The rural agribusiness development and environmental conservation in highland areas of Peru.

An analysis of the current and future situation of organic farming in three districts of the Lurin River Basin.

Thesis of Masters in Sustainable Technology Guido Vega Supervisor: Larsgran Strandberg

Table of contents
1. 2. 3.

Introduction Aim and Objectives Literature Review

3.1. Rural Agribusiness 1. 3.2. Traditional farming and agroecology

4. 5. 6. 7. 8.

The Study Area: Lurin River Basin Materials and Methods Results and Discussion Conclusions Recommendations

Introduction

Rural agribusiness (RAI) is an activity that implies many small producers in vulnerable areas since ancient times. RAI has mostly been developed under the organic farmings principles. For many small farmers in Peru, RAI is important because it contributes significantly to food security, generate income and develop in balance with nature.

Aim and Objectives

To describe the characteristics of rural agribusiness (RAI) and how this activity contributes to the conservation of the environment in the high land areas of Peru. Thus, RAIs strengths and limitations and its impact on environmental conservation have been identified and described. For this it has taken the experience of small farmers in the Lurin River Basin as a case study.
Finally, a study on the current and future situation using the scenario methods, and a sustainability analysis is carried out for the three districts of Monticielo Association.

What is the rural agribusiness (RAI)?

RAI is an activity that allows increase and retain in rural areas, the added value of production in rural economies, through the implementation of post-production stages, such as selection, washing, sorting, storage, preservation, processing, packaging, transportation and marketing of agricultural, marine and forest products (FAO, 2000). RAI includes companies involved in the food and fiber production and seed supply, agrichemicals, farm machinery, processing, distribution, and marketing (Agribusiness Association of Australia, 2010).

Rural agribusiness in Peru

Many small rural agro-industries (over 3 000 m.a.s.), they are artisanal, traditional or subsistent. Is heterogeneous, depending of zone, area, product, etc. It involves thousands of farmers; it generates development for their families and their localities. Production: Dispersed, mostly for auto consumption, Institutional framework: Public and private institutions, where NGOs have an important role. There is no enough a legal framework. Market: empirical

Traditional farming and agroecology

Traditional farming is based on farmer`s knowledge and skills. It is a cultural legacy. A key feature of traditional farming is its diversity. Agroecology is a scientific discipline focused on ecological perspective of agriculture. The great aim of agroecology is agro-ecosystem optimization.

Organic agriculture

It is a holistic production management system which promotes and enhances agro-ecosystem health, including biodiversity, biological cycles, and soil biological activity... (FAO, 1999). It is is a production system that sustains the health of soils, ecosystems and people... and promote fair relationships and a good quality of life for all involved (IFOAM, 2008).

Global organic agriculture

Total land: 35 million hectares

Figure 1: The organic agricultural land in the world, (adapted from FIBL & IFOAM, 2010a: 8).

Figure 2: The organic agricultural land in the world, (adapted from FIBL & IFOAM, 2010a: 18).

Organic agriculture in Peru

Figure 10: Export of Peruvian organic products, (adapted from IDMA, 2008d: 9)

Role of agribusiness in environmental conservation

RAI have been developed under organic farming principles. Thus it contributes significantly to the environmental conservation from a holistic context. RAI optimizes the use of local resources, promotes the agroecology, thus helping environmental conservation.
RAI and sustainability RAI and food security RAI and biodiversity

The study area: Lurin River Basin

It is located in central Peru, department of Lima, extending from the western slopes and glaciers in the Andes to the Pacific Ocean on the coast, between 0 and 5,000 m.a.s.

Figure 12: Lurin River Basin, (adapted from AAM, 2007).

Environmental characteristics

Climate: It varies from warm to cold (bottom: subtropicaldesertic/warm-tempered; middle and high: cold tropical/dry in winter/abundant rains).

Hydrography: Pacific Hydrographic System (0-5000 m.a.s.). Natural lakes and snow capped mountains give rise to the
formation of the Lurin River.

Geology, relief, soils and erosion: It has been deformed forming folds and geological faults. It presents a greater susceptibility to erosion. Biodiversity: Mega diversity. It has six of the eight natural
regions. Microclimates and ecological zones make it a privileged position.

RAI in the Lurin River Basin

It is in an early stage of development. It is an important alternative for farmers income generation. Wide production because of the heterogeneity in the area. Institutional framework: NGOs, local governments and some ministerial programs. Market: Ecological fairs, institutional sales, auto consumption. Potential: Growth in consumption of organic products. Limitations: Weakness in the productive units, technology, organisation, market, and institutions.

Materials and Methods

Purpose: To study the current and future situation of Lurin River Basin, as well as an analysis of sustainability. Boundaries: Lurin River Basin (time boundary: 2010-2020). Limitations: Data availability. Methodology: Information is obtained from NGOs working in the Lurin River area, local governments, the portal of the Peruvian State and online/internet sources. Scenarios:

Scenario 1: Forecasting scenario (Business as usual). Scenario 2: Organic-point of sale. Scenario 3: Organic-all Basin.

Analysis of Sustainability

Results and Discussion

Current situation - production Agricultural land and producers: There are over 300 organic farmers in the Lurin River Basin. Monticielo Association has 86 organically certified producers (32,5 hectareas ).
Agricultural production
Zone Lower part Agricultural production Fruits, vegetables, cereals, forage, roots and tubers, herbs. Fruits, vegetables, cereals and legumes, forage, tubers and roots, herbs Livestock production Small animals. creole chicken, guinea pigs, ducks, creole turkey, pork Small animals: Creole chicken, guinea pig, rabbit, duck, sheep, goats, pigs. Major animals: cows, donkey and horse. Other: bees (honey, pollen, royal jelly).

Agribusiness production
District Products of

San Damian S.J. Chorrillos

Milk Apple and quince

Medium and high part

Tupicocha

Herbs

Results Current situation

Market: The main market is the city of Lima. Small amount is sold in the same places of production. Standards and certification

3% 2%

4% 7%

National Commission of Organic Products (CONAPO). Participatory Guarantee SystemSGP. Biolatina. Monticielo Association National Association of Ecological producers of Peru (ANPEP) National Network of Organic farming (RAE)

19% 4% 65%

Organization

In the district Minimarkets Institutions Others Ecological fairs Wholesale market Delivery

Figure 26: Marketing of products by type of market in percentage 2008, (adapted from IDMA, 2007, 2008d).

Results SWOT analysis

Strengths
Biodiversity and microclimates. Farmers` ancient knowledge. Ecological farming practices . Strategic location close to the city of Lima. Producers working together with NGOs IDMA and certifier Biolatina.

Weaknesses
Low production/productivity/quality products. Insufficient water supply. Lack of technical use/knowledge. Market (poor negotiating capacity). Informality in local producer organization. Few researches about organic production.

Opportunities
Growth in consumption of organic products. Comparative advantages. Peru's economic stability. Decentralization process No threats of pollution Positive society perception. Good possibility for strategic alliances

Threats
Dispersion of production and competition Limited access and high cost of technology Low institutional presence of the State Climate change (drought and frost, and the occurrence of pests and unknown diseases) Uncertainties to external economic crisis, the government and ethics.

Drivers of change

Production and processing. Use of technology. Research and technological development Farmers organization. Marketing. Elections and political changes. Policies and support institutions. Urbanization and population growth. Climate change.

Scenarios
Scenario1: Forecasting (Business as usual)

It would achieve a small increase in the processing of raw materials and sales. The most influential drivers of change are production, farmers organization and sales. Apple products: strongest growth Dairy products: growth is almost negligible Herb products: the main problem is the market

Scenario 2: Organic-point of sale

This scenario aims to implement a point of sale in Lima, in order to articulate the processed products to different markets.

By 2020: Farmers organically certified: 80% by Participatory Guarantee System-SGP, 60% by third certifier. Five new products are developed, standardized and certified. On average sales are increased 15% per year. Farmers will have more resources and skills for managing their fields, processing plants and social organization. A strategic alliance of territorial development established.

Scenario 3: Organic-all Basin

All stakeholders take an empowerment of the agroecological proposal.

By 2020: 80% of the agricultural fields will be organically certified. All districts will have solid organizations and agro-processing plants are implemented. 20 new products are developed, standardized and certified. The main markets are identified and products are marketed successfully (sales are increased 30% per year). Strategic alliances are established.

Finding strategies towards Organic-point of sale scenario

The strategies were divided into five main categories: Biodiversity, production and productivity. Use of technology. Farmers organization. Marketing. Institutions: Territorial Rural Development.

Analysis of sustainability
Technical and environmental sustainability: Incorporation of agro-ecological techniques Process simple and easily adapted Technologies easy to use and management.

Social sustainability: Actors involved and engaged with the proposal. Replicability National network of organic farming and institutional support.
Economic sustainability: Increased production, sales and profitability. Income is reinvested in the processing plants. Monticielo Association is formalized. Great opportunity: legal and institutional framework.

Conclusions

Rural agribusiness allows increase and retain the added value of farm production through transformation. In highland areas of Peru there are many small farmers who develop rural agribusiness, in general, by traditional methods, small-scale and in a family atmosphere. The rural agribusiness is a very important sector for because it contributes to food security and generates income and employment for rural families. In addition, ancestral knowledge and agroecological practices by farmers help preserving the environment. The main strengths of rural agribusiness are the great biodiversity and microclimates that favor organic production, and growth in consumption of these kind of products by consumers. Moreover, the main constraints are lack of knowledge, the low use of technology and marketing problems. In the case study of the Lurin River Basin it has been identified that most farmers use ecological farming practices in the cultivation and processing of their products. 70% of cultivated lands by members of the Monticielo Association are organically certified. There are three small plants for processing dairy products, apple and quince, and aromatic and medicinal herbs. However, the main obstacles are the low institutional support, weak organization and lack of marketing ability of farmers.

Recomendations

Continue with the training and technical assistance in production technology, organization and marketing. Supervise and monitor activities post-project ", in order to verify compliance with the techniques taught. Prepare documents of systematization of successful, innovative and replicable experiences. Develop and strengthen initiatives focused on Territorial Development.

Thank you for your atention