U.S. Colombia aid fails to drive up cocaine price

MADRID, May 8 (Reuters) - Billions of dollars in aid to Colombia have failed to drive up the price of cocaine on American streets, the head of the top U.S. anti-narcotics agency said on Tuesday.

Officials in Washington have said crop spraying and military pressure on drug-smuggling guerrillas and paramilitaries would make cocaine more expensive in the United States following a U.S.-backed offensive launched in 2000.

But the Drug Enforcement Administration's chief said that a higher price -- a key indicator of success in the war on drugs -- had failed to sustain itself for long.

"The tough challenge for us is to raise that price and keep it at that higher level," D.E.A. director Karen Tandy told reporters at a law enforcers' conference in Spain, the main entrance point for a growing flow of cocaine into Europe.

The comments are especially relevant as U.S. President George W. Bush is preparing to asks Congress for $3.9 billion more aid for Colombia.

The U.S. price had at times risen by more than 50 percent for up to seven months thanks to anti-narcotics efforts, she said, but it had always fallen back again.

U.S. and Colombian officials say the failure of the cocaine price to move may be due to effects including hidden stashes of cocaine coming on to the market.

But some analysts say it shows Plan Colombia is not reducing cocaine production as much as hoped, and that drugs will always be sold so long as there are people willing to buy.

Colombian President Alvaro Uribe is Washington's closest Latin American ally but the U.S. government is facing increased resistance from Congress over providing aid after revelations of links between Colombian lawmakers and right-wing paramilitaries.

These are now under investigation in Colombia, and Uribe says wrongdoers must be punished.

Colombia's government says fighting drugs has deprived Marxist rebels and far-right paramilitaries of financing, and points to big falls in violence in the country in recent years.

Asked about the fate of U.S. aid, Colombian Defence Minister Juan Manuel Santos said: "We have to continue this struggle with or without the help of the United States."

"For us, it is a question of national security," he told Reuters in Madrid late on Tuesday.