This is the second story in a series about global shipping and the surge in drug trafficking. Read the first installment from Businessweek here.
The biggest cocaine boom in history has its origins outside towns like La Dorada, Colombia. Here, a few miles down a rutted track through the Amazon, cattle ranches and fish farms give way to endless fields of coca, the pale green shrub used for making the drug.
Apart from a few schoolteachers and occasional raids by the armed forces, the Colombian state barely exists beyond this point. To travel here, outsiders need permission from a much-feared drug cartel known as the Comandos de la Frontera, whose henchmen in military green T-shirts patrol the lanes in trucks and on motorbikes.
This region, Putumayo province, is a key supplier of the unprecedented surge in cocaine production. While fans of the hit Netflix series Narcos may have the impression that the era of Pablo Escobar’s Medellin Cartel in the 1980s and 1990s was the heyday of the cocaine trade, in fact, a much bigger boom is going on right now.
“We’re living in the golden age of cocaine,” said Toby Muse, the author of the 2020 book Kilo: Inside the Deadliest Cocaine Cartels, who has been reporting on the Colombian drug trade for more than two decades. “Cocaine is reaching corners of the planet that have never seen it before, because there is so much of the drug.”
Underlying that boom is a massive growth in acreage, as well as higher productivity on coca farms — trends driven by shifting political dynamics in the region as well as rising demand. The illicit industry now produces about 2,000 tons of cocaine per year, almost double the amount being made a decade ago, according to the UN Office on Drugs and Crime. Satellite photos show that the amount of Colombian land planted with coca rose to a record of more than 200,000 hectares (500,000 acres) last year, more than five times what it was when Escobar was gunned down in 1993.
All that supply is flooding markets around the world, bringing violence, corruption and huge profits with it. Some 10,000 miles from those farms in the Andes, arrests for cocaine possession in Australia have quadrupled since 2010. US overdoses involving cocaine have quintupled over the past decade as dealers took to mixing the drugs with synthetic opioids. Ecuador imposed states of emergency on its largest port, Guayaquil, this year as warring cocaine traffickers spread terror with car bombs and contract killings.
While cocaine is still reaching traditional markets in the US, it is deluging Europe, where seizures have tripled in just five years, according to EU figures. In Africa, cocaine seizures increased 10-fold from 2015 to 2019, while the amount captured in Asia increased almost 15-fold over the same period, according to data collected by the UN. Greater volumes of the drug are being seized at ports in Turkey and Eastern Europe as traffickers open new routes. It is also advancing into places where it wasn’t as common just a few years ago, such as Argentina and Croatia.
And the average purity of cocaine on the streets of Europe has risen to more than 60%, from 37% in 2010, while residue from the drug in major cities’ wastewater has doubled over the past decade.
“Europe is awash with cocaine,” said Laurent Laniel, the chief scientific analyst at the European Monitoring Centre for Drugs and Drug Addiction, an EU agency. “The supply is just unheard of.”
The size of this global cocaine wave is underpinned by sophisticated drug cartels that have grown increasingly adept at concealing the drug and moving it in large quantities around the world. To get it to Europe, traffickers rely primarily on commercial cargo ships sailing across the Atlantic Ocean. That's allowed them to leverage the main engine of globalization to reach overseas markets with unprecedented scale and efficiency.
Amazonian Heat
The white powder inhaled at dance clubs in Warsaw may have come from Pedro Morales’ farm in Putumayo, along Colombia’s border with Ecuador. On a recent day, coca pickers soaked in sweat from the Amazonian heat dragged huge sacks of leaves to the rustic laboratory on site where they’ll be turned into a type of unrefined cocaine known as coca paste. The workers make about $1.90 for every 25 kilograms (55 pounds) of leaves they harvest, and an average picker might gather about 250 kilos in a day.
One worker takes the leaves from the sacks and feeds them into a shredding machine. The chopped up coca is treated with cement, quicklime and sulfuric acid in a bit of bucket chemistry, then left to soak in giant tubs of gasoline. The paste is later extracted from the solution using sulfuric acid and ammonia.
Morales (not his real name) estimates that his eight hectares of coca can produce about 40 kilograms of paste per year. The finished product, worth about $630 per kilo, is sold to traffickers who arrange for it to be processed into cocaine hydrochloride, the powder form of the drug that most users are familiar with. One kilo of paste is enough to make one kilo of cocaine, which might sell wholesale for about $30,000 in the US, $50,000 in Germany or $160,000 in Australia.
Morales and his neighbors are at the heart of the multi-billion dollar surge in global cocaine production, but very little of the profit ends up with them. Instead, they live in poverty in wooden shacks, while the real money is made by people higher up the chain including the leaders of groups such as Comandos de la Frontera, as well as mafias in Mexico, Italy, the Balkans and elsewhere.
One lab worker inquired about how much the drugs would fetch in London and when told the answer — about 20 to 30 times the price in Colombia — asked a reporter what he knew about UK visa rules and airline ticket prices.
Around La Dorada, an industry has sprung up to separate the low-level workers from the money they do earn. When they finish for the day, lab employees often head to a cockfighting pit to gamble. Bars and brothels dot the countryside where coca pickers, some of them migrants who fled poverty in Venezuela, can drink themselves into oblivion amid deafening music.
With almost no police presence, the cartel keeps order, imposing punishments — such as forced labor repairing the roads — for fighting or being disorderly. But it’s also responsible for intense violence.
About 20 people were slaughtered in a November battle between Comandos de la Fontera and a rival faction for control of the coca plantations and lucrative trafficking routes around Putumayo. That same month, a group of people were shot a couple of minutes from Morales’s farm, apparently in a dispute between the Comandos and another group.
Cocaine from Putumayo often begins its journey by being hauled over the Andes to Colombia’s Pacific coast, loaded onto speed boats in jungle rivers then taken to Central America before traveling on to Mexico and the US. Or it might cross a river into Ecuador, then be sent overseas concealed in shipping containers.
Traffickers have tapped into the explosion in trade in fresh produce and other goods from South America’s Pacific coast over the past 20 years, helped by free-trade accords and an expansion of the Panama canal. Cartels have become increasingly sophisticated at hiding drugs among the millions of containers heading into ports such as Antwerp and Rotterdam every year.
The perishable nature of cargos such as bananas, blueberries, asparagus, flowers and grapes works to traffickers’ advantage by discouraging police or customs inspections that would delay shipment.
The flood of cocaine has brought turmoil as far away as Guinea-Bissau. Several hours of gunfire roiled the capital in February as armed men surrounded the government palace. President Umaro Sissoco Embalo blamed drug traffickers for what he said was an attempt to murder him and his cabinet. The nation is a transshipment hub for cocaine headed to Europe, since its uninhabited islands along the coast of West Africa are seen as an ideal place for disembarking and stockpiling drugs.
Back in South America, the surging supply has even transformed local drug markets. Much of the cocaine produced in Peru and Bolivia is also fueling consumption there, particularly Brazil and Argentina. About 5 million South Americans used cocaine in 2020, according to an estimate by the UN Office on Drugs and Crime, which means the continent’s internal market for the drug is now approximately the same size as Europe’s.
“There's expansion in South Africa, Asia and also Europe,” said Ruben Vargas, a former head of Peru’s government anti-drug agency. “But, for us, the big problem is Brazil, which has become an ever more insatiable consumer of cocaine.”
Soaring Production
Colombian cocaine production began rising sharply 10 years ago, around the time the government began peace talks with the nation’s largest guerrilla group, the FARC. The Fuerzas Armadas Revolucionarias de Colombia got their start in the 1960s as a Marxist band of rural peasants seeking to overthrow what they viewed as corrupt governments that favored the wealthy. But the group funded its expansion in the 1990s with money it got taxing farmers and others involved in the cocaine trade.
The authorities eased up on forced eradication of coca during the negotiations, and said they would focus on intercepting shipments and confiscating laundered money. Then, in 2015, Colombia stopped spraying coca fields with the herbicide glyphosate, the government’s main weapon against growers, after the World Health Organization said it was probably carcinogenic. The amount of land planted with coca has roughly tripled since the peace talks started.
The peace deal, signed in 2016, was accompanied by programs to encourage voluntary substitution of coca with legal crops. But these barely got off the ground thanks to legal difficulties, bureaucratic inertia, and sabotage by new mafias, which swiftly moved into former FARC territory, threatening to kill anyone who cooperated with the government.
With little in the way of either carrot or stick coming from the state, Colombian farmers embarked on the planting spree whose effects are now being felt across the world.
After the crop substitution programs failed, “people had to go back to relying on their coca,” Morales said. (Morales himself used to keep bees, but he says they died of hunger or migrated elsewhere after planes flew over spraying glyphosate.)
Colombia’s coca farms have also become more productive, according to the UN. The lack of eradication efforts means the bushes can grow to reach their most productive phase, which is when they are two to three years old, according to Daniel Rico, the director of C-Analisis, a Bogota-based risk consultancy. Also, the lower risk of eradication has made the farmers more willing to invest in irrigation and fertilizers, Rico added.
In the decade through 2021, the amount of land planted with coca rose 182% in Colombia, 71% in Peru and 56% in Bolivia, according to US government figures.
Colombia currently produces about twice as much cocaine as its Andean neighbors combined. In recent years, small amounts of the crop have also been grown in Central America and elsewhere.
A Tipping Point?
Putumayo was ground zero when US President Bill Clinton’s counter-narcotics initiative Plan Colombia was launched around the turn of the century. Two decades and more than $10 billion of US aid later, Putumayo is still full of coca.
This year, Colombians elected Gustavo Petro as president after he campaigned on a pledge to phase out fossil fuels and redistribute wealth. In his inaugural address after taking office in August, Petro called for a new approach in the war on drugs, saying that the policies pursued by Bogota and Washington for decades have fueled violence while failing to cut consumption.
Petro says his government will target the mafia, rather than the coca farmers, who are nearly all very poor. But Petro has also warned that the authorities aren’t giving farmers a green light to plant coca, and will continue to eradicate plants in areas where there is no agreement to dig up the crops voluntarily.
And, under Petro, those efforts have often triggered clashes with local communities, while having little effect on the narcos’ business. Last year, Colombian authorities destroyed about 5,000 makeshift labs, according to data collected by the UN. Cocaine production rose by about 14%, to a new record high.
In the first week of November, the army showed up on Morales’ farm. Commandos jumped out of a helicopter in the adjacent coca field, set fire to the laboratory then flew out as the huge volumes of gasoline fueled an inferno that charred tree trunks in the surrounding rainforest.
“It took about five days, not even a week,” Morales said, and the lab was up and running again.
--With assistance from Patricia Laya.
©2022 Bloomberg L.P.
