Alternative Development<strong>The</strong> USAID alternative development program in Peru aims to improve communityparticipation in local government to streng<strong>the</strong>n <strong>the</strong> rule <strong>of</strong> law for <strong>the</strong> community’s benefit.To support a stronger legal environment locally, USAID provides economic aid to build <strong>the</strong>local economy’s competitiveness through legal crops and improved infrastructure, making<strong>the</strong> alternative development program available to communities in coca-growing areas thatvoluntarily eradicate <strong>the</strong>ir coca cultivation. Pro-coca-farming groups challenge communitiesthat accept <strong>the</strong>se voluntary eradication agreements, at times violently. As a result, progressimplementing <strong>the</strong>se agreements slowed during 2005 as cocalero strikes and threats <strong>of</strong>violence forced <strong>the</strong> closure <strong>of</strong> regional <strong>of</strong>fices for roughly a third <strong>of</strong> <strong>the</strong> year. 340In 2005, an additional 9,000 families joined <strong>the</strong> voluntary eradication program, which beganin October 2002. Since <strong>the</strong> program’s start, 11,000 hectares <strong>of</strong> coca have been voluntarilyeradicated, approximately 3,000 hectares in 2005. 341 <strong>The</strong> director <strong>of</strong> Peru’s national drugagency cited a variety <strong>of</strong> legal crops as substitutes for illegal coca cultivation for familiesenlisted in <strong>the</strong> alternative development program. <strong>The</strong>se crops included bananas, birdseedmaize, cacao, c<strong>of</strong>fee, cotton, oil palm, orchids, hearts <strong>of</strong> palm, palm oil, papaya, peanuts,pineapples, rice, rubber, sesame seeds, and variety beans. 342By <strong>the</strong> end <strong>of</strong> 2005, USAID reported providing technical assistance to 26,469 familyfarmers, covering more than 31,000 hectares <strong>of</strong> legal crops, as well as building infrastructurefor communities participating in <strong>the</strong> voluntary eradication program. By <strong>the</strong> end <strong>of</strong> 2005, 231separate projects had been completed. In addition, USAID completed <strong>the</strong> $30-millionrehabilitation <strong>of</strong> <strong>the</strong> Fernando Belaunde Terry highway, <strong>the</strong> sole major highway thatconnects <strong>the</strong> Central Huallaga Valley–a major coca growing area–with western Peru, wherelegal agricultural markets are more accessible. Such transport access should contributesignificantly to improved legal agricultural production in <strong>the</strong> Central Huallaga Valley. 343Since October 2002 when it began, <strong>the</strong> national alternative development program, Programade Desarollo Alternativo (PDA), working in conjunction with USAID, had enrolled 50,000families by May 2006 and agreed to 600 contracts with rural communities to voluntarilyreduce coca cultivation. 344 According to Peru’s national drug control agency, Devida, <strong>the</strong>program has helped build 600 various infrastructure projects in nearly four years, includinglocal roads, bridges, electricity stations, water systems, and community education and healthcenters. Under this and related programs, 60,000 hectares <strong>of</strong> coca have been forciblyeradicated and an additional 11,000 hectares have been voluntarily eliminated, substitutingto date approximately 52,000 hectares <strong>of</strong> legal crops. According to <strong>the</strong> U.S. Embassy, <strong>the</strong>340 U.S. Department <strong>of</strong> State, INCSR 2006, pp. 116-119.341Ibid.342U.S. Department <strong>of</strong> State telegram, “Ambassador Discusses Free <strong>Trade</strong> in Piura,” message referenceNo. 2235, prepared by U.S. Embassy, Lima, May 18, 2005; Nils Ericsson Correa, “Cacao... No Coca,” ElComercio, May 31, 2006; Devida, “Stand de Devida Fue Premiado en Semana de Comercio Exterior,” pressrelease, Oct. 21, 2005. As noted previously, a number <strong>of</strong> alternative development products may receive tradepreferences under o<strong>the</strong>r programs in addition to ATPA or may already enter <strong>the</strong> United States duty-free.Also, industries established with <strong>the</strong> help <strong>of</strong> ATPA trade preferences may market alternative developmentproducts in markets o<strong>the</strong>r than <strong>the</strong> United States, for example, for local consumption or export to neighboringcountries, <strong>the</strong>reby still providing legitimate employment opportunities as a counter to coca cultivation butwithout alternative development products being imported into <strong>the</strong> United States per se.343U.S. Department <strong>of</strong> State, INCSR 2006, pp. 116-119.344Devida, “Devida Cumplio Cuatro Anos de Fundada,” press release May 16, 2006, found athttp://www.devida.gob.pe/Modulos/Noticia/DetalleNoticia.asp? Cod=355, retrieved June 12, 2006.4-12
agricultural sector in Peru has clearly benefitted from ATPA preferences, developingnontraditional export crops such as artichokes, asparagus, beans, flowers, grapes, mangoes,onions, and paprika. 345Asparagus has proved to be one <strong>of</strong> <strong>the</strong> foremost alternative development export crops thatbenefits from ATPA. According to <strong>the</strong> Peruvian Asparagus and Vegetables Institute in itssubmission to <strong>the</strong> Commission for this report, Peru ranked as <strong>the</strong> world’s largest exporter <strong>of</strong>asparagus in 2005. <strong>The</strong> institute notes that Peru is also a significant and growing exporter<strong>of</strong> o<strong>the</strong>r fresh and preserved vegetables, such as artichokes, chili peppers, pimientos, andpaprika. Stating that it supports <strong>the</strong> positive effect ATPA has had on <strong>the</strong>se industries, <strong>the</strong>institute points out that <strong>the</strong> asparagus industry now “provides alternative legal employmentto over 60,000 workers, many <strong>of</strong> whom come from mountainous areas where cocaproduction has traditionally taken place.” 346<strong>The</strong> institute’s submission estimates that, <strong>of</strong> 4.3 million formal jobs in Peru in 2004, 1.1million were related to nontraditional exports, and 600,000 <strong>of</strong> those were in <strong>the</strong> agriculturalexport sector, which benefits from trade preferences <strong>of</strong>fered under programs such as ATPA.<strong>The</strong> institute highlights <strong>the</strong> artichoke industry as ano<strong>the</strong>r nontraditional agricultural exportsector. <strong>The</strong> sector currently employs 15,000 people and surpassed $40 million in value in2004. Paprika exports also increased by 88 percent between 2004 and 2005, surpassing $90million in value to make Peru <strong>the</strong> world’s top paprika exporter.<strong>The</strong> administration <strong>of</strong> President Alan Garcia, who was elected in June 2006, is formulatinga five-year export promotion plan called Sierra Exportadora that aims to encourage farmersin <strong>the</strong> Peruvian highlands–where much <strong>of</strong> Peru’s coca is grown–to increase economic growthby shifting from traditional food crops, such as corn, potatoes, and quinoa, 347 to higher-valueexport products, such as artichokes, snow peas, peppers and paprika, onions, and trout. 348This export promotion plan is modeled on increased agricultural exports, such as those from<strong>the</strong> asparagus industry that were induced by ATPA trade-based preferences and which hasgenerated economic growth on <strong>the</strong> Peruvian sou<strong>the</strong>rn coast. 349345U.S. Department <strong>of</strong> State telegram, “<strong>USITC</strong> 2005 Investment and Drug Crop Survey,” messagereference No. 2490, prepared by U.S. Embassy, Lima, June 21, 2006.346Carlos Mateo Paz-Soldan, and John B. Totaro, Jr., attorneys, Schmeltzer, Aptaker & Shepard, onbehalf <strong>of</strong> <strong>the</strong> Peruvian Asparagus and Vegetables Institute, written submission to <strong>the</strong> Commission concerninginv. No. 332-352, <strong>Andean</strong> <strong>Trade</strong> <strong>Preference</strong> <strong>Act</strong>: <strong>Impact</strong> on U.S. Industries and Consumers and on DrugCrop Eradication and Crop Substitution, June 8, 2006.347A high protein, desirable plant found in <strong>the</strong> high Andes whose seeds are <strong>of</strong>ten ground for food in Peru.348 U.S. Department <strong>of</strong> State telegram, “Understanding Garcia’s Export Promotion Plan,” messagereference No. 2507, prepared by U.S. Embassy, Lima, June 22, 2006; U.S. Department <strong>of</strong> State telegram,“Garcia’s Campaign Proposals – He’s Got <strong>the</strong> Dough,” message reference No. 2532, prepared by U.S.Embassy, Lima, June 26, 2006.349U.S. Department <strong>of</strong> State telegram, “Understanding Garcia’s Export Promotion Plan,” messagereference No. 2507, prepared by U.S. Embassy, Lima, June 22, 2006.4-13