to pull up their illicit crops in favor of palm-oil trees and pineapples. Farmers received approximately $60 for each acre of coca eradicated, as well as assistance to plant alternative crops. More than 80 percent of Shambillo's farmers have eradicated their coca.

Now he is ready to take the final step in his transition from clandestine coca grower to legitimate farmer. He will be given official ownership of the land in February. It's all part of a new stage in Peru's drug-eradication effort, started last month. Thousands of farmers like Flores will be given title to their land as a way to formalize the economy in the country's vast drug-growing regions.

"Having title to land is an incentive for us. With the titles, we now know the land is ours and we can use it to improve our standard of living," Flores says.

The Peruvian government and US Embassy officials hope that ownership in the land and the equity that comes with it will help solidify recent gains in the decades-long war on drugs.

"We are trying to formalize the economy in these areas to increase investment and production, which is the only answer to combat drug trafficking," says a US Embassy official in Lima.

Hernando de Soto, author of "The Other Path," the 1986 bible on the importance of formalizing the economy, says the process is a major step toward changing the entire illicit economy on which drug trafficking is based.

"Property changes the rules of the game. It gives farmers something tangible they can use as collateral. It is a bargaining chip they never had before," he says.

With land titles, farmers can enroll individually or as communities in a number of government programs, like housing services or agricultural assistance.

USAID has earmarked $1.3 million to title 4,300 plots of land, most averaging about 30 acres. The Peruvian government's Special Land Titling Program (PETT) is carrying out the program, which involves 15 eight-person brigades. The value of the plots being titled in Shambillo is approximately $5 million.

Omar Valderrama, a PETT director, says the program shows people that the state is interested in improving the livelihoods of farmers and not simply eliminating the illegal drug industry.

" We have found a successful formula to combat the drug economy that will allow us to transform this region and begin to create new levels of prosperity," he says.

Once the process here is finished in March, the plan is to move into coca-growing areas farther west and south. Overall, USAID has $120 million for programs to get farmers out of the coca market.

Although land-titling programs have been under way in Peru for years, this is the first effort in coca-growing regions, which have been wracked by violence from drug traffickers and guerrilla activity. Peru's Maoist Shining Path guerrillas moved into most of the country's coca regions in the early 1980s. While the outlawed party has been on the decline for a decade, the remaining guerrillas are active principally in coca-growing regions.

If the strategy works as planned, palm-oil trees and other crops could be viable alternatives to coca. An acre of coca can produce 400 to 500 lbs. per year at $1 a pound. Palm oil currently sells at around $475 a ton and each acre can produce half a ton per year.

The plan does face a number of challenges, however. One is that palm-oil trees take several years to develop, so farmers will require assistance in the meantime. And while pineapples could be lucrative, they require more know-how and investment.

Hugo Cabieses, an economist who has studied the coca issue for years, says the land-titling program in Shambillo should work because it is linked to a profitable alternative product. He says that the key will be the loan component, which will allow farmers to grow other crops to get by while the palm-oil trees mature.

The self-eradication plan has helped Peru surpass a target set with the US government to eliminate 19,800 acres of coca plants this year. As of mid-November, 22,417 acres of coca had been eradicated. Of the total, 8,583 acres - or 38 percent - were eliminated through the self-eradication program. According to a mid-November report from the White House Drug Policy Office, 77,875 acres in Peru are being used to grow coca, down from 91,500 last year.

In addition to eradication and economic-development programs, in the first 11 months of the year, Peru's antinarcotics police in a series of raids destroyed nearly 700 clandestine cocaine-producing laboratories, eliminating potential production of more than three tons of cocaine.

Authorities have also seized 7.4 tons of cocaine totaling $7.4 billion in US street value. Based on the amount of coca in the country, Peru could produce up to 150 tons of cocaine annually. It is second after Colombia both in acres planted with coca and in cocaine production.