Economic and social benefits of the drug trade

There are three principal stages in the processing of coca leaves into cocaine. The first step is often done by the coca farmers themselves and involves harvesting and processing the leaves into a brown coca paste, which is approximately forty percent pure cocaine. Coca growers then sell the paste to drug labs—which are often owned by drug traffickers—where the second and third stages in the process occur. The second stage involves processing the brown coca paste into small white rocks, called cocaine base, which is ninety percent pure cocaine. The third and final stage involves processing the cocaine base into cocaine hydrochloride, or powder cocaine, which is ninety-nine percent pure cocaine. Traffickers then ship the cocaine hydrochloride to drug dealers in North America and Europe.

A financial breakdown of the cocaine trade illustrates how Plan Colombia’s fumigation of coca growers is targeting the weakest and poorest link in the production and trafficking chain. It takes approximately one hundred kilos of coca leaves to make one kilo of coca paste and the average coca-growing farm can produce two thousand kilos of coca leaves a year if it is not fumigated. Farmers sell a kilo of coca paste to processing labs for about $600; therefore the average small farmer earns at most $1,000 a month if he has not been fumigated. Out of this money, the farmer has to purchase pesticides and the chemicals for processing the leaves into paste, pay coca pickers to harvest and process the leaves, and pay taxes to the paramilitaries if that group controls that particular region. In FARC-controlled regions, the rebel group often acts as a broker, buying the paste from the farmers and selling it to the processing labs at a profit.

Meanwhile, the cocaine processors, who are often drug traffickers linked to the paramilitaries, purchase the coca paste from the farmers for $600 a kilo and then sell the processed cocaine to drug dealing organizations in the United States or Europe for $23,000 a kilo. The US and European drug dealers break down each kilo into grams and sell them for approximately $100 each, for a total earnings of $100,000 per kilo. In actuality, the dealers earn even more than this amount because they cut the cocaine with cornstarch, talcum powder or other similar products in order to increase the number of grams they can sell.

At the end of the day, the farmer’s profits amount to several hundred dollars per kilo of coca paste. In contrast, Colombia’s drug traffickers pocket over $10,000 for each kilo of cocaine sold while the profits of US and European dealers are in the tens of thousands of dollars for each kilo of cocaine. Clearly the overwhelming majority of the profits go to Colombia’s drug trafficking cartels and US and European dealers. However, despite the relatively small amount of profit that coca farmers earn, it is often more than they can make from growing legal crops due to low prices and difficulty in accessing markets because of poor infrastructure.

Shorter version