As the world's largest producer of coca and cocaine paste, Peru had a major drug-trafficking problem during the 1980s, concentrated in and around the Upper Huallaga Valley, where most of the coca used in the manufacture of cocaine for export was grown. Weekly flights from the area's more than 100 clandestine airstrips by small aircraft laden with cocaine paste were believed to have peaked in 1988 and 1989 at about fifty. Concentrated efforts in late 1989 and 1990 to restrict the trafficking in Colombia, the destination of most flights, and in Peru itself were partially successful, as indicated by a sharp overall decline in price for the coca leaf. Counting Peruvian coca growers (estimated to number between 70,000 and 320,000), cocaine-paste processors (estimated at between 23,000 and 107,000), and cocaine-paste transporters (some 2,400 to 11,000), from 95,400 and 438,000 individuals were employed in the illicit production and preliminary refining of the drug in Peru. Considering the average peasant family size of five, between 477,000 and 2.64 million Peruvians depended directly on coca and cocaine-paste production for their livelihoods, or between about 4 percent and 20 percent of the country's economically active population (about 10 percent of Peru's coca production is legal, mostly for traditional uses of coca by the indigenous population). Joint Peruvian-United States efforts to reduce the supply of cocaine reaching North America initially focused on coca crop eradication but shifted to interdiction and crop substitution in the late 1980s, in part owing to tensions with peasant growers.

Cocaine and cocaine base use among Peruvians was also perceived as a problem. A 1990 national epidemiology study of drug use among 12- to 50-year-olds put one-time use of cocaine paste at 4.6 percent and more frequent cocaine use at 1.5 percent, slightly higher than a similar study conducted in 1986. It was believed that drug use in and around centers of drug production was growing much more rapidly. Arrests for drug consumption were about 1,900 in 1985, peaked at 2,200 in 1986, and then declined to about 1,400 in 1987, 900 in 1988, and 500 in 1989. Cocaine seized by Peruvian authorities showed a similar pattern--15.4 tons in 1985, 48.4 in 1986, 36.6 in 1987, 30.9 in 1988, and 8.4 in 1989, with a substantial increase to 14.9 tons during the first half of 1990. Peruvian authorities recognized the seriousness of the drug production and trafficking problem but were more worried about the economic crisis and the insurgency.

Data as of September 1992