Challenges and opportunities of family farming in Peru
June 23 , 2021
Family farming is one of the most widespread and important economic and productive activities nationwide, not only because of its contribution to the Gross Domestic Product, but also because of the number of jobs it generates, as well as the food and nutritional security it provides. Within the framework of the "Día Nacional del Campesino" (National Farmers' Day), Angie Higuchi, professor of Business Administration at Universidad del Pacífico, and Daniel de la Torre Ugarte, researcher at the UP Research Center, reflected on the challenges and opportunities of the activity.
Family farming, according to the definition adopted by the Food and Agriculture Organization of the United Nations (FAO), includes family-based agricultural activities, that is, those managed and operated by a family and which depend mainly on family labor (men and women), including forestry, fishing, pastoral and aquaculture activities, in addition to agricultural production.

In Peru, according to the Ministry of Agrarian Development and Irrigation (MIDAGRI), family farming contributes 5.3% of the Gross Domestic Product (GDP). Likewise, according to the National Household Survey (ENAHO), family farming employs 83% of the agricultural workforce, around three million people, and generates 80% of the food products consumed in the national market (Gestión, 2019). Similarly, in our country, the number of producers amounts to 2 million 181 thousand 977, of which 64% is located in the highlands. "Family farming is important because it produces the highest percentage of the food products consumed in the national market and provides a lot of employment in the agricultural sector. Thus, its economic, social and, above all, food and nutritional security importance for Peruvians at the national level is highly significant. Basically, if there were no family farming, we would not be able to feed ourselves adequately or in a balanced way all the time, every day of the year," said Angie Higuchi, professor of Business Administration at Universidad del Pacífico. Despite the importance of family farming, there are a number of challenges and adversities it faces, such as climate change, vulnerability (especially in the case of women farmers), limited access to credit and financial services, the absence of young people in the countryside, who prefer to migrate to large cities, etc. (Comunicación Formagro, 2019). In Higuchi's opinion, there is ample room for action on the part of the State to close the gaps that exist in small-scale agriculture, such as creating a regulatory environment towards the advancement of food security and nutrition for Peruvians and the importance of the link with family farming. Similarly, to generate the conditions for commercialization, such as access to markets and road infrastructure, and to have an integrated information system for decision making. "Fieldwork for land titling has to be emphasized. This can help farmers access credit. In addition, there is no information system nationwide where there is cross-referencing of information, which should also include the producer's DNI, information on whether they own or rent the land, whether they still carry out ayni or bartering, etc., with disaggregated data with sub-items that allow for a more precise identification of the members. This has made it impossible to correctly identify these farmers who are in poverty or extreme poverty and address their problems," Higuchi said. In the same vein, she also highlighted the importance of policies to promote the consumption of Peruvian organic products in order to promote higher-value crops that justify the costs of revaluing environmental sustainability, biodiversity and culture. On the other hand, she pointed out that, on the part of farmers, the main strategy to close gaps is associativity, since this allows them to enter their products into a market that demands volumes, allows them to access credits and financing, as well as training for productive purposes, quality techniques, finance, costs, access to markets, among others. In addition, associativity allows them to better manage logistics, since it gives them access to machinery, which they could not afford on their own, and to transportation to collect and ship production in volume to markets. Effects of Covid-19 on family farming Regarding family farming, Daniel De la Torre Ugarte, researcher at the UP Research Center (CIUP), said that different types of family farming can be identified, depending on their characteristics, such as the size of the farm, the altitude at which they are located, the technological level that characterizes them, among others. In this regard, he pointed out that, following the work carried out by Héctor Maletta (2017) using the National Agrarian Census (CENAGRO) 2012, four categories of Small Family Farming can be identified: Substandard (614,969), where the level of production does not allow them to reach a standard of living above the extreme poverty line; Subsistence (975,809), where the level of production allows them to generate a level of income that allows them to be above the extreme poverty line, but does not allow them to generate savings to increase their standard of living; Intermediate (426,092), where they can generate a moderate income above the poverty line, but run the risk of falling into poverty in the years of low agricultural income and do not have much savings capacity; and Surplus (112,853), which includes those who can achieve a standard of living significantly above the poverty line and have savings capacity. "The bulk of substandard and subsistence Family Farming has seen their income reduced mainly due to the restrictions imposed on economic activities outside agriculture, since it is from these activities that they generated a significant part of their income. The impact on intermediate and surplus farms may have been less significant, since agricultural activity remained open, albeit with difficulties, during the pandemic; they may have had to use their savings and the challenge is whether they have enough capital for this year's sowing," said the CIUP researcher. The next Government's priorities to promote family farming Among the main challenges family farming faces is access to credit or financing for agricultural campaigns. In this regard, Higuchi said that a medium-term solution would be to evaluate a credit against agricultural pledge, since farmers in many cases do not have a property title, in order to prevent them from resorting to informal financing, which charges very high interest rates. In turn, De la Torre Ugarte stressed the need for decent work alternatives in rural areas of the country for those who depend on additional income to their agricultural production. On the other hand, he agreed with Higuchi that it is necessary to increase the level of income from agricultural and livestock activities, through increased productivity and increased demand; especially the linking of family farming production to export activity, added De La Torre Ugarte. "Substandard and subsistence farming units require multidimensional State intervention. In other words, an agricultural policy or intervention from MIDAGRI is not enough. A coordinated intervention by MIDAGRI, PRODUCE, MIDIS, MINCETUR, Education, Transport and Communications, Health, Culture, among others, is needed to generate greater job opportunities and raise the level of human capital of household members. While it is true that social programs are an important mechanism, this cannot be permanent," said De la Torre Ugarte. On the other hand, he said that MIDAGRI needs to carry out comprehensive and not isolated interventions. As an example, he said that credit expansion should be accompanied by the availability of improved seeds, better inputs, technical training, market expansion, by bringing the producer closer to the domestic market, as well as the sophistication of the final product to generate added value. "Within all this is the recognition of the real capabilities of the public sector to provide all these services. The human capital existing in MIDAGRI or Regional Governments is good, but it is not enough to face this challenge alone," he concluded. Reference: Comunicación Formagro (2019). "La agricultura familiar: retos y posibilidades". Extracted from: Eguren, F. y Pintado, M. (2015). "Contribución de la agricultura familiar al sector agropecuario en el Perú". Centro Peruano de Estudios Sociales. Editor CEPES. ISBN: 978-9972-722-25-7. Gestión (2019). "Agricultura familiar y pobreza rural". Instituto Crecer (07/03/2019). Maletta, H. 2017. La pequeña agricultura familiar en el Perú. Una tipología microrregionalizada. IV Censo Nacional Agropecuario 2012: Investigaciones para la toma de decisiones en políticas públicas. Libro V. Lima, FAO.



Latest news
The webinar "Formalizar para crecer" (Formalize to grow), organized by Universidad del Pacífico and the World Bank, served to discuss labor informality in Peru and to propose some necessary actions. The event was attended by leading economists in a roundtable discussion.
Within the framework of the World Day to Combat Desertification and Drought, Ari Caramanica, professor of the Department of Business Administration and Researcher at the Universidad del Pacífico Research Center, warns us about the importance and need to make urgent changes to reduce Peru's vulnerability to droughts and climate change.
An Economics graduate from UP, Sofia Aron Said has experience working in the Ministries of Education and Economy and is the founder of 180 Degrees Consulting (UP-Lima) and Impacta, organizations that involve students with society and public management.