Juanjui, Peru
Next time you wander down the extensive chocolate aisle in the Hanover Co-op or other local stores, put a few bars in the cart and help fight the illegal drug trade. The more chocolate you buy, the less cocaine Peruvians will produce.
I saw this trade-off in action in San Martin, the primary cacao-producing region in Peru. Cacao is the main ingredient in chocolate. The distinctive purple pods were growing on nearly every stretch of farmland I passed. The now-ubiquitous crop is a relatively new phenomenon.
According to USAID, San Martin was home to nearly 75,000 acres of coca โโ the plant base of cocaine โโ in 1996. Today, the region grows less than 5,000 acres of it. Much of what used to be coca is now cacao. The words may sound similar, but one crop creates a dangerous and addictive drug, and the other creates a healthy, delicious dessert. As one local resident pointed out to me, โWe used to process the white; now we process the brown.โ
The primary driver for this change is simple economics. Kevin Cleaver, the former director for agriculture and rural development at the World Bank, explained to me that the transition occurred โalmost entirely through the marketplace.โ As demand for chocolate has rapidly increased, the price of cacao has risen.
In recent years, sophisticated chocolate consumers have introduced a niche market for artisan chocolate. I have noticed the chocolate aisle in the Co-op expand and diversify in the last several years. The aisle includes a huge variety of bars: 70 percent cacao, 75 percent cacao, organic, fair-trade, etc.
These fancy bars are often made from Criollo cacao, a finer type of cacao that grows only in Peru and surrounding areas. Criollo cacao fetches an even higher price than regular cacao. Adrian Bedregal โโ an artisan chocolate-maker in Arequipa, Peru โโ says, โAfrican cacao sells for 20 cents (per kilogram) and Criollo sells for $3 per kilo. The Amazon area is the biggest area for Criollo cacao.โ
Consumers are willing to pay more for fine chocolates, and as a result, the price of cacao has skyrocketed. In the last decade, the price of cacao has increased by nearly 60 percent. The price increase for Criollo cacao has been even greater.
Coca used to be the more lucrative crop. It fetched an exorbitant price on the world market and was exceptionally easy to grow. According to Cleaver, โCoca grows like weeds here.โ For Peruvian farmers, cacao is now a more profitable crop than coca.
Two simultaneous forces drove the switch from coca to cacao: the โcarrotโ of high cacao prices and the โstickโ of stricter anti-narcotic measures. The price of chocolate rose just as the Peruvian government cracked down on coca production.
In the 1980s and 90s, San Martin was the cocaine center of Peru. The region was a lawless stronghold for two leftist guerrilla groups, the Sendero Luminoso (Shining Path) and the MRTA (Tupac Amaru Revolutionary Movement). Both groups terrorized the population and traded coca to fund their activities.
Maria Nikolov, a San Martin native, told me, โI couldnโt come to my hometown for seven years.โ Mariaโs hometown, Juanjui, was one of the most violent cities in San Martin. Drug dealers and guerrillas killed hundreds of people and threw the bodies in the river, making it a โfloating cemetery.โ During the worst of the violence, the owner of the Juanjui hotel where I stayed was kidnapped from her shower, raped and held for ransom.
The region has made tremendous progress since this era of coca-fueled violence. San Martin has seen the highest poverty rate reduction in Peru, from 70 percent in the 2000s to 31 percent in 2015. In a 2011 letter to the Peruvian president, President Obama called the change โThe San Martin Miracle.โ
But the news is not all good in San Martin. The same economic incentives that have inspired so much progress have the potential to undo it. Farmers have a powerful incentive to clear the rainforest. That destruction exacerbates climate change and, ironically, hurts cacao production.
Cleaver says, โThe first impact of climate change will be water, and itโs already happening here.โ Cacao trees need a great deal of water to survive. I witnessed the devastating effects of a current drought. On Maria Nikolovโs farm, the drought has killed 80 cacao trees this year. Last year the farm only lost eight.
Cleaver explained to me, โThe whole Andean basin is under attack on three fronts: by farmers who hunt and deforest, by loggers and by miners.โ One way to protect the environment from these threats is through tourism. Cleaver says, โConservation only works if thereโs the support of the local community and if itโs in their financial self-interest.โ If locals can reap more benefits from tourism than through deforestation, perhaps they will switch paths as rapidly as from coca to cacao.
To paraphrase a popular song, โItโs all about the money.โ Good development policies align individual incentives with socially optimal outcomes. The good news is that chocolate can make you happy โโ and the rest of society, too. So toss another fancy bar in your cart.
Katrina Wheelan is a Hanover High School grad who is spending a gap year in South America.