Industries in Depth

How coffee and cocoa provided these farmers with the tools to escape the drug trade

Cocoa fruit and products made with cocoa are displayed during a chocolate convention in Lima July 5, 2012. The five-day exhibition, which drew distributors from Latin America and chocolate sommeliers from Europe, featured organic dark chocolate candy bars, chocolate sushi and Machu Picchu and Lord of Sipan sculptures carved out of chocolate. REUTERS/Mariana Bazo (PERU - Tags: SOCIETY FOOD BUSINESS) - GM1E87608QQ01

Alternative crops to coca, such as the cocoa fruit, must provide farmers with a decent income Image: REUTERS/Mariana Bazo

Victor Ganoza
Country Director, Peru, TechnoServe
Nick Rosen
Senior Associate for External Communications, TechnoServe
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Less than a decade ago, the villages and towns of northeastern Peru’s vast Huallaga Valley were a centre of the global drug trade. Thousands of farmers used their plots in the high jungle to grow coca, the primary ingredient used to make cocaine.

“We all harvested coca”, said Elmer Ereta Ramos, a farmer from the hamlet of Villa El Sol.

“Coca plantations were everywhere.”

While coca provided a steady income in a remote region with few alternatives, the illicit crop also brought with it the violence of drug traffickers and their allies. The government was eager to eradicate it. Elías Faustino, a farmer further up the valley, remembered: “growing coca, we had work, but no future”.

Elías and Elmer wanted to make a change. Taking advantage of assistance from the Peruvian government and international donors, they replaced their coca plants with coffee and cocoa respectively, betting on a future with legal crops. And they weren’t alone: across the Huallaga Valley, the land area planted with coca fell by more than 90% between 2009 and 2016.

But the success there has not been repeated everywhere. In Colombia, for example, many farmers have refused to give up the crop or have returned to it after trying alternatives. The country saw record coca production in 2017.

What does it take for farmers to give up illegal crops for good?

The experience of the Huallaga Valley can provide some important answers. From 2010 to 2017, TechnoServe partnered with the United States Agency for International Development, the PIMCO Foundation and other funders, in coordination with Peru’s anti-drug agency DEVIDA, on the Economic Development Alliance (EDA), a project to assist former coca-growing families in the region to transition to cocoa.

Based on this experience, we have identified three key lessons for helping farmers leave the drug trade behind.

1. Equip farmers with the tools to succeed

Alternative crops such as cocoa must provide farmers with a decent income, and that starts on the farm. Many farmers don’t know how to improve their yields and the quality of their produce, and they need training on good agricultural practices in order to improve their harvests. Sometimes, that knowledge can be created locally. For example, we identified one family whose members had, through trial and error, developed techniques that led to extraordinary yields. We worked with them to translate their approach into a curriculum that was taught to other farmers.

Farmers also need access to inputs, such as high-quality seedlings, fertilizer and pesticides. These can be difficult to access in regions such as the Huallaga Valley, where most producers have little in savings. The national and local governments have provided subsidized or free inputs, in some cases. EDA also worked with lenders to improve farmers’ access to finance, enabling them to purchase and use the inputs they need.

The combination of effective training and access to inputs can make a big difference. Participants improved the productivity of their cocoa plots by an average of 33% within two years of starting the programme.

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2. Build profitable markets and ways to access them

However, the cocoa still needs buyers, and farmers need an efficient way to reach them. For that reason, alternative development initiatives must work across the entire value chain, from the farm to the consumer. This includes creating stable, profitable end markets for farmers’ crops. We’ve provided training to farmers and cooperatives about how to process their cocoa, in order to improve quality and attract buyers who offer better prices. There has also been a major push to highlight Peru’s cocoa in domestic and international trade fairs, and EDA helped to play matchmaker between buyers and suppliers.

Farmers also need a cost-effective way to get their crops into the hands of buyers, which is a long-standing challenge for those in the Huallaga Valley. With their scattered plots and communities, stitched together by rough and winding roads or muddy mountain trails, farmers struggled to attract the interest of cocoa exporters, despite forming small cooperatives to aggregate their production.

As a result, they relied on middlemen to sell their crops, which cut into their margins and threatened their profitability. To address that problem, the programme helped cooperatives work together to create larger commercial blocks capable of negotiating directly with exporters. The farmers were able to cut out the middlemen and earn a better price.

3. Lasting change requires a team effort

For farmers, switching from coca to an alternative crop must not only mean changing the source of their income, but also the quality of their lives. That requires the cooperation of a number of important stakeholders.

In Peru, this cooperation has included: the efforts of the military and police to assure the safety and security of farmers and those helping them; projects from the local, regional and national governments to expand education and health services in marginalized communities; and initiatives from international donors, DEVIDA, government ministries, civil society and the private sector to develop economic opportunities. The combination of improved security, better access to services and a stable livelihood is what keeps most farmers from returning to coca.

'Like a miracle'

Over seven years, the EDA programme worked with 31,000 farmers. It helped them to achieve a 32% increase in their incomes and sell more than $25 million of cocoa every year. That kind of change is possible elsewhere. By fostering cooperation, focusing on the entire value chain and identifying what farmers need in order to seize new opportunities, the global community can help coca growers forgo their illicit crops and develop profitable, legitimate livelihoods.

The change can be dramatic. Reflecting on the transformation in Villa El Sol, Elmer said: “it still seems like a miracle that we are now a cocoa-producing zone, exporting high-quality beans - the best in the world”.

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