evolving from farming systems research into a more holistic rural development approach

ISBN 978-92-9060-346-7Natural ResourcesManagement DivisionWorking PaperNo. 2008-1

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Evolving from farming systemsresearch into a more holistic ruraldevelopment approach: Experiencesin the Andean region

Carlos U. León-Velarde, International Potato Center (CIP)Roberto A. Quiroz, International Potato Center (CIP)Roberto E. Valdivia, International Potato Center (CIP)Jorge Reinoso, Centro de Investigación en RecursosNaturales y Medio Ambiente (CIRNMA)Miguel Holle, International Potato Center (CIP)

C I P • N A T U R A L R E S O U R C E S M A N A G E M E N T W O R K I N G P A P E R 2 0 0 8 - 1

ii E V O L V I N G F R O M F A R M I N G S Y S T E M S R E S E A R C H I N T O A M O R E

Evolving from Farming Systems

Research into a More Holistic Rural

Development Approach: Experiences in

the Andean region

From farm to market

Farming System Analysis and Rural Development

From farm to market

Farming System Analysis and Rural Development

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Evolving from farming systems

research into a more holistic rural

development approach: Experiences

in the Andean region

Carlos U. León-Velarde, International Potato Center (CIP)

Roberto A. Quiroz, International Potato Center (CIP)

Roberto E. Valdivia, International Potato Center (CIP)

Jorge Reinoso, Centro de Investigación en Recursos

Naturales y Medio Ambiente (CIRNMA)

Miguel Holle, International Potato Center (CIP)

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© International Potato Center (CIP), 2008

ISBN 978-92-9060-346-7

CIP publications contribute importantdevelopment information to the public arena.Readers are encouraged to quote or reproducematerial from them in their own publications. Ascopyright holder CIP requests acknowledgement,and a copy of the publication where the citationor material appears. Please send a copy to theCommunication and Public AwarenessDepartment at the address below.

International Potato CenterP.O.Box 1558, Lima 12, [email protected] • www.cipotato.org

Produced by the CIP Communication and PublicAwareness Department (CPAD)

Production CoordinatorCecilia Lafosse

Design and LayoutElena Taipe and contributions from Graphic Arts

Printed in Peru by Comercial Gráfica SucrePress run: 200March 2008

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Comments are invited.

This series is available on the internet at www.cipotato.org

Evolving from farming systems research into a more holistic ruraldevelopment approach: Experiences in the Andean region


E V O L V I N G F R O M F A R M I N G S Y S T E M S R E S E A R C H I N T O A M O R E v

Table of contents

Acknowledgements vi Preface vii Evolving from farming systems research into a more holistic rural development approach: Experiences in the Andean region 1 Introduction 1 The Systems Approach 3 Implementing the farming system analysis research approach oriented to rural development in the Altiplano 14 Creating producers’ capacity and linkages with the private sector for rural development 23 Challenges for the Natural Resources Management (NRM) Division of CIP to reduce poverty at farm level 26 A few lessons learned in the process 28 Concluding remarks 30


vi E V O L V I N G F R O M F A R M I N G S Y S T E M S R E S E A R C H I N T O A M O R E

Acknowledgements The authors are indebted to the peasants of different communities of the Altiplano who actively

participated in the work that inspired this paper. Due recognition is also given to the International

Development Research Center, IDRC-Canada, the Instituto Nacional de Investigación y Tecnología Agraria

y Alimentaria of Spain, INIA-Spain, and the Canadian International Development Agency, CIDA, for their

generous financial contribution to the work in the Altiplano. We also gratefully acknowledge the valuable

comments and suggestions of Dr. Victor Mares on the technical aspects of this document.


E V O L V I N G F R O M F A R M I N G S Y S T E M S R E S E A R C H I N T O A M O R E vii

Preface

This document describes the evolution of the Farming Systems Research (FSR) approach into an expanded

development framework that takes into account the chain of activities from the farm level to the

processing of products and access to markets. The development framework includes the identification of

commodities with a comparative advantage in effectively contributing to poverty reduction.

The evolution of the original FSR methodology into a more holistic rural development approach

proceeded during a long process of research for development carried out in the Peruvian Altiplano, where

CIP and its partners have conducted a string of projects. The evolution described in this document is a

significant contribution to the robustness and scope of FSR; it is not one of those slight changes of

denomination that are frequently presented as new or alternative approaches (but that are, in essence, the

same FSR with the convenient addition of new methodologies and tools). It is important to recognize the

difference between a new approach and the enrichment of an old one by the addition of tools and

methodologies. The evolution here is the result of incorporating the analysis of the continuum from farm

to markets and identifying agricultural products with comparative advantage as contributors to poverty

reduction.

The authors, based on their experience in conducting several agricultural projects in the Andean Altiplano

and other regions, hope that this document will help clarify the conceptual framework of the systems

approach and integrate it into multidisciplinary efforts to generate, through research, adequate

technological alternatives for rural development and so contribute to poverty reduction.

E V O L V I N G F R O M F A R M I N G S Y S T E M S R E S E A R C H I N T O A M O R E 1

Evolving from farming systems research into a more holistic rural development approach: Experiences in the Andean region1

INTRODUCTION

The Andean region is a mountainous area of around 1.5 million km2 and is well endowed with

natural resources. Its population is estimated at more than 115 million, most of whom depend on

agriculture for their livelihood. Over 60% of the population lives in rural areas, although this is

changing as urbanization increases, with related increases in unemployment and the demand for

services. In rural areas the main agricultural systems are mixed crop–livestock farming; extensive

livestock grazing predominates in drier areas. Subsistence farming, where animals play

complementary roles as a source of food, traction, asset building, insurance against climate

shocks and food security, is a trademark of those systems.

Due to limited market access, lack of appropriate technologies, and increased population growth,

the deterioration of natural resources – mainly soil and water – and the loss of fauna and

palatable native grass species of the high Andes are evident. This degradation threatens the

capacity of the land to provide environmental services and sustain the growing human

population. It also fuels rural poverty and migration to urban areas, which exacerbates urban

unemployment and poverty.

In the search for technological options for small farmers of the Andean region, many projects

were implemented to enhance crop and livestock production at the farm level. However, some

projects also focused on consolidating participatory research methodology for rural

development.

These projects originally took a collaborative approach, focused on fieldwork with farmers to

solve identified agricultural problems. They promoted adoption of new technologies generated

at experimental stations, with the assumption that they would produce almost immediate results.

Technology adoption by users was promoted by support in terms of inputs and infrastructure.

1 International Potato Center, CIP. 2 Centro de Investigación en Recursos Naturales y Medio Ambiente, CIRNMA.

Document prepared on the basis of information from different projects carried out in Puno, Peru by the CIP, in close collaboration with CIRNMA and other partners and collaborators.


2 E V O L V I N G F R O M F A R M I N G S Y S T E M S R E S E A R C H I N T O A M O R E

The first steps in the work were the analysis and characterization of the farming systems and

households.

However, project progress showed that problems were very complex, and required further

analysis and synthesis. Therefore, both biophysical and socioeconomic studies were emphasized

to produce a synergism between both fields. These conjoined studies improved understanding of

the problems limiting farm production and technology adoption by the farmers, and helped

formulate mathematical models to simulate and test scenarios and hypotheses regarding the

operation of production systems.

The use of participatory methods fosters producer-oriented research that solves problems

prioritized by the farmers themselves, as opposed to a top–down approach that imposes

technologies based on results from experimental stations. Contests among farmers such as those

promoted in “seed fairs” generate a more fluid dialogue between farmers and scientists, and

contribute to exchange and mutual assessment of experiences in seeking joint solutions.

However, since this approach limits the extrapolation and adaptability of results, and may

influence the objectivity of the explanation for particular phenomena, the extensive use of

simulation models was progressively introduced into our research activities. This allowed

treatments or technological alternatives to be simulated before implementing them on farms; it

also allowed for ex-ante and ex-post analyses of systems (Dent, 1993; and León-Velarde and

Quiroz, 1994). Models were valuable tools for professionals who were inclined to assign special

importance to traditional practices of production management. Also, the capacity of the models

to handle variables which are difficult to measure but amenable to be simulated (e.g. potato

tuber development), helped explain the rationale of farmers. The results of the evaluations were

positive, indicating that both approaches (on-farm trials and simulation models) could be used to

validate technology options that had broad acceptance.

Nevertheless, surplus production without the market capacity to absorb it is a problem that

should be addressed. Likewise, problems of land tenure, equity, property rights and product

transformation should be addressed to understand the dynamics of evolving agricultural

production systems. Consequently, the technologies and strategies used, as well as the policies

and capacity building that link research and development, must be based on the following: (1)

adequate use and conservation of natural resources, (2) market-oriented agricultural production

systems, and (3) improved post-production processes. Also needed are policies that promote

trade and regional integration.



This paper describes experiences in the Andean region, from the perspective of some members

of a group that initiated the work as a Farming Systems Research (FSR) team. Highlights of the

evolution during the last fifteen years are presented.

The paper is divided into three parts. In the first is an overview of systems and the FSR approach

and its evolution. It was important to present some details since the methods and experiences

from this phase were the basis for and the theoretical framework behind the move to a different

paradigm.

The second part is related to the implementation and evolution of the farming systems approach

within some Altiplano projects, where members of the original FSR team developed "more

holistic approaches" towards the Systems Analysis Research and Rural Development (SAR&RD)

approach.

The third part presents case studies focused on sustainable natural resource management (NRM)

based on innovative methods of empowering farmers/resource-users and communities.

Emphasis is given to efficient learning, monitoring and evaluation of the learning process, and

the effect that learning has on decision-making and the impact of that decision-making. The

cases examined deal with our experiences on how to involve the producers and bring them and

the private sector together in order to increase investment in the agricultural sector.

Finally, a short concluding section shares some of the lessons learned with the reader.

The Systems Approach

The systems approach is critical to our modern views on agriculture and rural development.

Particularly as researchers and developers currently seek to intervene in agriculture via

technology, policy instruments, education and market support programs, and to improve the

welfare of disadvantaged rural people by increasing income, improving health and nutrition,

providing education and facilitating fair access to markets (Bertalanffy, 1968). Thus, in work

oriented to improving agriculture using the systems approach, the classic way of conducting

analyses and interventions is by focusing on farms as the unit of analysis. In other words, the

systems approach attempts to study total-system performance rather than its components.

Understanding the performance and rationale of farms and farmers can provide a means of

gauging their reaction to different conditions and, hence, of predicting the consequences of

policy interventions (McGregor et al., 2001). This systems concept is used by many disciplines, as

it contributes to organizing and understanding a complex situation (Shannon, 1975). In



agricultural production research, the systems thinking helps incorporate the farm components

into a conceptual framework defining the FSR approach. Its use began in Latin America in the

early 1970s and since then its adoption, adaptation and evolution have been highly variable

across the continent (Hart, 2000). In some cases the development of a new approach that

rendered the systems approach “obsolete” was claimed. However, in many cases, this simply

involved creating a new name after researchers had integrated some tools and methods (such as

modeling or stakeholders’ participation) into the basic conceptual framework of FSR.

Consequently, there are different research groups that are implementing the original approach

used by some of the pioneers in the 1970s, while other groups are moving into allegedly "more

holistic" approaches, which at their core are methodologically and conceptually the same as the

“Systems Approach”.

Nevertheless, to apply the original FSR approach or any variant (Hart, 1982), it is necessary to start

by defining a “System” and the hierarchal level in which the system stands (Fresco and Westphal,

1988). A system is an arrangement, set or collection of physical things connected such that they

form an entirety or act as an integral unit (Hart, 1982; Conway, 1985). Therefore it is possible to

define its structure, function and objective. Basically each system has a limit, components, inputs,

outputs and relationships among components, commonly denominated interactions

Figure 1A shows, schematically, a system and its components that can be easily related to a

particular commodity like potato; thus, the system becomes a “Potato Production System”.

Figure 1B shows a general crop–livestock production system, a common production system in

the Altiplano, which is more complex due to an increased number of components. This

complexity helps to define certain characteristics of a system related to the environment,

organization, change, interdependency, counterintuitive behavior and drift to low performance

(Shannon, 1975).



Since the system approach can be applied to different situations it is necessary and fundamental

to define the operational level. Thus, it is necessary to define the level of work by defining the

hierarchal level.

Figure 2 shows the hierarchal levels related to agricultural systems. Once the level is defined it is

not possible to describe other systems within the system. However, it is possible to define a

subsystem, which becomes a system if we separate it for a specific analysis. However, this

subsystem should be always located within the system to which it belongs.

Figure 1.Schematic representations of a system; 1A shows a system and its components that can be easily related to a particular commodity, like potato or sweet potato. 1B shows a crop–livestock production system - a common production system in the Altiplano (León-Velarde et al., 2000).

n

Soil Plant n

-

Countries

Eco-regions Basins

Production Systems (particular technology)

Physical components

1 2 3 n

Farms

Crops

Livestock n

Water Soil

Plant

Animaln

Crop- Livestock

Figure 2.Schematic representations of the hierarchal level of work related to agricultural systems. Each level can be a system by defining its physical components and the relationship among them.

Component, C

Component, S

Cows

Potato

Forage ? Fertilizers

∑

Component, C

Component, S

Outputs

Inputs

Limits

Interrelations

Component, C

Component, S A

Cows

Potato

Forage ?

Varieties

∑

Cows

Potato

Forage

?

Potato

Milk

Meat

Precipitation

Solar Energy

Technical knowledge

Manure∑

Other crops Others

B

1 2 3 n

1 2 3 n



Once the hierarchal level of work is defined it is necessary to characterize the studied system by

describing its components and their relationships. Figure 3 summarizes, graphically, the

subsystems and their components of the agricultural production systems in the Altiplano. This is

done through the characterization phase, which implies the use of several techniques and

adequate procedures to collect relevant information to diagrammatically represent and analyze

each component.

The analysis of subsystems and their components is based on the definition of both their static

and dynamic representations. The first representation is a graphic model of an actual system

(Figure 3), and the second involves a computer program that deals with dynamic changes. This is

Figure 3.Schematic

representation of anagricultural productionsystem in the Altiplano

showing thesubsystems and theircomponents with therelationships amongthem. Bio-economic

and social informationfor each component

contributes to theanalysis of the system

as an initial step todetermine products

with comparativeadvantage in relation

to marketopportunities and to

set up newtechnologicalalternatives.



one existing option that can be used to formalize the knowledge generated by research in a

manner useful for designing, testing, and implementing technology innovations and knowledge.

In their scientific endeavors, agricultural researchers applied the scientific method to search for

answers to factors limiting agricultural production. The scientific method is a valuable process

that utilizes knowledge to generate new knowledge (Cañas and Lavados, 1989); however, its

application in isolation is not enough to solve technological problems (Figure 4).

Problem solving requires adaptation of knowledge to overcome limiting factors. The successful

use of technology to solve major limitations to agricultural production relies upon an adequate

acquaintance with the problems within a specified context (i.e. environment) and a good

application of available knowledge. When this interface is used to solve agricultural problems of

small farmers with their active participation, we say that we are applying a holistic methodology

to SAR&RD.

In the Altiplano the application of the FSR approach was initially oriented to solve the food

security problem and producing, whenever possible, a surplus for the market. The details are

presented elsewhere (INIA-PISA, 1992 and 1993; Quiroz et al., 1994; León-Velarde et al., 2000).

Dent (1993) and Thornton (1991) discuss general problems in the implementation of the

approach.

Figure 4. Schematic representation linking a problem with knowledge generation by scientific method and its application in Systems Analysis Research and Rural Development (SAR&RD) methodology, considering the main limitations and constraints (adapted from Cañas and Lavados, 1989).

Knowledge generation Scientific method PROBLEM Application of Knowledge

OBJECTIVE

NO

TECHNOLOGICAL CHANGE

Knowledge generation Scientific method

PROBLEM Application of Knowledge

OBJECTIVE

HYPOTHESIS

EXPERIMENTATION

RESULTS

NEW KNOWLEDGE

ANALYSIS

Is technology available?

YES NO

Portfolio of solutions

EXANTE Analysis

Best SolutionNO

YES

EX-POST viability

TECHNOLOGICAL CHANGE

Land tenureCredit Market Education

BIO SOCIO ECONOMIC constraints

KNOWLEDGE AVAILABLE



Figure 5 shows the original approach with its methodological steps: characterization, research,

validation, and the production programs. These are oriented by the analysis of the target area

and opportunities related to surplus production for the market, to increase income.

Thus, farm income is one of the main factors analyzed and evaluated in agricultural systems.

Considering the factors involved in income generation, it is then possible to determine the points

of interventions to enhance it. Figure 6 shows farm income determinants and constraints, the

research issues addressed by most rural development efforts. Due to the complexity of

agricultural systems, the majority of agricultural projects aimed to increase production per unit of

land area (t/ha). The other two factors, “total area” and “price” were not considered since the area

is fixed, as determined by the system limits, and price is highly variable depending on the

demand and supply. However, the income generated by any agricultural production system,

particularly those managed by small producers, requires a more comprehensive analysis because

it is also considered a poverty indicator. Figure 6 relates farm income to some production system

components and shows that any increase in income depends on increases in production by unit

area as well as on the cost of production and the market price of the product. Since market price

could be fixed it is also necessary, in any kind of intervention, to reduce the production costs.

Thus, increasing the productivity and increasing the difference between sale price and

production cost will result in a better gross margin, benefits and total income. However, when

market competition increases, the price of the commodity could be reduced, bringing down farm

income. This effect can be minimized when the products with comparative advantage in the

market are well defined.

Figure 5.Schematic flow

diagram of Farming Systems Research

(FSR) and its modification in

relation to market orientation and rural

development. (PRODASA/CIP,

1994).

Farm - Market Production — Consumption

Characterization

Research

Technologicaloptions

Validation

Productionprograms

Farm - MarketProduction - Consumption

Characterization

Research


Validation

Productionprograms



The definition of products with comparative advantage is related to the market opportunities.

Analyses of production cost, sale prices and time series of total production and internal gross

product in relation to market demand help identify those products. Likewise, optimization

methods can allow the generating of bio-economic scenarios to determine future interventions

with adequate technology to improve technical and economic efficiency (León-Velarde and

Quiroz, 1994).

Table 1, which is related to Figures 5 and 6, shows the different techniques and procedures

utilized in the SAR&RD. They all require an adequate group of human resources within a

particular institution. Nevertheless, continuous training and integration of new knowledge

(Figure 4) contributes to technological change.

To initiate a technological change, adequate technological alternatives must be implemented for

each production system identified, including the market opportunities. Preferentially, the

alternatives should have low input requirements for an increased production at a lower unit cost.

Figure 7 shows an integration of the phases and possible results in each phase.

Figure 6. Main factors and constraints related to the income from agricultural production systems.

$ = plants / ha kg / plant $ / kg =

= ha heads / ha kg / head $ / kg =

= ha

Income = Area x Current capacity x Animal production x Sale price - or plant density or crop production production cost

=

Size of operation Land tenure Police

Technology Market Policy

Technology Capital

= = $



To implement the different phases of the farming SAR&RD, both financial and skilled human

resources are required. In many projects the work has focused on the system’s characterization

phase, which includes defining the target area and identification of the needs and opportunities

through system analysis. Nevertheless, many projects have excessive work in characterization

and definition of a baseline but define neither the products with comparative advantage nor the

technological alternatives, which could benefit the target households. Likewise, the adoption

phase usually has insufficient funding or the technology dissemination process is inadequate.

Consequently most of the work remains in pilot sites, which are described as case studies in final

reports.

Phase Methods and procedures Observations/procedures Characterization, defining: Target and base line Needs and opportunities

Secondary information Static and dynamic surveys Rapid rural appraisal GIS & remote sensing

Statistics/compilations, charts, figures Farmer participation; depending on the dynamic of the variables Farmer participation Satellite images; ground truthing; maps

Analysis, defining: Products with comparative advantage

Principal components & cluster analysis Linear and non linear mathematical models Econometric models and simulation models Cost–benefit analysis

Definition of farmer strata and target population Trends; sustainability (logistic, linear and non-linear models) Comparison of scenarios (current and potential production); risk analysis Economic response; profitability; risk analysis. Linear and multiple goal programming

Research, defining: Technological alternatives or innovations,on farm/on station

Experimentation and validation

Experimental designs (classic) Central composite design Trials farmers vs alternatives

Cause–effect response Response surface; bio-economic scenarios; cost–benefit analysis Validation on farms/linking adoption

Diffusion, promoting capacity building; Farmers, researchers and extension agents

Fields days; short courses Seminars; workshops; technology contests Publications; manuals Communication media

Farmers’ participation/linking adoption Description of technological alternatives or innovations Researchers and extension agents Radio, television (documentaries and case studies), Internet

Table 1.Main methods

and proceduresutilized in

participatoryagricultural

system analysisresearch by a

partnership ofdifferent

institutions.



To avoid concentration on one particular phase of the approach or a bias for a particular

discipline it is necessary to identify the phases and their objectives. Thus characterization

includes defining a target area and a clear set of needs and opportunities for a particular product

with comparative advantage related to market demands. This phase also includes a complete

analysis of perceptions and aspirations of farmers, who need to recognize that some

interventions or modifications to improve the production system are required. In a similar way,

the research phase includes model simulations to evaluate the integration of technological

options or alternatives of low production cost into well-defined production programs. This

includes linkages for dissemination as well as a good evaluation program to assess the impact of

the interventions in the targeted production system. Figure 8 summarizes the relation between

phases and objectives. This scheme has been modified and is described in summarized form by

the International Potato Center (CIP) as the pro-poor cycle for rural development.

Site / area

Rural factors

Ecoregion Farms Components Systems

Information

GIS/RS Experimental Station

Research / Commodities; Technological alternatives or

Experimentation & validation in farms

Rural factors

Experimentation &Validation

Use & Adoption

Ecoregion

Area selection -- producers

Diffusion

P O L I C E S

Characterization Information

Experimental Station

Research / Commodities;

Technological alternatives or innovations

Description & analysis

Experimentation & validation in farms

Defining products & alternatives

Components Systems Farms

Systems analysis

Site / area

Case studies

Figure 7. Phases of the implementation of the System Analysis Research for Rural Development, SAR&RD.



Nevertheless, one of the lessons of the application of FSR in Latin America in the 1970s is that

farmers do not adopt complete technological packages, but components of them (León-Velarde

and Quiroz, 1994; PRODASA/CIP, 1996; Collinson, 2001;Tinsley, 2004). Unfortunately, this message

has not reached key research and development decision-makers, since most of the limited

agricultural extension and development projects in the region tend to promote technological

packages to small farmers. Changes in productivity of a small farm from a low level to its potential

level might be pictured as an ascending spiral (DASA-CIP, 1997; Quiroz et al., 2000) with actual

production level at the lower end and potential at the upper end (Figure 9).

Figure 9.Systems

hierarchies andresearchmethods

utilized in theSAR&RD.

Figure 8.Schematic flow

diagram presentingan analogy between

the main steps of thefarming System

Analysis Research forRural Development

(SAR&RD) approachand the phases of the

pro-poor R&D cycle.

Target areas


Productionprograms

Farm - Market Production - Consumption

Needs and opportunities

assessment

Characterization

Models and simulation

Linkages fordissemination

Impact assessment

Research

Validation

Linkages for dissemination



The number of turns required to go from the actual to the potential level differs among

agricultural production systems. Results are not expected in the short term. Technological

alternatives will be incorporated on each turn depending on their profitability (increased cash

flow). It can be envisioned that a complete turn of a cycle requires the application of several

methodological steps (Figure 9) and the participation of several agents. At the level of the

agricultural scientist a high level of precision is demanded, which apparently decreases in each

turn, but the demand for better policies to obtain equity and natural resource conservation

increases. The role of institutions and policy makers increases with each turn. A balance of

integrated planning and responsible decision-making in each turn is necessary considering a

bottom-top and vice versa planning of activities (adapted from Quiroz et al., 2000).

In some cases, institutions applying the system approach or any modification of it tend to

organize networks or other types of partnerships. This approach is correct and valid when there is

no bias in the objective of the targeted system. However, some research institutions that retain a

disciplinary or commodity orientation for their work are convinced they are using the system

approach for conducting applied research, but by considering the mode of production of the

isolated commodity as a production system, the analysis of the whole farming system is

incomplete or missing altogether (McGregor et al., 2001). Consequently, there is not the required

emphasis on the farm as the unit of analysis and intervention, which hampers the generation of

relevant research outputs and the improvement of the livelihoods of smallholders with complex

agricultural systems. Thus, in any intervention it is necessary to recognize and identify the actions

that could maintain the “status quo” of the system, enhance one or more of its components or

change the system altogether - which is the most difficult action (León-Velarde and Quiroz, 1998).

Therefore, in any case it is necessary to clearly identify the research needs and opportunities to

apply the adequate knowledge generated for a particular situation. When an institution

implements the approach described above, there is a need to recognize that the work is dynamic

and continuous; since in some cases the activities apparently do not have a beginning or an

ending, thus distorting the approach. For each activity it is necessary to recognize the phase and

the level of work that is being executed within the SAR&RD approach.



Implementing the farming system analysis research approach oriented to rural

development in the Altiplano

The Altiplano is a special ecoregion in South America, covering approximately 180,000 km2

between Peru and Bolivia at an altitude of 3,800 masl. Some of the area is well endowed with

natural resources. However, it is also a region with high climatic and economic risks. In addition,

due to historical, cultural and political reasons its population has a quality of life well below its

potential. Poverty, a very slow rate of development, an increasingly high population growth rate,

unequal distribution of wealth, and natural resource degradation characterize the region. In

recent years, government policies have promoted the development of large urban centers and,

as a result, most of the population is now found in major cities. It is estimated that by the year

2025 over 75% of the population will be urban (IICA, 1994; Winograd, 1995). Although extreme

poverty is common in city outskirts, the majority of the poor are in rural areas, and most are small

farmers.

Most farmers are smallholders and they comprise over 70% of the Altiplano farm population

practicing a highly diversified agriculture to cope with both climatic and economic risk. Within

these diversified farming systems, crop–livestock production systems are critical, as they provide

valuable products to contribute to a sustainable agricultural system, but are well within

agricultural subsistence farming. Therefore, these farmers demand options derived from a clear

problem solving focus to improve livelihoods, while preventing natural resource deterioration.

For decades the usual approach has been to improve the system by increasing productivity.

However, such an approach did not necessarily improve the overall system. Figure 10 shows a

simplification of the poverty cycle in relation to the natural resources in the region. The scheme

indicates that poverty is not related to only one factor or indicator. Therefore a clear intervention

on exogenous factors to reduce the effects of migration, malnutrition, poor education and poor

health is needed (IICA-RISPAL, 1996). It is also necessary to recognize the comparative advantage

of other institutions, thus a clear and strong horizontal collaboration should be organized.

Likewise, a holistic approach integrating other disciplines, various sectors of the economy and

policy studies must be organized and oriented towards rural development.



Figures 8 and 9 jointly describe the integrating methodology used at different hierarchical levels,

as well as the institutions necessary to complete each turn of the pro-poor research and

development cycle. The classical scheme of FSR includes diagnosis, experimentation, validation

and diffusion (Zandstra et al., 1981, Hart, 1982; Conway, 1985; INIA-PISA, 1992; León-Velarde and

Quiroz, 1998). These research phases, have been commonly applied by most research teams

following FSR methodology or its modifications during the last decade. However, in many cases

the diffusion phase is the most difficult step. Usually, constraints by land tenure, size of operation,

access to credit, market opportunities, education and health prevent adoption of technological

alternatives or innovations.

A brief description of each research phase in the generation of technological alternatives or

innovations for a specific agricultural product with comparative advantage in a specific market

was provided in the previous section. Thus, several technological alternatives were developed for

each product and integrated so that each farmer could use a combination of them according to

their resources (capital and land) to improve the productivity of the commodity with more

comparative advantage and so enhancing their income (see Figure 11). The agricultural system

includes crops and livestock and not all farmers have the same ability or adequate resources for

both activities. Consequently, in the analysis of the agricultural system it is necessary to consider

the skills and aspirations of the farmers.

Figure 10.The vicious cycle of deterioration of natural resources, low agricultural productivity, poverty and violence. (Adapted by CIP-NRM from INIA-PISA, 1993, and PRODASA/CIP, 1994).

Lowproductivity

Householdincome

Poverty

Use of hillsides for agriculture

Child malnutrition& mortality

Migration totropical areaslarge cities &foreigndevelopedcountries

Capability tobuy goods &Services

Erosion of natural resources

Region’s food production

Socialproblems(lack ofSecurity).

Foreigninvestment

Budget for ruraldevelopment

EducationHealthNutritionRoadsResearch & Development Agricultural

technology

Lowproductivity

Householdincome

Poverty

Use of hillsides for agriculture

Child malnutrition& mortality

Migration totropical areaslarge cities &foreigndevelopedcountries

Capability tobuy goods &Services

Erosion of natural resources

Region’s food production

Socialproblems(lack ofSecurity).

Foreigninvestment

Budget for ruraldevelopment

EducationHealthNutritionRoadsResearch & Development Agricultural

technology

Increase Decrease



Therefore, it is necessary to identify the crop and livestock products with comparative advantage

from the point of view of the farmer and the region. Thus the productivity of those products can

be improved to enhance their access to markets and income generation. In this scheme the

organization of producers is important, because most production is collected by aggregation.

There is a need to create solid farmers’ organizations linked to the market, to obtain better

commodity prices and farm income.

The level of farm income is usually a criterion to group producers for research purposes. However,

in many cases it is necessary to include other factors related (or in addition) to income. These

include land size, number of children, level of education and assets; they can be integrated using

cluster and principal components techniques. Figure 12 shows a summary of a cluster analysis of

communities in the Altiplano and Ecuador. The Altiplano community is grouped by area and

assets (animals: alpacas, llamas and sheep) and the Ecuadorian community is stratified by family

components (children) and assets (land area and animals: cattle and swine).

Figure 11.Schematic

representations ofoptimal

combinations ofproducts with

comparative marketadvantage based on

adequatetechnological

alternatives orinnovations

generated byresearch. (Adapted

by CIP-NRM fromINIA-PISA, 1993 and

PRODASA-CIP,1994).

Potato, P

Forage, F Cattle, C Sheep, S

Vegetables, H

Agricultural systems / family far

Trout, T Alpacas, A

Other, ot

Optimal combination

of production

alternatives

Quinoa, Q Analysis & Research

Technological alternatives

Farms productionsystems improved

Oca, O

F

C

A - S

F P

C - S

Q

O

F P

C

T

O

ot

Alternatives of Production

Potato, P

Forage, F

Cattle, C

Sheep, S

Vegetables, H

Ag

ricu

ltu

ral s

yste

ms

/ fam

ily

farm

Trout, T

Alpacas, A

Other, ot

Optimal combination

of Production alternatives

Quinoa, Q

Analysis & Research

Technological alternatives

Farms production systems improved

Oca, O

F

C

A - S

F P

C - S

Q

O

F P

C

T

O

ot



The categorization of farms allows a clear intervention on the way of producing the commodities

with main comparative advantages. The result is reflected in income, one of the main poverty

indicators. Table 2 shows the income range in the Altiplano (Ilave and Mañazo zones), from an

analysis of five components: crops, livestock, processing, labor off the farm, and external support.

The average daily gross income range is US$1.46–2.81 per day and, when expenses are deducted,

the annual gross margin is $US70–97, which puts these farmers within the category of ‘poor’

(World Bank, 2004). Consequently they have a very low or no level of investment.

+

Group 1

Component 1 (area and livestock)

Component 2 (Family; children)

Group 2

Group 3

- 2 - 1 - 0 1 2 3 4 5- 2

- 1

0

1

2

3

+ + +

++

+

+

+ +

+ +

+ + + + +

+

+ + +

+ +++

+ + + + + + + +

+

+ + + + + +

Component 1 (Alpacas) 0 50 100 150 200

0

100

200

300

400

500

Group I Group II

Group III

Group IV

B

+

Component 1 (area and livestock)

Co

mp

on

ent

2 (F

amily

; ch

ildre

n)

-2 -1 -0 1 2 3 4 5 - 2

- 1

0

1

2

3

+ + +

++

+

+

+ +

+ +

+ + + + +

+

+ + +

+ +++

+ + + + + + + +

+

+ + + + + +

Co

mp

on

ent

2 (a

rea,

ha)

A Figure 12. Schematic representations of categorization of farms in the Apopata community Puno, Peru (A) and Cañar, Ecuador. (B) by using principal component and cluster analysis. The Altiplano community shows four groups based on animals and area. The other communities were stratified by family (children) and assets including land area and animals. For each region or zone the classification of producers by type of group facilitates a definition of the beneficiaries, allowing clear technological interventions with selected technological alternatives adequate to their resources and products with comparative advantage. (Adapted by CIP-NRM from INIA-PISA, 1993; León-Velarde and Barrera, 2003).



1PRODASA–CIP, 1996; CIRNMA-CIP, 2004

Therefore, the approach was oriented to identify products with comparative advantage to

enhance farm income by improving crop and animal productivity and access to markets whilst

improving household health and nutrition. Figure 13 shows the biophysical components for

which research has generated technological alternatives adequate to farmers’ resources. Some of

the appropriate technological alternatives generated for the Altiplano are summarized in Table 3.

These technologies cause no deterioration of natural resources. There was a study on farmers’

assessments of these technologies (INIA-PISA, 1993) and the evaluation of the interventions was

reported by De Los Rios and Diaz (2003).

Methodologically, the application of the farming SAR&RD approach to generate technological

alternatives, besides a clear participatory process with partners, allows the introduction of

process-based simulation models and decision support systems. A step-wise description of the

Andean experience in systems analysis is presented in Quiroz et al. (2000). Simulation models

were used to select treatments for on-farm experiments, perform ex-ante evaluations of

technology options, conduct simulated experiments whenever biophysical or economic

limitations existed, understand the farmers’ rationale on specific production decisions, and assess

the sustainability of practices and options. The process, including farm interventions, is

conducted with full participation of farmers. Several examples are given elsewhere (Arce et al.,

Sources Range Contribution Income US$ per year %

Crops (potatoes, quinoa, oca, barley, others) 109 240 22.36

Livestock production 378 458 53.56

Processing (handicrafts, animal products, jerky, meat) 10 107 7.50

Migration and trading 0 60 3.84

External support (food aid, others) and credit - loan 37 162 12.75

Total gross income 534 1027

Expenses

Own consumption of products 240 393 45.41

Food and supplies 140 340 34.43

External support (food aid and others) 19 62 5.81

Other cash expenses 20 32 3.73

Credit -Loan 18 130 10.62

Total gross expenses 437 957

Gross margin 97 70

Table 2.Sources of income

and expenses intypical small farms

in the Altiplano.1



1994; León-Velarde and Quiroz, 1994 and 1998; León-Velarde and Quiroz, 1999; Quiroz, et al.,

2003).

Figure 13.Scheme of biophysical components for research interventions to generate technological alternatives adequate to farmers’ resources and production alternatives.

GRASSLANCROP

ANNUAL FORAGES

CROP PRODUCTION grains, tubers roots, others

ANIMAL

PRODUCTION

meat, milk, wool

fiber, others

MANURE

URINE

FORAGE

RESIDUES

POLITICAL DECISIONS Land Use

N-fixation Grazing

Transformation Market

CROP PRODUCTION grains, tubers roots, others

ANIMAL PRODUCTION meat, milk, wool

MANUREURINE

CROPS RESIDUES

SOIL NutrientsAvailability Losses through

Denitrification Drainage, others

INCOME Nutrition

and health

E N V I R O N M E N T

Transformation Market

FARMER DECISIONS

ANIMALS

FORAGE RESIDUES

FERTILIZATION Organic; inorganic



Alternative of production

Technological alternative Impact on traditional use Result

Potato Use of manure; decomposition/mud Compost from crops residues

Increase water retention and nutrient availability

14% increase on potato and quinoa crop rotation production; reduce the use of fertilizer by 30%

Use of bitter potato varieties clean of virus

Availability of healthy product and better quality

Increase of 20% on bitter potato production

On conventional production the use of improved varieties, and fertilizer NPK 80-40-80 or 40-20-00 per hectare

Increase quinoa production from 0.62 to 1.3 t/ha

Increase production by 110% and family income by 82%

Quinoa

Organic fertilization and use of biocides

Improve production to 1.1 t/ha and quality grain increasing demand for organic product.

Increase production by 77 % and family income by 84% protecting the environment

Oca Use of genetic variability and adequate storage (rustic shelter) of tubers combining with compost and organic fertilization

Increase quality product and production from 6.5 t/ha to 8.2 t/ha improving demand

Increase production by 34% and family income by 62%

Cattle Use of improved forages and forage conservation (silage and hay)

Increase forage production and availability Increase production by 35% Minimize climatic risk while maintaining production levels

Meat Milk

Forage budgeting; use of perennial and temporal forage base (improved pastures

Increase forage availability and weight gain Reduce age at first mating Increase milk production

Forage increment 38-96% weight gain increase 53% 18-20 months 45-75%

Use of aquatic forage; llachu-totora 0.584 g/day Increase income by 142% Use of shelter Climatic risk minimization; increase of milk

and meat production 53% on weaning weight 25-35% milk increased

Crops/ Greenhouses

Use of vegetables/ horticulture Potato 2.8 kg/m2 minimizing climatic risk on seed production Increase mixture of vegetables

Availability of seed for conventional production Improved the family diet and increase family income by 58%

Alpaca fiber Alpaca management production system; fiber-interchange of sires

Increase: Fiber production Birth weight Income (US$1980/year)

12-15% 18% 55–104%

Trout Use of natural and artificial ponds on alpaca highlands farms

New alternative and source of protein and family income

Improve availability of family diet and income

Use of floating cages and adequate feeding strategy and management oriented to intensify trout production

New alternative oriented to national and international market

Improve the trout farm and family income up to more than 300% by market articulation.


E V O L V I N G F R O M F A R M I N G S Y S T E M S R E S E A R C H I N O A M O R E

21

Production

Production

Animals Crops

Agricultural

practices

Storage

Self consumption

Sales

Processingand

Transformation

Market

Sales Planting

Consumption

Planting

Producer

Local market

Regional market

National market

International market

Post production Agro industries Market

Transformation

ConsumptionProduction

Production

Animals Crops

Ag

ricu

ltu

ral

pra

ctic

es

Storage

Self consumption

Sale

Processing andTransformation

Market

Sales Planting

Consumption

Planting

Producer

Local market

Regional market

National market

Internationalmarket

Post production Agro industries Market

Transformation

Consumption

It is clear that the implementation of technological alternatives requires a strong linkage between

production and consumption, where markets are important as the driving force of the farming

SAR&RD approach.

Figure 14 shows the components of this orientation aimed at improving production at low

production cost to generate a surplus. This includes an adequate process of transformation to

generate an added value product that responds to demand, which can be local, regional, national

or international. The production to market chain should be analyzed with respect to costs of

production and transport to the market. In some cases the processing should occur in other areas

with the infrastructure and marketing connections.

To complete the cycle of the farming SAR&RD approach (Figure 5), production programs must be

implemented. Without the implementation, the population benefiting from outputs of the

SAR&RD approach is limited to a small number of farmers, mainly those participating in the

process, as the dissemination reaches a very low percentage of the population. This is

exemplified in Figure 14. Note that since a long time is required to reach the total population, so

Figure 14.Schematic representation of the market oriented production by the farming System Analysis Research & Rural Development (SAR&RD) approach. Main components in the process are the production, postproduction agro industries and market. The system moves from a subsistence level to a market oriented one, responding to a market demand for products with comparative advantage but without leaving aside food security. Thus, a farm can gain one step in the intensification process while maintaining other products to complete an adequate level of family food intake.



Population

0.0

0.2

0.3

0.4

0.5

0. 6

0.7

0.8

0.9

1.0

0 36

Months

I

II

Prod

ucer

s; p

erce

nta

ge

18 2412

0.1

6

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0c

b

a

1

Pro

duce

rs; p

erce

nta

ge

2 3 4 5 6 7 8 10

)e(1b1eb

y tb0

tb0

t1

1

−−=

A

B

goal

objective

Population

0.0

0.2

0.3

0.4

0.5

0. 6

0.7

0.8

0.9

1.0

0 36

Months

I

II

Prod

ucer

s; p

erce

nta

ge

18 2412

0.1

6

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0c

b

a

1

Pro

duce

rs; p

erce

nta

ge

2 3 4 5 6 7 8 10

)e(1b1eb

y tb0

tb0

t1

1

−−=

A

B

goal

objective

immediate impact can be limited. The presented case on potato seed production in rustic

greenhouses involved the use of fertilizer and plastic, materials that negatively affected the rate

of dissemination of the technology after the project activities ended (SEIMPA, 1995). A similar

experience was documented for the commercial greenhouses producing vegetables in the

Altiplano (CIRNMA, 1999) and mixed forages in Carchi, Ecuador (León-Velarde and Barrera, 2003).

In the Andes, the possibility of initiating and maintaining effective production programs through

conventional means is very low (Figure 15). Local and national governments have neither the

level of financial support required nor the infrastructure to implement them. Innovative methods

Figure 15.Rate of technology

dissemination.A) Shows the potential

to increase the rate ofadoption by using a

participatory methodamong farmers; It is

more important the rateof communication than

the initial number offarmers adopting a

particular technologicalalternative; the use of

farmer collaboratorsand contests among

farmers contributes toan increase in the

adoption rate.B) Shows a particular

case study on rusticgreenhouses to produceseed potato; during the

first three years anaverage of 88% of the

objective (goal) wasreached, which

represents the 18% ofthe total population

(target). The questionremains on the

continuity of actions toreach the total

population; some casesdo not consider linkages

with other institutionsand the diffusion rate

decreased.



23

Private enterprise

Micro enterprise

Market

Nucleus of producers

Private enterprise

Association ofProducers

Micro enterprise

to attract producers and the private sector with cost-effective mechanisms to increase the

adoption rate of good technological practices are required. In addition to solving the productivity

problem other important issues must be included in the new paradigm: the protection of the

natural resource base, market competitiveness and the generation of rural income and

employment. Empowerment of farmers’ organization and participation of private enterprises

under well-defined market rules consolidate the impact at the farm and regional levels.

In this way, the integration of the knowledge and experience within the SAR&RD approach is

shown in Figure 16, which summarizes a representative scheme and results obtained in the

Altiplano, where a sort of activities were concatenated to achieve an impact at the regional level.

The defined objective to work from production to consumption, including products

transformation, created the necessity to promote capacities in a step-by-step mode. During this

time many projects with specific roles and locations were carried out, representing a continuous

line of action with several partner institutions, which contributed to attaining the objectives and

the goal of the research for rural development, creating producers’ capacity and linkages with the

private sector.

Creating producers’ capacity and linkages with the private sector for rural development.

The opportunity to expand the area of crop–livestock systems, thus increasing the size of

operations, can only be realized if concrete measures are taken. Given the circumstances, a large

challenge of the rural sector is the incorporation of underutilized land to increase the cultivation

Figure 16.Schematic forms of association of the small producers of products that have a comparative advantage.



Profit

Contractedfamily

work force

Resources soil, water,

energy

Weather

Family Regional

PRODUCTION

Technological Development (bio - physical)

Fixed assetsother inputs

EconomicalControl

Input Investment

DemandSupplies

I

N

P

U

T

S

P R I C E S

Local, market, regional Unsatisfiedneeds

Basic human needs Profit

ContractedFamily work

force

Resources soil, water,

energy

Weather

Family Regional

PRODUCTION

TechnologicalDevelopment(bio-physical)

Fixed assets other inputs

Economical Control

Input Investment

DemandSupplies

IN P U T S

Local, market, regional Unsatisfied

needs

Basic human needs

P R I C E S

area as well as to generate new jobs, protect natural resources and produce sufficient to

guarantee food security. However, the incorporation of new land is constrained by topography,

type of soils and water availability among other physical factors. Consequently, the discussion

about the evolution of agriculture should be focused on the economic competitiveness of the

crop–livestock production systems as compared with other ways of employment generation

(rural tourism, agro-industry, construction of roads, etc.) and other uses of natural resources

(protection of water sources, capture of CO2, construction of terraces, etc.). Thus it is necessary to

incorporate producers with the capacity to invest in efficient technological alternatives for

producing commodities with comparative advantages. This implies assessing the potential for

added value and generation of employment and income of different commodities. Figure 17

shows the relationship of production at different levels with the market demand (local, regional,

national and international).

The dotted area represents the link with the demand of products. However, the economic control

includes mechanisms of liberalization to support the primary sectors that are most affected. This

dislocation was so significant that none of the Andean countries have been able to allocate

enough resources to cope with those effects, leaving the mixed systems at a disadvantage

compared to other production systems (i.e. intensive production systems). Contrary to

expectations, the Andean countries increased their public expenditures creating fiscal deficits

Figure 17.Schematic

integration of natural resource

management with production,

income and market demand

regulated by economic

control and investment to

increase productivity.



25

that were impossible to handle rationally in the following years (gross domestic product debt

service increases from 1% to 6%). Consequently, limited resource availability makes the political

cost of investing in poor areas very high, drastically limiting government willingness to invest

directly to help small producers. Likewise, the pressures of the services and industry sectors

maintained the exchange rates below equilibrium level, in favor of imports of crop–livestock

products, showing a clear bias toward the consumers. With that exchange rate management,

public debt increased disproportionately and there were no possibilities of exporting crop–

livestock products. Other structures created by state modernization reforms were expected to

contribute to developing the agricultural sector, but have had limited success. The semi-fiscal

funds are interested in state-of-the-art technology and very few are willing to invest in

infrastructure and/or support for small-scale production systems and much less in mixed systems

(Estrada and Quiroz, 1999).

Nevertheless, through different projects the NRM Division of CIP is exploring the possibility of

bringing together the small producers and the private sector to invest in rural areas. The strategy

is based on the premise that there are low-cost, underutilized products with comparative

advantages. This is particularly true in areas of Peru and Ecuador. The following paragraphs

summarize what NRM/CIP is implementing in some areas. The main objective is to help the

producers solve their problems through sound management of natural resources, and for them

to achieve technical and economic efficiency and social equity.

There are producers, landowners and investors that want to enter in strategic alliances to ensure

possession of land and/or production of raw materials. However, under the current situation:

Few producers in different areas are keen to finance the establishment of a farming

business of necessary scale to guarantee adequate market price for their products.

The availability of land has been reduced, and the lack of income makes it impossible for

producers to accumulate capital to purchase more land and thus expand operation size.

With the current levels of unemployment the cost of capital has increased for the small

producer.

The government or private banks are neither willing nor have the available capital to

finance the establishment of rural micro enterprises, even if it is demonstrated as one of

the best investment alternatives.

With this scenario, one viable solution is to create groups of producers to promote commercial

alliances between farmers, entrepreneurs and large producers. These alliances should promote

the development of business capacity among the farmers.



There is a consensus on the need for making the change through strategic alliances. This

consensus is based on the required better administration, vertical integration of the production

chain, and agreements on prices in critical periods. An absolute necessity is to have objective

criteria to prioritize investment, so that it fulfills partners’ expectations.

Each member of the alliance plays a complementary role. National research institutions and

universities are important in technology generation. Non-governmental organizations, which are

in contact with farmers, contribute to the implementation of activities. In the Altiplano, CIRNMA

was responsible for creating the farmers’ associations and managing the credit fund. In this case,

the project provides technical assistance to farmers in the different stages of the research and

development process, including marketing of farm products. Farmers sign an agreement of co-

responsibility to pay the loans provided by the project through a voluntary credit scheme based

on revolving funds, oriented to facilitate access to markets.

Challenges for the Natural Resources Management (NRM) Division of CIP to reduce poverty

at farm level

The NRM Division conducts several projects in the Altiplano, which have activities oriented to:

Designing case studies within the project that would be attractive to farmers and other

actors,

Promoting the creation of farmers’ associations and a credit fund,

Creating a strategic alliance among producers and the private sector based on actual

revenues for all the partners,

Helping negotiate the financial support and link with the market,

Creating financial mechanisms that can stimulate participation.

To illustrate the work that NRM/CIP is doing we include a summary of the on-going program

“Poverty reduction in the high Andean region through the production, transformation and

marketing of agricultural products” (Figure 16). This program integrates several projects in a

horizontal collaboration manner based on the comparative advantage of each project, all

with a similar general objective. Thus, there is an integrated effort, pooling funds towards the

same objective to minimize transaction costs and conduct more activities.



27

Activities are based on the SRA&RD approach, which facilitates different types of associations

of small producers. Figure 18 summarizes three main types of association based on the

population of producers. From this population, one individual producer can create a micro

enterprise, such as the case of the dairy farmer who is now producing cheese. Also from the

population, a group of farmers could constitute a micro enterprise, which is the case of oca

farmers who now produce oca marmalade. Another type of association links a group of

producers with the private sector. This is the case of trout production, textiles (sweaters) and

other handicrafts. Table 4 describes the different stages of the production to consumption

chain for three products with comparative advantage in the Altiplano, oriented to different

markets. The table shows the gain that each segment obtains. The first step is to increase

production with low-cost inputs, which increases the producer’s income. This is facilitated by

technical assistance and supervised credit. The other stages add value through processing

and facilitate access to markets.

Watershed

GIS Remote Sensing

Agro ecological

Zones

Differences on Potential

Productivity Agricultural

Characterization

Models ofmarketing andtransformation

Standardize

AggregateValue

MarketingConnections

Normalize

Market Local

Regional National

International Differentiates

Products

Production Productivity

Nutrients Recycling

Livestock & current capacity

Lost energy

Varieties

Model Simulation

Organizationof producers

Actions

Offer ofvolumes of

products with comparative

advantage

• Capacity building• Consolidation of

organizations• Micro enterprises

IndividualCollectiveMixed (private)

M i c r o C r é d i t

Trout/jails

Technological Alternatives/Commodities

OrganicProduction

Greenhouses

Shelters

Cheese

Textiles

Silage -Hay

Processing

Fertilization

Irrigation

Integrate pest control

Production Consumption Transformation

Others

Watershed

GIS Remote Sensing

Agro ecological

Zones Differences on

Potential Productivity

Agricultural Characterization

Models of Marketing and transformation

Standardize

Aggregate Value

Marketing Connections

Normalize

Market Local

Regional National

International

Differentiates Products

Production Productivity

Nutrients Recycling

Livestock & current capacity

Lost energy

Varieties

Model Simulation

Organization of producers

Actions

Offer of volumes of

products with comparative

advantage

• Capacity building • Consolidation of

organizations • Micro enterprises

Individual Collective Mixed (private)

M i c r o C r é d i t

Trout/jails

Technological Alternatives/ Commodities

Organic Production

Greenhouses

Shelters

Cheese

Textiles

Silage -Hay

Processing

Fertilization

Irrigation

Integrate pest control

Production Consumption Transformation

Others

Figure 18. Representative results on the Altiplano, where concatenated activities were implemented for creating producers’ capacity and linkages with the private sector for rural development.



* Values between brackets indicate benefit percent ** Production obtained in transition to organic *** Cheese production; fresh cheese and cheese improved **** Production cost of a kg of Oca marmalade

A few lessons learned in the process

During many years of continuous implementation of different projects in the Andes some lessons

were learned and applied in the new agricultural project. Among them we can summarize:

The operational size of the participating farm is critical. The size should be as efficient as

possible to minimize fixed costs.

The geographical coverage should be selected to include as many small farmers as

economically viable. It is required that the alliance be effective in a great scope of action

without significantly reducing profitability. This is necessary so that the alliance can

select areas with biological potential that guarantees productivity and in turn includes

an adequate number of small farmers in areas where a large impact on environmental

externalities is expected.

It is of outmost importance to generate income in the shortest time possible. This is most

attractive to the private sector and ensures future investment that benefits a larger rural

population. Products with periods of less than 18 months of production have a clear

advantage.

Fast implementation should be a priority. To do this, the selected product should have a

consumer demand and be linked with private sector partners. Partners from the private

sector strongly linked to local, regional and international markets facilitate fast

implementation of the project.

Product Production Production Cost $/kg

Gate Price $/kg

Intermediary Marketing

$/kg

Agro Industry

$/kg

Broker; National

International Markets

$/kg

0.650 t/ha

0.30

0.34 (13%)

0.40 (18%)

none

none 1.300 t/ha 0.34 0.44 (29%) 0.50 (13%) none none 1.300 t/ha 0.34 0.48 (41%) none 0.8 (25%) 0.96 (30%)

Quinoa; Traditional Improved Organic** 1.200 t/ha 0.39 0.54 (39%) none 0.96 (23%) 1.13 (32%)

3.2 kg/cow 0.22 0.25 (13%) 0.31 (24%) 1.08*** 1.24 (18%)

-none Milk; Traditional Improved 5.8 kg/cow 0.15 0.25 (66%) none 1.96*** 2.48

(27%) 3.34 (24%)

Oca; Traditional

4.5 t/ha

0.16

0.19 (19%)

0.21 (14%)

none

none

Improved 7.5 t/ha 0.15 0.20 (33%) 0.24 (16%) 1.35****1.73 (28%)

1.97 (14%)

Organic 7.5 t/ha 0.22 0.30 (36%) none 1.35****1.73 (28%)

1.97 (14%)

Table 4.Improving

production andincome on each

segment ofmarketing

model applied inthe Altiplano



29

A very important part of the economic and social benefit is related to evolution of the

existing alliances. It is expected that the alliances by product should increasingly evolve

toward niches of poor population with environmental impact. Government is willing to

invest to achieve this change, whenever ex-ante analyses show the alternatives produce

a large total benefit (economic and social). Some products are more suitable than others,

but in most cases the evolution depends on the convening capacity and leadership of

the entrepreneurs and managing partners.

Timely investment is required. The long-term products that are those which currently

have better profitability are subjected to cyclic price fluctuations in both the national

and international markets. The profitability of the investment and the cash flows are

closely related with the time the activity is initiated, and as a result it should be regarded

as a key element to identify the niches of investment available in the Andean countries.

Defining the optimal time of investment involves a complex analysis that requires long-

term information and studies of cycles of production and prices. Entering in these

businesses without knowing these fluctuations in depth might make the difference

between project success and disaster.

Maintaining or creating rural employment, as investment necessary for generating

permanent employment is a major issue. Unemployment is one of the main problems in

rural areas and this indicator is valid for identifying niches where government

investment is more effective. There are good opportunities to invest in smallholders’

farms that could increase profitability in response to minor management changes.

Equivalent income of the producers that enter in the alliance: the shadow prices for the

farmers, adjusted for the costs of the basic services, would be an indicator of the regional

niches to which investment should be oriented. The shadow price of the wage is one of

the most decisive factors in the profitability of the alliances. The critical economic

situation in the Andean countries is making farmers enter in alliances where they

contribute labor for 12 months, without receiving a cash payment, expecting only the

income at the harvest.

Strategic alliances with the private sector require government funds to cover a percent

(around 30-40% of the total amount required). To achieve this, projects must include

governmental priorities such as generation of rural employment or the protection of the

environment.

The fund should be initially managed by the private sector and then transferred to

farmers. The process should include the training of farmers in managerial skills.



Alternative financing sources for small producers. Large export companies have access

to credits, provided the government policies are clear and stable; therefore, they will be

able to atract new capitals.

CONCLUDING REMARKS

The challenge to rural agriculture in the Andes is no longer limited to productivity. Other

elements such as global competitiveness, the conservation of the natural resource base, and the

generation of rural employment, among others, are becoming more relevant. These changes

imply that the scientific community must also evolve to provide the answers needed by the rural

farmers.

Research based on farming systems analysis, oriented to rural development, is an approach that

has contributed to overcoming limitations in the productivity of rural farms. Some of the tools

introduced through this approach, such as systems analysis, have been instrumental not only in

solving local problems but also as a repository of knowledge management systems. The

information and knowledge generated in a specific environment can be encapsulated,

transported and adapted to other situations thus minimizing the cost of searching for specific

answers.

Due to the localized impact of the technology generated and validated following the farming

SAR&RD approach, new complementary methods with more participation of other actors –

policy-makers, NGOs, groups of farmers, private sector, etc. – have been tested. The paper focuses

on examples where the so-called more holistic approaches are being tested. All cases are highly

participatory without free-gifts to farmers. Farmers must pay their way to solve their problem. In

both cases systems analysis tools have played an important role. In the first case, the models built

were used to show to the national institutions and donors the expected feasibility of the project

under the SAR&RD approach. In the case of scenario analyses, it had to be very convincing for the

private entrepreneurs to buy-in. We strongly believe that more holistic approaches are viable

with good scientific backstopping, and that those more holistic approaches, formerly known as

production programs, are a necessary complement to SAR&RD.



31

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CIP’s MissionThe International Potato Center (CIP) seeks to reduce poverty and achieve food security ona sustained basis in developing countries through scientific research and related activities onpotato, sweetpotato, and other root and tuber crops, and on the improved management ofnatural resources in potato and sweetpotato-based systems.

The CIP VisionThe International Potato Center (CIP) will contribute to reducing poverty and hunger; improvinghuman health; developing resilient, sustainable rural and urban livelihood systems; andimproving access to the benefits of new and appropriate knowledge and technologies. CIPwill address these challenges by convening and conducting research and supportingpartnerships on root and tuber crops and on natural resources management in mountainsystems and other less-favored areas where CIP can contribute to the achievement of healthyand sustainable human development.www.cipotato.org

CIP is supported by a group of governments, private foundations, and international andregional organizations known as the Consultative Group on International AgriculturalResearch (CGIAR).www.cgiar.org

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