Improved Mining Revenue Management and Better Agricultural Practices in Apurimac, Peru

IFC’s Infrastructure & Natural Resources Advisory works in Apurimac, Peru, in partnership with the government of Canada, to ensure that mining revenues benefit the local population and to help small-scale farmers improve their agricultural practices.

Apurimac is the second poorest region in Peru. It is sparsely populated, with limited access to basic services and significant needs. It is also poised to become one of the country’s largest mining districts, given recent investments. In the coming years, substantial annual revenues from mining projects are expected to flow to local Apurimac municipalities. This is a potentially problematic situation, in which unfulfilled expectations could lead to conflict.

Agriculture plays an important economic role in Apurimac as well—after mining, the region’s primary source of jobs and income. Yet the farms in the mining areas are mostly small, subsistence operations. Agricultural productivity is low and growth is constrained due to lack of access to capital, markets, and technical assistance.

THE INITIATIVE

In response to a request from the government of Peru and as part of a larger World Bank Group effort, IFC is partnering with the government of Canada on two projects, aimed at addressing this dual-pronged challenge. The Apurimac Revenue Management project is building local capacity to improve mining revenue governance at the local level. The Apurimac Mining and Agriculture project, called Ayninakuy - “Let’s collaborate” in Quechua, the local language—is a collaborative model to support small-scale agriculture in 16 communities,

involving public and private partners.

The Apurimac Revenue Management project is designed to enhance the capacity of municipalities so they can better manage royalty revenues expenditures. It targets two key groups with guidance and technical assistance:

• Municipalities: Efforts here focus on helping municipal authorities improve their investment processes and enhance their ability to meet the needs of their citizens.

• Local leaders: Efforts here focus on building skills so these leaders can participate in municipal investment decisions and push for accountability on the use of resources.

1 This initiative included learning and best practices from over 10 years of experience

in previous successful projects in Peru and Colombia. Additionally, new tools and methodologies were tested and adjusted to more effectively reach the established objectives.

Canada

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The Apurimac Mining and Agriculture project is based on a successful government program implemented by Peru’s Ministry of Social Inclusion. It is a collaborative, public-private model that supports farmer families by:

• Improving productivity: Encouraging the adoption of better agricultural practices such as micro-irrigation systems, family greenhouses, and small-scale guinea pig breeding through small investments and peer-to-peer advice from Yachachiq—community technology leaders.

• Incorporating nutrition and health practices: Promoting kitchen upgrades such as better stoves and sinks and educating families on better nutrition practices through learning sessions.

• Accessing local markets: Providing training for farmers on post-harvest activities and marketing, identifying potential markets and encouraging participation in local fairs, and promoting linkages with larger buyers.

RESULTS*

Apurimac Revenue Management Apurimac Mining and Agriculture

• 6 municipalities improved their management of investment resources: - more responsive to citizens’ needs - more effective use of funds  and time - more  accountable to local residents

• Nearly 70 percent of municipality expenditures aligned with the population’s needs

• 74 percent of investments prioritized through a participatory budgeting process

• 6 municipalities adopted transparency practices: - regularly held accountability meetings - information about investments shared with local leaders and residents

• 46 strategic projects monitored, totaling $44 million in investment in education, health, irrigation, and water

• More than $10 million in additional resources leveraged  to finance social infrastructure projects

• 300 families adopted new production techniques such as small-scale irrigation systems that allow a more efficient use of water

• 239 new greenhouses give families access to wider variety of vegetables and nutritious foods all year long

• Improved pastures enable guinea pig and hen breeding for family consumption or sale

• Sale of vegetables in local markets generates additional income, particularly for female farmers

• A technological hub—Yachaywasi—supported by regional and local governments provides training and certification for yachachiq and promotes better

agricultural technologies and practices

IFC’s Apurimac Revenue Management & Mining and Agriculture program was recently named as a top practice by the World Economic Forum. In addition, Ciudadanos al Día, a prestigious Peruvian non-profit, cited two of the practices deployed in the project as part of its annual “Good Practices in Public Management” initiative. Such public recognition is based on the concrete results produced by the two projects, with strong positive impacts that benefit Apurimac’s citizens, as well as both projects’ potential for replication by other organizations, creating a strong multiplier effect.

For additional information please visit: www.commdev.org/ifc-helps-bridging-capacity-gap-local-governments-peru www.commdev.org/ifc-engages-local-leaders-municipal-planning-peruvian-highlands

* As of March 2018

Canada

Photos are property of IFC