TOCACHE, PERU -- After years of U.S.-funded efforts to stop the production and traffic of cocaine in South America's Andean region, key Latin leaders and U.S. officials are saying the policy has failed and a new strategy is necessary.

Last year, narcotics experts here estimate, traffickers shipped out of Peru about 640 tons of cocaine base, the material manufactured in the last stage before producing an equal amount of refined cocaine. That is roughly the same amount as has been shipped out of here each of the last three years.

About eight tons of cocaine base were seized in Peru in 1992, representing only about 1.5 percent of the country's production. This is up from about 1 percent the previous year.

"The Peruvian-American anti-drug policy has failed," President Alberto Fujimori said in an interview. "For 10 years, there has been a considerable sum invested by the Peruvian government and another sum on the part of the American government, and this has not led to a reduction in the supply of coca leaf offered for sale. Rather, in the 10 years from 1980 to '90, it grew tenfold.

"So I have only one term for it," Fujimori said, "a little undiplomatic, it appears, but objective: It's a failure."

"It's clear that we need some rethinking," said a U.S. official based in Peru. "We have wrecked the economy of towns like Tocache but have not brought an alternative economy to the region. We have not given people another way to make a living."

Officials and narcotics experts interviewed in Peru, Colombia and by phone from Washington, most of whom requested that they not be identified by name or position, were nearly unanimous in the view that what has been tried so far to stem the cocaine trade has not worked well and that the Clinton administration is likely to turn to other means.

"There are big stakes here, and frankly I think the new administration is going to see the need for a strong interdiction policy to continue, perhaps with a different emphasis," a senior U.S. official familiar with narcotics matters said. "What worries me is the growing perception among the Latin American elite that the drug war is over. Because there hasn't been a strong signal, that is the perception, and the administration has to be very careful."

Law enforcement officials said they believe it was a mistake to bring the U.S. and Latin American militaries into fighting drugs, saying it has complicated their efforts by adding bureaucratic obstacles and siphoned off resources that might have gone into police work.

The senior U.S. official said the Latin militaries were only interested "getting the goodies and the guns," while doing nothing to fight traffickers.

"I think it is safe to say that the Bolivian military has never done anything whatsoever against narcotic traffickers, nor will it," he said. "In Peru, not only has the army not done anything, it actually supports the traffickers in the Upper Huallaga Valley, and the Colombian military has not been very effective, either."

U.S. officials in Peru pointed out that although the military and police here have made some strides in cleaning up both corruption and their human rights record, they are still grossly underpaid compared to the resources drug traffickers can marshal for bribes. In the Upper Huallaga, U.S. officials said, some new commanders who have been rotated in recently appear to be making a serious effort to take on the traffickers.

Much of the United States' $11 million effort in Peru last year went to support a police base at Santa Lucia, deep in the Upper Huallaga Valley, which the Drug Enforcement Administration helps operate. The base's 10 helicopters and a contingent of the Peruvian air force fly missions to intercept cocaine shipments to Colombia, destroy laboratories in the jungle and render airstrips and roads unusable for the cartel's planes.

The result, after nearly four years, is that much of the coca trade has left the area within helicopter reach of the base. But it does not mean coca cultivation is down; it just means it has gone elsewhere, out of the base's range and away from a mysterious fungus that has damaged the crop. Some growers are convinced the fungus was planted by U.S. agents.

"Drugs are going to flow out no matter how many interceptors you put up," said one Western diplomat knowledgable about drug matters here.

Washington's "Andean Strategy," begun in 1989, rested on getting Colombia to declare war on drugs and go after cartel leaders whom U.S. officials wanted extradited.

But the "declaration of war hasn't solved the drug problem," the diplomat said. "And even total victory in Colombia would just change the routes for drugs produced in Peru. . . . This is not Desert Storm, and it's never going to be."

What the effort against drugs in the Andes is really about, officials from Fujimori to foreign diplomats, narcotics experts and development specialists said, is agriculture, and in particular the price of coca as an agricultural commodity.

In Tocache, an area that is not only in the heart of coca-growing country but a little more than a year ago was a guerrilla "red zone," local residents are now trying to grow something other than coca. But it is not easy.

There are few roads to get products to markets, and rice, chickens and hearts of palm are not as lucrative as coca has been. A kilo of coca leaf was selling for more than $3 not long ago. It is down to half that now, but that is still more than six times the price of corn. And the coca grower does not have to worry about trucking his produce anywhere; the cartel's planes pick it up for free.

Worse, said Tocache Vice Mayor Tadeo Rengifo Arevalo, traffickers will give coca growers seed money up front, while rice farmers get paid months after they have harvested their crop and only for what the buyer says arrived at its destination in good condition.

Nevertheless, local residents are proud of the rice mill they inaugurated a month ago with the help of a $173,000 loan from the U.S. Agency for International Development. It can husk and sack 1.5 tons of rice per hour, and if the farmers can find markets and a way to deliver it, they will have begun to kick the coca habit.

This kind of program has not been high on Washington's agenda in the war on drugs. After Fujimori dissolved congress and the courts last April 5 in what has been called a "self-coup," nearly all U.S. aid was halted except what was needed to maintain DEA and other activities directly involved with intercepting drug shipments.

Whether the Clinton administration will take a less militaristic approach to fighting drugs is something officials in the Andean region are only guessing at, but the presidents of Colombia and Peru said they have heard nothing from Washington on the subject.

"We are not worried that it is not the first item on the agenda," said Colombian President Cesar Gaviria in an interview in Bogota. "We are not worried if the emphasis changes or has new components. But we are worried that the fight will be weakened or the political will lost to fight drug trafficking."

Officials in Colombia said they sense that once Medellin cartel kingpin Pablo Escobar is captured or turns himself in, U.S. interest in the drug war will fade even further.

Fujimori said he had no knowledge of what the Clinton administration might be planning to do with the anti-drug program here.

But whatever it is, even law-enforcement officials here believe it would need to include development aid and not just interdiction and arrests. "In the end," the Western diplomat said, "we can't police the Andes forever."

Podesta reported from Peru; Farah reported from Colombia.