Cream or the coca crop?

What do Swedish Pentecostals, Bolivian farmers, and the United Nations have in common? Dairy products. A joint venture that was expected to bring in $7 million a year and unbind farmers from the pressure to grow coca, used in the production of cocaine, is instead curdling into courtroom drama and possible violence. Last month the overseer of the project, a missionary, was arrested and briefly deported. Two weeks ago, he and local farmers sued the Bolivian government to regain what was once a mission project but now is a bureaucratic battlefield, one that shows how the rule of law and the grace of God are needed in economic development. Gilead Church in Gotëborg set out to build a regional creamery in Bolivia after a visiting evangelist told the nondenominational congregation about revival among coca farmers and the need for alternative forms of income. After Pastor Sven-Olof Mattsson and other church leaders envisioned a marriage of Swedish ingenuity and Christian charity, the Milka creamery was born 10 years ago. The church prepared for a long-term investment, hoping to wean Andean farmers from coca harvesting and encourage dairy production. They also hoped to supply the Chapare region, one of the fastest growing areas of coca cultivation in Bolivia, with adequate dairy products, and to establish an income-generating enterprise that would eventually be managed as a cooperative. The project "was a means of showing love in practical ways," said Mr. Mattsson The church called Jean-Erik Mortensson, a Finnish pastor with an engineering background, to manage the project. It raised over $2 million to underwrite the dairy equipment and put it in place near Cochabamba, an Andean enclave almost 200 miles from La Paz, the capital. Mr. Mortensson relocated to the area with his wife, and imported half a dozen Scandinavian engineers and technicians to get the venture off the ground. Once underway, Mr. Mortensson and his backers quickly saw the need to link forces with other development projects in the region, in part as a concerted means of throwing off the clutch of coca growing and the drug cartels that had a chokehold on peasant farmers. Gilead Church signed an agreement with the Swedish government, the United Nations, and Bolivia's Ministry of Agriculture to expand the creamery operations. Eventually the Swedish government pumped $6 million into the effort. But Mr. Mortensson, since dubbed "the fighting Finn" by locals, soon found himself up against UN agents who wanted to bring the project more fully into the UN orbit. For UN officials, the creamery project fit into a plan to modernize agri-businesses in the Andes, with a dividend: The Finns and Swedes had already done the heavy lifting necessary to launch a smooth-running dairy machine. After a disagreement with UN officials about how to run the project, Mr. Mortensson briefly left Bolivia. During that time, in 1992, Gilead Church turned over responsibilities for the creamery to two organizations, Projekt Gilead Sverige and Projekt Gilead Bolivia. The latter, set up to give a farmers union and other locals a toehold in the operation, received legal ownership of the creamery, the equipment, and the surrounding property. UN officials did not object to the new arrangement. But by 1994, the UN had wrested control of the operation from local project organizers and turned the property over to UNIDO, the United Nations Industrial Development Organization. The agency oversees business development projects for the UN in underdeveloped areas. UN officer Hans Lindberg, a Swede who initially offered support for the Gilead Church project, told Mr. Mattsson that UNIDO stepped in because the UN had not approved the project's total privatization. UNIDO ran the creamery like a government aid project and eventually turned it over to FONADAL, a Bolivian government agency in charge of agricultural development. By that time, production had dropped by 75 percent. The FONADAL affiliation made Milka look once again like a local project, even though FONADAL was receiving UNIDO funds. FONADAL is historically aswirl with controversy stemming from the coca-growing industry, and Milka was soon subsumed in political infighting and pressure from coca-growing federations that would like to see alternative farming go the way of the butter churn. Coca leaf is Bolivia's largest agricultural export. Cocaine producers, faced with growing demand, take advantage of traditional ties to the crop. Andeans have legally grown coca for centuries, chewing it to ward off hunger and fatigue in the harsh highlands and relying on it for medicinal purposes. Producers of cocaine, who combine the leaf with a chemical paste to manufacture the illegal drug, have transformed the rural economy in Chapare. Over 100,000 families in the region are involved in coca farming, and growth in cocaine production has spawned a surge of migrant labor to the area from all over Bolivia, a country that averages 20 percent unemployment. Bolivian officials are pulled by the economic realities driving coca growing, and pushed by pressure abroad-particularly from the United States-to clamp down on cocaine production. The government has avoided confrontations with drug cartels and the guerrillas who do their bidding; such battles have plagued neighboring Peru and Colombia. But Bolivian policymakers are increasingly subservient to coca-growing federations/ labor unions. These act as local authorities in areas like Chapare, raising funds for public works projects and determining who gets into office. The controversy over Milka is now playing out at the federation level. Bolivia's milk-producing union, a federation with 2 million members, has asked Mr. Mortensson to serve as its technical advisor, in addition to again promoting his leadership of Milka. Meanwhile, coca-producing federations have lined up against the creamery and are lobbying National Congress members to oust the 67-year-old Finnish minister. With help from Bolivian authorities, they appeared to have succeeded last month. Immigration officials refused to renew his visa, which came due mid-month, and had Mr. Mortensson arrested. He was interrogated for several hours, he said, and released on bail. Police questioned his activities with the farmers union but in the end granted an extension of his stay. Meanwhile, Bolivian agricultural officials tried to sell off the creamery in a compulsory auction. Local farmers turned out to demonstrate against the auction and were confronted by coca growers. They scared off at least one potential buyer after protesting the government's claim of ownership, and the auctioneer called off the event. The milk producers and Mr. Mortensson have followed up with a civil suit against the government. They claim the government violated its original cooperative agreement by trying to sell the creamery. The legal action has significantly raised the profile of the dispute. Opposition parties in Bolivia's Congress are asking the government to support the small but growing number of dairy farmers. Agriculture Minister Oswaldo Antezana agreed to investigate, as has Swedish Minister of Social Affairs Maj-Inger Klingvall. Mr. Mortensson did not expect the outside attention. He saw legal action as an end-run around growing local tension, which, he feared, was quickly escalating into a violent confrontation between milk producers, coca growers, and what he called the "mafia" controlling coca farming. "In the right hands, the creamery Milka should be able to produce 100,000 litres of milk a day, which means over $7 million every year for these poor people," he said. "But the mafia doesn't accept this. They want to make all people dependent on coca selling." Mr. Mortensson says his enemies may appear more powerful than he is, but he knows many Christians in Finland and Sweden are praying for what began as a mission project. He has taken to staying with crowds and having friends act as unofficial bodyguards. "My job is dangerous in a way, indeed, but it means a lot for me to help these people," he said. Like any good dairyman, he is waiting for the cream in Chapare to rise to the top.

-with reporting by George Ahonen, in Stockholm, Sweden