The United States says Peru is the world's second largest producer of coca leaves, from which cocaine is extracted and Washington has spent millions of dollars trying to eradicate coca crops in Peru, 90% of which goes to illegal trafficking.
But anthropologist Eliane Karp, wife of Peru's President Alejandro Toledo, said coca had a positive side as well.
"Coca has many, many virtues in addition to health and ritualistic uses," she said.
Peru's Indians use coca to combat fatigue and altitude sickness, and as part of their cultural identities.
"It's part of their way of life and their rituals," she said.
Native people of Bolivia, Colombia and Peru have for centuries chewed the leaf, which releases small amounts of the stimulant without ill effect.
Karp said in Peru, farming coca leaves for illegal cocaine is dictated by the high prices paid by drug users and drug traffickers.
"It's completely market driven. The demand exists," she said. "Coca cannot be completely eradicated."
President Toledo said last week that Peru would spend $61 million of international aid to destroy drug crops this year. He said 10,400 hectares was eradicated in 2004, but added it was not enough, because cultivation grew by 17,000 hectares last year.
Peru's drug tsar, Nils Ericsson, said according to the United Nations, drug crops in Peru covered 48,000 hectares - up from 42,000 in 2004.
Coca crops have increased in Peru as the US-financed Plan Colombia has eliminated illicit crops in the neighbouring Andean country. Bolivia is the world's largest producer of coca leaves.
Traffickers in Colombia refine Bolivian and Peruvian coca paste into finished cocaine, making their country the supplier of some 80% of the cocaine used in the US.
Refined cocaine is highly addictive and can cause permanent nervous system damage.