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Crisiscouldhavel¡ttte
o
impacton Peru'spoor
A largeproportionof Peru'spopulation is concentrated
in themountain areas.
Economic growthin the lastfewyearshasnothadanysubstantia[ effecton reducing
povertyin theruralhightands, wherealmostZopercent of thepoputationlives
belowthepoverty line;it is hopedthattheeconomic downturn asa resultof the
currentglobatcrisiswil[haveanequalty negtigible
effect.

LatinAmericancountriesare find-
ing they are lessaffectedby the crisis
than other partsof the world (Trivelli,
C., Yancari,Y.and De los Ríos,Carlos,
2009),mainlybecause it hascomeat a
time when they possess international
reserves and tax revenueswith which
to combatit. Thegreatest impactswill
befelt bythoselabourmarketslinkedto
exportingsectorsandwhereverthe rural'
worldisintricatelyinvolvedin dynamic
productmarketsand usesoutsidepro-
ductionfactorsandemployment.
AugustoCavassa
Innovaciónparael Desarrollo
Lima,Peru
acavassa@terra.com.pe
The Peruvianeconomy felt the
negative effectsof the worldwide
financialcrisisin 2009.CDPhasfallen
drastically:
theyear-on-year rateCDP
growth fell from an average11 per-
centin thefirstthreequartersof 2008
to 6.5 percentin the lastquarter,and
to 1.8 percentin the first quarterof
the currentyear(BancoContinental,
2009).
This blow to the economycomes
afteran exceptionalperiodthat drove
up the2008CDPto US$127.7billidn,
afterhavinggrown at an annualrate
of 7.7 percentin2006,8.9percentin
2007and9.8 percentin 2008.Percap-
itaearningsincreased from US$2,592
in 2005to US$4,457in2008.Inflation
waskeptat approximately two percent
in the yearsup to 2007,but roseto
6.6 percentin 2008andfellsharplyin
2009,when the accumulated rateof
inflationoverthe firstfive monthsof
theyearwas0.4 percent
ihis economicgrowthwasreflected
in a reductionin povertyfrom4S.Tper-
centin 2005to 39.3percentin 2007,
although theimpactwasslightamong
the ruralhighlandpopulation, which
still hasratescloseto the 70 percent
mark.The continuingpovertymeans
that rural development iñ highland
regionswill be on the agendafor the
coming years,especiallyin view of
the competitionfor naturalresources
betweenagrjculture and mining.

Rural21 - 05/2009
Focus
r Possibleimpactsof the crisis tion costs(bought-ininputs)account
for 64 percentof total agricultural
The importanceof miningin Peru costs.Accordingto Yancari,Y.
has led to a number of outcomes,. theeffects of thecrisisin Peruarebeing
whichinclude: felt in fourways:
r The accumulation of funds from
m i n i n g r e n t s a n d r o y a l t i e si n t h e
h a n d so f l o c a la n d r e g i o n a g
l overn-
ments,which is a key factor in pro-
moting localand regionaldevelop-
ment.
r C h a n g e si n l e g i s l a t i o tnh a t w i l l h a v e
implicationson small-scale crop and
livestockfarming, biodiversityman-
agement, eco-farming and food
security.
r ln terms of the effects of climate
c h a n g e o n a g l o b a l l e v e l ,P e r u i s
one of the hardest hit countries,
particularlyas regardsthe availabil-
ity of water, and this could lead to
an increasein disputesover natural
res0urce5.
Due to the fall in the orice of min-
erals, the crisis has greatly affected
exportsof traditionalproducts,causing
r e g i o n a la n d l o c a l g o v e r n m e n te a r n -
ings to drop. Another visible conse-
q u e n c ew i l l b e h i g h e rp r i c e so f a g r i c u l -
tural inputs,which will affectallfarmers
and particularlyproducersof cropsfor
domesticconsumption,where produc-
indicatethat the globalfinancialcri-
siswill not filterdown so easilyto the
(2009), rural sector,where familiesoperate
protectivemechanisms basedon their
own strategies for diversifying
earn-
ingsandsecuring food.Consequently,
r. Lowerexternaldemand,whichwill the crisismayhavelittledirectimpact
be reflectedin a reductionin non- on the ruralsectorand on the ooorest
traditionalexports; families.
z. Lowerexportprices,affecting
exportsof traditionalproducts
(minerals) andtax revenues; r Agricultural
sustainabitity
in
3. Higher interest ratesdueto the ruralareas
lackof liquidityworldwide;
4..Reduced flow of externalcapital Unlikewhat is happeningin other
(Yancari,Y.,2OO9). LatinAmericancountries,mostfarm-
ing landin Perubelongs to smallfam-
The fall in demandfor non-tradi- ily farming units,generallyclassified
tional agro-exports will mean lower as "peasanthouseholds". Moreover,
earnings andfewerjobsfor agricultural therearealsothe landsof 5,860peas-
workers,though it only affectsthose antandnativecommunities who con-
producersmost closelyintegratedin trol 40 percentof the total land used
productionchains.Lessforeignearn- for cropsand livestock and represent
ingsdo not seemto be an important 2.5millionPeruvians, i.e.40percentof
factor for rural populationsin Peru, the country'sruralpopulation.
particularlybecausemigratoryflows
are mainly internaland, thanksto Agricultureis the principalgenera-
improvementsin communications, tor of employmentin Peru;it is esti-
many people have dual residences, matedthat 10 millionindividuals live
which may be cushioningthe effects offthelandandtheysupplyfoodto the
of job losses.Dualresidence ischarac- country'stownsandcities.At present,
teristicof manyfarmingfamiliesandis six out of evéryten tonsof food con-
a subjectof nationaldebate. sumedoriginatesfrom smallfarmers
(Oxfam International Annual Report
All the aboverelatesto the trading 200812009).Accordingto the 2007
sectorof the economy,which would Population Census, 2.4millionpeople
wereworkingin theagriculturalsector,
constitutinga largeproportionof the
ruralpopulace.

78 percent of Peru'stotal rural

employmentis in the agricultural
sector, a figure only exceededin
LatinAmericaby Bolivia.Agricultural
8
ü employment in ruralareashasgrown
more in absoluteterms than non-
agrículturalemployment, both in the
s
s
S

v
Peoplein Peru'srurol highlandshave
e their own protectionmeasuresto cushion
9 the crisis,includingincomediversificqtion
and internal mioration.

Rurol21 - 05/2009

1970s,the 1980sandin the2000s.ln
contrast, in manyotherLatinAmerican
countriesnon-agricultural employ-
mentgrewin absolutetermsasfastas
or fasterthanagricultural
employment
(Cavassa, A. and Mezclier,
E.,2OOg).
r Small-scale
farmershave
developed
adaptation
mechanisms
R u r a ls m a l l h o l d e rf a m i l i e si n p e r u micro-landfills
have a number of options mainly
associatedwith the land, and they can
apply know-how, methods and physi_
cal resistancethey have acquiredover
the years.The diversificationof their
activitiesdoes not necessarilylead to
t h e i r a b a n d o n i n gt h e i r s m a l l h o l d i n g s .
T h e e m p l o y m e n t o p p o r t u n i t i e st h a t
m a i n l yf a m i l yf a r m i n g u n i t sh a v eu s e d
so far underlinethe number of systems
and other dual-residence activitiesthat
e n a b l et h e m t o h a n d l ec r i s e sw i t h r e l a -
tive success.
Surveysof a group of peasanthouse-
holdsin the southernhighlandsof peru
show that there is very considerable personswith greaterresources
mobility among families(Cavassa,
2009). Of 450 families interviewed
in 2005, only 200 could be located
in 2008. This chiefly indicates the
dynamic economic activity of many
families between these two years.
Basedon earnings,they can be divided
into two groups:
r On the one hand, a smallbut sig-
n i f i c a n tg r o u p w h o s ee a r n i n g sa n d
tangible assetsimproved; the main
change in the incomes of these
familieswas the increasedamount
obtained from farming, with crops
showing greater growth than live-
stock.
r O n t h e o t h e r h a n d , f a m i l i e sw h o s e
economicconditionsworsened;this
isexplainedby the reductionin non-
agricultural earnings (particularly because
employment),but agriculturalearn-
ings increasedeven in these cases, overcomeby integrating
Rurol21 - 05/2009
Focus
of the manyNGo activities for deveropmentit isimportantto highrighttraining
programmes for leaders in ruraldevelopment, the promotionof micro-businesses and
ruraland regionáldevelopment plans.Twoof the manyexampres of thesearetheAso-
ciaciónArariwain cusco(www.arariwa.org.pe) andCedapin Ayacucho(www.dexcer.
orglpdf/cedap-2008.pdf). Theprogrammes mustbe gearedto usingof localtechnical
services,and designedto meetthe demandsof users. Activities
includestrengthening
directmanagement of the organisations,
whichisfacilitatedwhen:
r Theset-upallowsproducers themserves
to designtrainingcapabirities.
r Thetrainingapproachincorporates famirywerfare,incrudingaspects
suchasim-
provements in housing,cookingfacirities,
farmyardhygiene,ratrines,
andsanitary
r A staggering of strategies
permitsmoreadvancedtrainees to furtherimproveby
betterpenetrating the market:approachesto potentiarcustomers, knowledgeof
productand business requirements
(quarity,vorume,frequency, packaging, invoic-
ing, paymentarrears, etc.);membershipof associations in orderto access more
demandingmarketsthat paybetterprices.
thoughwithoutmakingup for the n a t i o n a l C R E C E R( e n g l i s h : G R O W )
dropin familyearnings overall. strategy that aims to articulate and
organisethe different State interven_
Thesechangescan be relatedto tionsfor eradicatingpoverty,one pillar
higheragricultural prices,thedynamic of which isto revivesuccessful produc-
touristindustryin the area,and the tion practicesin agricultureand rural
highervalueplacedon Andeanprod- d e v e l o p m e n t .
uctsby the country'sburgeoningres-
taurant industry.Dual residenceof The Development projectsfor the
also Puno-CuscoCorridor and Marenass,
A., allowsthem to combinethe benefits which have nowbeen completed,
and
of agricultural activities with the more t h e S ó u t h e r nH i g h l a n O D s evelopment
numerousand betterqualityservices Project which is underway,
are con-
providedin the towns: the district sidered to be successful
in the fight
authoritiesusuallyresidein the near- againstpovertysincethey incorporate
est largecity,but most modestfami_ strategiesthat can be adapted
to local
liesalsotry to includetownsor citiesin demand. Fundsaredirectlytransferred
theireconomic strategies, oftenthanks to producers'organisationsby means
to the presencethere of childrenor of competitivegovernmentfunding to
siblinos. activatethe technicalservicesmarket
and targeting natural resourceman-
a g e m e n ta n d t h e p r o m o t i o n o f r u r a l
r Measures to advance rural businesses.
development
I n t h e n a t i o n a lr u r a l d e v e l o p m e n t
To counteractthe crisis,peru has p o l i c i e si m p l e m e n t e do n t h e b a s i s
of
drawn up an EconomicEmergency this experience, state development
Planthat givespriorityto higherpub- projects,the developmentexperience
lic spendingand investment, in order of NCOs and the producers,associa-
to generateshort-termemployment. tions are to complement each
other.
Agriculturalpoliciesface difficulties Eachlevelof organisation,both public
they are not well interlinked and private,will concentrateon what
with other sectors.This could be it does best. NCOs have developed
them in the strategiesto reduce the costs of dis_
31
Focus
s e m i n a t i n gt e c h n o l o g i c ailn n o v a t i o n s
f o r f a m i l i e s .s o t h a t r u r a l h o u s e h o l d s
with only a few yearsof formal educa-
t i o n u s ef a c t o r st h e y a r ea b l et o h a n d l e
a n d r e q u i r em i n i m a l f i n a n c i a lc a p i t a l
( s e eB o x o n p a g e 3 1) .
r Conclusion
The mostsuccessfulruraldevelop-
mentpro.jects
havestrategiesthat can
be adaptedto the needsof the local
Zusammenfassung
sind von der
Die StaatenLateinamerikas
globalenFinanzkrise
weniger starkbetrof-
fen alsandereRegionen.Dasliegt gróR-
tenteilsdaran,dasssiezu Beginnder Krise
auf Wáhrungs-und Steuerreseryenzu-
rückgreifenkonnten. Die Bevólkerungim
lándlichenRaumhat ihre eigenenSchutz-
mechanismenentwickelt,um Krisensitu-
ationenabzufedern,wie das Beispielder
peruanischenSierrazeigt: Einkommens-
diversifizierungund vor allem eine starke
interne M igrationsind charakteristisch
fürdiese Region,in der knapp 80 Prozent
der Menschenvon der Landwirtschaft
leben.Der nationaleKonjunkturplan,
der vor allemArbeitsplátzeschaffensoll,
wird den lándlichenRaumaufgrund der
mangelndenVerknüpfungvon Agrarpo-
litik und anderenPolitikbereichen
kaum
positivbeeinflussen.Wirksamerscheinen
ü
Forthis,smallproducers'organisa-
! tions (farmersassociations,peasants
B
€ cooperatives,irrigators
- etc.)must be strengthened and they
mustbesuccessfully integratedin net-
worksor consortia.
P
population.The continuing impor-
tance of agriculturein the ruralsector,
the efforts by familiesto give greater
addedvalueto their products,and the
new strategies suchasdualtown-coun-
try residence,need to be understood
and harnessed.
While rural development projects
havesuccessfully improved household
welfare,asyet they havenot beenvery
effectivein ensuringthat ruralfamilies'
earnings grow sufficiently to allow
die verschiedenenspezifischenProjekte
zur Fórderungdes lándlichenRaumeszu
sein.Dank dieserProiekteist es bereits
gelungen,die Lebensbedingungen der
Familienzu verbessern.Ob es mit ihrer
Hilfegelingt, die Einkommender Men-
schennachhaltigso weit zu erhóhen,dass
sie die Armutsgrenze überschreiten,ist
jedoch fraglich.
Resumen
Los estadosde América Latina se ven
menosafectadospor la crisisfinanciera
mundial que otrasregiones.Ellose debe
en su mayor parte a que - al iniciarsela
crisis- los paísespudieron recurrirsus
respectivasreservasmonetariasy fiscales.
A su vez, la poblaciónde lásáreasrurales
ha desarrolladomecanismospropiosde
protecciónpara amortiguarlassituacio-
nesde crisis,como queda demostrado
AgriculturaI production remains an
imoortant sourceof incomefor rural
householdsin the AndeanSierra.
them to keepthem sustainably above
the officialshoppingbasketof USD70
per personper monthwhichclassifies
them asooor.
orga isations,
n
A detailed list of referencescan be
obtoined from the outhor.
Cavassa,A. (2004):Construyendo
regióndesdelosespocios
locales.
LoexperienciodeAroriwoen Cusco.
EED-AsociaciónArariwa.
GermanAgroAction(2007):
EvqluqciónExpostde Proyectoen
bosea losindicadoresdelobjetivo
delmilenio,Estudiodela Micro-
cuencade Piuray- Cusco.Erwin
Geuder-JilgandAugustoCavassa.
por el elemplo de la sierraperuana:en
esta región - que se caracterizapor la
diversificaciónde ingresosy sobretodo
por una fuerte migracióninterna- casiel
80 por ciento de la poblaciónvive de la
agricultura.El plan coyunturalnacional
(PlanEconómicode Emergencia),que
debíacrearante todo puestosde empleo,
apenastendrá influenciaspositivasen el
mundo rural debido a la falta de vincu-
laciónentre Ia políticaagrariay otros
sectoresde la política.En vez de ello, los
diversosproyectos específicospara el
fomento del sectorrural parecentener un
mayor efecto. Craciasa estosproyectos,
ya ha sido posiblemejorarlascondicio-
nes de vida de lasfamilias.5in embargo,
es dudoso que tales proyectos logren
incrementarel ingresode estaspersonas
en forma sosteniblehastael punto de
superarel umbral de la pobreza.