incagro converting ideas into values

8/14/2019 INCAGRO Converting Ideas Into Values

1/36

INCAGRO

Converting Ideas into Values

To survive in the current environment, agricultural producers must optimize results

and add value. The only way to add this is through innovation. To innovate is toconvert ideas into value. The ideas that people generate.

Jos R. Benites and Hugo WienerINCAGRO

Lima, October 2008


2/36

2

Executive Summary

Nearly eight years have passed since the Peruvian government with the support of theWorld Bank began the project PIEA INCAGRO of the Ministry of Agriculture thathas the objective of establishing a modern system of science, technology andinnovation, decentralized, plural, and oriented by demand and leadership through the

private sector.

Since 2001, INCAGRO has shared innovative experiences with thousands of producers,research organizations, private sector civilian organizations, professional organizationsand successful companies in the country. With these alliances, INCAGRO has

performed co-financing to the order of $ 36,000,000 to make more dynamic the systemof agrarian innovation (livestock, agriculture, fish farms, forest grazing, forestry andothers). All these sectors have to do with the great limits that still exist that Peru be

ranked not only as a producer of food in the world but also with potential as anagricultural exporter of competitive strength.

This challenge has not been easy but the strategy used to generate incentives that thevarious agents participate and make the innovative system dynamic have been the majoraccomplishment of INCAGRO.

As is well known, one of the accomplishment of INCAGRO has been the advancedinstitutional development which has defined clear playing rules in fomenting the wide

participation of producers, businessmen, NGOs, state organizations and internationalinstitutions which have animated or reanimated agrarian innovation in this country. On

the other hand, among the strengths of INCAGRO stands out the quality of theprofessionals joined with INCAGRO who daily bet on an innovative nation with greatethical value and respect for the rights of their countrymen who every day assume therisks which the country and its surroundings generate.

INCAGRO, with a modest number of decentralized professionals throughout the 24regions of Peru, has managed to anticipate the new policy of decentralization and hassuccessfully provided co-financing for more than 500 innovative projects. These

projects have animated the principal agricultural and livestock activities of the country.Main promoted products were asparagus and other food crops; mango, avocado, grape,

banana, chirimoya and other fruits; coffee and cacao, native potato and tubers such as

sweet potato, milk derivative products such as from ranch vicua and sheep, fiberderivatives from alpaca and vicua, guinea pigs, forest products and other species ofhigh value in developed countries.

Currently, INCAGRO continues to co-finance innovative projects but with a focus moreoriented to the development of added value and the associated training to guarantee thesustainability of the competitive capacity of the country.


3/36

3

Introduction

Innovation and competitiveness, the challenge of Peruvian agriculture

Throughout the world there are millions of people acting on their own behalf or

organizationally, determined to sell to others the fruits of their labor. To do so, they areconcerned with obtaining products at the lowest possible cost, because they have a

better quality, because they are more quickly available or because they look better to potential consumers. They all know they are not alone or cannot be alone for long inthe markets and for this reason must better their goods and services offering more valuefor a lower price. This is the great benefit of competition and this is that supports andreinforces people to innovate; it is the lifeblood, the sustenance essential to reachcompetitiveness and success in everything. The globalized world we know could not beso without having accelerated these processes and driven forward the ingenious person.

In the field of agriculture, to treat with the most basic of the means of humansubsistence, competition is even more intense. The efforts to raise the performance and

productivity were the standards, which marked the Green Revolution. Today, withnew concepts regarding the sustainability of agricultural systems and the environment,with the search for healthier and more diverse products, with the demand forcertification of processes and products, new and ample challenges and opportunitieshave opened for innovation and competition.

The place that Peru occupies in the international context in the coming years will beowed in great measure to the administration of its commercial opening to the rest of theworld but in a very specific manner: the offering of products and services of quality,

certified and competitive.

In recent years, production and especially export of agricultural products has had anotable growth. The re-conversion today in progress means greater volume but morethan anything greater value-added and greater product knowledge. In a word:innovation.

The increase in the relative prices of commodities and, in general, of agricultural products, is an opportunity to invest in technology and innovation which permits asustainable development for thousands of producers in the field.

To confront these challenges a new agricultural policy for the country has defined sixmain strategic ideas: (1) agricultural innovation; (2) access to markets; (3) agriculturalinformation; (4) agricultural capitalization and insurance; (5) water management; (6)rural development,

The strategic idea of agricultural innovation leads directly to agricultural modernizationand competitiveness. The definitions of this point have been united in LegislativeDecree 1060 that regulates a National System of Agricultural Innovation as a group ofinstitutions, principles, standards, procedures, techniques and instruments throughwhich the State can promote and develop the activities of research, training andtechnology transference in the area of agriculture.


4/36

4

The Ministries of Agriculture and Education, the Agricultural Health Service,applications of both regional and local governments, universities both public and

private, private businesses dedicated to agricultural activities, agro-industrial andtechnological development, agricultural producers organizations, legal entitiesconnected to agricultural research and training and INDECOPI (to assist in the

protection and announcements of intellectual rights in agricultural matters) allcontribute. Furthermore, the National Institute of Agricultural Research (now the

National Institute of Agricultural Innovation) has been designated the governing entityof this system.

This article seeks to explain the importance of agricultural innovation andcompetitiveness in Peru, using as reference the world environment as well asendogenous factors. Likewise, it describes how INCAGRO, imbued with this delicateresponsibility, promotes a culture of quality and the emulation which strengthensscientific research, technological development and the joining of forces oriented toinnovation and competitiveness in Peruvian agriculture.


5/36

5

Concepts and Principles of Innovation,

Competitiveness and

Competitive Funding

Concepts and Principals of Innovation and Competitiveness

Innovation is an essential component for the production and competitiveness of farmersand of agro-industry. This produces innovation in processes, in products and in themarket.

To innovate is to transform knowledge into money; to research is to transform moneyinto knowledge. Innovation implies change but not all change is innovation. When thechange is valid, you have welcome and demand in the markets and, therefore,

innovation.

You innovate to compete with better advantages in the market but also to offer publicgoods with a better cost effectiveness relationship. Innovation can be based on theresult of scientific research about processes or the attributes of a product, or about neworganizational arrangements that optimize production, management or administration.But there are innovations which have little or nothing to do with technical or scientificresearch but which refer to the form of organization of the production or distributionchain or the presentation of the product.

Innovation comes to a head when a good service allows better satisfaction of a need,

whether for better production, more quality such as flavor, fragrance and color, betterresults in the pot, packaging that protects the nutritional content, a commercialarrangement for distribution that better serves the consumer or a cost system that allowsone to establish more attractive prices. Though innovation is related to research, theyshould not be confused because they are different and fulfill distinct roles.

INCAGRO is -- day to day -- one of the principal animators of agricultural innovation.Even though its resources are modest, the project has arranged through strategicalliances that other entities seriously assume the work of research and innovation, suchthe demand for quality services. It has significantly contributed to the development ofthe associability of producers, to empower them as executing entities and leaders in the

contracting of services for innovation. Thanks to it, for example, more than a thousandorganizations have formulated - together with their allies business plans detailing theservices required to develop such plans and at least a third of them have put their plansinto action.

The procedures which INCAGRO uses to activate an innovative system are totallydistinct from interventionist schemes employed by other national programs in variouscountries in this region and throughout the world. INCAGRO administers and managescompetitive nature to co-finance innovative projects and to sponsor strategic alliancesso that innovation (the conversion of knowledge into money) will be attractive for allwho participate in a business, including the nation of Peru.


6/36

6

Competitiveness

Competitiveness and innovation are every day more closely associated. Day to day noproductive activity can be competitive -- that is to say, continuing to attend to a market-- if it does not constantly renew itself in answer to the expectations of the consumers or

users be they people or businesses and if it does not incorporate new knowledge.All nations which have prospered in the last 50 years have invested in education,science and technology for innovation. There is no exception to this rule.

Competitiveness always depends on value which adds to knowledge and, therefore,helps to construct a system of innovation which has as its goal to accomplish saidcompetitiveness. The answer is oriented to demand through a decentralized system andleadership through the private sector. This is a theme which, as you can see in theexperiences of other nations, requires reconsideration at the end of which MINAGthrough INCAGRO, plays the most strategic role, inducing the demand for certaininnovations.

Competitive Funding

Competitive funds to finance innovative projects have various decades of antecedents,but recently, at the end of the 90s, have been viewed with increasing interest, especiallyin the field of assignment of public funds for technological development, particularlyfor research and extension of the service of agriculture and ruralness.

For competitive funding understand a quantity of financial resources assigned to helpspecific initiatives, resources for which distinct social actors can compete, adjusting to

specific rules of the game, expressed in the terms of reference of a public and openannouncement.

In the operation of competitive funding to co-finance innovative agricultural projects, aseries of principles have been agreed on such as the following: transparency, inclusion,synergy and technical rigor. Transparency in the access, assignment and use of publicresources. Inclusion of all public actors who wish to participate in competition for thefunds ensuring that there are compensatory elements to overcome inequalities and reacha better fairness of assignment in regional terms or for segments. Synergy betweenactors who work in teams and add value to their contributions, mutually reinforcing andcomplementing their strengths. And technical rigor in the selection and prioritization

of the proposals with the most merit, those which should be complemented withtechnical rigor in their follow-up and evaluation.

Among those instruments which have been shown to contribute to the effectiveness ofthe operation of competitive funding have been: a) the open and public announcement;

b) a focus of demand or conditions which assure that they take in the demands orexpectations of the actors; c) cooperation among consortiums; d) the free agreement ofthe proponents; e) the qualification and prioritization by panels of independent andhighly qualified experts; and f) the management of the fund through a directive bodywith wide participation of civil social actors, honorable and competent in the materialwhich corresponds to the nature of the projects.


7/36

7

The project as a unit of analysis and execution

The unit of analysis and execution is the project. In a competitive funding scheme, theapplication of financial resources can operate as well for projects stimulated by demand(from below to above), for offer (from above to below) or through combinations of both

forces.

The project is a coordination and promise of different sectors. In this they try to definehow joining will occur, for example, between the actors in the productive chains anddifferent organizations and regional and local, public and private programs.

The projects are qualified by panels of experts of specialists who regulate the terms ofreference and make comparable their qualifications through the application of explicitcriteria.

For the qualification and prioritization of the projects, the expert panels apply theirexpert judgments with a base scale equal for all projects for each announcement. Thescale has to have been approved previously by the directive body of the fund. In thisscale, the relative emphasis regarding distinct criteria must be expressed in the form of

points. The scale can vary from one announcement to another, but in search oftransparency, must remain immutable within each announcement competition.


8/36

8

The INCAGRO Model

INCAGRO has contributed to a modern, plural decentralized system of agriculturalinnovation, in accordance with the demands of a vigorous and growing competitive

sector, succeeding in the implementation of efficient and transparent processes andmethodologies.

Through the rigor of its performance, it has created within the sector the capacity toprepare quality projects, canalizing external resources. Furthermore, it has consolidatedits credibility with all actors in the sector (public and private institutions, academicorganizations, the private sector and producers of little resources) bringing together their

participation.

The projects co-financed through INCARGO propose to achieve changes in the incomeand economic level of the lives of producers. With its intervention methodology, it has

promoted hundreds of networks among producers, universities, businesses, and localand regional governments; it has made links between offers and demands for innovativeservices which are the institutional fabric which agriculture requires to better itscompetitiveness and to create a great movement toward innovation. It has enrichedregional competition to invest in specialist training in projects which accompany theorganizations during execution of the projects.

The social construction which INCAGRO has and continues to contribute to since itscreation eight years ago is the cement in a national system of agrarian innovation.The relations among producers and with technological service providers are the essenceof the system of agrarian innovation.

In summary, INCAGRO has been successful in the establishment of a new focus ofagrarian innovation. It has developed a model without antecedents in the country whichhave been replicated in others areas of the government and even the AgricultureMinister has created various funds for the promotion of scientific and technologicalresearch for productive innovation and to help businesses to which INCAGRO has

provided assistance for methodic development and for administration.

Forms of INCAGRO Intervention

INCAGRO has intervened centrally through three competitive funds: The Fund for theDevelopment of Strategic Services (FDSE); The Agrarian Technology Fund (FTA);and The Fund for Awards for Quality in Innovative Projects (Moray).

The execution of these projects and the evaluation of their results is part of a complexsystem of accompaniment developed by INCAGRO to promote thematic and regionalcooperation and the diffusion of experiences through which these are thus replicable.The Fund for Awards was set up in that sense: the recognition of achievements reachedand the contribution of the solutions to problems to the betterment of competitiveness.

The general strategy of INCAGRO is summarized in Figure 1. INCAGRO offers co-

financing for specialized services to the end of fomenting competitiveness throughFDSE and FTA. In the first case it generates public goods through applied basic


9/36

9

research projects and training for competition. In the second case, it promotes profitable businesses through extension services and adaptive research. In this form,INCAGRO seeks to contribute to the services market, training development and thecreation of networks.

Figure 1. INCAGROs Strategy

The INCAGRO ModelCo-financing Innovation services

FTA for competitiveness FDSEAgrarian Strategic Services

Technology Fund Development Fund

Approve Business Generate Opportunities

Opportunities

Projects Projects

Table 1 Types of Extension Projects 2008Type Product Market Type of Product Type of Activity Type of

Organization of

Producers

Number of

Producers

I External

(export)

For Export or

chains of

Exporters

Farms, livestock,

agro- industry,

forestry, fish

farming

Allowances for

100 or more

producers

II Internal

(national market)

For bread basket

(vegetables, fruit

and other

products)

Farms, livestock,

agro-industry,

fish farming

Legal model

which best

adjusts to the

form of work

Allowances for 75

or more

producers

III External or

Internal

diverse Farms, livestock,

agro-industry,forestry, fish

farming and

rural crafts

Preferably

peasantcommunity,

organizations for

natives and

women

Allowances for 30

or moreproducers

Product: Profitable Business Product: Public Good

Public Competition

EXTENSION

SERVICESAVAILABLE

SPECIALIZED

KNOWLEDGE

ADAPTATIVE

RESEARCHSPECIALIZED

KNOWLEDGE

TO ADAPT

BASIC AND

APPLIED

RESEARCH

TRAINING FOR

COMPETITION


10/36

10

Project Cycles

INCAGRO has two responsibilities in the cycle of the projects which it supports. Thefirst is to select those proposals which have during the previous evaluation shown themost promise and innovation. This evaluation is entrusted to a technical evaluation

panel (PET) formed of specialists from outside the program. However, INCAGROpersonnel intervene in the selection process monitoring the work of the panel providingcomplimentary information and, eventually, historical information regarding the

proponents and the theme. Finally, in this phase they negotiate the contract todetermine a common agreement with the project proponents, the critical course forestablishing a sequence of indicators which in the next period act as instigators or

persuaders.

All of these are incorporated into an annual operative plan when the project extends for

more than one year. INCAGRO defines it as such from the beginning and focuses onresults and impacts.

Once there is an agreement of co-financing and expected results as expressed in theintermediate and final indicators, INCAGRO accompanies the execution process,disbursing in sections promised resources based on verification of technical advances ofthe project in the first term.

The concept ofaccompanimentunderlines the sense of identification with the seekingof the project objectives. INCAGRO recognizes that projects fail or stray from theirobjectives, not reaching their own objectives.

To this measure, the Program is co-responsible for the achievements and failures and inthis it is understood that it should lend maximum attention to the indicators in thecritical phase which constitute early warning signs to begin corrections in execution.

For this consideration as for the high cost implied in the selection process, INCAGRO isreluctant to close projects other than when conditions of execution do not permit one tovisualize the desired achievement or when there is a diversion in the use of resources tothe advantage of institutions or personnel.


11/36

11

Figure 2. Project Cycle

Basis and Notification

Closing Profile

The growth of INCAGRO supporting subprojects with both funds can be appreciated inFigure 3, the most obvious being the expansion of projects in the years 2006 and 2007.

Figure 3. INCAGRO Expansion 2001-2007

ProjectCycles

Number of projects assigned by Contested Fund

Final Evaluation

Project

Business Plan

Experimental Plan

Quality Control

Technical and

Financial Follow-up

Contract

Subscription

Technical Panel

Evaluation

Disbursement

Negotiation and

Awarding


12/36

12

In Figure 4 it can be seen the number of types of projects is extremely great, but almost27% of the resources have been assigned through FTA for agricultural projects.

INCAGRO - Ministerio de Agricultura

MINAG-INCAGRO-FASE II :

Distribucin de categoras por fondo concursable

FTA-Agrcola,S/. 27,596,702, 27%

FDSE-Recurso naturalrenovable,

S/. 3,597,880, 3 %

FDSE-Plantas y fibrasindustriales,

S/. 6,736,241, 6%

FDSE-Pecuario y acuco la,S/. 15,269 ,207, 14%

FDSE-Cultivo industrial, S/.4,424,981, 4%

FDSE-Cultivo alimenticio,S/. 16,165,403, 15%

FDSE-Bosquesamaznicos,

S/. 3,097,947, 3% FDSE-rboles frutales, S/.8,070,802, 8% FTA-Ecoturismo,

S/. 232 ,725, 0%

FTA-Pecuario,S/. 12,395,678, 12%

FTA-Artesana,S/. 1,059,140, 1%

FTA-Forestal,S/. 532,612, 1%

FTA-Acuicultura,S/. 2,240,649, 2%

FTA-Procesados,S/. 4,596,622, 4%

INCAGRO shows as one of its achievements its contribution to the development of theinstitutionalism of a scientific, technical and innovative agricultural system for thedevelopment of the capacity and maturity of services for agriculture. However, it hasrecognized that its accomplishments in each of these aspects require betterdocumentation.

In relation to the service market, INCAGRO should be creating bases to stimulate thedemand for services to support solutions to the fixed needs explicit in the business

plans. For its part, the offer has been given on the regional level although it recognizesthere is a way to better the quality of its services.

Associativity and Strategic Alliances

One of the most important factors in the strategy of INCARGO has been associativityand strategic alliances. 67% of the FTAs projects have been based on strategicalliances. Another aspect emphasized in INCAGROs strategy it that it is contributing

to the awareness of ecosystem stability as an indispensable element of lastingsustainability. In similar manner, it has given a significant response to the demands of

Distribution of categories by Contestable Fund


13/36

13

traditionally marginal groups like peasant communities, native communities andwomens organizations; to date 21% of the projects in the second phase are managed bythese groups.

INCAGRO has valued the importance of depending on a network of these allies which

participate greatly in the processes of formulation as well as in the implementation of projects. The portfolio of allies is approximately 500 persons and organizations.Through these links, AGRORED PERU has built a place for the meeting of innovatorsand researchers who share common challenges.

In Peru the focus of food farmers has extended and enthusiasm for agricultural productexport has grown. Taking into account the chains which MINAG promotes and giventhe potential of the agricultural exporter, INCAGRO has supported diverse initiativeslinked to chains for the national markets as well as for export.

Difficulties of the INCAGRO Model

The work of INCAGRO has not been without its difficulties, as well as for its ownstrategies and modus operandi as for other external factors. For example, INCAGROshows among these difficulties the weakness of the producers organizations, whichretards the executions of their projects; the difficulties in achieving financing for fixedcosts and complimentary investments, which inhibit a more extended adoption ofinnovations; the high levels of informality in agriculture which makes difficultaccreditation of the organizations as businesses; the still low level of knowledge ofdigital media, the limits of public information systems and others which offerinformation about business opportunities.

As reflections and themes which should be taken into account in the revision of itsstrategy, INCAGRO points to fragmentation, dispersion and educational level of the

producers organizations while at the same time maintaining interest to assure theparticipation of those groups most excluded. The growing opening of commerce whichoffers opportunities, but for which it is indispensable to have more and betterinformation regarding the markets, goods and technological services as well as the bestdiffusion of successful cases of innovation. In its operational strategy, INCAGROrecognizes the importance of considering decentralization, the role of the allies and thestrengthening of the producers organizations.


14/36

14

Participation in the Innovation of Private

Businesses, Unions and the Public Sector

To make possible the innovative processes in the chains and in specific territories in thelong run, it is important to take into account the role of at least four groups of actors: a)the private businesses that are in the business of agriculture as either providers or usersof technological goods; b) the organizations which invest to generate technologicalgoods and services; c) the unions; d) the State entities which support the process.

In the case of private businesses which participate in the generation of innovations,there are few, but it is necessary to document them. These include businesses which

produce or acquire potato or corn seed, nurseries, which produce and freeze semen and

embryos. It is here it is necessary to put more attention because private investmentmust be greater and at the same time serve to motivate the growth of businesses in thearea of innovation. This requires incentives and a framework of protection of propertyrights which causes more innovative businesses to penetrate especially the area oftaking advantage of biodiversity and biotechnology. The market for the goods theygenerate should be valued on an international level. In the same way that Peru is a greatimporter of technological goods for agriculture, it could, on the other hand, be anexporter.

With respect to organizations which perform basic research, we emphasize theuniversities and some institutes. It is in general there that the generation of knowledge

and formation of highly specialized human resources are centered. Their role has beenvery important but they now require a substantial renovation to the tune of a nationalcontext with more institutional actors, new opportunities and requirements and aninternational context. The principal change must focus on valuation of technologicalgoods resulting from research and experiment. In this sense it is important to find anequilibrium between public good and those which, for their characteristics, should bestrategic goods. The second change must give long range administrative aspects toinnovation chains. In this territory, the universities and research institutions such asIIAP, IVITA and some experimental stations of INIA have great potential. There must

be a search for opportunities to construct international alliances for them.

The support of the producers unions for the generation and transference of technologywas very important many years ago. But public policies discouraged these initiatives.The weakening of the unions has been massive. Some union organizations aredeveloping the investigation and transference of technology (asparagus, avocado, etc.).It must be recognized, however, that some unions are more interested in market researchand the seizure of technology for which they have international links. The role ofunions has a great potential more than in other areas to include their associates forinvestment through self-taxing and through paid services. Without these resources it isnot feasible for them to have neither adequate performance nor the right to demand.The Boards Regents can become involved in research projects like service centers onthe valley level, creating transferable and easily replicable technological options.


15/36

15

With regards to the support of public institutions, note that there exists a great dispersalof forces among entities which apparently have the same objectives but which do notcompliment each other. The vision which prevails among State entities is to attenddirectly to the producers instead of creating a critical mass of actors who could delivergoods and services. In this area massive changes are needed. On one hand, the State

should maintain its support for basic research with preference for those programsadequately oriented toward processes of innovation and not for researchper se. As analternative to public extension, the State could subsidize those producers with greatereconomic limits to acquire services, but the offer cannot be directly from the State

because it would be expected to be free and this creates dependence and is notsustainable.

In addition to the measures needed to democratize the benefits of innovation, the bestsupport the State could give with clear standards is to penalize corruption and piratingand would be a substantial force to correct informality. These are the conditionsnecessary to increase private investment in innovation for the long run.

The role of the State, which has been retiring from the direct offering of services for private actors in agriculture, has not always fulfilled the function of facilitator of thedevelopment of the market for goods and services. This has resulted in the market, formany technological goods and services, for innovation and administration, has beenlittle developed. In other cases these markets have developed notable when there has

been a growth of demand in some significant form, because there have been forceswhich encouraged, for example, the demand for quality control services for exportgoods.


16/36

16

Strengthening the Market for Innovative Services

To refer to the market of goods and technological services and of administration foragriculture and agro-industry implies recognition of the existence of specializedmarkets, for specific goods, for example, for specific seeds, or for laboratory service orveterinary service or for the certification of processes. It should be recognized that ineach case the market forges an answer to a demand and that the respective offer isdifferent according to geographic spaces, production chains and segments of actors.The markets of technological goods and services have a very differentiated developmentlevel, very dynamic for the asparagus sector in the central coast or the rice in the coastand the jungle and very little developed in the alpaca herder sector of the southernmountains.

Two active processes have had an enormous influence on the development of themarkets for goods and services that support agricultural innovation and agro-industry inPeru. On the one hand, gradual changes, although not always well oriented, regardingthe role of the State, and on the other, globalization. In this sense, the decision of thePeruvian State to retire from the provision of services gave cause to private businesses,

NGOs and unions to enter, although timidly, in the offering of services to farmers. Thetimidity was due, in part, to the fact that the State maintained some level of delivery offree technical assistance services with special projects. In other cases, the State retiredin an orderly manner and accredited other actors to offer services, as in the case ofvarious services in the areas of sanitation.

The Peruvian experience regarding actions to foment a services market for agriculture isstill beginning. Between 1993 and 1999 the FEAS project was implemented in themountains; its objective was to foment the technical services assistance market to attendto the necessities of producers in the mountains. A short while after the close of the

project, neither the majority of the micro-businesses which had been helped nor aneffective demand for technical assistance services had been consolidated. The cases inexception were those of micro-businesses offering veterinary services, which had the

peculiarity of offering services that solved problems. Many of the lessons learned inFEAS were used to advantage in the MARENASS project.

In the case of PSI, the component PERAT promoted the creation of a demand and theability to offer technical assistance services for irrigation. The program depended ondirect subsidies and State support for its promotion. In this case also there wasinsufficient advance in the development of the market for technical assistance servicesfor irrigation.

The most recent experience, that of INCAGRO, shows that a temporary direct subsidyon the part of the State and the demands of the co-financing of the interested partiesachieves agreements between offerers and demanders of research services, technicalassistance and training. However, it cannot yet be affirmed that these organizationsoperate within the frame of genuine relations of the market for specific services of

research and technical assistance. This appears to be a gradual process which should beconducted between those who require the services they seek for themselves and pay the


17/36

17

estimated cost of the offerer or even better when various offerers compete for clients.This is already given in some cases when the service shows its effective contribution toresolve concrete limitations.

The fundamental processes activated for the development of the services market have

unchained a series of processes aligned with the objectives and mission of INCAGRO,which are enumerated below:

a. Confidence to encourage service businesses. The projects co-financedby INCAGRO constitute important steps in the establishment of confidence between offerers and demanders, which require a service market for goodfulfillment and consolidation.

b. The coming together of offer and demand. The FTA strategy was topromote reduction of the breach in the market of intervening services: a) aprocess of bringing together demanders (producers organizations) and thosewho offer technological services, of administration and marketing, beingthose organized producers who seek allies and offerers; b) participation of

the projector, who acts as an ally of the producers organization,materializing in the form of the project the demands of the last and concurscompetitively.

c. Separation of offerers and demanders. The separation of demanding producers and technical offerers is a basic principal of the services marketand strategic alliances lead the producers to assume responsibility for the

project and, like real clients, choose the offerer with the best options in valueand price. Additionally, celebrating the contract with INCARGO, anorganization avoids the influence of the technology of the offerer andconfirms the independence of both actors which the services market requires.

d.

Organized producers, innovation and local development. It is notfrequent in this country that producer organizations and agricultural businesses invest in research for innovation. But the tendency is for theassociations of small farmers to do so more frequently. Adaptive research isrevealed to be the nexus between the market demand and the generation ofscience and technology for the science of research, development andinnovation. The absence of adaptive research generates enclaves whereinsome businesses import technologies without sharing them or developinglocal capacities.

e. Regional priorities, competitions and the new business culture. The principal crops and attentions prioritized by regional governments to

encourage agricultural development coincide with projects co-financed byINCAGRO and are an expression of the real abilities of producersorganizations and entities offering technology. Additionally, these have

been the winners of public competition (something not publicized in thiscountry). They elevate significantly the guarantee of the investment of thePeruvian State funds. The investment in these subprojects is confirmed byformal transactions registered by SUNAT.

f. Empowered producers innovate and manage agro-business. The producers organizations have invested in their formalization to lead thestrategic alliances and conduct their own projects, which permits them tocontract for specialized services, activating the service market. These

organizations have contracted with entities offering technology and expertsin the required services. This unprecedented process has been selective and


18/36

18

despite being a first experience, has shown that the producersorganizations have used entities which offer technology (generally NGOs).

g. Empresarial attitude and strengthening organization. To conduct andadminister their own projects , the strengthening organization hasdemonstrated that the rendition and vigilance over the quality of technical

and financial execution of each project is in direct relation to theDecentralized Unit or INCAGRO and the producers organization. Thestrategy of FTA can construct the real business practices the producersorganizations need to respond to the tendencies and forces of theenvironment.

h. Regional competition and basic and applied research. The key problemsof regional competitiveness come in the reception of projects of basic andapplied research. The evolution of institutional and professional competencein the ability to compete has permitted the co-financing of subprojects ofresearch in themes which affect the regional competitiveness.

i. Additionally, we have in line a system of competitions, the decentralizationof execution and the national technical evaluation panel guaranteeing the

presence of evaluators in the majority of the regions of the nation.


19/36

19

Follow-ups and Evaluation of Results and Impacts

For follow-ups on the projects, INCAGRO established that each of them according to

its particular characteristics be organized in critical steps which are periods comprisedamong one or more intermediate relevant results and whose fulfillment describes theroute of impact created in the project design. For the recovery of this information,INCARGO designed a system of digital formats denominated Technical FinancialReports (ITF) which are structured through the indicators critical steps and the goals ofthe execution of the activities included in the operating plans of the project. Thisinformation system also permits the reprogramming of activities and to include baselineand exit information which are then stored in the Administrative Information System ofINCAGRO.

This follow-up and evaluation system is focused on results and these describe an impact

route. Promoting the best sustained and accumulative in provision of co-financedprojects in the manner of these supplies lessons to the gathering of actors in the systemof science, technology and agrarian innovation. In this manner INCAGRO promotes,among the actors of the system, shared criteria of efficiency, feasibility, or, moregenerically, quality in the execution of their activities.

The performance of the projects is evaluated not only with relation to their specific proposals but also with respect to other similar projects, thereby establishing andenvironment of emulation, cooperation and learning subject to public vigilance.Beginning with the follow-ups and evaluations of the projects, they identify standardswhich give account to the best practices, the diffusion of themselves and theirrecognition, establishing better indicators through the selection of the proposals more

promising at the moment of assignation of resources whether they be from the privatesector or public.

DocumentationAll the critical processes of the project cycle have been adequately documented. Youcan cite the following documents:

1. the technical and financial proposal which for part of the Awards Contract asan annex.

2. the act of negotiation including critical steps.3.

the Base Line, established at the beginning of the project.4. operation plans.

5. technical financial reports which are presented at each critical step. This isan electronic format which arranges specific sections for the INCAGROevaluator. These should be accompanied by physical documents,

publications, articles, photos, videos or other materials.6. the Exit Line, done at the end of the Project.7. the Closing Report is done by the strategic alliance and can eventually

receive the advice of INCAGRO or of consultants.

Changes in activities such as revision of goals and objectives are authorized by

INCAGRO when they are sufficiently substantiated in a manner which gives theexecutors sufficient flexibility to adapt to changing environments.


20/36

20

The last purpose is to diffuse the information and access to the knowledge. In this wayINCAGRO understands that the private benefits are converted into public benefitsavailable to many and this graphs mainly as information patrimony which is the mostvisible form of a system of science, technology and innovation. In this orientation,

INCAGRO does not only manage all aspects of the competitions through Internet, butalso its web page publicizes the information regarding advances in the projects and allthe relevant publications they generate within the concept of the Open ArchiveInitiative.

Evaluation of the INCAGRO Project

Evaluation of the impacts of the INCAGRO Project is in process. To evaluate theimpact at the level of the clients and users of the diverse services of the program,estimations have been made of economic impact, adoption rates and distribution byregion and by user type to analyze the distribution potential of the benefits generated by

INCAGRO. Thus we can analyze the economic surplus at the national level and bydepartment where results of the program are occurring. It is possible that specific

projects co-financed by INCAGRO have benefited regions of the country that were notconsidered in the execution. If this is the case, we must say that these regions have

benefited from spillovers or effects that overflowed from INCAGRO.

The cost-benefit analysis or profitability of the INCAGRO interventions will be realizedcalculating the flow of net economic benefits, which is to say, deducting from therealized economic benefits the annual investments made, annually. In the constructionof the flow of net benefits, we use as a unit of measure the units of economic benefit perhectare, discounting the participation of temporary partners, multiplied by the sum ofannual rates of estimated adoption at the level of each of the regions where the programhas intervened. In the analysis of the profit for the investments of INCAGRO, threeindicators have been used: the internal rate of return (TIR); the benefit/cost ration(B/C); and the actual net value (VAN).

As for the analysis of the sustainable social impact, the impacts of determined factors ofincome levels of beneficiaries according to the profile, the change in employment level,the impact on the organization and associativity of the producers and the change in thequality of employment will be considered. Another indicator considered very importantin the evaluation of social sustainability or fairness is what is referred to as the

conditions or labor relations on the farms and other segments of the productive chainaffected by the program.

An analysis of the environmental sustainability impact will also be done. Thedifference between this and the economic evaluation is that the evaluation ofenvironmental impacts derived from scientific and technological development issomething very recent in the context of studies of impact at the level of agricultural andlivestock research.

As for the contribution of technology, the indicators of technological efficiency usedare: the use of agro-chemicals, the use of energy and the use of natural resources. The

use of agro-chemicals includes: a) the use of pesticides evaluated for the alteration (dueto the application of technology) of frequency, variety of active ingredients and toxicity


21/36

21

of the products; and b) the use of fertilizers, evaluated for the alteration in the quantityof water-soluble fertilizers, liming and micro-nutrients applied as a consequence of thetechnology being evaluated. The use of energy includes the change in consumption ofa) fossil fuels (expressed as combustible oils, gasoline, diesel fuels and mineral coal), b)

biomass (expressed as alcohol, firewood, cane shuck, vegetable remains), and

electricity; the use of natural resources is evaluated in terms of the necessity, imposedby technology, of water for irrigation and processing, and dirt for planting.

In addition to the analysis of the profitability of the INCAGRO investments and thesocial and environmental sustainability, other impacts are measured and analyzed basedon reports to be collected according to the themes and sub-themes specified in thequestionnaire.

The analyses should seek to identify the role of INCAGRO in the strengthening of thesystem of innovation and regional development (changes in the organization andcoordination of the regional systems), in the scientific and technological development

and the generation of innovation in the agrarian sector (changes in capacities), in the propensity for innovation (changes in the degree of interest in innovation), in thecompetitiveness of producers and in the changes in the services market for technologyand innovation (volume, diversification and quality).


22/36

22

INCAGRO in the Regions and the Cities

The territorial dimension

Agricultural innovation develops in territories and these are organized into regions andlocalities. It is there where we find the producers and all the actors directly involved.That is where it is necessary to form and consolidate networks to generatecompetitiveness in value chains regional clusters.

Happily, Peru is advanced in its process of regionalization. Regional and localgovernments have resources from various places. In some cases we have registeredimportant participations regarding these resources in the financing of agriculturalinnovation. It is foreseeable that these participations will increase. INCAGRO hasdeepened its relationships with these instances of sub-national governments. For this,the Decentralized Units are adequate, with strengthened capacities and with specific

mandates in this area.

Decentralization toward the regions and the cities determines the possibility of a newdevelopment strategy which comes from below, impelled by the same local actorswhich tries to activate the existing potential in the territory and avoid dependence oncentral decisions. In this situation, the role of the institutions, public and local private,and their ability to implement a politic of this type, means the real possibility ofconfronting the restrictions on employment and the low quality of life which haveaffected the majority of regions with new politics of local development whicheffectively articulate the trio: territory, innovation and competitiveness so they reflect amajor penetration into the regional and national space.

The importance of the territorial focus

The territories of all of Peru are generous and offer a rich diversity of landscapes andresources inhabited by people of many cultures expressed through their cuisine, theirfolklore and their ancestral traditions. A territory includes the familiar undertakingswhich always combine the ancestral systems of elaboration with advanced productiontechnology combining tradition and science. Local actors are also components of aterritory the State, businesses, workers, academia who are that which identify the

potentials and the needs of the territory as regards its productive development.

The long term success of territorial management is determined by:Knowledge of the territoryLinks with industries and consumers (market niches)Relationship with science, technology and innovation (available options)Leadership and social cohesion (underlying social mobilization)

In a regional or municipal territory, the Title of Origin constitutes a key instrument thatgives recognition to many products which enjoy special characteristics and which alsoaccount for market potential. In Peru, despite a wide biodiversity, there exist only two

products protected by a Title of Origin: pisco, which was the first to be so protected,

and now the giant white corn from Cusco and thus their profitability.


23/36

23

Other products with the potential for Title of Origin are pallares from Ica, the ceramicsof Nazca, the cheese from Ambar, the tiles from Ica, ceramics from Chulucanas 42 andMaca. Also: cheese from Cajamarca, filigree from Catacaos, flat engraving fromHuancayo, ceramics from Quinua, ceramics from Pucar, pottery from Simbil, olivesfrom Acari and Yauca, tapestry from San Pedro de Cajas, alfajores from Lambayeque,

coffee from Convencin, coffee from Chanchamayo, coffee from Canchaque, orangesfrom Palpa, hot chocolate from Cuzco, among others.

The Role of INCAGRO

INCAGRO is better attending the uncertainties distinguished in a country with greatinternal diversity through competitions for the presentation of regional projects withterritorial focus, through chains or problems. For the identification of particular themesand for a relationship with the actors of the local innovation system, INCAGRO usesregular consultations.

The systemization of processes, results and impacts at the level of the region are anadditional medium to mobilize innovative actors and to replicate experiences, creating agreater density of intervention areas, better complementation between projects and

better relationship on the local level.

Since 2006, INCAGRO initiated an aggressive functional decentralization. This beganwith transference of follow-up work which currently is completely in the hands of theDecentralized Units. Additionally, INCAGRO has transferred the substance of thecompetitions process, especially the crucial stage of contract negotiation, the moment inwhich the critical steps are elaborated. These negotiations are carried out as closely as

possible to the actors (in situ) to avoid intervention of service providers or managers.

Knowledge

Information

Evaluation

Following up

Support

Projects

UPS

UPS


24/36

24

The goal which INCAGRO pursues is that innovation and competitiveness are thefundamental axes of the policies of the regional and local governments and that for theirimplementation the regional governments agree with the creation of innovative andcompetitive units within the structures of the regional and local governments. Thisdecision should serve to analyze the adaptation of the territories to new agricultural and

industrial technology situations must be an effective instrument for planning. Activatingand making competitive territories through interaction, mobilization and regulation ofagents, resources and infrastructures. On the other hand, they must be distinguishedfrom thesuppliesor political measures which the agents and administrations carry outand which are products of the system which are objectives within reach. Thus, aninnovative of competition system is that which shows abilities to acquire somesuccesses which guarantee a better standard of living for the society.

INCAGRO Contributions

AGRORED Peru

Agrored Peru is a tool in the Internet for the diffusion of information about Peruvianagriculture. It has generated great hope and enthusiasm among public and privateentities which wish to see such information gathered and presented in an orderly mannerfor the search engine. Until now it has given transcendental steps to articulate anextensive net of entities of the private agrarian sector, academia, development

promoting NGOs, unions and producers organizations, agricultural serviceorganizations and others throughout the country. This is a great opportunity toconsolidate the cooperative inter-institutional force which is reach for maturity.

This tool packages perfectly the priorities of the new agrarian policies of MINAG andspecifically attends to one of the central objectives of the National System of AgrarianInnovation which was established to promote the interchange of information between

public and private entities about their respective programs and research projects in thearea of agriculture to the end of facilitating general coordination of scientific andtechnical research in said area (Number 8.2 of DL 1060 which regulates the NationalSystem of Agrarian Innovation). This is just what permits AGRORED PERU.

Other private andpublic organizations

Researchers and

academic sector

Ag. PublicSector


25/36

25

Projects for competence training for extension agents

In the projects for competence training for extension agents, the impact should bemeasured in the field and the population attended, not in the total amount of knowledgeacquired by the extension agent. Many of the training projects financed by INCAGRO

have components of extension practice and are clearly focused beginning with thedemand which facilitates the application of the method described, realizing a previousevaluation of the effectiveness of the training for the extension agents to establish thecausality of the events.

Awarding quality in agrarian innovation projects

Since 2007, INCAGRO has depended on a new tool to promote innovation. In this casealso there is a Competition for Quality in Innovative Agrarian Projects. The awardsgranted in this competition are provided by the Awards Fund MORAY. They areassigned annually by means of the competition on a national level.

The Awards Fund defines as Innovative Projects those oriented to the creation,development, validation, use and diffusion of a new product, process or service. Theinnovation includes knowledge, technological goods, processes, changes in the forms oforganization and administration, quality control, marketing technique whose productsare accepted in the market but calls for projects which have ended a term of existenceand have accomplishments to show. In this way, the society recognizes their efforts andawards them. Also, this diffuses these accomplishments like the Memorial Competitionin 2007 and makes possible that other people are encouraged to participate and emulatethe successes.

INCAGRO: the farmers partner

INCAGRO in seven years has accompanied and accompanies the initiatives and dreamsof 36, 749 producers throughout Peru. Of them, 7,015 cultivate the parched lands of thecoastal border with crops like hard yellow corn, legumes. Rice, asparagus, artichoke,

paprika or fruits such as mangos, grapes, olives, bananas, avocados, tangerines andother citric fruits and others which each day acquire more importance in the country andin the world market.

Rising to the mountains, in the valleys and buttes of the Andes, in the high plains where

all the conditions are harder and the restrictions more severe, INCAGRO has come toagreements with 12, 543 peasants who cultivate these lands raise potatoes, white corn,cereals like quinua and kiwicha, where herdsmen raise alpaca and vacunos, sheep andcuyes or who work in the manufacture of fine handcrafted textiles or who comparatively

produce the protein food of the Incas, the charqui, and other native species which areonly produced in the Peruvian Andes like maca and other species which are open to theexport market.

In the extreme east of the nation, from the high jungle to Amazonian plain, INCAGROhas associated with 17,191 producers dedicated to the cultivation of coffee, cacao, sachainchi, camu camu y aguaje among other crops, breeding and adequate management of

the biodiversity sui generis of the Amazon region which is categorized as one of the


26/36

26

most diverse in the world and to which INCAGRO contributes to the nationalutilization.

In all 222 associations or producers committees, 48 producers and service cooperativesand the respective centers, 10 peasant communities and 51 business organizations

among businesses, associations or agrarian service businesses have participated activelyin the activation of the strategic services of the agrarian sector of the country. Theseorganized forms administer a range of services for 40 transitory crops, 26 permanentcrops, 10 types of animal farms, 11 types of fish with either closed or controlledgrowing areas, 18 activities of transformation or service. In this extensive list isincluded the principal products of agricultural export, the most important chains ofagricultural foodstuffs, the traditional food crops and some of the examples of the mostnotable of the organic production such as mangos, bananas, cacao and the biodiversityof flora and fauna.

INCAGRO has not only worked with producers with initiatives which contract

extension services, but has also supported research for added value. It has amplified theknowledge in the genetics and characterization of alpaca and sacha inchi, both natives toPeru. It had developed varieties of better production and less susceptibility to plaguesand diseases of legumes, grains, tubers and other crops oriented for the local market andfor export. It has contributed to the adaptation of crops or new agro-ecologicalconditions as in the case of long fiber cotton, sweet potato and grape, the identificationof plant-attacking insects as well as insects useful for the biological control of fruit

plagues and forest species which enables the free commerce between Peru and othernations which register phytophagous and insects; to the specialization and diffusion oflivestock growers for milk production and rabbit species with better characteristics andselected offspring in agreement with characteristics in demand both internally and forexport; a new presentation of traditional products such as coffee and cacao which have

been revolutionized in the last decade in the Peruvian position in world markets, thedevelopment of organic agriculture and the diffusion of good practices to farms,livestock growers and manufacturing, obtaining products which are harmless andhealthy and which do not only open new markets for national products but also positionPeruvian products among the most competitive in the world context.

Producers organizations, associates of INCAGRO, have been the central protagonistsin the development of innovative services. They have shared in and exploited the workof agrarian researchers, they have directly contract extension services to innovate the

form of cultivation and raise species which have a market demand, presenting betterproducts not only to traditional markets but also to specialized markets. In addition to partner, INCAGRO has fulfilled a role of promised friend to reduce the uncertaintywhich traditionally accompanies the man of the countryside.

Peruvian farmers have gained much in their competitiveness. Notable examples areofferings of organic coffees and specialty coffees; organic cacao and bananas; the

production of potatoes to include native varieties for the snack industry; artichokes,avocado, peppers, piquillo, paprika, Andes cereals, camu camu, cheeses, Guinea pigswith special cuts, etc.

In the world environment, the most dynamic innovative sector is the cultivation ofvegetables and fruit, expressed in the betterment of the lives in the most prosperous


27/36

27

societies and an important segment of emerging economies. The most prosperousfarmers are those of vegetables and fruit.

There is room for differentiation and this is important for a country with tremendousdiversity such as Peru, where areas for large scale production are limited. In other

words, we distinguish products of agricultural origin or we condemn ourselves to lowprofit margins.

The numbers talk

After almost eight years of operations, the principal products and results can besynthesized into the following global ciphers which refer to the subprojects co-financedduring the period 2001 2008:

a. Between 2001 and 2008 we brought about 57 different competitions on thenational level. Said competitions have promoted the development of the

services market not financial for the agrarian sector of the country, focusingon the co-financing of subprojects of strategic research, adaptive research,extension agent training through competence training and subprojects forextension.

Agrarian TechnologyFund

Strategic ServicesDevelopment Fund

TotalYear ofCompetition

ExtensionServices

AdaptiveResearch

StrategicResearch

ExtensionTraining

2001 3 3 1 1 8

2002 3 3 1 1 8

2003 2 1 1 1 5

2005 1 1 1 1 4

2006 3 1 1 1 6

2007 18 6 1 1 26

total 30 15 6 6 57

b. Between 2001 and 2007 INCAGRO has received 2468 project profiles ofproposals for innovative agrarian technology projects in the entire country. The profiles

and proposals which the diverse regions of the country presented in 2007 tripled thenumber registered in 2001, which reflects how INCAGRO has mobilized the privateand public capacity to activate the innovative system in the country.


28/36

28

DemandsCompetitionYear Extension

servicesAdaptiveResearch

StrategicResearch

ExtensionTraining

Total

2001 64 35 94 73 266

2002 86 33 8 18 1452003 160 32 26 75 293

2005 237 78 140 29 484

2006 246 29 93 56 424

2007 418 74 266 98 856

Total 1211 281 627 349 2468

Judged

2001 18 9 14 1 42

2002 8 9 7 7 31

2003 28 7 6 9 50

2005 20 9 21 7 622006 120 14 32 15 181

2007 136 22 19 12 189

total 330 70 99 51 550

c. in the eight years of operation, INCAGRO judged through the competitionsand for merit 550 innovative projects. Said projects mobilized the investmentof 43.7 million dollars, of which INCAGRO supported 23.1 million. Thisrepresents co-financing of 52.8%.


29/36

29

CCIE

IASE

Fase 1

Fase 2

43.4%44.5%

61.5%

67.8%

47.5%

43.2%

53.8%

51.2%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

Aporte de INCAGRO

13.0

30.7

4.9

16.8

8.1

13.9

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

Millones

Total FDSE FTA

Monto de proyectos (Millones US Dlares)

Fase 1 Fase 2

Pro ect Amount Millions USD

INCAGRO Contribution

d. On the average, to activate the agrarian innovation in the nation, for everydollar support through INCAGRO, the executing entities (strategic alliances)have supported 0.92 dollars. This reflects the strong engagement ofmonetary participation as well as no monetary of the entities which executethe projects following a policy of co-financing to develop new knowledgeand, when that exists, to transform knowledge into money (innovation).

e. Between 2001 and 2008 38,347 producers have become involved as clientsof the services of projects which INCAGRO judged.

INSERT TABLE

f. 2697 extension agents have been formed or are in the last stages of formationthroughout the nation who were trained through extension agent training

programs following the methodology for competence.g. Hundreds of strategic alliances have been promoted between service

provider businesses, NGOs, government entities and formalized producersassociations which have fomented strengthened associative experiences to

obtain the advantages of a scaled economy in a nation where the producersof low and medium scale predominate.

7,332

7,739

298

6,352

8,497

3,834

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000

Investigacin Adaptativa

Sin diferenciacin

Huchuy Ayni

Tipo I

Tipo II

Tipo III

Productores clientes de serviciosProducer Customers of Services

No differentiation

Adaptive Research


30/36

30

h. The projects which INCAGRO co-finances promise an agricultural andlivestock area of approximately 130,890 hectares. It is estimated that thelivestock areas involve some 98,500 head of cattle, andean camels andswine.

i. The average investment was $516.42 for extension services per producer, theinvestment of the adaption of technology rose to $995.41 per producer andthe investment for the formation of extension agents was $1576.17 per agent.

j. The projects co-financed by INCAGRO have achieved a good level ofempowerment for the executing entities. To date, 435 different executingentities execute or executed the subprojects in the nation. 239 projects wereor are conducted by formally constituted associations or committees of

producers, 49 projects were or are executed by cooperatives of producers, 11 by peasant or native communities, 47 by businesses or organizations ofdifferent agricultural businessmen, 83 by different NGOs, 108 by differentresearch institutions, 34 by eight universities in Lima and 34 principally forstrategic research by 6 universities in the provinces.

k. In the mountain has concentrated the greater amount of projects co-financedby INCAGRO (45%), followed of the jungle (34%) and the coast (21%).


31/36

31

l. The total investment of the innovative projects in the mountains was 14.5

millions of dollars, in the jungle it was 17.9 millions of dollars, and on thecoast it was 11.2 millions of dollars. Of the total amount co-financed byINCAGRO for subprojects of innovation, 34.3% was oriented to projects inthe mountains, 39.6 for projects in the jungle and 26.1% for projects on thecoast.

Entidades de investigacin

Universidades, 34

IIAP, 16INIA, 25

Ins. Investigacin,

28

Entidades de servicios

Emp. Agrarios, 51

Comunidades, 10 Cooperativas, 49Org. productores,

224

Otros, 14

ONG, 74

Organizations of ServicesService Organizations

Research Organizations


32/36

32

Distribucin de productores clientes por regiones naturales

Costa, 16.7%Selva, 49.5%

Sierra, 33.8%

Distribution of producing clients by natural regions

Jungle,49.5%Cost, 16.7%

Mountain, 33.8%

53.3%

29.0%

5.0% 4.8% 4.4%2.5%

1.1%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Agrcol

a

Pecuari

o

Agroindustr

ia

Acuicultur

a

Artesanayturismoru

ra

Foresta

l

Rieg

oyclim

a

Actividades de proyectosActivities of projects


33/36

33

m. The producing clients of the projects in the mountain range add 13.107, injungle 17.592, and coast 8,041.

n. the client producers of projects in the mountains were 13,107, in the jungle17,592 and on the coast 8,041.

o. In accordance with the non exclusive categorization of projects, 41% of themwere for export products, 24% for products of biodiversity, 15% for sensitive

products, 12 for organic products, 10.2% focused on production chains, 2.1%the incorporation of good practices, 5.1% dealt with sanitation and 5.1%dealt with genetic engineering.

p. Additionally, 65% of the projects dealt with technologies for development of production, 23.4 dealt with product improvement, 14.5% dealt with betterpresentation and 9.3% dealt with agro-industry.

q. We have executed or are executing projects in all the departments of thenation. However, the investment has been most notable in the departmentsof Junin, San Martin, Huancavelica, Puno, Piura, Lambayeque, Cajamarca,Lima, Loreto, Arequipa and Huanuco. INCAGO invested 13.5% of the

resources in the five poorest departments (Amazonas, Apurimac, Ayacucho,Huancavelica and Puno). Said investment was 3.2 millions of dollars.

r. In the same way, in Huancavelica there are 43 producers associations whichhave executed or continue executing co-financed projects for INCAGRO; inPuno there are 30 executing associations; in Junin 22 associations and inPiura 19 associations. In Junin 17 producers cooperative participate infomenting the improvement and competitiveness of coffee and cacao.

s. The projects co-financed by INCAGRO deal with or dealt with 94 differentcrops, 27 types of livestock growers including fish farming, 19transformation products or sub-products and 19 forest or pasture species.

t. The facts before expressed are referents or indicators which serve for anappreciation of the generation, activation and mobilization of the agents,technologies and products which have a determined effect on the system ofinnovation in the nation. For this reason, there is currently and evaluation ofthe impact INCARGO has had in the fomenting of capacities of innovationtaking as examples the achievements of the sub-projects.

In particular, signs of INCARGO support:

a. its contribution in the creation of a service market around agrarianinnovation bring providers and producers together, interesting research

groups, consultants and NGOs to the resolution of problems of productchains, privileging the mobilizing factor of the demand,b. its capacity to identify relevant actors in agriculture and livestock innovation,

promoting its capacity for formulation and execution of projects. Itscontribution to the entire and the collaborative action among universities,

public and private research centers, NGOs, producers organizations andregional and local governments has been significant, the evidence being theestablished alliances and the sub-projects executed together.

c. The promotion of associativity and the process of the formalization ofproducers organizations.

d. The support of resources for the mobilization of established but under usedcapacities.


34/36

34

e. The demonstration of the viability of co-financing on the part of the privatesector through actions of research and transference.

f. The constitution of networks of actors which permits the interchange ofinformation and experiences, the identification of common problems and theundertaking of shared projects, as evidence being the constitution and

functioning of AGRORED Peru; andg. It has gained the recognition of the agrarian sector for its manner of rigorous,

objective, participative functioning submissive to social control. INCAGRO,as a project of the Agriculture Ministry, impulses the productivereconversion of the nations agriculture. It has animated the services marketfor innovation and strengthened producers organizations which demandthese services.

From the institutional point of view, it is notable that INCAGRO:

a. has contributed to decisions of the Agriculture Minister which lead to thestrengthening of the policy of technological agricultural innovation. withinthe process of restructuring the sector, it has initiated the reorientation of theINIA toward innovation and its future conversion as a promoter andcoordinator of the National System of Agrarian Innovation (DL 1060);

b. it impulses and has compromised the regional governments of the nation inthe promotion of agrarian innovation as part of the regional policies. Thishas been realized through conventions and involvement in the projects andactivities which INCAGRO co-finances. Also, it has compromised manylocal governments as co-financers and collaborators of projects whichINCAGRO pushes.

c. The experience of INCAGRO in competitive funds administration and theprincipal instruments managed through the program, has been very useful tomany institutions projects of public investment, generating an importantsavings in the development and implementation of projects and decisions. Inrespect to this: i) the transference of experience, the institutional knowledgeand the important administrative instruments to FINCYT: all themethodology of competitions and the evaluation of proposals has beentransferred to said Fund; ii) the transference of the project administrationinformation system (SIGER) to MARENASS (allied project); iii) thesupport given to PROSSAMER in the elaboration of it institutional operativemanual; iv) the transference to PSI of the administrative information system

for projects (SIGER), v) the support to DGPM/MEF in the design ofadministrative instruments and the evaluation of technological innovationprojects; vi) transference of the methodology of competitions for innovativetechnological projects to the Program Sierra Export;

d. The strengthening of the formulation and administration of projects of R & D+ 1 of important institutions such as INIA, IIAP, the Agrarian University ofthe Molina, the Private University Cayetano Heredia, among others. Thishas permitted many of these institutions to positively qualify in the FINCYTcompetitions with amounts superior to those which finance the program and

better notably its efficiency and effectiveness in the administration ofprojects of science and technology;

e. INCAGRO Phase II, has participated in the elaboration of the first study ofthe prospects of what it has done in this sector, generating an institutional


35/36

35

know how which should translate into an improvement of the quality ofstrategic administration in this sector and certainly to a government level;

f. INCAGRO has been a substantial factor in the formalization of hundreds of producers organizations on the national level. All the institutions whichhave participated in the INCAGRO competitions have been supported in

their formalization and are currently entities registered in SUNAT andSUNARP;

g. The strengthening of the associativity between producers associations hasbeen a very important activity of the program;

h. INCAGRO has permitted that the technology services market be sociallyactivated. On the one side we have producers who have increased theirdisposition to pay for innovative services and better their knowledge ofregarding their needs and about the offer of regional services for innovation.On the other, we have improved the qualifications of important service

providers through training programs which focus on competence. Thisreflects a betterment signifying the quality of the services for innovation in

agriculture in many regions of the nation;i. It has designed and implemented an administrative information system for R

& D + 1 projects which monitors the projects from presentation as proposalsin the competition phase until the execution and closing in theaccompanying phase. Today we find a phase of technological realization.

Conclusions


36/36

INCAGRO could continue managing public funds with international cooperation,programs of business responsibility, of producers union self-assessment.

There exists much hope, optimism and confidence. The bases have been set and have begun to change the focus of the producers. Today there exist many organized

innovative groups. They are present in an awakening of research in the universities, inthe consolidation of the research programs of INIA, IIAP and the conversion of NGOsinto research entities and in the articulation of innovations.

A new public institutionalism with a subsidized role is needed, a catalytic agent andpromoter of the State and a firm decentralization of the decision making process.

The competitive funds for the co-financing of projects for agrarian innovation are one ofthe systems used by various nations to strengthen research and technologicaldevelopment in agriculture and natural resources.

This is not a panacea for all problems. As a consequence, its establishment mustfunctionally deal with each specific situation.

incagro converting ideas into values

Documents