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The rural agribusiness development andenvironmental 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
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Table of contents
1. Introduction
2. Aim and Objectives
3. Literature Review
3.1. Rural Agribusiness1. 3.2. Traditional farming and agroecology
4. The Study Area: Lurin River Basin
5. Materials and Methods
6. Results and Discussion7. Conclusions
8. Recommendations
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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 organicfarmings 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.
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Aim and Objectives
To describe the characteristics of rural agribusiness (RAI)and how this activity contributes to the conservation of theenvironment in the high land areas of Peru. Thus, RAIs
strengths and limitations and its impact on environmental
conservation have been identified and described. For thisit has taken the experience of small farmers in the LurinRiver Basin as a case study.
Finally, a study on the current and future situation usingthe scenario methods, and a sustainability analysis iscarried out for the three districts of Monticielo Association.
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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 ofagricultural, marine and forest products (FAO, 2000).
RAI includes companies involved in the food and fiber
production and seed supply, agrichemicals, farmmachinery, processing, distribution, and marketing(Agribusiness Association of Australia, 2010).
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Rural agribusiness in Peru
Many small rural agro-industries (over 3 000 m.a.s.), theyare artisanal, traditional or subsistent.
Is heterogeneous, depending of zone, area, product, etc.
It involves thousands of farmers; it generates developmentfor 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
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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.
Traditional farming and agroecology
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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 thatsustains the health of
soils, ecosystems and people... and promote fair
relationships and a good quality of life for all
involved(IFOAM, 2008).
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Global organic agriculture
Figure 1: The organic agricultural land in the
world, (adapted from FIBL & IFOAM,
2010a: 8).
Total land: 35 million hectares
Figure 2: The organic agricultural land in the
world, (adapted from FIBL & IFOAM,
2010a: 18).
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Organic agriculture in Peru
Figure 10: Export of Peruvian organic products, (adapted from IDMA, 2008d: 9)
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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, promotesthe agroecology, thus helping environmental
conservation.
RAI and sustainability
RAI and food security
RAI and biodiversity
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The study area: Lurin River Basin
It is located in central Peru, department of Lima, extending from thewestern 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).
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Environmental characteristics
Climate: It varies from warm to cold (bottom: subtropical-desertic/warm-tempered; middle and high: cold tropical/dry inwinter/abundant rains).
Hydrography: Pacific Hydrographic System (0-5000
m.a.s.). Natural lakes and snow capped mountains give rise to theformation of the Lurin River.
Geology, relief, soils and erosion: It has beendeformed 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 privilegedposition.
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RAI in the Lurin River Basin
It is in an early stage of development.
It is an important alternative for farmers incomegeneration.
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.
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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 LurinRiver area, local governments, the portal of the Peruvian State andonline/internet sources.
Scenarios: Scenario 1: Forecasting scenario (Business as usual).
Scenario 2: Organic-point of sale.
Scenario 3: Organic-all Basin.
Analysis of Sustainability
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Results and Discussion
Current situation - production
Agricultural land and producers: There are over 300 organicfarmers in the Lurin River Basin. Monticielo Association has 86organically certified producers (32,5 hectareas ).
District Products of
San Damian Milk
S.J. Chorrillos Apple and quince
Tupicocha Herbs
Zone Agricultural
production
Livestock production
Lower part Fruits, vegetables,
cereals, forage, roots
and tubers, herbs.
Small animals. creole chicken,
guinea pigs, ducks, creole
turkey, pork
Medium and high
part
Fruits, vegetables,
cereals and legumes,
forage, tubers and
roots, herbs
Small animals: Creole chicken,
guinea pig, rabbit, duck,
sheep, goats, pigs.
Major animals: cows, donkey
and horse.
Other: bees (honey, pollen,
royal jelly).
Agricultural production Agribusiness production
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ResultsCurrent situation
Market: The main market is thecity of Lima. Small amount is soldin the same places of production.
Standards and certification
National Commission of Organic
Products (CONAPO). Participatory Guarantee System-
SGP.
Biolatina.
Organization
Monticielo Association National Association of Ecological
producers of Peru (ANPEP)
National Network of Organicfarming (RAE)
7%
65%
4%
19%
3%2%
4%
In the district Ecological fairs
Minimarkets Wholesale market
Institutions Delivery
Others
Figure 26: Marketing of products by type of market
in percentage 2008, (adapted from IDMA, 2007,
2008d).
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ResultsSWOT analysis
Strengths Weaknesses
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.
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 Threats
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
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.
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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.
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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
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Scenario 2: Organic-point of sale
This scenario aims to implement a point of sale in Lima, inorder to articulate the processed products to differentmarkets.
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 theirfields, processing plants and social organization.
A strategic alliance of territorial development established.
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Scenario 3: Organic-all Basin
All stakeholders take an empowerment of the agroecologicalproposal.
By 2020:
80% of the agricultural fields will be organically certified.
All districts will have solid organizations and agro-processingplants are implemented.
20 new products are developed, standardized and certified.
The main markets are identified and products are marketedsuccessfully (sales are increased 30% per year).
Strategic alliances are established.
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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.
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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.
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Conclusions
Rural agribusiness allows increase and retain the added value of farm productionthrough transformation. In highland areas of Peru there are many small farmers whodevelop rural agribusiness, in general, by traditional methods, small-scale and in afamily atmosphere.
The rural agribusiness is a very important sector for because it contributes to foodsecurity 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 byconsumers. Moreover, the main constraints are lack of knowledge, the low use oftechnology and marketing problems.
In the case study of the Lurin River Basin it has been identified that most farmers useecological 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, andaromatic and medicinal herbs. However, the main obstacles are the low institutionalsupport, weak organization and lack of marketing ability of farmers.
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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 onTerritorial Development.
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Thank you for your atention