Coca growers turn a new leaf

(Fortune Magazine) -- Bolivian President Evo Morales wants to convince the world that the coca leaf has been unfairly maligned. Yes, it's the key ingredient in cocaine, but the leaf also has nutritional and pharmaceutical uses, according to the International Coca Research Institute in La Paz.

Coca flour is rich in iron and helps balance blood sugar, the institute says. Tea from the leaves - which give a buzz only when they're chewed raw, not when processed as tea or flour - can counter altitude sickness.

Venezuelan President Hugo Chavez is helping the Bolivian growers harvest their crop.

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Thanks to the largesse of Venezuelan President Hugo Chávez, Bolivian growers received $1 million to open factories as early as September to produce such products. The aim is to make them more commercially available.

"Before, the coca leaf was totally satanized, penalized," Morales has said. "But we respect the doctors and scientists who have begun to industrialize it."

Bolivian law permits 29,600 acres of coca cultivation for traditional use and consumption. Morales, a former coca grower and union leader, has made the fight for the leaf, which sustains thousands of poor farmers, a theme of his presidency.

His advocacy has frustrated the U.S. government, which will spend $30 million in 2008 on coca eradication in Bolivia.

Still, a Coca-Cola (Charts, Fortune 500) supplier in the U.S. is allowed to import the leaf from Peru, remove the buzz-inducing alkaloid, and extract the essence, which is used to flavor the drink.

Aside from this exemption and several bilateral agreements, coca trade is banned by the UN.