* Government losing battle against drug runners
* Farmers say other crops cannot touch coca's value
* Drug runners aligned with Shining Path guerrillas
VIZCATAN, Peru, Aug 26 (Reuters) - With the sudden burst of a fireball and a blast of heat, another clandestine cocaine lab in a remote jungle valley on the front line of Peru's drug war went up in flames.
Minutes earlier, drug runners fled the makeshift cocaine kitchen when they heard the phwap-phwap-phwap of the police helicopter arriving. They ran away before finishing their lunch -- rice and beans in blue plastic bowls.
With one drug lab torched, Captain Acero, whose nom de guerre means Captain Steel, yelled orders to his team of 15 to hurry on to raid the next camp. Moving quickly, they doused another cache of coca and chemicals in kerosene and set it alight.
Peru's anti-drug police are locked in an ongoing game of cat-and-mouse in the Ene and Apurimac River Valleys against drug runners, many of whom are aligned with a remnant band of about 200 leftist Shining Path guerrillas. But the government appears to be losing the battle.
This year, the United Nations said that Peru has overtaken Colombia -- which has received billions of dollars in U.S. aid to fight drugs -- as the world's No. 1 coca producer, the main ingredient for cocaine.
The fallout has put additional pressure on Peruvian President Alan Garcia to ramp up efforts to seize more drugs, but the inhospitable valleys have dealt the army and police repeated setbacks. They are frequently ambushed in the middle of the night by hit-and-run traffickers armed with grenades.
The VRAE, as the mountainous jungles are known, has 42,000 acres (17,000 hectares) of coca farms and its expansion, combined with other coca planting areas in Peru, has occurred despite a decade of booming growth in the economy and jobs.
The drug trade, fueled by consumers in the United States and Europe, is so lucrative that coffee and cocoa planters in the VRAE say they cannot find enough people to pick their crops.
On any given day, police torch up to 20 drug labs, usually built along the banks of creeks and rivers. When helicopters are not available, reaching the labs requires slogging through thick forest on foot for hours at a time.
To locate the labs and Shining Path rebels, police rely on a network of informants who sometimes double-cross them. Villagers view police skeptically as they often rely on planting coca to make ends meet in a world of wooden shacks, dusty streets and pit toilets.
Local mayors, widely suspected of collaborating with drug runners, build statues in town squares honoring the "sacred leaf" of coca, which has been used in the Andes as a food and religious symbol for centuries.
Though the Shining Path's leaders were captured in the early 1990s and the group no longer poses a threat to the stability of the government, Peru's army and police consider the VRAE a conflict zone and say they have yet to "pacify" it.
Residents in the village of Canayre have long felt abandoned by the government and still weep about the terrifying day in 1989 when Shining Path fighters massacred some 40 people in the town with machetes.
Maribel Herrera, 30, whose tanned face is aged and wrinkled beyond her years, lost her father in the killing.
She has spotted Shining Path rebels near her house in recent months and holds little hope they will abandon the drug trade.
For farmers, coca provides a new crop every three months, whereas alternative crops that the government promotes -- like coffee and cocoa -- usually one provide one harvest a year.
Milquiades Ayala, 61, says he is aware that part of the coca raised on her farm probably ends up being made into cocaine, but says he has no other options and needs to $250 he gets four times a year by selling coca.
"These alternative crops like cocoa, coffee and sesame, give us only one crop a year," he said. "They aren't like coca, which gives you a constant yield."
(Reporting by Patricia Velez; Editing by Terry Wade and Jackie Frank)
By Patricia Velez
Thu Aug 26, 2010 1:07pm EDT
Torching a drug lab in Peru, the No. 1 coca grower