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Peru
>> Regional Overview >> Peru Overview Activity Data Sheet
PROGRAM: Peru
TITLE AND NUMBER: Reduced Illicit Coca Production in Target Areas of Peru, 527-005
PLANNED FY 2001 OBLIGATION AND ACCOUNT: $25,000,000 (INC)
PROPOSED FY 2002 OBLIGATION AND ACCOUNT: $79,000,000 (INC)
STATUS: Continuing
INITIAL OBLIGATION: FY 1995; ESTIMATED COMPLETION DATE: FY 2008Summary: During the last five years, the Government of Peru (GOP) has made remarkable progress in reducing both the coca cultivation area and the flow of illegal drugs to consumer countries. As reported by U.S. Government (USG) agencies, a total of 81,100 hectares (70%) of the original 115,300 hectares of coca leaf have been eliminated as of December 2000; however, this outstanding achievement is not yet permanent mainly due to fluctuations of coca leaf prices. Production and trafficking of coca leaf and coca-based products continue to cause serious political, economic, and social harm, while domestic drug abuse has increased significantly. In addition, deforestation, erosion, and the disposal of toxic chemicals resulting from processing coca are causing ecological damage. The Alternative Development Program (ADP) helps increase employment and income from licit economic activities for farmers who reside in the participating coca growing areas. The ADP is an integral part of a long-term integrated counter-narcotics strategy that has two critical elements: 1) interdiction and law enforcement to disrupt narcotics trafficking and lower the farm-gate price of coca leaf (which is the responsibility of the GOP and other U.S. Government agencies, and is not within USAID's management control); and 2) alternative development interventions aimed at restoring authority of participating local governments and promoting voluntary participation of farmers to engage in licit and sustainable economic activities leading to reduced coca leaf and cocaine production. The ADP strategy is premised on the development hypothesis that offering farmers alternative licit sources of income and employment, coupled with improved living conditions and organized communities with the ability to enforce laws, will lead them to voluntarily abandon coca cultivation, thereby achieving a lasting or sustainable reduction in coca and cocaine production. The ADP now benefits almost 400,000 people in approximately 1,600 communities located in six of the eleven coca-growing areas where most coca leaf is produced. The ADP conforms with GOP targets and goals as outlined in its Comprehensive Alternative Development and Prevention and Rehabilitation Programs for the period 1999-2003. Overall USG assistance amounts to $194.5 million, with a program assistance completion date of December 31, 2003. The agreed-upon GOP counterpart contribution totals $115.5 million. USAID assistance contributes to the GOP program and, at its completion in 2003, it is anticipated that a follow-on GOP program will be negotiated in which USAID's ADP will also have a major role.
Key Results: Key results achieved in 2000 include a 12% net reduction (4,500 hectares) in coca cultivation area with an estimated decrease of over 14,800 metric tons in coca leaf production. In addition, a total of more than 27,600 hectares of licit alternative crops (e.g., coffee, cacao, palm heart, pineapple and other crops) have been technically and financially supported and are under improved management models, having generated around 10,000 new full-time equivalent jobs, nearly 20% for women. Living conditions of participating communities and farmers improved significantly in 2000 with: 1) completion of 289 new social infrastructure and small scale productive projects, (e.g., health clinics, school rooms, and water supply systems); 2) rehabilitation of over 290 kilometers of feeder roads and one hydroelectric power plant; 3) construction of 16 key bridges and one irrigation canal; and 4) establishment of an $11.5 million rural credit system through a non-governmental organization (NGO) and a private bank, which resulted in the approval of over 3,300 micro-credit and small commercial loans, out of which 32% went to women and around 80% went to farmers who had never had access to credit before.
Performance and Prospects: The ADP is implemented with emphasis on the Upper and Central Huallaga Valleys and the Apurímac River Valley that includes Palmapampa, where most coca is currently produced, as well as in the Aguaytia and Pichis-Palcazu-Pachitea Valleys. Although there is less coca under cultivation in the latter two areas, consolidating ADP achievements in reduced coca production and a growing alternative licit economy, requires continued financing of income-generating activities. ADP interventions aim at strengthening local governments, increasing income and employment opportunities, improving infrastructure (e.g., road rehabilitation, bridge construction, small electricity-generating facilities, schools, health posts, etc.), protecting natural resources, and increasing people's awareness of the harmful effects of coca cultivation and use of drugs. In addition, ADP seeks to strengthen CONTRADROGAS, the primary GOP agency responsible for providing policy guidance and operational coordination to multi-donor alternative development initiatives.
ADP continues to demonstrate a successful trend toward sustained coca reduction. Since ADP's inception in May 1995, there has been a cumulative coca reduction of 81,100 hectares, representing a more than 70% decrease in coca area from the 1995 baseline level. This overall reduction caused a drop in potential coca leaf production of approximately 129,200 metric tons, and reduced potential cocaine hydrochloride production by 315 metric tons. There is little doubt that such reductions have decreased significantly the potential flow of harmful drugs to the United States and elsewhere. Only 34,200 hectares remain devoted to coca cultivation, including 8,000 to 10,000 hectares that produce coca leaf for legal consumption in Peru. Other ADP achievements to date include: 1) 679 agreements signed by communities and farmer organizations to voluntarily reduce coca hectares and not plant new coca; 2) completion of around 1,400 social infrastructure projects; 3) rehabilitation of the Palmapampa airstrip and over 1,100 kilometers of farm-to-market roads, including 31 key bridges; 4) increased production and marketing of over 31,700 hectares of licit crops, as well as development of 1,500 hectares for livestock and pastures; and 5) generation of approximately 28,600 new full-time equivalent jobs.
Prospects for ADP success are evidenced by the political will of the GOP to address coca cultivation and the involvement of the donor community in support of ADP activities. The GOP's political will to address illicit coca cultivation, production, and trafficking is laid out in its newly developed 2001-2005 National Strategy Against Drugs. There is increasing international support from the donor community to the GOP's Comprehensive Alternative Development, Prevention, and Rehabilitation Program for 1999-2003 as a result of meetings of the Consultative Group on Alternative Development held in 1998 and 2000. ADP implementing institutions, especially the private-sector entities, are showing increasing commitment and performance.
Based on the mid-term evaluation recommendations, a series of corrective implementation actions and adjustments are being introduced to the ADP. The current challenge is two-fold: 1) to sustain previous successes and further reduce coca cultivation; and 2) to make these successes permanent over time by creating a sustainable licit economy within an improved environment for participating communities and farmers. To meet these challenges $54,000,000 of the Andean Regional Initiative (in addition to the $25,000,000 currently authorized under the ongoing ADP) will be devoted toward economic growth, democracy, and environment activities in FY 2002.
Economic growth activities consist of market access, credit access, licit crop production, and emergency food assistance. A multi-donor road improvement activity will make the upper and central Huallaga Valley and the Apurimac-Ene River Valley more accessible to markets, decreasing the time to get goods to market, reducing spoilage of goods en route, and providing sellers with a choice of markets. This activity will leverage the investment of other donors, especially the Inter-American Development Bank and the World Bank. Credit access activities will develop and leverage area-wide market-oriented credit systems. Licit crop production and marketing assistance will energize continued implementation of current ADP initiatives in crop production, processing, and marketing with a stronger focus on the Huallaga and Apurimac-Ene River Valleys.
Democracy activities will strengthen local governments, address key decentralization policy constraints, and develop a municipal road maintenance capability. Under the environment component, USAID will initiate a comprehensive natural resource assessment and management effort in the Huallaga and Apurimac-Ene River Valleys.
In FY 2001, funds will be used to: promote citizen participation in local decision making processes through local government strengthening and construction of social infrastructure ($6,270,000); support improvement and maintenance of feeder roads and bridges ($8,240,000); promote production, processing and marketing of alternative crops ($9,350,000); strengthen the institutional capability the GOP coordinating organization, the National Commission Against Drug Consumption (CONTRADROGAS) ($850,000); support narcotics awareness ($500,000); and program monitoring and support ($540,000).
FY 2002 funds will be used to: support citizen participation and social infrastructure ($10,000,000); support GOP access to and leverage of funding for improved road access between priority ADP areas and market centers ($25,000,000); develop and leverage credit funds and other market-oriented financial services ($10,000,000); support production and marketing of alternative licit crops ($25,000,000); alleviate the social and economic impact of eradication ($5,000,000); increase awareness of the social and environmental impacts of coca production and use ($2,000,000); 7) protect and improve natural resources management ($1,000,000); and 8) program management ($1,000,000).
Possible Adjustments to Plans: Current ADP implementation strategy and plans are being adjusted based on mid-term evaluation results; the new USG "source zone" strategy that requires concentration of activities and resources in the Upper Huallaga and Apurimac River Valleys, where most coca is currently produced; the GOP's involuntary coca eradication program, and the work plan to be proposed by the new "umbrella institution", CARE. Work plans for CY 2001 will devote close to 70% of resources to the "source zone" areas, while other working areas will continue to be supported, as needed, to consolidate ADP achievements in both coca reduction and growth of alternative licit economic activities. Planning and implementation of ADP interventions and coca eradication activities will be much more closely coordinated to avoid potential negative effects and to coordinate immediate assistance in areas where the economic and social impact of eradication could be highly disruptive. Communities and farmers' organizations with signed voluntary coca reduction agreements will first be requested to honor their commitment before eradication takes place, while new communities will be asked to "eradicate voluntarily", with or without alternative development assistance, before forced eradication is done. In addition, an "emergency program" has been initiated in eradication areas to prevent and relieve malnutrition among children, implement labor-intensive activities to generate cash income, and supply micro-credit for small-scale economic activities.
Other Donor Programs: Currently, USAID is regarded as the leader in alternative development, both in terms of strategy and funding. Other donors include the United Nations Drug Control Program, the Netherlands, Switzerland, Germany, Canada, and the United Kingdom. As a result of the Consultative Group meetings and in recognition of Peru's alternative development success, other donors pledged a total of $8.4 million for a series of interventions in coca producing areas not supported by USAID. Of this total, only $4.6 million has been made available to support the GOP's CY 2000 national Alternative Development programs. The GOP committed $2.3 million in CY 2000, as part of its counterpart contribution required under USAID's Special Objective Agreement.
Principal Contractors, Grantees, or Agencies: U.S. institutions include Winrock International, CARE, Chemonics, and Planning Assistance. Peruvian partners include: CONTRADROGAS, the National Development Institute, Ministry of Transport and Communications, San Martin Region Local Governments Association, Center of Information, Education, and Prevention of Drug Abuse, Nuevo Mundo (a private bank), and the Regional Administration Transitory Council of Ucayali.
FY 2002 Performance Table
Peru: 527-005
Performance Measures:
Indicator FY97
(Actual)FY98
(Actual)FY99
(Actual)FY00
(Actual)FY00
(Plan)FY01
(Plan)FY02
(Plan)Indicator 1: Percentage of public in Alternative Development Program target areas who recognize that drug production and consumption cause both environmental and social damage NA 59 62.7 32 70 77 81 Indicator 2: Percentage of households with access to basic services in Alternative Development Program target areas (analyzed by valleys) 66.3 39 49 51.2 50 55 60 Indicator 3: Number of communities and farmer groups represented in signed coca reduction agreements in Alternative Development Program target areas 239 581 679 679 850 1,006 1,150 Indicator 4: Coca leaf production in Peru 130,000 95,600 69,200 54,400 61,363 49,091 39,273 Indicator Information:
Indicator Level (S)or(IR) Unit of Measure Source Indicator Description Indicator 1: IR Percentage (disagregated by geographical areas) Alternative Development Program special survey People surveyed who recognize environmental damages caused by coca production, and social damages caused by drug production, trafficking and consumption. Indicator 2: IR Percent Alternative Development Program special survey A household is defined as having access to basic services if it demonstrates at least three of the following: sewage, drainage or toilet system, potable water system, schools facilities, health facilities, energy facilities Indicator 3: IR Cumulative number of communities CONTRADROGAS agreement records. Cumulative number of communities. Reduction agreements are signed by local authorities with their communities (coordinated by CONTRADROGAS and alternative development implementors). Indicator is a proxy measurement for the Intermediate Result. Indicator 4: IR Number of metric tons Reports from: Counternarcotics Center; Narcotics Affairs Section; Control and Reduction of Coca in Upper Huallaga Productivity per hectare times number of hectares cultivated times number of harvests. Includes licit and illicit coca production. U.S. Financing
(In thousands of dollars)
Obligations Expenditures Unliquidated Through September 30, 1999 127 DA 127 DA 0 DA 150 CSD 0 CSD 150 CSD 34,230 ESF 34,230 ESF 0 ESF 57,400 INC 19,424 INC 37,976 INC 0 FSA 0 FSA 0 FSA 0 DFA 0 DFA 0 DFA Fiscal Year 2000 0 DA 0 DA 0 CSD 46 CSD 0 ESF 0 ESF 25,000 INC 26,774 INC 0 FSA 0 FSA 0 DFA 0 DFA Through September 30, 2000 127 DA 127 DA 0 DA 150 CSD 46 CSD 104 CSD 34,230 ESF 34,230 ESF 0 ESF 82,400 INC 46,198 INC 36,202 INC 0 FSA 0 FSA 0 FSA 0 DFA 0 DFA 0 DFA Prior Year Unobligated Funds 0 DA 0 CSD 0 ESF 750 INC 0 FSA 0 DFA Planned Fiscal Year 2001 NOA 0 DA 0 CSD 0 ESF 25,000 INC 0 FSA 0 DFA Total Planned Fiscal Year 2001 0 DA 0 CSD 0 ESF 25,750 INC 0 FSA 0 DFA Future Obligations Est. Total Cost Proposed Fiscal Year 2002 NOA - DA 0 DA 127 DA - CSD 0 CSD 150 CSD - ESF 0 ESF 34,230 ESF 79,000 INC 86,350 INC 273,500 INC - FSA 0 FSA 0 FSA - DFA 0 DFA 0 DFA
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Last Updated on: May 29, 2002 |
