Often scholars identify the cocaine industry as a principal source of violence and conflict in different parts of urban and rural Latin America. As the ethnographical research in the Peruvian Upper Huallaga demonstrated, the mere presence of an illicit economy, in itself, does not always cause violence. In the Upper Huallaga’s rural areas, new Peruvian small-scale firmas established forms of power and domination. This article provides a broader understanding of the relationship within the local cocaine industry between those running it (the drugs bosses or patrones) and the population. It focuses on the realities of life in these villages, where the cocaine trade, far from being only an economical system, dominated social relationships and networks. Most incidents of violence were closely related to the diminishing cocaine industry, but were also related to the actions or the lack of actions of the state security forces.