• TABLE OF CONTENTS
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 Front Cover
 Title Page
 Table of Contents
 Glossary
 Summary
 Project setting
 The improved water and land use...
 Project impact
 Additional impacts
 Conclusions and lessons learne...
 Appendices














Group Title: A.I.D. project impact evaluation report
Title: Peru, improved water and land use in the Sierra
CITATION THUMBNAILS PAGE IMAGE ZOOMABLE
Full Citation
STANDARD VIEW MARC VIEW
Permanent Link: http://ufdc.ufl.edu/UF00087022/00001
 Material Information
Title: Peru, improved water and land use in the Sierra
Series Title: A.I.D. project impact evaluation report
Physical Description: 1 v. (various pagings) : 1 map. ;
Language: English
Creator: Wilkinson, John L
United States -- Agency for International Development
Publisher: U.S. Agency for International Development,
U.S. Agency for International Development
Place of Publication: Washington D.C.?
Publication Date: 1984
Copyright Date: 1984
 Subjects
Subject: Irrigation -- Peru   ( lcsh )
Water-supply -- Peru   ( lcsh )
Land use -- Peru   ( lcsh )
Agricultural productivity -- Peru   ( lcsh )
Agricultural assistance, American -- Peru   ( lcsh )
Genre: federal government publication   ( marcgt )
bibliography   ( marcgt )
non-fiction   ( marcgt )
Spatial Coverage: Peru
 Notes
Bibliography: Includes bibliographical references.
Statement of Responsibility: by John L. Wilkinson ... et al.
General Note: "December 1984."
General Note: "PN-AAL-040"--Cover.
 Record Information
Bibliographic ID: UF00087022
Volume ID: VID00001
Source Institution: University of Florida
Holding Location: University of Florida
Rights Management: All rights reserved by the source institution and holding location.
Resource Identifier: oclc - 23353845

Table of Contents
    Front Cover
        Front Cover
    Title Page
        Title Page
    Table of Contents
        ii-iii
    Glossary
        iv-v
    Summary
        vi-vii
        viii-ix
    Project setting
        Page 1
    The improved water and land use in the Sierra project
        Page 2-3
    Project impact
        Page 4-5
        Page 6-7
        Page 8-9
        Page 10-11
        Page 12-13
    Additional impacts
        Page 14-15
        Page 16-17
    Conclusions and lessons learned
        Page 18-19
        Page 20-21
    Appendices
        Appendix 1
        Appendix 2
        Appendix 3
        Appendix 4
        Appendix 5
        Appendix 6
        Appendix 7
        Appendix 8
        Appendix 9
        Appendix 10
        Appendix 11
        Appendix 12
        Appendix 13
        Appendix 14
        Appendix 15
        Appendix 16
        Appendix 17
        Appendix 18
        Appendix 19
        Appendix 20
        Appendix 21
        Appendix 22
        Appendix 23
        Appendix 24
        Appendix 25
        Appendix 26
        Appendix 27
        Appendix 28
        Appendix 29
        Appendix 30
        Appendix 31
        Appendix 32
        Appendix 33
        Appendix 34
        Appendix 35
        Appendix 36
        Appendix 37
        Appendix 38
        Appendix 39
        Appendix 40
        Appendix 41
        Appendix 42
        Appendix 43
        Appendix 44
        Appendix 45
        Appendix 46
Full Text






A.I.D. Project Impact Evaluation Report No. 54

PERU: Improved Water and
Land Use in the Sierra




















December 1984


U.S. Agency for International Development (AID)


PN-AAL-040












PERU: IMPROVED WATER AND LAND USE IN THE SIERRA


A.I.D. PROJECT IMPACT EVALUATION NO. 54


by


John L. Wilkinson, Team Leader
(Bureau for Program and Policy Coordination)


Cressida McKean, Economist
(Bureau for Program and Policy Coordination)

Dr. Raymond E. Meyer, Agriculturalist
(Bureau for Science and Technology)

Dr. Barbara S. Nunberg, Political Scientist
(Bureau for Program and Policy Coordination)

Caroline E. Weil, Administrative Assistant
(Bureau for Program and Policy Coordination)

Dr. Hector Martinez, Anthropologist
(University of San Marcos, Lima)



U.S. Agency for International Development



December 1984










The views and interpretations expressed in this report are
those of its authors and should not be attributed to the Agency
for International Development.








TABLE OF CONTENTS

Page
Foreword................................................... .ii

Project Data Sheet........................................ iv

Glossary................................................... v

Summary......................................... ............. vii

Map ......................................................... x


I. Project Setting........................................ 1
A. Peru's Agricultural Sector.... ....................... 1
B. Agriculture in the Sierra........................... 1
C. The Project Context ............................... 2

II. The Improved Water and Land Use in the Sierra
Project.......................................... ..... 2
A. Project Design ..................................... 2
B. Project Implementation............................ 3

III. Project Impact...................................... 5
A. Provision of Water............................... 5
B. Availability of Credit.................... ...... 8
C. Agricultural Technical Assistance................ 10
D. Forestry Activities.............................. 14

IV. Additional Impacts................................... 15
A. Employment-generation Impact...................... 15
B. Social Impacts..................................... 15
C. Institutional Impacts ............................. 16

V. Conclusions............................ .. ... ..... 17

VI. Lessons Learned...................................... 18
A. Project Financing............................. .... 18
B. Beneficiary Identification and
Involvement ..................................... 19
C. Provision of Credit............................... 19
D. Agricultural and Extension Services............... 19
E. Land Ownership and Titling........................ 19
F. Institutional Arrangements........................ 20
G. Project Design.................................... 20

Appendices

A. Evaluation Methodology
B. Table Subproject Data
C. The Rural Community and the Small Farmer
D. Agricultural Resource Base
E. Economic Issues
F. Institutional Issues
G. Impact on Women
H. Reforestation The Cajamarca Experience


- iii -


FOREWORD

In October 1979, the Administrator of the Agency for
International Development initiated an Agency-wide ex-post
evaluation system focusing on the impact of AID-funded
projects. These impact evaluations are concentrated in
particular substantive areas as determined by A.I.D.'s most
senior executives. The evaluations are to be performed largely
by Agency personnel and result in a series of studies which, by
virtue of their comparability in scope, will ensure cumulative
findings of use to the Agency and the larger development
community. This study of the impact of the Improved Water and
Land Use in the Sierra project in Peru was conducted in March
of 1983 as part of this effort. A final evaluation report
summarizes and analyzes the results of all the studies in this
sector and relates them to program, policy and design
requirements.







- iv -


PROJECT DATA SHEET

Project Title: Improved Water and Land Use in the Sierra

A.I.D. Project Number: 527-0156


A.I.D. Loan Number:


527-T-059


Borrower: Government of Peru

Loan Amount: $11,000,000

Loan Agreement Signed September 26, 1976

Government of Peru Contribution: $10,000,000

Total Project Costs: $21,000,000


Loan Terms:


40 years repayment from the date of first
disbursement, including a grace period of 10
years. Interest rate of 2 percent during grace
period and 3 percent thereafter on the
outstanding balance of principal and on any due
and unpaid interest.


Terminal Date of Disbursement: July 15, 1983

Purpose: To improve water and land use in the Sierra
through: (a) an increase in productive land area;
(b) an increase in crop yields; (c) expansion of
cropping alternatives; (d) an increase in the
efficiency of water use; (e) reduction in soil
loss from erosion; and, (f) the strengthening of
GOP technical capacity at the regional level.

Expected Outputs: 14,900 hectares newly irrigated; 13,000
hectares under improved irrigation; 650
kilometers of new canals; 500 kilometers of
improved canals; 1,200 hectares afforested;
$4 million of investments in land
development financed under sub-loans.


v -

GLOSSARY

BAP (Banco Agrario del Peru) Agrarian Bank.

CESPAC (Centro de Servicios de Pedagogia Audiovisual para la
Capacitation) Center for Audiovisual Pedagogic
Services government agency charged with providing
audio-visual production and distribution services to
government-sponsored activities.

CIPAS Agricultural and Livestock Investigation Centers -
decentralized units of INIPA; administer field
extension services and carry out research on a
regionalized basis.

CORDE (Corporacion Departamental de Desarollo) Departmental
Development Corporation; there is a CORDE in each of
Peru's 18 departments; they are responsible for
general development activities within the departments,
both in urban and rural areas.

DGA (Direccion General de Aguas) General Directorate of
Waters, Ministry of Agriculture.

DGE (Direccion General Ejecutiva) General Executive
Directorate; organism responsible for supervising the
implementation of Plan MERIS within the Ministry of
Agriculture.

ENCI (Empresa Nacional de Comercializacion de Insumos)
National Enterprise for Marketing of Inputs; state
enterprise responsible for the distribution and
commercialization of seeds and fertilizers throughout
the country.

FONGAL (Fomento Nacional de Ganado Lacteo) National Milk
Cattle Development; government-sponsored organization
of cattle and dairy farmers, combining aspects of a
semi-autonomous tate body and a producers' cooperative

GOP Government of Peru.

INAF (Instituto Nacional de Ampliacion de la Frontera
Agricola) National Institute for Agricultural Zone
Development; one of four semi-autonomous agencies
within ti;e Ministry of Agriculture which independently
administers project funds from outside donors; INAF
has over ight over Plan MERIS.

INFOR (Instito a Nacional de Forestal y Caza) National
Forestry and Fauna Institute; a component of the
General directorate of Forests and Fauna, Ministry of
Agricult ce.








- vi -


- vii -


INIPA National Institute for Agriculture Research and
Extension; principal GOP organ providing research and
extension services in the agricultural sector.

IRPA Institute for Agrarian Reform and Agricultural
Extension; organization made responsible for both
agrarian reform and national extension services after
1968.

MOA Ministry of Agriculture.

PEPMI (Proyecto Especial de Pequenas y Medianas
Irrigaciones) Special Project for Small and Medium
Irrigations; responsible, within INAF, for projects
dealing with small- and medium-scale irrigation.

UNA National Agricultural University.


SUMMARY

The Improved Water and Land Use in the Sierra Project
(called Plan MERIS, after its Spanish acronym) was evaluated
during March 1983 by a team of AID staff, assisted by USAID
staff, Government of Peru (GOP) personnel and a short-term
Peruvian contractor. The evaluation took place over a
three-week period and involved research and meetings in Lima
and field visits to project sites in the Cajamarca and Mantaro
valleys, where Plan MERIS is being implemented. During the
field trips, the team met with Plan MERIS personnel at the
region and project level, as well as with Agrarian Bank
representatives and personnel from related government agencies.

Plan MERIS was designed as a five-year effort. Improved
water and land use in the Sierra was to be achieved through an
increase in productive land areas, crop yields and the
efficiency of water use, expanding cropping alternatives and
reducing soil erosion. The project was to be targeted to small
farm families, typically farming less than two hectares of
land. To achieve its objectives, Plan MERIS encompassed
several components, among them: (a) construction of irrigation
and drainage works for up to 27 sub-projects; (b) a special
fund in the Agrarian Bank for sub-lending to participating
farmers for investments in on-farm land development; (c) a
complementary afforestation and reforestation program; and, (d)
strengthening of personnel and institutional capacity through
technical assistance and training. The project implicitly left
agricultural extension and development activities to the GOP.
Total project costs were set at $21 million, comprising an $11
million loan by AID and a $10 million contribution by the GOP.

The project has not been implemented as planned, in spite
of a two-year extension to the original five-year project
life. Delays in implementation can be traced to: (a) the
transfer of project responsibility within the GOP at project
initiation, causing a delay in staffing of the regional
offices; (b) slower than anticipated completion of sub-project
feasibility studies; and, (c) GOP delays in approving the
purchase of cons ruction machinery, equipment and materials.
As a result, 17 ub-projects will have been constructed, rather
than the 27 init Jlly envisioned. Also, project beneficiaries
have been reduced from an anticipated 21,737 farm families to
some 11,261. Anm:, total irrigated hectares have been reduced
from a projected 27,900 to an estimated 13,443.

Similarly, disbursement of the credit component has been
much slower than anticipated, reaching less than one percent of
the beneficiaries; The major weakness in project
implementation, however, has been in the agricultural technical
assistance component, due to a scarcity of GOP resources and
personnel. As a result, technical assistance is not reaching









viii -

the marginal small farmers; instead, as with the credit
component, technical assistance is being provided primarily to
larger landowners.

FINDINGS AND LESSONS LEARNED

In spite of project shortfalls, more water is now available
on a reliable basis to farmers in completed sub-projects for
crop and pasture irrigation. As a result, some significant
long-term production and economic benefits are likely to derive
from this project, at least for the owners of larger holdings.
While small farmers also benefit from the availability of
water, because of the above-mentioned shortfalls they are
likely to reap fewer benefits from the project. A significant
benefit accruing to all farmers, however, is a decrease in the
risk of catastrophic failure associated with a lack of rainfall.

While the project's physical works appear to be
well-designed and construction costs per hectare are relatively
low, the credit component was poorly designed, given the
intended target group. Thus, although this type of irrigation
project has the potential for reaching significant numbers of
beneficiaries and extensions of land, a special effort must be
made to reach small farmers with creative forms of financial
assistance.

The national water tariff structure currently in effect in
Peru is unlikely to produce the revenues necessary to make
water system maintenance self-financing. Additional resources
from the government's general budget are, thus, likely to be
necessary to adequately maintain the systems.

Where a host-country government is in financial straits, as
are many of the AID-assisted countries currently, counterpart
activities are likely to suffer from a lack of resources. If,
as in Peru, an agricultural development effort suffers from a
lack of adequate personnel and resources, AID should consider
financing the costs of agricultural extension.

Beneficiary involvement from the early stages of project
design and implementation is an additional key to success.
This involvement is also critical to survival of the irrigation
system, through periodic maintenance and improvements, as well
as to the success of ancillary project efforts.

Irrigation projects always seem to cost more, and take
longer to complete, than anticipated. Given this experience,
the design of such projects should allow for longer
disbursement periods. Or, missions should be allowed to fund
several follow-on projects of the same type, each within a
shorter disbursement period, until a body of experience
develops with which to interest larger donors in this type of
project.


ix -

On the whole, the Plan MERIS-type scheme is extremely well
suited to the small-farmer agriculture systems prevailing in
much of the developing world. It must be recognized, though,
that water is a necessary but not sufficient factor. Small
scale irrigation projects should not be engineering projects
with technical assistance and services appendages. Rather,
they should be technical assistance and services projects based
on a relatively assured source of water for irrigation.











I. PROJECT SETTING

A. Peru's Agricultural Sector

The agricultural sector in Peru is characterized by a
general production shortfall in relation to requirements, both
for domestic consumption and for possible exports. This
situation has prevailed over at least the last ten years, even
under normal growing conditions; it has been aggravated,
however, by four consecutive years of drought (1978-1981) in
certain parts of the country. In the aggregate, both domestic
agricultural production and per capital availabilities have
tended to decline in relation to steadily rising national
needs. In contrast to a population growth rate of some 2.8
percent annually, total agricultural production has virtually
stagnated. As a result, and partly due to Government of Peru
(GOP) policies that favor food imports, Peru has become heavily
dependent on imported food and feed commodities, including:
wheat, corn, grain sorghum, rice, soybeans, beef and offals,
milk products, and vegetable oils. Lately, even sugar, a
traditional major export commodity for Peru, has been added to
the list of imports because of difficulties in meeting domestic
demand.

Faced with these conditions, Peru's agricultural
development problem has been described as requiring a vastly
improved and more effective use of land and water resources,
along with increased agricultural labor force productivity.
The underlying need, furthermore, is to more adequately provide
for the country's poorest people, most of whom are in the
Sierra and who constitute a large segment of the total
population.

B. Agriculture in the Sierra

The Sierra, the name given the Andean mountain range
running north-to-south through Peru, is a region of isolated
mountain valleys and a few high plains. It supports over half
of Peru's rural population, primarily through subsistence
farming. Although some 2.5 million hectares (seven percent) of
the Sierra's total surface possibly could be used for
agricultural purposes, the amount of land actually cultivated
represents approximately 1.8 million hectares, or only five
percent of the total. Currently, of the area employed,
slightly more than 1.8 million hectares are devoted to rainfed
agriculture and 340,000 hectares are cultivated under
irrigation. An additional 18 million hectares are devoted to
natural pastures.

Overall, much of the soil in the Sierra is relatively poor
and production technology ranges from low to primitive.








- 3 -


Subsistence agriculture on minifundia (landholdings typically
smaller than one hectare) is the most common production
pattern, with low yields and widespread recourse to off-farm
employment to supplement incomes being the norm. These
factors, combined with increasing population pressures, lack of
additional suitable land for farming and a serious erosion
problem combine to make many inhabitants of the Sierra the
poorest in the country.

C. The Project Context

The Improved Water and Land Use in the Sierra Project
(known as "Plan MERIS", after the Spanish acronym for
Mejoramiento de Riegos en la Sierra) was conceived and designed
during a period beginning with General Velasco's military
takeover in 1968. In this period, a number of efforts had been
initiated to address constraints affecting the social and
production structures of agriculture in the Sierra. Chief
among these efforts was the sweeping Agrarian Reform program,
which expropriated large landholdings and redistributed them
among the peasants working on them. The Agrarian Reform both
limited the size of the largest individual Sierra landholdings
and attempted to establish a minimum family farm size of three
hectares, while encouraging the amalgamation of small plots
(minifundios). The latter provision of the law, however, was
never put into effect; as a result, the bulk of the lands in
the Sierra continue to be held in minifundios.

A second important effort directed at the Sierra was
increased public investments in irrigation. Although much of
the agricultural production in this area is dependent on
rainfall, there is a long tradition of community-based
irrigation in parts of the Sierra. One of the first foreign
assisted efforts to bring small scale irrigation systems to the
Sierra was represented by the Inter-American Development Bank's
(IADB) 1970 "Linea Global I". In effect the precursor of the
later Plan MERIS effort by AID, Linea Global I was, unlike Plan
MERIS, conceived-and implemented as a completely integrated
approach. In contrast, Plan MERIS emphasized the
infrastructure element, while including a line of credit for
on-farm investment costs such as land-leveling, drainage,
digging of tertiary canals and other improvements. Production
loans were not to be provided from this credit fund since the
Agrarian Bank was seen as a ready source. Provision of
research and extension services directly to the beneficiaries
was a GOP responsibility; the question of rural services was
not addressed.


II. THE IMPROVED WATER AND LAND
PROJECT


USE IN THE SIERRA (PLAN MERIS)


A. Project Design

Initially proposed by the Ministry of Agriculture's General
Directorate of Waters (Direccion General de Aguas DGA) in
mid-1974, the project paper was developed between August, 1974
and January, 1975. Submitted to AID/Washington by September,
1975, a loan agreement was signed between the GOP and AID in
September, 1976. It provided for an AID contribution of
$11,000,000, and a Government of Peru counterpart contribution
equivalent to $10,000,000.

Plan MERIS was designed as a five-year effort "contributing
to the planning and implementation of a program of improved
water and land use in the Sierra". This was to be achieved
through: (a) an increase in productive land areas; (b) an
increase in crop yields; (c) expansion of cropping
alternatives; (d) an increase in the efficiency of water use;
(e) reduction in soil erosion; and, (d) strengthening of GOP
technical capacity at the regional level.

The target group was small farm families having, on
average, less than two hectares of land per family in the
Cajamarca and Mantaro valley areas. This group is almost
entirely.dependent on marginal agriculture for their
livelihood, farming individually- or cooperatively-owned crop
or pasture land.

To achieve the project purpose and reach the intended
beneficiary group of small farmers, the project encompassed:
(a) construction of irrigation and drainage works for up to 27
subprojects -- $8,000,000; (b) establishment of a special fund
in the Agrarian Bank (Banco Agrario BAP) for investment loans
for on-farm land development -- $3,000,000; (c) high level
technical advisory services to the DGA in planning and project
analysis -- $1,000,000; (d) strengthening of the regional
offices with additional personnel and required machinery and
equipment -- $1,270,000; (e) an afforestation and reforestation
program -- $3,800,000; (f) long and short-term training for
Ministry of Agriculture personnel -- $155,000; and (g) funds to
finance watershed planning studies -- $250,000. An additional
$4,000,000 was budgeted for construction contingencies (at 16
percent) and for inflation (at 11 percent).

Within the above components, the evaluation team determined
the following four to be critical, at this time, to judging
project impact on the intended beneficiaries: provision of
water through infrastructure construction; availability of
credit; the availability to farmers, and nature of,


- 2 -








- 4 -


agricultural technical assistance; and, progress of the
reforestation effort. The team did not attempt to evaluate
fully the indicators of project purpose attainment, as
presented in the project paper, because of the relative newness
of most subprojects and the short period of time under full
irrigation in most areas. Despite this, it was felt that
evaluating the above four components, from which project
attainments would necessarily flow, would provide an indication
of current and likely impact.(Appendix E, however, contains a
preliminary economic analysis for the six oldest subjprojects.)

B. Project Implementation

The project was not implemented as had been planned.
Rather than 27 subprojects, 17 were built in the space of a
little over seven years -- from September, 1976 to an amended
project assistance completion date of January, 1984. This
period included a two-year extension recommended by a 1981
USAID/Lima evaluation. Delays in project implementation can be
traced, initially, to the transfer of project responsibilities
within the Government of Peru from the DGA to the General
Executive Directorate (Direccion General Ejecutiva DGE) at
the beginning of project implementation. This resulted in a
ten-month delay in the early project stages, with staffing and
organization of the Plan MERIS regional offices not being
completed until mid-1978. In addition, subproject feasibility
studies were completed more slowly than anticipated, and the
purchase of construction machinery, equipment and material
suffered from a delayed approval process within the Ministry of
Agriculture.

As a result, total project beneficiaries were reduced from
the 21,737 small farm families envisioned in the early stages
of the project to a level of 11,261. In addition, total
irrigated hectares, both in new and improved systems, were
reduced from a projected 27,900 to an estimated 13,443.

Disbursement of the credit component was also much slower
than anticipated. Four months before reaching the project's
final contribution date of July, 1983, only $100,000 of the AID
share of $1 million had been disbursed -- approximately $1.4
million of the total $3 million (AID and GOP contribution)
available for investment loans had been disbursed. In
addition, much of the credit activity took place after
November, 1982, when USAID/Lima expanded the investment credit
criteria to include the purchase of milk cattle and the
improvement of pasture lands. This represented an adaptation
of the project to tenancy and production patterns which had not
been taken into account during project design.

Beyond the credit component, the major implementation
weakness was the lack of technical assistance provided by the


GOP to beneficiaries. This derives, in part, from several GOP
"years of austerity", in which depressed economic conditions
led to restricted government revenues, reductions in the
government's budget, and a lack of personnel with which to
carry out extension and agricultural development activities.
There also appears to have been an emphasis, at the Lima level,
on the physical infrastructure aspects of Plan MERIS, rather
than on agricultural development. As a result, technical
assistance is not reaching the minifundista; as in the case of
the credit component, what technical assistance is being
provided primarily benefits the larger landowners.

The forestry component of the project, after initial
delays, appears to be progressing at an adequate rate -- in
spite of relatively high plant loss rates -- along canals and
on slopes subject to erosion. Although the project paper
envisioned reforestation and afforestation of some 1,200
hectares, since the number of subprojects is lower, and
forestry activities did not begin until early 1981, the total
area likely to be forested is also lower. As of the end of
December, 1982, 654.5 hectares had been reforested, an
impressive figure given the late start of this component.

In general, the lack of continuity in design,
implementation, and evaluation activities was a serious problem
plaguing the project. One major discontinuity stemmed from a
succession of four project managers over a seven-year period.

In spite of the above shortalls in implementation, the
design of the physical infrastructures appears to be
appropriate to conditions in the Sierra and requirements for
water supply. Construction costs per hectare are relatively
low, especially in comparison to the large irrigation projects
implemented on the Costa, the narrow desert coastal area of
Peru, where most larger-scale agriculture is found. As such,
if the design of supporting components is appropriate and
cost-effective, this small-scale irrigation model would be
worthy of replication both in Peru and elsewhere.


III. PROJECT IMPACT

Of the 17 subprojects to be built, eleven were completed as
of April, 1983. Of these, the evaluation team visited three in
the Cajamarca area and four in the Mantaro area. (See Appendix
A for summary data on the 17 subprojects.) A constraint to
assessing both the direct and indirect economic impact of the
project is that insufficient time has elapsed since most
subprojects have been completed. Thus, it is difficult at this
time to establish the impact on agricultural production and
farm incomes. The team, therefore, was left with the necessity
of looking at the impact on the project's four principal
components and on several other related aspects of the project.


- 5 -









- 6 -


A. Provision of Water

The provision of water is the principal impact of the Plan
MERIS project. Its availability will serve to reduce one of
the most significant risk factors in Sierra agriculture -- that
of unexpected or prolonged dry spells and their disastrous
effects on subsistence farmers. In general, water is available
as planned in the subproject sites, although not yet to the
full extent of each subproject's command area. Much of the
digging of tertiary canals has been done, to date, through
reliance on beneficiary self-help, supplemented by a
food-for-work scheme administered in connection with Plan
MERIS. The latter may lead to delays in bringing water to the
smallest farmers, or those most distant from a secondary canal,
once Plan MERIS ends its involvement in a subproject.

Maintenance of completed systems does not, at this time,
appear to be a problem. It is being performed on a routine
basis twice a year, both prior to and after the irrigation
season, using beneficiary labor. Whether this will continue
in the future depends, to a large extent, on the strength and
vitality of the Irrigators Committees (Comites de Regantes)
which Plan MERIS has organized. In only one instance, the
Chupaca subproject, was it apparent that these committees were
not functioning. The project manager at this site stated that,
since the people in the area had been irrigating for some
twenty years prior to Plan MERIS' arrival, it was difficult to
change old habits and that, in fact, there was little
beneficiary interest in participating on the committees.

It is unlikely, however, that maintenance at any subproject
will be self-financing, at least for the foreseeable future.
Although most project sites are charging some type of fee for
the use of water, they are not charging a water tariff. The
fee is, variously, used to pay the maintenance man responsible
for the system's intake, or has been levied to get the
beneficiaries accustomed to paying for the use of water. There
is some question, however, as to whether sufficient fees can be
charged to meet normal system maintenance costs. Beneficiaries
at Namora, for example, pay five soles (.004 cents) per hour of
irrigation; at the same time, they have asked to be temporarily
exempted from paying the Water District's water tariff of 30
centavos (.0002 cents) per cubic meter of water. At such a
generally low level, and given the past problems which DGA has
had in collecting water tariffs, it is unlikely that
subprojects will generate sufficient resources to pay for any
maintenance requiring inputs other than manual labor. Instead,
long-term maintenance of Plan MERIS systems is likely to become
an addition to the DGA's present budget line-item for
maintenance, which comes from government appropriated funds.


In addition, several factors currently reduce the full
benefits of the provision of water. Water discipline, for one,
does not seem to be well developed, particularly in subprojects
composed mostly of beneficiaries who are individual landowners,
as opposed to those composed primarily of peasant communities.
These communities have a strong tradition of self-help and
support, and the community council provides a ready system for
imposing and enforcing penalties on members who act against the
best interests of others.

At some sites, furthermore, larger landowners seem to be
pressuring minifundistas to pass up their turn at irrigation.
This appears to be most prevalent at sites where irrigation
turns are based on one section of the system irrigating during
a predetermined number of hours on assigned days, rather than
on the amount of land owned by each irrigator. Such problems
were reported at both Chupaca and La Huaycha in the Mantaro
valley. This valley, significantly, has a long history of
producing crops under irrigation.

Moreover, water theft and improper methods of irrigation,
typically involving overwatering, also take a toll. All Plan
MERIS sites reported problems with the unauthorized opening of
irrigation gates or the breaking of canal walls to draw off
water. These problems are currently dealt with by Plan MERIS
staff directly with the transgressors, but will eventually
become the responsibility of DGA's Water Districts; effective
monitoring will depend, at that time, on whether a water
technician is assigned specifically to the project sites. It
is evident that greater efforts must be made by the GOP to
ensure that a sense of water discipline is imparted to all
irrigators -- not just Plan MERIS beneficiaries.

Access to water is also affected by the structure of land
ownership in the Sierra and its primarily minifundista
character. Putting a small tertiary canal through to a
farmer's field may involve crossing the holdings of several
other farmers, all of whom must give permission for the canal
to be dug. In several instances, intervening farmers had
denied permission for a canal to be dug across their fields,
even though they also stood to benefit from the water. Again,
this appears to be a more prevalent problem in non-peasant
community areas, such as in Chupaca and La Huaycha. It is
unclear how amenable to resolution such problems are, but they
must be overcome before all farmers in the command area can
have access to water.

A further problem is mistrust of irrigation among some
small farmers, typically those without prior irrigation
experience. Interestingly, some of the same farmers who
admitted the benefits of irrigating natural and improved
pastures also stated the belief that irrigation would ruin


- 7 -








- 8 -


seedlings and plants. Thus, they irrigated
fields, but stopped as soon as plant growth
instead on the availability of rainwater.
example, this occurred even during a period


to prepare the
began, relying
In Chicche, for
of drought.


Improper drainage of irrigation water does not appear to be
a widespread problem; in those few areas where it has been,
engineers are taking steps to rectify this condition.

It is likely, of course, that the advantages of irrigation
will be increasingly perceived by all project beneficiaries as
they become accustomed to a steady and reliable source of
water. The availability of new or improved irrigation will
most likely stimulate, over the long run, increased crop
diversification and double cropping. But, at this time, the
regional markets and distribution mechanisms appear to be major
influences leading to changes in cropping patterns.

It should be remembered, however, that irrigation is often
a costly means of substituting for other inputs. In much of
the Sierra, production increases from irrigation with
traditional cropping practices are about the same as could be
expected from using improved seed and fertilizer under rainfed
conditions. Thus, except in the case where irrigation can be
inexpensively developed and applied, it would be more
cost-effective to obtain the same production increases by
improving agronomic inputs.

B. Availability of Credit

This aspect of the project clearly is not having any impact
on the small farmer target group. Minifundistas, who represent
80 to 95 percent of the beneficiaries in each subproject, do
not have any practical access to credit under this project.
Much of this can be traced to the Agrarian Bank's requirement
that borrowers have title to their land. Most minifundistas do
not have clear title; rather, they have it through inheritance
or informal bills of sale, neither of which tend to be
registered with the legal authorities and are not accepted by
the BAP. In addition, those minifundistas who happen to own
clear title may be excluded from receiving credit by the fact
that the BAP will not loan funds to owners of less than 1/2
hectare in the Cajamarca area and less than 1 hectare in the
Mantaro area. The BAP does not consider loans to owners of
such smaller holdings to be economically justifiable. In the
case of investment credit, the BAP may well be correct. The
income benefits from agricultural production on minifundia
receiving investment (vice production) credit are most likely
not sufficient to cover loan repayment.

Credit was to be made available on concessional terms
through the BAP's Agricultural Development Fund for integrated


medium- to long-term investment programs designed to maximize
the efficiency of water distribution and application, and to
finance supplementary on-farm improvements. Prior to mid-1981,
the Agrarian Bank was willing to consider such loans for
beneficiaries who only had "certificates of possession", which
are not titles to the land free and clear. Few loans, however,
were given under this arrangement, since most subprojects were
not yet completed and, as noted below, effective demand for
investment credit among minifundistas is low. Certificates of
possession are relatively simple to obtain, involving a notary
public or justice of the peace and at least two witnesses.
But, in mid-1981 the Agrarian Bank decided that, while it would
continue to make production loans from its normal funds
available to holders of these certificates, it would only make
Plan MERIS investment credit available to beneficiaries who
had, at least, imperfect land titles (titulos supletorios).

While Plan MERIS personnel are helping beneficiaries obtain
such imperfect titles, the procedure is rather onerous in terms
of time and resources. Since it involves lawyer's fees, court
costs and cadastral surveys, this procedure may cost a
minifundista as much as S/40,000 50,000 ($32 $41) -- a not
inconsiderable amount when compared to per family cash incomes
which can be as low as $200 annually in the Sierra. It also
requires at least two trips to the provincial capital, which
may take as much as 8-12 hours one way. As a result, there is
little effective demand for this service among the smaller
landowners who are, thus, unable to obtain BAP investment
credit.

In addition, the minifundistas' negative perception of the
BAP as a source of credit also reduces the possibility of
increasing its use. Many small farmers state they would use
credit to purchase inputs, but also state that, if BAP credit
were available, they would not use it. The most commonly
offered explanation is the fear that defaulting on their loans
will result in the loss of their land. Agrarian Bank personnel
denied that such a loss was possible; in fact, it is
specifically prohibited by the law under which the Bank
operates. Nevertheless, the farmers' perception is controlling
and further reduces the demand for, and use of, credit from the
Agrarian Bank. Instead, small farmers continue to rely on
agricultural produce wholesalers, the traditional sources of
production credit. The rate of interest offered by the
wholesaler is likely to vary with the type of product, its
quality, the producer's knowledge and awareness, the size of
the loan, and other related factors. In the Plan MERIS
context, therefore, production credit has not complemented
investment loans to the extent anticipated.
As a result, the principal impact which the credit
component has had is on the small proportion of beneficiaries


- 9 -








- 11 -


- 10 -


who farm more than two hectares. This is particularly true in
Cajamarca; the greater flexibility displayed by BAP agents in
the Mantaro area has resulted in some 30 percent of the loans
there going to beneficiaries with one-two hectares. This
development, however, was very recent and encompassed, at the
time of the evaluation, only 13 beneficiaries. However, even
the group eligible for credit did not have much demand for BAP
funds until the eligibility criteria were changed to include
the purchase of livestock and the improvement of pastures. As
a result, only 107 loans had been approved or were in the
approval process, representing less than one percent of the
families benefitted by the project. At least 60 percent of the
credit requests, furthermore, were for activities related to
milk production, such as the purchase of livestock, improvement
of pastures and construction of farm buildings.

There is some question, moreover, as to whether
minifundistas and small farmers can be adequately reached
through the BAP's Agricultural Development Fund, given the
Bank's need to peg its rates to the rate of inflation. The
suggestion has been made, for example, that a more appropriate
method of .extending credit to such farmers is through commodity
loan schemes, where repayment is also in the form of
commodities.

In sum, Plan MERIS' credit component has not had the impact
anticipated in the project paper. Primarily as a result of
faulty project design, Agrarian Bank loan policies, and
minifundista perceptions about credit, the positive impact of
this component is accruing almost exclusively to larger
farmers. Credit, of course, has had a beneficial effect on
their production levels, particularly of milk cattle. This
impact however, is causing a widening income and productivity
gap between the larger and smaller farmers. There are,
incidentally, no apparent ethnic differences between these two
groups. The net result is that the Plan MERIS project paper
identified as target beneficiaries, farmers without adequate
potential productive capacity, or legal recognition, to be
viable investment credit risks.

C. Agricultural Technical Assistance

Failure to deliver agricultural technical assistance to
small farmers is the major weakness in Plan MERIS'
implementation. The project design envisioned that on-site
technical assistance would be provided by the GOP; that this
did not occur is due to a chronic lack of GOP resources and the
state of agricultural extension services in Peru following the
agrarian reform in 1969. At that time, the government
dismantled a research and extension service which had been
among the leading such systems in Latin America. Extension
personnel were assigned to duties within the agrarian reform
program and extension was virtually ignored for more than ten
years.


In fact, if it had not been for Plan MERIS' special status
as a foreign-assisted project, it is unlikely that as much
technical assistance as has done so would have reached the
beneficiaries. This does not mitigate the fact, however, that
extension work in Plan MERIS is underfunded and is seriously
deficient in terms of sufficient personnel. Plan MERIS field
personnel reported that their budgetary support began to erode
in 1982 and that, other than for salaries, no operating
expenses had been received during the first three months of
1983. Plan MERIS personnel in Lima ascribed this to: the fact
that the GOP Treasury had not yet issued any funds, and that
Plan MERIS' 1983 budget was still in the final stages of
completion. Funds, they believed, would begin to be available
in April. This contrasts sharply with the physical
infrastructure side of Plan MERIS. Because its funds come from
AID, there have been no reported shortages of funds for the
construction work, or for personnel assigned to that work.

In the Cajamarca area, wage laborers, including some
technical personnel, had not been paid for almost three
months. In addition, there was no money for gasoline,
agricultural inputs or office supplies. All of these were
either being borrowed from Plan MERIS' construction division,
or were being obtained on credit from local suppliers. To
reduce field work costs, furthermore, some 80 percent of the
personnel in the Cajamarca agricultural development division
were ordered to take their annual vacations in January and
February, during the growing season. In the Mantaro area, the
agricultural development division has been borrowing both
supplies and operating funds from the infrastructure division.
Wage laborers in Mantaro, however, had not been paid for 45
days. And, as in Cajamarca, field technicians usually did not
have the means or funds to travel within their project area,
other than on foot. The situation is summed up by a Cajamarca
agricultural technician's plea to the evaluation team, "Please
tell Lima to send us even a little money so that we can do our
work."

Beyond this, however, is the problem of personnel
shortages. At most project sites one, or at most two,
technicians provide agricultural technical assistance, along
with advice on credit and some measure of social assistance.
It is only at projects that have recently been inaugurated that
there is a full complement of 3-4 technicians. This never
seems to last very long, however, as the opening of a
subsequent project then demands the attentions of a full team.
As a result, the farmer-to-technician ratios are astronomically
high. In the Apata subproject, for example, one technician
advises and supports 573 farm families. Once the subproject is
turned over to the beneficiaries, though,the Ministry of
Agriculture's extensionist will be responsible for some 2,400
farm families.









- 12 -


Thus, it is only natural that Plan MERIS extension
personnel tend to concentrate on larger farmers, who are better
able, through their command of time and resources, to take
advantage of the available technical assistance. It is not
incidental, furthermore, that access to credit is highly
correlated with adoption of new or changed technologies.

In addition, there appears to be some minifundista
resistance to the technology being presented. This may be due,
in part, to the effectiveness of the demonstration methods and
talks presented. All farmers interviewed were aware of the
extension talks and demonstration field days held by the
agricultural technicians. A high proportion of them, however,
reported not changing their methods of production as a result
of these presentations. The bulk of these respondents were
minifundistas and small farmers. For example, a small farmer
in Chicche stated that the talks were "interesting but not
useful". This he ascribed to the fact that "the technicians do
not know as much as we do, since we have always farmed and
lived on the land." As proof, he pointed to two small plots
owned by agricultural technicians and said, "Look at that; they
lost more crops than I did this year. Why should I do what
they say?"

Small farmers in other areas also asserted that their
methods were better than those presented by the technicians.
As a matter of fact, the team found that the traditional
methods used by small farmers are not at all inappropriate.
There is widespread use of manure as a fertilizer at planting
time among both irrigating and rainfed farmers. In addition,
most farmers know the value of using urea fertilizer on their
crops during the growing season, as well as the results
obtainable from using pesticides and fungicides. In general, a
relatively high level of knowledge about cropping methods
already exists among small farmers. Their access to needed
.inputs, however, is another question altogether.

Most small farmers interviewed stated that they used
purchased inputs when they had the money, but that all inputs
were becoming too expensive. Besides, most were reluctant to
travel long distances to purchase only a small amount of
inputs. Various sources have also reported that ENCI, the
state fertilizer distribution monopoly, is ineffectively run
and often does not have sufficient amounts of the appropriate
fertilizer for the agricultural needs of particular crops or
regions.

The small farmer is probably highly receptive to the use of
technical inputs in his agriculture. Such inputs, however,
must be perceived as effective and, more importantly, be
affordable and readily obtainable. That current technical
packages being offered the farmers do not seem to met these


- 13 -


criteria can be seen in that there appears to have been little
perceptible change in the methods of production used by small
farmers. Several farmers reported that the only difference
between their pre- and post-Plan MERIS methods of cultivation
was the fact that water was now available on a mbre-or-less
permanent basis. Furthermore, in-depth farm level surveys in
the Cajamarca and Mantaro areas indicate a disparity in yields
between minifundistas and medium-sized farmers. The former are
likely to be obtaining yields 15-20 percent less than larger
farmers. In addition, some of the reluctance to adopt improved
methods may be due to the inappropriate materials used by
technicians. One technician reported having to show a film
about wheat growing in Canada to illustrate a talk on
pesticides and fungicides. This may be improved by materials
which are now being produced in Peru by CESPAC, a government
agency charged with providing audio-visual production and
distribution services to government-sponsored activities.

The availability of water in itself, of course, will serve
to reduce the chances of crop failures. Yield increases in the
Plan MERIS area are mostly attributable to irrigation; these
increases, however, appear to have been limited by the lack of
appropriate agricultural inputs and technical assistance. This
may be partly responsible for the fact that many small farmers
are not producing, at this time, a second crop under
irrigation. In fact, because of frost hazard, only pastureland
is a viable year-round use of the land above 3,400 meters of
elevation; even with irrigation, only one crop of vegetables is
possible above this elevation.

In addition, it is questionable whether the marketing
infrastructure is sufficiently developed to accommodate two
crops. The full impact of irrigation, thus, is not yet being
felt. In the Apata subproject, for example, a second crop of
vegetables and legumes was reported for only 20 percent of the
lands under irrigation. Non-traditional second crops, however,
are more prevalent in subprojects close to Huancayo and Lima
because of the demand created by these areas. Cajamarca, on
the other hand, is much less urbanized and there is far less
demand for non-traditional crops. In general, though, cropping
patterns in six subprojects for which there is time-series data
showed no major changes.

As mentioned above, most of the adoption of technical
assistance is found among larger landowners; and, most of it
appears to be related to the production of improved pastures
and milk cattle. The expansion of dairy activities, encouraged
by Plan MERIS personnel, has a high potential for reducing the
effects of inflation on a producer's income. Because of
government controls on the prices of basic agricultural
commodities, and the resultant declining returns to production
as input costs have increased rapidly, agricultural income has










- 15 -


lagged behind the rate of inflation. The consequent lack of
incentives to engage in agricultural production has, not
incidentally, served to undermine the project's potential
impact.

Ownership of cattle, on the other hand, is a hedge against
inflation, since the price of cattle tends to keep up with the
rate of inflation. Moreover, farmers tended to be more
interested in livestock, since milk could be produced
year-round with little risk of loss. A second factor also not
sufficiently recognized in the project paper was that pasture
for livestock already accounted for a large proportion of land
in both project areas. While the impact on milk production is
a positive one, it is an impact not anticipated in the project
paper, and one from which small farmers are mostly excluded. A
milk cow currently costs approximately $1,200 -- a staggering
figure for most small farmers. At the same time, about
one-half hectare of pasture land is needed per head of cattle.
Thus, unless a small farmer has a steady source of income away
from the land, there is little opportunity to get out of
agriculture and into the more profitable production of milk.
This conclusion is supported by observations at Carahuanga,
Chupaca and La Huaycha, all of which are 15 minutes or less
from an urban center and in which most small farmers work away
from their land as wage laborers during the day. Here, small
farmers are increasingly moving into dairy production,
something which is not happening to much of an extent at other
sites.

In sum, the benefits of the technical assistance being
provided by the GOP are accruing primarily to larger
landowners, who tend to be in a position to use investment
credit and who tend to concentrate on the production of milk.
As a result, technical assistance is also contributing to a
widening gap in income and opportunity between smaller and
larger producers, which was not anticipated in the project
paper.

D. Forestry Activities

This component appears to be progressing at a satisfactory
rate. However, reforestation activities are, for the most
part, being carried out by INFOR wage labor, rather than the
community labor envisioned in the project paper. Some limited
food-for-work planting and maintenance has taken place,
primarily using women and children for the labor force, but
this is not widespread.

The long-term impact of this activity is likely to be
varied, depending on the location within the subproject of the
reforestation. Presently, average losses of plantings is
running at a 20-25 percent annual rate; at one project,


Chupaca, estimated annual losses are running as high as 40
percent. In all instances, the main causes for losses were
identified as overpasturing by animals and vandalism. The
latter, in many cases, was ascribed to "envy" by beneficiaries
not having trees planted on or near their land. In all
subprojects, however, some awareness education was taking
place, ranging from activities at the local schools to the
organization of Reforestation Committees among beneficiaries.

Such awareness efforts are being undertaken, in most cases,
well into the reforestation effort, rather than at the
beginning. And, they are starting at a time when INFOR is
preparing to end its involvement with most Plan MERIS
subprojects. Thus, it would appear that losses of plantings
will continue after subproject turnover to the beneficiaries at
a significant, although decreasing, rate. It is likely that
plantings along the canals, since they are mostly on
individually- or peasant community-owned land, will be viewed
as "property" and protected by the landowners. At the same
time, since they may well be seen as a free resource, plantings
on slopes subject to erosion are probably in greater danger,
unless the beneficiaries understand the importance of erosion
control. Ironically, these plantings are more important for
long-term agricultural productivity than those planted along
waterways for canal protection. Thus, the ultimate
reforestation impact hinges on the ability of GOP extensionists
to instill a sense of responsibility for all trees, regardless
of location, in both project beneficiaries and those
non-beneficiaries adjacent to project sites.


IV. ADDITIONAL IMPACTS

A. Employment-generation Impact

This impact also appears to have been less than anticipated
in the project paper. Quantifying the employment generated by
the project, however, was not possible during project design
and is not possible for this evaluation. Project beneficiaries
and some landless poor did participate in the construction
phase of all irrigation systems. However, up to 50 percent of
the labor required for construction of the Cajamarca
subprojects was brought in from outside the area. While this
was not contrary to project design, it was not anticipated in
the project paper's analysis of employment-generation. Plan
MERIS managers stated that, given the project deadlines,
outside labor was necessary because local labor lacked the
necessary skills to perform such tasks as working with
concrete. As a result, project beneficiaries and landless poor
were apparently limited mostly to performing manual labor tasks
such as the digging of canals.


- 14 -










- 17 -


- 16 -


There has also been some employment-generation from
increases in productivity on larger holdings. Several larger
farmers reported hiring laborers for land clearing, digging of
farmertiar canals construction of farm buildings, maintenance of
crops, and related activities. While a positive impact, this
is also a limited one, given the small proportion of
larger-sized holdings (approximately 10 percent, in the
aggregate) within Plan MERIS. The only site where this impact
is likely to be significant is in El Chingol, where some 800
hectares of new land were brought under irrigation. These
lands had also been subject to the agrarian reform and, thus,
were of a larger size than most of the holdings in the older
areas of El Chingol and other subprojects, which did not come
under the agrarian reform. The continuing employment-
generation impact of Plan MERIS, therefore, is necessarily
limited by the fact that the only farms able to use wage labor
in an economically viable manner are a small percentage of the
lands involved.

B. Social Impacts
Plan MERIS appears to have had a significant impact on at
least the peasant communities in the project area. Irrigation
has served to enhance economic opportunities for these groups,
given that most of them own and cultivate land in common.
This, in turn, has led to a resurgence of comunero
participation in the affairs of the community Peasant
communities in the Apata and Yanacancha subprojects, for
example, are planning to enter the commercial production of
milk and milk products. The Apata community, furthermore,
reported a one-third increase in its membership, primarily as a
result of comuneros returning from off-farm employment once
economic opportunities within the community expanded.
In addition, the Plan MERIS project has had an overall
social impact on its beneficiaries by the fact that the project
was executed at all. There is an undoubted value in being the
object of attention by one's government and foreign donors. To
fully capture these impacts, however, project such as Plan
MERIS must be implemented with less emphasis on infrastructure
and more emphasis on services and technical assistance.

C. Institutional Impacts
These have, in fact, been some of the principal impacts of
this project. Plan MERIS has demonstrated that a large number
of farmers in the Sierra can be reached by relatively
inexpensive, on a per hectare cost basis, irrigation systems.
Thus, Plan MERIS is an excellent prototype for projects that
the GOP should pursue in preference to the much larger and more
costly irrigation projects of Peru's coastal areas. Plan
MERIS, in fact, is already being replicated by the Development


Corporation for the Department of Junin (CORDE Junin). CORDE
Junin, like similar organizations in Peru's 17 other
departments, is responsible for general development in the
department, both in urban and rural areas. The emphasis of
these bodies, however, has traditionally been in the more
urbanized areas and has typically encompassed works such as
road construction.

In the Mantaro valley, though, CORDE Junin and Plan MERIS
have signed an agreement to construct up to ten irrigation
systems based on the Plan MERIS selection and design criteria.
These works will be financed by CORDE Junin, which, along with
CORDE Cajamarca, receives much of its budget from a USAID/Lima
integrated rural development project. Project implementation
will be by Plan MERIS personnel. This agreement might well
serve as an example on which to base further expansion of the
Plan MERIS experience throughout the Peruvian highlands.

Prior to it being an effective model, however, some
improvement in institutional arrangements will be necessary.
CORDE Junin personnel stated they had no immediate plans to
coordinate with the Ministry of Agriculture's extension
service. Similarly, contacts between Plan MERIS has had
minimal contact with the national extension service until a
short time before a project is turned over to its beneficiaries

In sum, Plan MERIS' status as a special project has been
both an advantage and a disadvantage. In receiving special
attention, Plan MERIS has been able to continue much of its
work during periods of severe belt-tightening by the GOP.
This, however, has been mostly true for the AID-assisted
portions, and not for the entire project. At the same time,
this special status has resulted in the development of a
structure apart from, and in many instances duplicative of,
other similar activities within the GOP. Such duplication,
especially in the area of technical assistance, seems endemic.
in Peru -- the evaluation team identified at least four
entities, including Plan MERIS, which were undertaking
extension activities without any reference to, or coordination
among, each other. Individually, moreover, these entities do
not seem to provide adequate support to their client group.

The fact that the Plan MERIS model appears to be gaining
acceptance by the GOP as a viable development vehicle could
outweigh its possible negative impacts. But such projects must
be properly designed to reach the majority of potential
beneficiaries.









- 19 -


- 18 -


V. CONCLUSIONS

. More water is now available to farmers on a reliable basis
for cro and asture irrigation. As a result, some significant
long-term production and economic benefits are likely to derive
from this project, at least for larger landowners. The
availability of water is also a benefit to small farmers and
minifundistas, but these groups are likely to reap fewer
l---nterm economic benefits. A significant benefit accruing to
the small farmers, however, is a decrease in the risk of
catastrophic failure associated with a lack of rainfall.
2. The physical infrastrucre w ar to be well
designed and construct costs r ectare are relatively
low. This is particularly true in cI a prison to the GOP's
l-age-scale irrigation projects in the coastal regions. The
Plan MERIS irrigation model has a great potential for reaching
significant levels of beneficiaries and land at a relatively
low cost. At the same time, a change in project emphasis away
from physical infrastructure and toward technical assistance
and services will be necessary before the project's benefits
can be fully realized.

3.The credit c onent was oorl designed gve te
intended target group. Tis is evident by the fact that
virtually no small farmers have taken advantage of this
component. Because of BAP policies and small farmer
perceptions of the dangers of credit, only farmers with'clear
title are able to obtain, or seem willing to request, credit.
The credit that has been disbursed, however, has had a positive
impact, especially since there are few other sources of
investment capital in the Sierra. At the same time, small
farmers have less need for investment credit than they do for
production loans at affordable rates of. interest. Therefore,
they will not benefit from credit until a special effort is
made to reach them with creative forms of financial assistance.

4. Aricultural technical assistance is not reaching the
m4. ri of the intend beneficiaries. Although Plan MERIS
personnel are doing an outstanding job with the few resources
and facilities at their disposal, the technical assistance
effort is bypassing the small farmers; benefits from these
activities are accruing to the larger farmers. There is no
question of receptivity here; small farmers are probably as
receptive as larger farmers to improved techniques and
methods. The latter, however, have the adequate resources --
sufficient land, credit, inputs -- to take advantage of the
assistance being offered. To reach the project's intended
beneficiary group, the small farmer, an effort must be made to
put more extension personnel in the field. They must also be
provided with appropriate technical assistance packages which
address Sierra conditions.


5. Maintenance of the water systems may become a problem in
the future. The current national water tariff structure is
unlikely to produce the revenues necessary to make maintenance
self-financing. Even though recent changes provide for tariff
revenues to be kept within the Water District which collects
them, it is unlikely that the rates charged, assuming full
compliance by water users, will cover all costs of maintenance
and improvements. Thus, additional government budget support
is likely to be needed. Participation by the beneficiaries in
the maintenance work is occurring at all project sites; such
work probably defrays a significant portion of the maintenance
costs. The DGA's Water Districts, though, must ensure that
viable, fully active Irrigators Committees continue operating
at Plan MERIS sites.

6. Reforestation and afforestation efforts are likely to be
less effective than anticipated. Project managers have
identified a lack of understanding of reforestation benefits as
a principal shortcoming in these activities. Without a
thorough program to develop such an understanding, the expected
reduction in soil erosion is not likely to be achieved.

VI. LESSONS LEARNED
A. Project Financing

When a host-country government is in financial
difficulties, project counterpart activities are likely to
suffer. It is also evident that the provision of irrigation
alone will not result in full benefits from the project; an
effective and wide-ranging agricultural extension effort is
also needed. In circumstances such as those in Peru, where an
effective extension effort cannot be mounted due to a lack of
personnel and resources, AID should seriously consider
financing the costs of agricultural extension, even if it means
reducing the number of irrigation systems built. To do
otherwise risks losing the full benefits of irrigation.

B. Beneficiary Identification and Involvement

The proper beneficiaries have to be carefully targeted in
order to meet project objectives. In Plan MERIS, the
identification of farmers with less than two hectares of land
was misplaced, if the intention was to increase the land under
cultivation, diversify crop composition, and raise yields. In
addition, potential beneficiaries should be fully involved in
the selection of project sites and, to the extent possible, in
the design and course of the waterways. Beneficiary
involvement is also key to the survival of the irrigation
system and to the success of ancillary project efforts. An
effort should be made, throughout the project process, to imbue
the beneficiaries with the notion that the project is "theirs".










- 20 -


C. Provision of Credit

Medium- to long-term investment credit is not a
cost-effective proposition for small farmers if they lack the
capacity to purchase needed inputs. Production credit, as well
as appropriate and sufficient agricultural extension, is needed
to ensure that the multiplier effect of irrigation and inputs
on agricultural production can be realized.

D. Agricultural and Extension Services

This aspect is critical to the success of any irrigation
project. Such assistance should begin at the same time as the
construction work, so that beneficiaries have a period of time
in which to observe, and probably improve, the technical
assistance before planting their first crop under full
irrigation. Additionally, technical assistance packages must
be appropriate to the agriculture practiced. Thus, it is
useless to present a subsistence farmer with a technical
package requiring expensive or scarce inputs when the bulk of
production will go for family consumption and the costs of
production are unlikely to be covered by any incidental sales.
It would be far better to present such a farmer with a
technical package which improves his methods of production but.
which changes little, if any, of the inputs used. Finally, it
is crucial for project design and implementation to recognize
the importance of existing land cultivation and production
patterns, as well as the role played by government pricing
policies in the agricultural sector.

E. Land Ownership and Titling

The patterns of land ownership in a project site are
critical to the success of an irrigation and agricultural
development project. In cases where the majority of the
beneficiaries are small, subsistence farmers lacking clear
title to the land, it is useless for project components to
require, or depend on, legal documents or a minimum extension.
of land to be fully operative. Similarly, the relative
economic strengths of the beneficiaries must be considered
during project design and implementation to ensure that all are
reached.

F. Institutional Arrangements

Projects which have the best chances of success are those
in which all organizations involved have a continuing and
active interest. While "special category" projects often are
implemented quickly, their gains can also be quickly dissipated
if the organizations responsible for continuing the project are
not involved in its implementation, even if as advisors. Not
doing this risks turning a special project into one without a


21 -



constituency. Ideally, this special status should not imply a
duplication, or ignoring, of efforts conducted by other
agencies. Rather, it should be expressed through coordinating
mechanisms which involve all agencies having an interest in the
activities being pursued by the project. While this may slow
implementation, it may well assure the gains from the project
in the longer term.

G. Project Design

Irrigation projects always seem to cost more, and take
longer to implement, than anticipated. Given this, project
design should allow for longer disbursement periods, or for
fewer subproject starts within a limited disbursement period.
From AID's standpoint, this implies either projects which are
allowed to run longer, in many cases quite a bit longer, than
the preferred five years, or projects which fit in the
five-year timeframe but involve a drastically smaller number of
sites. With this latter course, provisions should be made to
allow mission funding of follow-on projects until sufficient
experience is developed with which to get larger donors, such
as the Work Bank, interested in this type of project.

On the whole, the Plan MERIS model is extremely well suited
to the small-farmer agriculture conditions prevailing in much
of the developing world. Its potential should not be
overlooked because of implementation problems. However, it
must be recognized that, in these projects, water is a
necessary but not sufficient factor. Small-scale irrigation
projects do have an impact but, as implemented in Peru, it has
been far less than its potential. They should not be
engineering projects with technical assistance and services
appendages. Rather, they should be technical assistance and
services projects based on an assured source of water for
irrigation.












APPENDIX A

EVALUATION METHODOLOGY

John L. Wilkinson
PPC/Office of Planning and Budget


irrigation systems as well as the incorporation of new lands
under irrigation. Thus, it was felt that an adequate
cross-section could be obtained of both farmers who were new
irrigators and farmers who had previous experience with
irrigation.


The methodology and scope of work for the Plan MERIS impact
evaluation were developed by the team in meetings prior to
leaving Washington and, shortly after arriving in Peru,
following initial discussions with USAID/Lima and Government of
Peru personnel.

Prior to leaving Washington, team members reviewed
available project documentation and two mission-funded Project
Evaluation Summaries conducted in 1979 and 1981. Following the
documentation review, team members met with various officers
who had been involved in the Plan MERIS project during the
period 1976-1980 and who were now assigned to AID/Washington.
Additional, more general, data was obtained from sources at the
InterAmerican Development Bank and the World Bank. The
meetings and review of data provided the team members with what
subsequently proved to be a fairly accurate assessment of
present conditions in the Peruvian agricultural sector and the
Plan MERIS project itself.

As initially developed, the evaluation scope of work
encompassed four elements:

a) characteristics of project viability;
b) socio-economic impact on beneficiaries;
c) impact of other forces on, or by, the project; and,
d) overall, an assessment of project effectiveness and
lessons learned.

During its initial meetings, the team decided to send one
member to Peru five days ahead of the rest of the team. This
person was to obtain and review any additional pertinent data
available either in the mission or the Government of Peru, as
well as finalize the schedule of field trips to project sites.

Given the transportation problems encountered during the
trip due to the unseasonable'rains, the resultant mud and
landslides which closed many roads, and the time required to
visit some isolated sites -- up to six hours, one-way -- the
team decided to not visit sites under construction or those in
which the physical infrastructure had only recently been
completed, especially since agricultural development activities
had, in most cases, yet to be initiated at these sites. The
team felt justified in this approach given that most
sub-projects involved both the improvement of existing


In both Cajamarca
visit sub-project
longest period of
impact. The team
approach to allow
Thus, a sample of
seasons under new
visits.


and the Mantaro valley, the team chose to
sites which had been completed for the
time, allowing a better view of Plan MERIS'
considered this to be the most feasible
a comparison with pre-project indicators.
subprojects with at least two cropping
or improved irrigation was selected for site


In the Mantaro Valley, the team also visited a
non-irrigated area; this was done in order to attempt a
comparison of farming techniques between small farmers in
irrigated and non-irrigated areas. Other than for the
availability and relatively greater use of water in irrigated
areas, these techniques were found to be remarkably similar.

The general uncertainty associated with travel arrangements
because of the disruptive effects of the El Nino warm ocean
current, however, resulted in one-day delays in reaching both
Cajamarca and the Mantaro Valley, reducing the amount of time
available in the field. Thus, some four days were spent at
each of the two regional sites; two sub-project sites were
visited each day.

Upon arrival at the regional sites, the team met with Plan
MERIS regional staff to discuss the purpose of the evaluation,
the team's itinerary and desired goals, and the general
environment of the particular site. These discussions covered
the general scope of work for the evaluation, with emphasis on
the impact of external forces on the project's implementation.
The team also sought Plan MERIS' assessment of the impact of
the project on its beneficiaries; these were later compared to
the beneficiaries' perception of this impact. Following these
meetings, individual sub-project site visits were conducted;
the team operated as a unit during these visits, although
individual team members made an effort to interview both small-
and medium-scale farmers in an effort to determine differential
project impact, if any, on each group.

Farmers interviewed were selected at random -- as were the
women who were interviewed -- and interviews were conducted in
a semi-structured manner. Each team member had a common list
of questions and concerns the team felt were important. It
soon became evident, however, that after some initial questions
and the establishment of rapport, more information could be


I:'


LT._~_l~. L .











A-3


obtained by allowing the interview to become free-flowing,
rather than completely structured. Interviews with project
beneficiaries emphasized the impact aspects of the scope of
work. Questions directed at the farmers covered: their access
to and use of credit and technical assistance; changes in
production techniques or patterns; changes in income since
project inception; and, in general, their perception of the
benefits they are deriving from the project. The night after
each site visit the team met to discuss its findings, exchange
impressions and determine areas of information which required
greater or lesser attention.

At the completion of each regional site visit, the team met
with Plan MERIS, Agrarian Bank and other regional personnel to
informally discuss its findings and obtain clarification, if
needed, on points of fact concerning what had been learned.
These sessions proved to be valuable to both the team and the
Government of Peru participants.

Following the site visits, the team spent some six days in
Lima collecting additional data, conducting interviews with
Plan MERIS and other personnel at the national level, and
producing a first draft of the report. The drafting of the
report was aided immeasurably by the fact that, following the
first site visit -- to Cajamarca -- the team produced a
detailed outline of the likely final report. Following the
second site visit -- to the Mantaro Valley -- this outline was
expanded and modified, as needed, into a final outline. As a
result, the first draft was produced quickly and while the
information was still fresh in the team's mind.

While the above approach to the impact evaluation worked
well for the team, three shortcomings should be noted:

1) Lack of adequate baseline and current data on factors
such as production patterns and yields, land tenure patterns,
farm-level income and nature and pattern of off-farm
employment. Some data on agricultural production was
available, but it was too aggregated to be useful; most of the
data is being collected at the provincial level, and does not
allow for comparisons to be made between particular areas
within a province. Also, production data was not disaggregated
by size of producing unit. And, available data on farm-level
incomes is unclear, and not amenable to analysis, since it does
not take into account, or does not specifically calculate,
costs associated with production.

It does not appear, furthermore, that this and related data
is being collected in a systematic manner; much of the data
that was available seemed to be estimates and informed
judgments. As a result, the team was unable to do comparative


cost-benefit analyses between individual sub-project
feasibility studies and actual conditions in completed
sub-projects. Such an analysis was not possible given several
constraints. The computer program used in calculating the
projected rate of return for the feasibility analysis in the
project paper was not available either in Peru or in
AID/Washington. Plan MERIS, furthermore, did not have adequate
staff or financial resources to draw up comprehensive
statistics. And, given the delayed construction schedule,
calculating rates of return at a later date would have been
more appropriate.

The lack of adequate data, it should be noted, also
hampered the efforts of the Water Management Synthesis project
team which was in Peru at the same time as the impact
evaluation team. It would, thus, be well worth it for the
mission and the Government of Peru to consider devoting
resources to an extensive farm-level social and economic survey
to develop needed data on which to base future programand
project decisions.

2) Since Plan MERIS is an irrigation project, it might have
been preferable to have conducted the evaluation during the
irrigating season. While the timing of the evaluation was not
a major shortcoming, the team agreed that visiting Peru during
the dry season might have provided a somewhat different view of
farm-level activities. However, the team does not believe that
any of its conclusions or recommendations would have been
altered by conducting the evaluation at a different time of the
year.

3) The team also agreed that the time available in the
field was too short and did not allow for, ideally, revisiting
sites to confirm or modify impressions gathered during the
half- or one-day trips to each site. It also did not allow for
visiting a non-irrigated site in each region, although an
effort was made to interview farmers at each site who were
either not receiving irrigation water or who were only
irrigating part of their holdings. Again, although the team
would have been more sure of its conclusions with such visits,
it does not believe that these would have been materially
changed by additional visits to the sites.

Of the above three shortcomings, the greatest one, in the
team's opinion, is the first. The lack of adequate and
regularly-collected reliable data, though, is not an impediment
to just evaluating rural activities such as Plan MERIS. More
significantly, it is likely to hinder the design and
implementation of any project undertaken in rural Peru.
















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APPENDIX C


THE RURAL COMMUNITY AND THE SMALL FARMER


Dr. Hector Martinez
University of San Marcos, Lima



A. Land and Water Resources


According to the 1972 National Agricultural Census, Peru
has 1,390,000 agricultural units which, together, encompass
23,545,247 hectares of land. This land extension is
distributed in the following manner:


Major Use of the Land


Farming
- Rainfed
- Irrigated


Natural Pastures


Woods and Forests


Other


Not Determined


TOTAL


Hectares Percentage


3,691,417
(2,417,904)
(1,273,513)


15,128,861


3,069,381


1,580,487


75,001


23,545,247


In looking at rural Peru, one is immediately struck by the
fact that the available agricultural land is insufficient for a
population that is constantly growing. One can also discern
that, at present, the land which could be intensively
cultivated is very limited, given the fact that, within the
3,690,000 hectares farmed, only 34 percent comprise irrigated
lands, compared to the 66 percent which are rainfed.


It should be noted, further, that 59 percent (approximately
750,000 hectares) of the irrigated lands are in the Costa; in
other words, some 80 percent of agricultural areas in the
Sierra consist of rainfed lands. In general, this would mean
that, in 1982, without taking into account the 15 million
hectares of natural pastures, the total of 3,690,000 hectares
of farming land in Peru was the actual base of a rural
population of 6 million. This would mean that, on average,
each rural family -- with the typical family size being five
individuals -- had only three hectares available for farming.


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The small extent of farming land available in the Sierra
would not be so critical if the following factors did not also
have to be taken into account:

1) The low quality of these lands;

2) Their location, generally on steep slopes and,
therefore, subject to dangerously erosive conditions;

3) The severe climatic conditions -- droughts, freezes,
hailstorms and, sometimes, excessive rainfall -- which,
practically speaking, allow only one crop per year in much of
the Sierra;

4) The prolonged fallow periods (from two to seven years)
needed to regain land fertility, absent the extensive use of
fertilizers; and,

5) The extremely polarized structure of land tenure; that
is to say, most of the farming lands are concentrated in a
small number of cropland and cattle-raising farm units, while
most of the population has access only to very small and
dispersed parcels of land. This makes it difficult, and
sometimes impossible, to provide such small units with
technical assistance or credit, even if these inputs were
abundant or readily available.

Thus, as seen in the table below, concentration and
minifundia are the two most outstanding characteristics of land
distribution in rural Peru. Although the data on which the
analysis is based correspond to 1972, the conclusion is still
valid at present, since the Agrarian Reform -- initiated in
1969 -- has not resulted in significant land tenure changes.

Agricultural Units

Size of Unit Percentage Percentage Average
(Hectares) of Total Units of Total Area Hectare/Unit


Less than 1

1 to 5

5 to 50

50 to 100

100 to 2500


34.8

43.2

20.0

1.8


0.8

5.9

14.3

17.3


0.1 7.4


0.4

2.3

12.1

158.0

1484.7


C-3


Agricultural Units (con't)


Size of Unit
(Hectares)


Above 2500

TOTAL


Percentage
of Total Units


0.1

100.0


Percentage
of Total Area


54.3


100.0


Average
Hectare/Unit


12577.0


16.0


The above data is based on a total of 1,290,288 farm units
encompassing some 23,545,147 hectares.

This data clearly illustrates three fundamental
characteristics of land tenure in Peru:

1) Almost two-thirds of the area farmed (61.7 percent) is
held by only 0.2 percent of the farm units;

2) Medium-sized farm units (ranging from 5 to 100 hectares)
represent 21.8 percent of all farm units, but occupy somewhat
less than one-third of all lands (31.6 percent); and,

3) The bulk of the farm units (78 percent) typically farm
only a small area (up to 5 hectares in the best of cases) and,
as a group, encompass only 6.7 percent of the total
agricultural lands.

Land tenure in the Sierra, furthermore, is remarkable not
only because of land concentration and a marked minifundismo.
It is also remarkable for land dispersion and the division of
farming units into various parcels. In the Mantaro valley, for
example, researchers have found a one-hectare plot of land
which has been divided into 24 separate parcels. This
situation is not unusual elsewhere in the Sierra.

Using additional sources of information, it may be
estimated that, in 1982, of the total of 23,500,000 hectares in
rural Peru, 8,000,000 hectares belonged to the more than 3,000
recognized rural communities, comprising 600,000 families.
Five million hectares belonged to the 670 agrarian production
cooperatives, agro-industrial complexes, social ownership
enterprises, and agricultural social interest societies.
Between them, these organizations comprised 34,000 families.
And, finally, the remaining 10,500,000 hectares were owned by
an undetermined, but probably large, number of non-recognized
rural communities, independent minifundistas, and small
landowners which, in sum, represented 566,000 families.















B. The Rural Communities and the Small Farmers

The rural communities, 98 percent of which are located in
the Sierra, range in character between two extremes. At one
extreme are those communities which are highly isolated and
almost self-sufficient. Within such communities, predominant
norms and values are the result of a complicated fusion of
pre-Columbian and colonial Hispanic elements.

At the other extreme are communities which are dynamically
integrated into the market economy, mainly as a result of their
proximity to cities and large markets. This integration does
not necessarily imply the loss of traditional values; rather,
these values have been adapted to the exigencies of life within
a modern society. This type of integration and adaptation, for
example, is evident among communities in the Mantaro valley.

Whatever its character, the rural community is frequently
characterized -- beyond ethnic and racial considerations -- as
involving the communal exploitation of land. While such a
characterization is based on historical fact, it lacks validity
today. In fact, since Colonial times, rural communities have
undergone deep transformations involving their: ethnic
composition; governmental structure -- which parallels
traditional structures persisting from the Colonial era; land
tenure and access to the land; organization of labor; and,
ideologies, norms and values. In short, most of the original
characteristics of rural communities have been effectively
weakened, although they continue to retain their original form.

In government and administration, for example, new methods
of organization representing regional or national interests
have been introduced and are taking the place of some community
functions. This is the case, for instance, where rural
communities have become the seat of a district or provincial
government. In this situation, the community both loses
authority over the lands considered urban and also suffers the
loss of some members who become alienated from the communal
organization. The presence of officials -- governors,
lieutenant governors, and municipal agents -- representing the
central government also plays a role in destabilizing the
authority of community officials such as the presidents of
administrative and supervisory councils.

The ethnic composition of rural communities -- which in the
past identified them as "indian towns" -- has also changed
following centuries of inter-racial contact and intermarriage.
In the past few decades, migration into and out of the
communities has played an important role as well. This
migration has been due both to the very poor or insufficient
resources available to a rapidly-growing population and to the


rising expectations generated by increased contacts with the
outside world.

These local change processes are damaging to old values
such as: the prestige derived from physical work; the
integrative nature of communal work; and, the patriarchal
position of the husband in relation to his wife and children.
Equally disruptive, however, are the urbanization and
industrialization processes occurring on a more global basis.
These phenomena, however, also have a countervailing influence
on the downfall of the old community, and on its quick
integration into modern society. Thus, the survival of the
community, in spite of centuries of acculturation and siege,
can be seen as a reaction to these forces of modernization.

In short, changes occurring within rural communities do not
necessarily mean that their basic characteristics have been
destroyed. Rather, these characteristics continue today, even
though some of their external manifestations no longer occur or
are suppressed.

Given this, we can point to the following identifying
characteristics of the present rural communities:

1) Communal tenure of land. Community members are
usufructuaries of the land, with the exception of lands set
aside for communal exploitation. Depending on the community,
this communal land has either symbolic or economic importance.

2) Communal identification on the basis of a defined land
extension, and a strong sense of community expressed through
communal work, religious celebrations, customs, ideologies and
ethnocentric events.

3) Frequent meetings to discuss and solve community
problems, as well the election processes for officials, express
a greater or lesser degree of active institutional life.

4) Acceptance of administrative and governing decisions --
although not always democratic in nature -- adopted by their
leaders.

5) Active participation in socio-cultural events, under
common rules; the failure to fulfill these rules is the object
of sanctions by the community.

Within these communities, water and land are clearly the
most interesting and crucial factors related to modernization














and the implementation of rural development projects. It
should be noted that:

1) Only since the 1920 Constitution has the juridical
existence of the communities been recognized, making their land
inalienable; legal recognition of these communities dates from
1926. As a result, a partial end was brought to the taking of
community lands by medium- and large-sized landowners.

2) Most of the communities occupy only a small area of
land, generally located on soils less advantageous for
agricultural development. This is aggravated by the fact that,
as the community's population increases and land is made
available to new families, each family has access to
progressively smaller areas of land, eventually facing a
serious minifundia problem. The hereditary system of land
succession, thus, is an important reason why many community
members migrate. Migration is primarily to cities in the
Costa, to mining centers, or to the Selva Alta.

3) The unequal distribution of land is a source of
permanent tensions and conflicts. The concentration of land in
a few hands and minifundismo are noted most sharply in rural
communities. As an example, within Plan MERIS' six irrigation
projects in Cajamarca, 71 percent of the 2,461 farm units are
landholdings of one hectare or less; 21 percent of the
landholdings range from 1 to 5 hectares; and, only 8 percent
encompass more than 5 hectares. Similar conditions can be
found in the Mantaro valley.

4) Given these conditions, it is:obviously difficult for
people who own very small and dispersed fields to obtain
whatever limited technical assistance and credit are available
from private or governmental agencies. For this reason,
agricultural or rural development projects have only tended to
benefit medium- and large-scale owners. There have only been a
few exceptions to this pattern, as in the case of the
Puno-Tambopata Project (a United Nations and Government of Peru
project during the 1960s), which carried out a successful
program of land reconcentration, aimed at overcoming the
problems of minifundia and land dispersion, to achieve
socio-economic development.

5) As stated in Section 25(a) of the 1970 Special Statute
for Farmer Communities, the community, as a legal entity, is
the sole owner of all resources encompassed by its land.
Community members only have the right "to participate of the
goods and services.... in the manner established by the internal


rules (of the community)". In reality, however, the control
the community has over its resources is only formal since, in
practice, its members consider themselves "owners" of the
parcels of land they work. As a result of this, sales
contracts for these lands are very common, with titles
generally issued by justices of the peace, although such titles
have no legal standing.

6) The persistence of communal work (commonly known as
"faenas") allows the communities to solve internal needs, such
as the construction or maintenance of community roads, schools,
churches, graveyards, etc. And, in the past, communal work has
made it possible to build important irrigation systems,
allowing water distribution according to the size of the
parcels of land worked by each community member.

7) The farmers who live outside of a recognized community
are primarily merely holders of the lands and pastures they
work, as they usually do not have title to their land. This is
generally true regardless of the manner in which they acquired
their land -- whether through hereditary succession,
traditional (undocumented) ownership, unregistered purchase,
mortgages, etc.

C. The Farm Economy

The following characteristics can be noted among both farm
communities and small farmers living outside a communal system:

1) Working tools are extremely simple and are constrained
mostly to the use of the Spanish plow pulled by oxen and the
"chaquitaclla", or pre-Columbian foot plow. The use of
machinery such as tractors is very limited. Farming techniques
tend to be primitive: non-irrigated cultivation; land left
under prolonged fallow to regain fertility; little use of
fertilizers, which are primarily limited to animal droppings;
use of native seeds and traditional farming practices. Given
these conditions, change comes slowly and incompletely.

2) The prevalent technical backwardness finds its
expression in an elementary division of labor, often based on
the traditional differentiation between sexes. Knowledge of
agriculture and cattle-raising, however, is common to both men
and women. In more advanced communities, though, such as those
in the Mantaro valley, artisan and service specialization may
be found. While such specialization occurs, it does not mean
an abandonment of agricultural work or the occasional provision
of off-farm labor. Specialization is often undertaken to meet















the need for a cash income. Such an income is used to satisfy
traditional small-farm needs or those which arise from contact
with the market economy.

3) Productivity is low, as a result of: technical
backwardness; the poor quality of available resources; and, the
lack of, or difficulty of access to, cheap credit or adequate
technical assistance.

4) The availability of capital goods is limited: home
implements are simple and of poor quality, as are farming
tools; there are few oxen; animals, mostly cows and sheep, are
primarily considered as a form of savings or are prestige
items; and, even the land, in addition to being of low quality
and limited extent, is closely tied to fundamental social
beliefs and rules. This latter factor contributes to
segregating the land from strictly commercial considerations;
and, it means that demographic pressures are not decreased when
a family migrates. Migrants tend to retain ownership of their
land through renting it out, exploiting it through a
partnership arrangement, or just leaving it in the care of
relatives or other persons.

5) The farther communities and small farmers are from
important urban centers -- which helps determine their amount
of contact with the market economy -- the more they tend to
take on a subsistence character, because these farm units
produce hardly enough to fulfill the family's needs. On the
other hand, cattle raising, especially of sheep, is directed to
external markets. Even milk production has become important
since national enterprises such as FONGAL (Fomento Nacional de
la Ganaderia Lechera National Milk Cattle Development), as
well as transnational enterprises, have created an efficient
storage and processing system, assuring producers of a regular
daily income.

6) Agricultural production, besides being affected by the
small size of most farm units, is also often restricted by
climatic factors which sometimes result in the total loss of
plantings or harvests. This also contributes to the lack of
enthusiasm for production credit on the part of many farmers.

7) During planting and harvest periods, the shortfall of
family-supplied labor is made up by free reciprocal labor
("ayne", "huajate", "yanapa" are all regional terms for such
labor) by relatives, godparents, and neighbors. At the same
time, wage labor is almost nonexistent -- even though it may
exist in symbolic form, as wages do not meet the minimum


established by law and are paid partly in money and partly in
food, drink and, almost invariably, coca. Reciprocal work is
also a common practice for other activities, such as house
building.

8) Despite the above, in wide areas of the country
agricultural and cattle production is increasingly
participating in the market economy and is abandoning its
subsistence character. This can be traced to the existence of:
improved communications channels; greater contact with the
modern world; changes in food consumption patterns; the need to
educate children; and, increased desire -for access to
manufactured goods.

9) Incomes that communities and small farmers can obtain as
a result of their participation in the market economy are based
more on the exploitation of their labor, than on the fair
prices they could obtain for their products.


~-:~=~'~`~s~"~BP~i~iMr~ -- -- __._











C-10


SOURCES

Amat y Leon, Carlos, et.al. Realidad del Campo Peruano
Despues de la Reforma Agraria. 10 Ensayos Criticos. Lima, CIC,
1980.

Aguirre Beltran, Gonzalo. Regions de Refugio. El Desarollo
de la Comunidad y el Proceso Dominical en Mestizo America.
Mexico, Instituto Indigenista Interamericano, 1967.

Castro, Mariano, et.al. "Los Campesinos: Son Duenos de la
Tierra?", Informativo Agrario, No. 12. Lima, CEPES, 1982.

DGOR-SINAMOS. Comunidades Campesinas del Peru: Situacion
Problematica. Lima, mimeo., 1978.

Maletta, Hector y Foronda, Jesus. La Acumulacion de Capital
en la Agricultura Peruana. Lima, Universidad del Pacifico, 1980.

Martinez, Hector. "Reforma Agraria Peruana: Empresas
Asociativas", Boletin de Estudios Latinoamericanos y del
Caribe, No. 30: 103-123. Amsterdam, CEDLA, 1981.

Sabogal Wiesse, Jose R. (Ed.). La Comunidad Andina. Mexico,
Institute Indigenista Interamericano, 1969.


APPENDIX D

AGRICULTURAL RESOURCE BASE


Dr. Raymond E. Meyer
Science and Technology/Office of Agriculture


Peru is a large, geographically diverse nation with a
tremendous variety of different agroecological zones. Almost
every conceivable climate and land form is present. Within
this geographical diversity, Peru has a rapidly growing
population of approximately 16 million.

Topography: Peru is physically divided into three distinct
large land systems -- coastal (Costa), highlands (Sierra), and
lowlands (Selva). The agriculture in each of these systems is
quite different, with a tremendous diversity of agroecological
zones among and within these systems. A breakdown of the total
land area and the current agricultural land estimates is given
in Table 1.


Table 1

Surface Land Areas (ha)


Costa
Sierra
Selva

Total


Total Area



13,000,000
35,000,000
80,000,000


Cropland


Irrigated

700,000
340,000
30,000


128,000,000 1,070,000


Rainfed Total


negligible
1,850,000
570,000


700,000
2,190,000
600,000


2,420,000 3,490,000


The Costa system is an arid and semiarid area crossed by
numerous river valleys of differing sizes and productivity.
Agriculture in the Costa system is completely dependent upon
irrigation, with an estimated total of 700,000 hectares in
production. This area is the principal source of Peru's export
crops, notably sugar cane and cotton. Although the Costa
region is agriculturally the most intensively developed, only
about half of the agriculturally useful land is being
exploited. Water is the major constraint. Rainfall is
negligible and for intensive production, water must be made
available continually throughout the year.














The Sierra system is the large inter-Andean basin system
with the agriculturally useful areas having elevations of 1200
to 4000 meters. Climatic conditions vary from temperate to
frigid, with an extremely high number of microclimates.
Rainfall in the agriculturally important areas ranges from 400
to 800 mm, being generally sufficient for rainfed production of
one crop growing season. Principal biophysical constraints to
production are frosts at the higher altitudes and droughts of
varying intensities and duration. Rainfed production occurs on
about 1.8 million hectares with another 18 million hectares in
natural pastures, much of very limited productivity. As much
as a third of the rainfed area may be under long-term (3 to 7
years) fallow at any one time. About 340,000 hectares are
under irrigated production with varying levels of management
intensity. Irrigation serves to reduce risks and stabilize
rainy season production and, ideally, provide for a second
cropping season, depending on altitude and resultant frost
risk. While irrigation may help prevent frost damage, there is.
no local data available on the protection that the current
ability to manage water may give against the radiative type
frosts dominant in the Sierra. An additional 500,000 hectares
could be placed under irrigation, if water can be supplied.

The Selva system is the extensive and isolated jungle
region with elevations up to 1200 meters and numerous large
river basins. Less than an eighth of the potentially useful
agricultural land is being used. Currently, much more emphasis
is being given, by the government and foreign donors, to the
Selva Alta or "Ceja de Selva" as the area having the greatest,
most readily attainable, agricultural potential.

Climate: The topographic features of the country are
complex and this creates very diverse climatic conditions with
many microclimates, particularly in the Sierra and Selva Alta.
Some examples of basic climatic data for the Costa, Sierra and
Selva Alta are given in Table 2. The climate in the Costa is
temperate, allowing for crop production the entire year if
water is available. In the Sierra the climate varies with the
altitude, with mean temperatures of 12-16 OC and annual
precipitation of 400-800 mm. Generally, the period of rainfall
is 4-6 months and there is a 6-70 C decrease in temperature
for every 1000 m altitude. Frequent frosts and droughts are
the main climatic constraints. In the Selva Alta the mean
temperatures are similar to the Costa but with precipitation
greater than 1000 1200 mm. Still, there is generally a
pronounced dry season where precipitation is limiting to normal
plant growth.

Good, extensive, and reliable historical and current
meteorological data is essential for successful technology


transfer and rapid agricultural development. The data is
essential for good system design in irrigated agriculture. It
is also equally important, however, in rainfed agriculture for
crop zoning and matching agronomic inputs to probable
production. *Rainfall probabilities also allow for better
selection of planting dates, harvest dates, and crop
varieties. Reliable data collecting and processing requires
high manpower and equipment inputs. While Peru has much basic
meteorological data, there is a question about the reliability
of much of the data. There is an urgent need for better
collaboration among the various institutions involved in
agriculture in obtaining better, more extensive, meteorological
data.

Costa Agriculture: Irrigation is essential for
agricultural production in the Costa. The soils are very low
in nitrogen, medium in phosphorus and more or less rich in
potassium. The principal crops include cotton, sugar cane,
rice, corn, alfalfa, vegetables, and fruits. The Costa uses
the greatest proportion of the fertilizer in the country and
produces 40% of the agricultural output with only 21% of the
cultivated land. While additional hectareage is available to
irrigation, providing water can be extremely expensive and not
economically justifiable from a production standpoint; this,
for example, has been the experience with the Majes project.
This is a large-scale irrigation scheme in southern Peru
estimated to cost approximately $20,000 per hectare. A third
of the cultivated land in the Costa has salinity and/or
drainage problems, with 20 % of the land having severe problems.

Sierra Agriculture: Sierra agriculture faces many
constraints deriving from varied agroecological settings as
well as infrastructural problems, particularly that of
difficult transportation and its resulting effect on
marketing. The Sierra also contains 40 % of the population,
most of very limited means. There is a generalized need to
increase food production, both for the people within the Sierra
and for the urban Lima market. Increased production would also
address the socioeconomic factors of improving life for the
Sierra inhabitants and reducing the rate of emigration to the
coast, with its resulting political, social, and economic costs.

Much of the Peruvian Sierra has sufficient precipitation
and distribution to provide one good growing season. However,
the Sierra is also subject to rather devastating droughts,
which have a tremendous impact on the social well-being of the
Sierra people and serious food production implications, not
only for the Sierra inhabitants but also for Greater Lima.
Irrigation can greatly reduce this risk-effect but does not
always do so to the extent hoped. Risk insurance may be a
viable alternative in many rainfed areas depending on drouth
probabilities.











D-5


Sierra soils lack nitrogen and phosphorus and are medium in
potassium. The principal crops are potatoes, wheat, barley,
corn and alfalfa. Traditional Andean crops such as quinoa,
olluca, and tarwi are also grown. Crops in the Sierra require
a growing season 15-20 % longer than in the Costa. There is a
need to increase production in the lower parts of the valleys
so that the farming intensity can be decreased at the higher
elevations where erosion is generally more severe.

Irrigation serves to reduce risks and stabilize rainy
season production and, ideally, provides for a second cropping
season. Irrigation systems in the Sierra are generally small
and have a limited infrastructure of lined canals. Maintenance
of the systems is generally poor to nonexistent. An additional
problem in a number of Sierra river systems is poor water
quality due to contamination of the system by mine tailings
and/or processing. This has been a major problem in the past
in the Mantaro valley. Although efforts are being made to
decrease the problem, it is still a factor in favor of
considering projects which primarily use smaller alternate
water courses which are not contaminated.

Two crops per year in lower elevations under irrigation
might be an effective means of increasing production in the
Sierra, but it requires a knowledge of the frequency and
intensity of frosts and average temperatures throughout the
year, resistance of specific crops to frosts and low
temperatures, vegetative period of crops, crop water
requirements, water availability and crop values. Yields may
differ more than 80 % from one field to the next, even under
the same climatic conditions, due to differences in
technological levels.

Generally, only pastures can be cropped the entire year
above 3400 m. Given the difficult climatic and geographic
conditions, any increase in production in the Sierra will have
to come from improved pasture and livestock management, more
and better-managed irrigation, and the successful transfer of
production technology such as fertilizers and improved seed.

Selva Alta: The mean temperatures in this area are similar
to the Costa but with precipitation generally greater than 1000
mm. The principal crops are coffee, rice, corn, citrus, banana,
cacao, oil palm, and coca. The soils are generally very good
and frequently do not need large amounts of fertilizer at least
during initial cropping seasons; as improved management
increases yields and nutrient depletion becomes more important,
fertilizer need will increase. Soil conservation and water
management problems are similar to the Sierra and, thus,
require similar improved practices.


Agricultural Production: Peru continues to have rather
serious shortfalls in the production of a number of basic
foodstuffs. Reasons for this are complex and include
agronomic, infrastructure, pricing, and marketing
considerations. Wheat, corn, milk products, and oils are the
most consistent and serious shortfalls. Others are important
at various times, depending on particular conditions such as
droughts, floods, landslides, and earthquakes.

Total production may be increased by either increasing the
area cultivated or by increasing yields. Peru has large
additional areas that can be brought under cultivation in the
coast, if water can be made available, and in the Selva, if
infrastructure and production technology can be made
available. Such expansion in either area, however, involves
environmental considerations which require high levels of
resource management capability. It would seem, therefore, that
possibly greater benefits can be obtained by increasing the
productivity of land currently being cultivated. Much of the
land currently under fallow for one to three years in the
Sierra could be brought under at least annual production with
minimal input costs. Irrigated yields are also far below what
they should be and could be increased considerably if inputs
were available and used. Thus, increasing yields, decreasing
fallow periods, and double and triple cropping should provide
the greatest production increase at the lowest costs to both
the producers and country as a whole.

Small and Medium Irrigation in the Sierra: Irrigation in
the Sierra is very inefficient and prospects for immediate
improvement are not good. Most farmers are using primitive
production methods and traditional technologies in the use of
fertilizers, herbicides, insecticides, plant varieties, and
seeds. Irrigation and soil conservation are poorly understood
and practiced. These poor production techniques, and the
marginal lands used, produce low yields and limited returns.
Irrigation of unimproved crops on lands with capability
limitations provides limited short-term benefits and may have
questionable long-term effects on crop yields as well as
disastrous effects on soil erosion.

The Directorate for Preservation and Conservation (DIPRECO)
was created within the Directorate General of Water (DGA) to
address the problem of small and medium irrigations and help
communities improve their systems. The DGA, and DIPRECO in
particular, was staffed primarily with agricultural engineers
and agronomists reflecting their major concern with
agricultural production. This is in contrast to the
Directorate General of Irrigations (DGI), which was staffed
primarily by civil engineers concerned with works and with
responsibility for large projects.















Plan MERIS was proposed as a part of the overall plan for
Sierra irrigation in Peru. It was originally intended to be
concerned with projects that were simple to design and
construct and which were inexpensive, as local materials and
unskilled labor would be used. While it was expected that
beneficiaries would do most of the work, it was also realized
that a large technical assistance input would be needed to
fully realize the benefits of irrigation. As the project moved
through the design process, however, more civil engineers
became involved and more specific detail was required. As a
result, Plan MERIS eventually became more of a construction
project with a credit component for land improvement. When the
project was then placed in the new General Executive
Directorate (DGE), instead of the DGA, decreased emphasis on
technical assistance and community interest resulted, as the
DGE was also primarily staffed with civil engineers.

Support for the research component of the project was also
decreased. Originally, this component was to support extension
efforts in applying new technology to improve water conveyance
efficiency and water application efficiency, as well as
improved agronomic technology. The changed nature of the
project, though, was manifested in the fact, for example, that
the possibility of using gravity-fed sprinkler systems as both
a more effective and efficient means of irrigating some areas
with difficult terrain and as a means to decrease erosion was
deleted.

The major Plan MERIS effort in the Sierra has taken place
in two of the most Sierra important valleys. The Mantaro
Valley (Huancayo) in the central Sierra is the larger and more
densely populated. Because it is much closer to Lima, the
resulting marketing situation is much better, a condition not
present in the Cajamarca Valley in the northern Sierra. The
Plan MERIS subprojects in the Mantaro valley were primarily
developed with water sources other than the Mantaro river,
which supplies the major older established irrigation system
and was contaminated by the mining industry. This
contamination apparently has been decreased and the most recent
subproject is mixing Mantaro water with another source.
Mantaro farmers, however, still exhibit a reluctance to use
water they have known to be contaminated in the past.

In general, the physical engineering aspects of the
subprojects are adequate, and have not encountered major
problems. The extensive lining of canals has certainly
decreased water losses in the main canal system, but the
on-farm canal systems appear to have had very limited technical
imput and, in many cases, could be improved as to their layout
and use. Waterlogging and salinity is not a major problem, but
drainage is necessary in several localized areas. It seems


apparent that more water is available to more farmers and more
reliably within the project area than before. The actual impact
of this availability is more questionable, however. The very
high level of minifundistas within the project area (90%) makes
improving the water management and production technology
difficult. The difficulties posed by this factor were
certainly underestimated during project planning and have still
not been addressed in an adequate way.

Irrigation is practiced to increase crop yields. This may
take the form of supplying water during a
precipitation-deficient period in a supplemental manner, or by
supplying water during the dry season for a second crop in the
same year. A second crop has the same effect as opening new
land, and possibly at lower cost if the water supply is readily
available. A second crop may, however, have unexpected
socioeconomic effects in that, while it allows for more
efficient production (as some fixed costs are spread over two
seasons), the increased production may lower prices, creating
adversity for other farmers who remain limited to one crop per
year. Generally, however, other marketing factors are probably
more important.

In the case of Plan MERIS, several of the subprojects were
not able to double crop because of the frost hazard present at
the high elevations at which they are located. It also seems
questionable, in several cases, whether the marketing
infrastructure is developed sufficiently to accommodate two
crops. It seems apparent that some of the traditional Andean
crops, although they could be produced at somewhat higher
elevations during the second growing season, have a very
limited market potential.

Supplemental irrigation may also act to lengthen the
growing season. A pre-irrigation may allow planting before the
rainy season and thus allow the crop to receive more benefit
from the subsequent normal rainfall. This may be a major
benefit in the case of Plan MERIS as rainfall during November
in the Sierra, which is the normal planting month, is extremely
variable. Being able to plant at a specified time may also
have some very real market advantages.

An additional benefit of irrigation is that it allows a
better payoff from inputs such as fertilizers, pesticides,
improved seed, etc. The converse, however, is also true. To
increase yields significantly and obtain maximum return from
the applied water the associated complementary inputs of high
yielding varieties, fertilizers, disease and pest control, and
improved agronomic management must be supplied. If these
inputs are not provided, then the full impact of irrigation is
lost.














Frequently, in justifying irrigation projects, production
inder irrigation with improved agronomic technology is compared
7ith existing rainfed production without improved agronomic
technology This, of course, overestimates the probable
benefitss of irrigation.

Unfortunately, there is not sufficient resource information
(soils and climate) and data on potential gains from irrigation
iith and without improved cropping practices to accurately deal
jith the rainfed versus irrigated question in Peru. However,
there is considerable evidence from other countries with
similar conditions that, in many conditions, rainfed yields can
be doubled if inputs, training, and assistance are provided to
farmers. Given the current average national yields of 0.8-1.0
r/ha for grains, and 6-7 T/ha for potatoes, improved agronomic

practices or irrigation should provide a two-fold increase.
irrigation-plus improved agronomic technology should provide an
additional two-fold increase. It would seem wise,therefore, to
not begin new projects until the existing ones are brought up
to this potential.

Irrigation is often a very costly, capital-intensive means
of substituting for other inputs. This appears to be true in
the case of Peru. In much of the Sierra, production increases
from irrigation with traditional cropping practices are about
the same as could be expected from using improved seed and
fertilizer under rainfed conditions. This is to be expected
when water is supplied 'free' or needed inputs are not
available. In the case of new irrigation development, except
in situations where irrigation water supplies can be very
inexpensively developed and applied, it would be more cost
effective to obtain the same crop production increases by
improving agronomic inputs (seeds, fertilizers, management)
under rainfed conditions or by opening new lands to settlement.

The experience with settlement of new lands in the Selva
Alta appears to substantiate this conclusion. Input costs are
still low as disease systems have not yet been established and
the soils have high native fertility. Yields are good for
rainfed conditions with irrigation giving a considerable
additional increase.

In a number of the Plan MERIS subprojects, less than 50% of
the expected area was being irrigated although water was
available for more area. In some cases, much of the area was
not even cultivated. While there was some supposed
double-cropping in certain cases, reducing the area in fallow
and obtaining annual cropping may be a higher priority because
of cost and input supply. A greater effort, therefore, must be
made in the supplying of technical assistance. It is evident
that there is a challenge for creative social scientists to
devise ways of increasing acceptance and implementation of


improved production technology by the minifundistas, whether on
rainfed or irrigated lands.

Technology must be made available to reduce the risks
associated with rainfed agriculture, while increasing and
stabilizing production consistent with conservation of
available soil and water resources. Technology is also
essential to realize maximum production benefits from irrigated
lands. Improved seed and fertilizer are the technological
inputs that are most effective in increasing land use
productivity. The use patterns of both are very poor in Peru
at present, and particularly so in the Sierra. Fertilizer use
in the Sierra is only a fraction of that in the coast, although
there are actually more outlets in the Sierra. Using improved
potato seed as an example; 85% of the farmers on the coast use
improved seed, whereas only 3% of the farmers in the Sierra use
improved seed.

Short-season varieties reduce the time of climatic exposure
in the field. Crops do not vary much in daily water
requirements during the growing season, particularly after they
cover much of the surface; therefore the length of the growing
season is a major factor in total water demand. Although a
short-season variety may have a lower potential yield, actual
yields may average somewhat higher because of reduced climatic
risk when compared to long-season varieties.

Rainfed croplands are the source of much of Peru's food.
Indeed, the current food role of rainfed techniques would be
even more important except that output is constrained in
regions that still rely upon a traditional technology that
evolved to reduce risk of losses in dry years. With this
emphasis, some of the potential benefits that could accrue in
good years is lost. The design of new or improved technology
should be focused on opportunities for farmers to invest safely
in anticipation of good years. New technology should prevent
destruction or diminution of the biological potential of land,
maximize economic benefits from a given environment, and
minimize damage through manmade as well as natural processes of
desertification.

Rainfed agricultural systems revolve around the principle
that water is the limiting factor. To increase or maintain
yields, the water use efficiency for crop production must be
maximized. This efficiency may be defined as the yield of
product per unit area and unit of water and is, to a
considerable extent, a reflection of management skill. Thus,
while the yield potential in rainfed areas may be limited by
the moisture supply, the actual yield obtained is determined by
the skill in manipulating agronomic practices to optimize
water use. Improved management practices may, in many cases,


















D-10





count for 50% of the yield increase in rainfed agriculture,
th improved varieties accounting for 30%, and improved
wanting and harvesting accounting for the other 20%.


Conclusions and Summary: It is evident that the Peruvian
crigation sector as a whole, including Plan MERIS, performs
ell below its potential. This is not unexpected as new
irrigation schemes invariably fail to achieve either area or
productivity targets, and always exceed estimated costs and
ime required for implementation. Thus, food demand always
utstrips production increases and the economic justification
n which the project rests is not attained.


The Plan Heris model, with per hectare costs of less than
;1000 does, however, appear to be much more viable than some of
he coastal projects with costs of $20,000 per hectare. While
:he transportation and marketing costs in the Sierra may exceed
:hose of the coast, the resulting social benefits are probably
nore important to the well-being of the country.


The immediate needs are those of education and extension.

7 concerted effort should be made to intensify educational and
extension services on all established projects. Efforts should
be concentrated and directed to basic farm management,
production techniques, water management, and soil conservation
practices. It is, however, quite possible that no amount of
technical assistance will overcome the current disincentives in
pricing and marketing.


There can be no disagreement with the conclusion of the

Sederhana (Indonesia) Impact evaluation:


"... greatest value of the irrigation system is the
reliability of the water supply. While production
increases are also valued highly, farmers prefer stable
yields to yields that vary from a bumper crop one year to a
bad crop the next. The greatest benefits of a small-scale
irrigation system, then, are those that first assure water
security and build water management activities and other
production increases on that solid base."


or, with those of the Impact Evaluation series in general:


"Strikingly consistent theme participation of the
project's beneficiaries is as essential to the successful
project as any physical input, and that sustaining the
benefits of development projects depends increasingly on
the interest, care and support provided by beneficiaries."


In sum, irrigation programs can provide substantial benefits
for the rural poor but they must be integrated with other

agricultural development and national development efforts.


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APPENDIX E

PLAN MERIS PROJECT IMPACT: ECONOMIC ISSUES
Cressida MlcKean
pPC/Office of Women in Development


This appendix will analyze several economic issues raised
by the Plan MERIS project. First, the cost and use of
agricultural inputs, particularly the credit component of the
Plan MERIS project, will be examined. An important assumption
of this project was that irrigation is necessary, but not
sufficient, to improve agricultural production. Therefore, it
is important to analyze the way in which select agricultural
inputs, particularly credit, contributed or did not contribute
to the project outcome. A related issue to be discussed is the
Peruvian government's agricultural pricing policy. While the
complexities of subsidization and price supports can not be
fully addressed here, it is important to examine how price
incentives and disincentives may have exerted an influence on
farmers in the Sierra over the life of the Plan MERIS project.
Second, economic trends in a select group of subprojects
will be examined. The assessment will include a discussion of
land use, cropping patterns, crop yields, income and
employment, as well as milk and meat production, indicators not
originally identified as part of the Plan IERIS project. The
issues of income and employment will be discussed only in
passing, since the lack of verifiable information substantially
limits the analysis of these factors. The overall aim is to
identify the preliminary changes underway in the subproject
areas and to compare these to regional statistics to the extent
possible. In short, in what way does the Plan MERIS project
appear to have influenced agricultural production in the
Sierra, or do other factors appear to have played a primary
role? This appendix also includes a preliminary list of
lessons learned to guide future AID assistance to similar
projects.
It is important to mention than this appendix does not
attempt to calculate an economic rate of return for the
subprojects. Such an analysis was not possible, given various
constraints. The computer program used in calculating the
projected rate of return for the project paper was not
available either in Peru or in AID/Washington. Plan MERIS did
not have adequate staff or financial resources to draw up
comprehensive statistics. Also, given the delayed construction
schedule, calculating these returns at a later date would be
more appropriate.


E-2

I. Agricultural Inputs--Credit and Working Capital

A critical assumption of the Plan MERIS project is that
provision of both a steady water supply and agricultural
inputs--such as--redit, fertilizer, and extension--are required
to assure improved agricultural production. Without the proper
use of irrigation, together with specific inputs, the benefits
of a multiplier effect on agricultural production will probably
be negligible. In the Plan MERIS project, given delays in
feasibility study preparation and canal construction,
agricultural production under new or improved irrigation has
been slow to get underway. By March, 1983, six subprojects had
had two cropping seasons, while agricultural production was
just getting started in five others. Therefore, it is possible
to take only a limited look at the use and effect of
agricultural inputs.

One serious limitation to the use of agricultural inputs in
conjunction with irrigation by farmers in Peru has been the
sharply rising cost of fertilizer, pesticides, and agricultural
equipment all critical inputs in agricultural production. In
January, 1979, just as agricultural production was getting
underway in the first subprojects, the Peruvian government
eliminated subsidies on fertilizer purchased for agricultural
production. Prior to that time, subsidy payments covered 35
percent of the total cost of fertilizer. In 1979, fertilizer
prices jumped an average of 180 percent. By 1980, fertilizer
prices were up another 60 percent (U.S.D.A. Agricultural
Situation Reports).

The world energy crisis, the rising cost of transportation
(e.g., of agricultural inputs), the Peruvian government's
austerity program, and other factors contributed to similar
rises in the prices of pesticides, and in the replacement and
operating costs of agricultural equipment. Just the additional
cost of fertilizer alone is substantial, when farmers use up to
56 kilos of fertilizer per hectare of corn and up to 41 kilos
per hectare of potatoes. Inevitably, producers have been
compelled to limit their use of these inputs and, given their
Smaller operating margins, the small scale farmers have been
most affected by the price squeeze.

The Plan MERIS project paper did identify the lack of
medium- to long-term credit for on-farm improvements, such as
land leveling and clearing, canal hook-ups, drainage, and fence
construction as a critical constraint to agricultural
development in the subproject areas. Even with irrigation, the
land has to be prepared for agricultural production. As a
result, the Banco Agrario del Peru (BAP), assumed management of















medium- to long-term investment credit fund for on-farm
improvements in the Plan MERIS subproject areas. However, Plan
IERIS did not consider working capital loans for the purchase
,f fertilizer, pesticides, and other inputs, or other factors,
;uch as land tenure, to be potential bottlenecks. In 1975,
working capital loans from the Agrarian Bank were relatively
available and affordable. Moreover, since the agrarian reform
ias still underway, it appeared that the small farmers in the
;ierra would soon gain title to a plot of land.

Unfortunately, by 1981, the change in monetary policy of
the Banco de la Reserva, the Peruvian equivalent of the U.S.
federall Reserve Bank, resulted in a sharp rise in the interest
rates charged by the Agrarian Bank, both for short and
long-term credit. Peru's high inflation rate had led to
increased government concern about decapitalization of local
banks, given that the interest rate charged was usually below
the rate of inflation. More significant than the high cost of
the credit was the fact that the Agrarian Bank was increasingly
Less interested in serving the small, private farmers. As it
faced an interest rate squeeze, it became more concerned with
return on its investment than it had been previously. It is
important to remember that between 70 and 80 percent of the
Agrarian Bank's annual lending is in short-term production
credit, primarily to medium- to large-scale cooperative
enterprises. In 1980, 64 percent of the value of the Agrarian
Bank's new agricultural loans went to cooperatives; almost 36
percent to farms with more than 20 hectares, and only
four-tenths of a percent to small-scale, private farms.!/

One problem for the small- to medium-sized farmer in the
Sierra is that while production costs were more than doubling,
access to short-term production credit to purchase the
necessary fertilizer, seeds, pesticides, and equipment, became
even more limited than the data suggests. In the Plan MERIS
project context, therefore, working-capital credit has not
complemented investment loans for on-farm improvements to the
extent anticipated, at least in the Cajamarca region. In
Cajamarca, 31 medium-term loans were disbursed for on-farm
improvements between 1980 and 1982; however, only one
short-term production loan was disbursed in this same time
period (source: BAP regional office in Cajamarca). A similar



A/These World Bank figures on small-scale, private farms
refer to farms of 20 hectares or less. In fact, it is unlikely
that many farmers in the beneficiary target group of Plan MERIS
were recipients of BAP production credit.


breakdown of short- and medium-term loans was not available for
the Mantaro region, even though production credit from the
Agrarian Bank was generally more available in this area,
according to farmers interviewed in these subprojects.
Nonetheless, in both regions, the cost of production credit was
increasing substantially, from 18 to 20 percent in 1978, to
32.5 percent in 1981, and 46.5 percent in 1982.


II. Banco Agrario del Peru's On-Farm Credit Fund

Slow disbursement of the on-farm medium-term credit fund
and the concomitant limited access of beneficiaries to this
credit has been a serious problem for farmers in the Plan MERIS
subprojects. Between 1979 and 1982, the BAP had disbursed only
$1.4 million of the $3 million budgeted for the on-farm
investment fund. In this time period, 79 medium- to lona-term
loans had reached farmers in the Plan MERIS subprojects. /
The issue raised by the slow rate of disbursement is what kinds
of farmers have benefited from the credit fund and what kinds
have not.

For borrowers in the Plan MERIS subprojects, a breakdown of
loans by size of landholding would be useful to test the
assertion that a small group of medium-sized farmers have been
the prime beneficiaries of this on-farm credit fund.
Unfortunately, comparable breakdowns of loans by size of land
holding in both Mantaro and Cajamarca regional subprojects were
not available.

Still, it is possible to compile a rough picture of the
Plan MERIS borrower population. First, between 80 and 95
percent of the farmers in those subprojects with two cropping
seasons, have one or less than one hectare of land. Only in
the Chingol subproject do the majority--54 percent--have over
five hectares, with nine percent having one or less than one
hectare (see Table I). In the Mantaro area, 30 percent of the
45 Agrarian Bank on-farm investment loans (45 in total) were
approved for farmers with two hectares or less of land,
according to statistics provided by the Plan MERIS regional
staff. Moreover, 54 percent of these Agrarian Bank loans went
to farmers in the Mantaro region with three hectares or less of
land, according to the same statistics.



SThis figure was submitted by the BAP's regional staff
offices; however, the number of loans may be greater if
information were available concerning loans for the Cajamarca
region for 1979 and 1980.















In short, a limited number of small farmers in the Mantaro
Isuprojects, understood to be those with three hectares or less

of land, have benefited substantially from on-farm, investment
ofb oesia t have benefited s uze a efrombene same statistics
credit from the Agrarian Bank. However, these same statistics
reveal that 41 percent of the Agrarian Bank loans for the
Mantaro region went to medium to large farmers, who are farmers
with over three hectares of land. The latter were not among
the beneficiaries anticipated by the project paper.

It is not possible to make a statistical comparison between
borrowers in the Mantaro and the Cajamarca regions since a
similar detailed breakdown of borrowers by size of land holding
for the Cajamarca region is not available. Nonetheless,
estimates about the size of the land holdings of the borrowers
can be deduced from the size of the loans. If one assumes, as
does the Agrarian Bank's regional staff, that the bank will
lend S/1,200,000 (in 1982 soles) for every one and one-half
hectares, the Bank appears to have favored the medium to large
farmer over the small farmer, especially in the Cajamarca
subproject sites (see Table II).
In the Cajamarca region, where small farmers are those with
less than five hectares, 89 percent of all loans have been in
the over S/4,000,000 range, i.e. to farmers with over five
hectares of land. Even in the Mantaro region, the Agrarian
Bank appears to have favored medium-sized farmers more than the
Plan MERIS Regional office figures suggest. Sixty-four percent
of the Agrarian Bank on-farm, capitalization loans have been in
the S/2,400,000 and up range, i.e. to farmers with over three
hectares. Moreover, 38 percent are in the over five hectare
range. The disparity between loans in the Mantaro region and
those in the Cajamarca region can be attributed, in part, to
the fact that farms in Cajamarca, well known for their
livestock, tend to be larger than those in Mantaro.
Nonetheless, the breakdown of loans by amount does suggest that
the "small farmers" with two hectares or less -- the
beneficiaries identified in the original project paper -- have,
by no means, been the primary beneficiaries of the on-farm
credit program.

Other information on this credit fund confirms the
perceived trend toward favoring the medium-sized farmer,
especially in the Cajamarca region. Interviews with Plan MERIS
staff indicate that loan activity has been concentrated in only
a few subprojects. For example, farmers in the Chingol
subproject have been primary beneficiaries; 23 of the 35 loans
extended in the Cajamarca region have been to farmers in this
subproject. Significantly, almost all these borrowers are


E-6


farmers with 8 to 20 hectares of newly irrigated land. The
minifundistas on one-half to two hectares plots, with improved
irrigation, have not had access to credit from the Agrarian
Bank.

Similarly, 24 of the 45 loans extended in the Mantaro
region have been to borrowers in the Chupaca subproject. In
this case, the borrowers also appear to be those benefiting
from newly irrigated land. While it is not clear how large
their farms are, it appears that those farmers with sufficient
land to pasture livestock or to cultivate a highly marketable
product may have been the prime beneficiaries of the credit
program. In Chupaca, yields on pastureland jumped from zero to
16.1 tons per hectare between 1978 and 1982 (see Table V).
Moreover, with new irrigation, farmers cultivating vegetables
may have been perceived as good credit risks by the Agrarian
Bank. Yields on vegetables more than doubled in Chupaca between
1978 and 1982 (See Table V).

Medium-term loans from the Agrarian Bank's on-farm credit
fund have not only largely benefited medium-sized farms in a
few subproject areas, but also have been used primarily to
purchase livestock and to build fences for the livestock. In
subprojects in both the Cajamarca and Mantaro regions, at least
55 percent of the loans from this on-farm credit fund have
permitted borrowers to buy cattle and construct fences (see
Table III). The percentage for livestock-related activities is
even higher if one includes land clearing and leveling, and
planting for improved pastures as a use of the credit. Prior
to November 1982, the Agrarian Bank could only earmark 25
percent of this on-farm credit fund for livestock activities.
Even though the objective of the Plan MERIS project was to
improve agricultural production, increasingly, the credit fund
stimulated livestock activities. By November 1982, AID no
longer restricted the Agrarian Bank's lending for
livestock-related activities from the on-farm credit fund.

This trend in lending, in effect, affirms the Agrarian
Bank's claim that it is uneconomic to lend to farmers with
holdings of less than one to two hectares. In fact, interviews
with minifundistas in the subproject areas revealed that most
of he agricultural produce from their landholding is consumed
by the household, and is not marketed. Cash income was most
often forthcoming from off-farm, as opposed to on-farm,
employment. Moreover, various studies have found that the
smaller the plot, the larger the amount of agricultural produce
consumed on the farm. Another finding of these studies was














that the smaller the farm, the lower the yields. / In short,
the income benefits from agricultural production on minifundios
receiving on-farm credit are most likely not sufficient to
cover repayment of an investment loan. As well, these
minifundistas tended to be farmers without title to their
land. This proved to be a major obstacle since the Agrarian
Bank required title to disburse a medium-to-long term
investment loan.

The net result is that the original project paper for Plan
MERIS identified as target beneficiaries farmers without
adequate potential productive capacity or legal recognition to
be viable credit risks. Instead, the Plan MERIS project would
have been better directed to targeting inputs, such as on-farm
credit, to those "medium-sized" farms-with the potential to
reap the benefits of agricultural production. Also, these
so-called "medium-sized" farmers, e.g., those with more than
three hectares (Mantaro) or more than five hectares
(Cajamarca), are still small farmers relative to those in Peru
as a whole.

Use of On-Farm Credit Fund

Medium-term loans from the Agrarian Bank's on-farm credit
fund have not only largely benefited medium-sized farms in a
few subproject areas, but also have been used primarily to
purchase livestock and to build fences and other infrastructure
for the livestock. In subprojects in both the Cajamarca and
Mantaro regions, at least 55 percent of the loans from this
on-farm credit fund have permitted borrowers to buy cattle and
construct rural infrastructure (see Table III). The percentage
for livestock-related activities is even higher if one includes
land clearing and leveling, and planting for improved pastures
as a use of the credit.

Prior to November 1982, AID required that the Agrarian Bank
earmark only 25 percent of this Plan MERIS on-farm credit fund
for livestock activities. Even though the objective of the
Plan MERIS project was primarily to improve agricultural
production, increasingly, the credit fund was used to support
livestock activities; By November 1982, AID no longer
restricted the Agrarian Bank's lending for livestock-related



3/D. Horton, et al., "Tecnologia de la Produccion de Papa.en
el Valle del Mantaro, Peru," International Potato Center, 1980,
and E. Franco, T. Haller, G. Gonzales, "Proyecto Cajamarca La
Libertad -- Programa de Estudios Socio-Economicos," 1976.


activities from the on-farm credit fund. After this decision
was made, disbursements from the credit fund accelerated.

In effect, AID was belatedly acknowledging the increasing
importance of livestock in the subproject areas. Even prior to
AID's decision in november 1982, when the limit was 25 percent
for livestock-related use, the Agrarian Bank had allowed
anywhere from 30 to 50 percent of the loans for on-farm
improvements to be used for the purchase of livestock, leaving
aside the use for rural construction.

From the point of view of the majority of farmers
interviewed in the subproject areas, livestock was a valuable
hedge against rapidly-rising inflation. Moreover, farmers
tended to be more interested in livestock, since milk could be
produced year-round with little risk of loss, while farmers
interviewed perceived agricultural crops as seasonal and with a
greater potential for loss. A second factor not sufficiently
recognized in the original project paper was that pasture for
livestock already accounted for a large proportion of the land
area in both Cajamarca and Mantaro. In the Cajamarca
subprojects, over 70 percent of the land area is dedicated to
pasture for livestock. Third, credit for livestock-related
activities appears to be a more attractive investment to the
Agrarian Bank than credit for on-farm improvements for
agricultural production. Both the decontrolled price of meat,
the rising price of milk, and the established milk marketing
system have made livestock a good investment, while
agricultural production, particularly on small plots, has not
been perceived to be as attractive.

In sum, the tendency of the on-farm credit fund to favor
medium-sized farmers, particularly for livestock-related
activities, suggests that the design of the original project
paper was inappropriate. The aim of the project -- to reach
the minifundistas, i.e., those with less than two hectares --
was consistent with the basic human needs philosophy adopted by
AID in the mid-1970s. However, the expectations as to the
actual agricultural productive capacity of this target group
were unrealistic, even assuming the presence of new or improved
irrigation. If minifundistas were to be the prime
beneficiaries, the credit fund would have to be redesigned to
serve their diverse needs.











E-9


rici ol and Aricutural Production

oth pr r the small- to medium-sized farmer in
Another problem fO es returns have been sine
the Sierra is that producers' returns have be tecr dining
input Sierra ,en going u
the prices of most inputs haven the dramatic rises in the price
prices of most outputs. Given the ds
ofprices of most outputup 160 percent in 1979 and another 60
of fertilizer alone -- up na is already in a dpoiff int
percent in 1980 -- the small farmer is already in a difficult
ercensituation. however the government's price control policy i
effect from 968 through 1980 has been a major disincentive to
producers of main foodstuffs, such as corn, potatoes and wheat.
Domestic prices for these goods were insulated by the price
controls, to some extent, from changes in international prices,
but they did not provide sufficient stimulus to increase
product While imports of agricultural commodities have
production. While imports ooution of the main foodstuffs
been increasing, domestic production f the main dstuffs
have remained stationary or in some cases even declined. Also,
direct subsidies of imported foods has probably discouraged
rodcers from growing substitutes (e.g., substantial imports
odui efrom rowing su stuct ion). The new gore
of wheat and decline in quinua production). The new government
has made a major effort to remove marketing and price controls,
and to eliminate subsidies. The new Agricultural Promotion and
an t eliminate subsidies. m 1980l is specifically
Development Law, issued November 17, 1980, is specificallon
aimed at increasing yields and overall food production.
However, the drought, combined with the political demands of
urban consumers, has made implementing this well-intentioned
initiative difficult.
nFor the farmers interviewed in the Plan M4ERIS subprojects,

disincentives to engage in agricultural production have
encouraged them to diengagversify into livestock production. As
early as 1978, the government had subsidized dairy production,
and had dismantled the agrarian reform in the dairy producing
sector. Dairy producer prices were up 64 percent by 1978. As
a result, even despite increasing production costs, farmers
were re-investing in livestock. By 1980, the drought had
brought down the level of both agricultural and livestock
production; imports of dairy products and agricultural crops
were on the rise. Nonetheless, livestock has remained an
attractive asset in highly inflationary times and climatically
variable regions.

III. Economic Indicators in Six Plan MERIS Subprojects

One serious constraint to assessing the direct and indirect
economic effects of the Plan MERIS project is that insufficient


E-10

time has elapsed in which to establish the impact of irrigation
on agricultural production and, ideally, on farm incomes. Each
of the subprojects has three phases: first, the feasibility
study; second, the construction of the canal works; and third,
agricultural development. However, by March 1983, construction
had not yet been completed in six subprojects and had only
recently been finished in five others. Under these
circumstances, the most feasible approach which would provide
some basis for comparison with pre-project indicators was
determined to be preselection of a sample of subprojects with
at least two cropping seasons with new or improved irrigation.

This preselected sample includes three subprojects from the
Mantaro area (Chicche, Chupaca, and La Huaycha) and three
subprojects from the Cajamarca area (El Chingol, Namora, and
Carahuanga). The primary source of information on these
subprojects was a statistical annex prepared by the Plan MERIS
staff (Evaluacion del Impacto Socio-Economico del Proyecto Plan
MERIS Primera Etapa 1982). While this document was most
useful in providing a base of statistical information, the
resource limitations on the Plan MERIS staff in its preparation
suggested that it should be used with caution. Semi-structured
interviews with farmers in these six subprojects and Plan MERIS
regional staff served to supplement this document. This
restricted information base limited the analysis to the
following economic indicators: land under cultivation, crop
composition and multicropping, crop yields, and milk and meat
production. Statistics on employment were not available, and
the data on increases in income was questionable. For example,
it assumed that the costs of production had not increased over
the life of the project to date.

A. Land Under Cultivation

In the Sierra, only 1.8 million hectares five percent of
this region's total land surface is actually under
cultivation for agricultural production. Moreover, only
700,000 additional hectares are suitable for conversion to
agricultural use. Natural pastures account for the largest
percentage of the Sierra's land area approximately 18 million
hectares.

The great majority of the Sierra's rural population is
involved in dry land subsistence farming. In 1980,
approximately 1.5 million hectares were cultivated under dry
land farming, while only 250,000 hectares produced crops under
irrigation. Among the most serious constraints to expanding
agricultural production in the Sierra are the extremely limited
cultivable land base, the large proportion of fallow land, and
inefficient water use.










E-ll


The Plan MERIS project aimed to increase the cultivable
land base in the Cajamarca and Mantaro regions. The plan was
to bring 14,900 hectares under new irrigation and to improve
irrigation facilities on 13,000 hectares in up to 27
subprojects. The Plan MERIS' decision to reduce the number of
subprojects from the 27 envisioned in the project paper to the
eventual 17 scaled down considerably the expectations about the
amount of land to receive new or improved irrigation. It is
necessary to limit the analysis of the amount of land under
cultivation to those thirteen subprojects which had initiated
farming with irrigation. The other four on which construction
had not yet been completed are not included.

In 1978, prior to the new construction and/or canal
improvements of the Plan MERIS project, 5,227 hectares of
irrigated land were already under cultivation in these thirteen
sites. By 1982, a total of 8,295 hectares of irrigated land --
an increase of 3,068 hectares -- was being farmed in those same
subproject sites. In short, Plan MERIS had succeeded in
expanding the irrigated cultivable land base by nearly six
percent in 13 subprojects.4/

While an increase to 8,295 hectares of irrigated cultivable
land by 1982 is significant, this amount is substantially less
than the rise of 27,900 hectares originally anticipated.
Nonetheless, if the Plan MERIS project is able to reach its
goal of 11,800 hectares of irrigated, cultivable land in these
thirteen project sites, the project will have been directly
responsible for a twenty percent increase in the Mantaro and
Cajamarca subproject areas.

As Table III indicates, those subprojects in which
construction has been completed for several years tend to have
a high proportion of land under cultivation. On the other
hand, those subprojects lacking completed canal infrastructure
tend to have a way to go to reach the anticipated levels of
cultivable land. However, the different relative increases in
the amount of land under cultivation for the various
subprojects can also be attributed to the fact that, in some
cases, the land is being irrigated for the first time, while in
other cases, Plan MERIS is just improving upon old irrigation
systems. Thus, in the Mantaro region, the high percentage



4tA breakdown was not available of the amount of newly
irrigated land as opposed to land with improved irrigation.


increase of irrigated land under cultivation may be due to the
fact that more than half of the land area in the subprojects
had not been irrigated previously. In Cajamarca, the
percentage increase of cultivable land is much smaller, in
part, because Plan MERIS improved upon existing irrigation in
80 percent of the subproject areas and provided new irrigation
to the other 20 percent.

Despite these advances, the current and anticipated
increases in the land area farmed in the Plan MERIS subprojects
probably still overestimate the amount and actual usage of
cultivable land. Given that underutilization of potentially
productive land is a problem observed in most subproject areas
visited, figures on increases in cultivable land have to be
examined with caution.

First, interviewed beneficiaries who live at high
elevations were unfamiliar with, and generally wary of,
irrigation as an agricultural input. At one project site in
the high Sierra (Chicche, at 3,500 meters), only 20 percent of
the community used irrigated water for pasture or agricultural
production; instead, it was used as a source of drinking water
for their livestock. At these higher elevations, the risk to
agricultural production associated with frost and the tendency
to often leave land fallow because of soil quality has
seriously inhibited full utilization of "cultivable land."
Also, insufficient or ineffective agricultural extension has
not encouraged farmers to overcome traditional biases and to
increase usage or irrigation for agricultural production, at
least at this time.

A second, serious constraint on usage of cultivable,
irrigable land is the farmers' perception of the potential
costs and benefits. In on-site interviews, small farmers,
particularly minifundistas, often did not consider it worth the
additional cost in time and money to dig a tertiary canal to
reach their land. The majority of the beneficiaries --
minifundistas who have not received technical support or credit
-- tended not to have constructed an ancillary canal to their
farm. On the other hand, those beneficiaries with at least 3
to 5 hectares, who often had received technical support and
credit to prepare land for cultivation, tended to already have
dug tertiary canals and to put a high value on access to
irrigation. This might be traceable to the fact that the small
landholders interviewed relied on their plot as a means to
provide for home consumption, not as a primary source of cash
income. In turn, the anticipated benefit of gaining access to
the irrigation was often perceived to be insufficient to


E-12










E-13


outweigh the perceived costs of securing their neighbors'
acquiescence, digging the tertiary canal and sacrificing time
which could be used to earn cash income from employment off the
farm. One minifundista who launders clothes for extra income
stated, "I have no one to help me and it isn't worth the time
and trouble."

The fact that 80 to 95 percent of the farmers in the Plan
MERIS subprojects are minifundistas -- many of whom are women
-- underlines the significance of this constraint (see Table
I). In Mantaro, the decreasing size of farms, as they are
subdivided by families into increasingly smaller plots, has
brought about a situation in which 90 percent of the farms in
the Chicche, Chupaca and La Huaycha subprojects have less than
one hectare. In turn, it is not surprising that at least 25
percent of beneficiaries in Chicche are engaged in off-farm
employment, according to interviews with Plan MERIS staff. The
number may in fact be much higher, since estimates of the
number employed off the farm for the Mantaro region range from
60 to 80 percent, according to an extensive farm survey
conducted by the International Potato Center in 1980. Another
factor has been the abandonment of cultivable land, which has
occurred as a result of outmigration in Chupaca and La Huaycha,
subprojects in the Mantaro region. In sum, while the Plan
MERIS project has increased the amount of new and improved
cultivable land by at least six percent, the lack of incentives
to engage in agricultural production have also served to
undermine the intent of the project.

B. Crop Composition and Multicropping

Cropping patterns in these six subprojects have not
undergone major changes since the initiation of the Plan MERIS
project. Between 1978 and 1982, there has been a greater
diversification of crops under cultivation in the Mantaro
region subprojects, while in the Cajamarca region the pattern
of crop cultivation has remained relatively static (see Table
V). In the Cajamarca area, the predominance of pasture and the
trend to improve on existing irrigation has been a disincentive
to diversifying into agricultural production.

In the Mantaro subprojects, improved pastures have assumed
a rapidly-growing proportion of cultivable land, increasing
from near zero in 1978 to 12 percent of the total in 1982.
Interviews in all three Mantaro region subprojects revealed
that a second crop in improved pastures or the development of
perennial pasture was increasingly the trend, even at the
higher altitudes. Double cropping, already common at the lower


E-14


elevations in the Mantaro valley, is more prevalent at slightly
higher elevations than prior to the Plan MERIS project,
according to farmers in Chupaca and La Huaycha. While this
benefit is directly traceable to the availability of irrigation
water, its impact in the context of the Plan MERIS project has
been slight.

In the Mantaro subprojects, vegetables, potatoes and sweet
corn still remain the primary crops under cultivation.
Vegetables, which includes beans and peas, still occupy the
largest percentage of the cultivated land area in the
subprojects; but, as a percentage of the total, vegetables
dropped from 46 to 30 percent, apparently due solely to the
dramatic shift into improved pastures in the large Chupaca
subproject. Despite this drop, the increase in land cultivated
in sweet corn, and the appearance of improved pasture, wheat
and barley indicates a probable rise in multicropping in the
Mantaro area.

In Cajamarca, known for the heavy predominance of
livestock, pastures continue to occupy over 70 percent of the
cropland, though dropping a percentage point between 1978 and
1982. Since the start of the Plan MERIS project, however,
vegetables and dried legumes have begun to assume a minimal
presence in the subprojects in Cajamarca. Cropping patterns in
Cajamarca may have been less affected by irrigation, since the
majority of subprojects have improved on existing irrigation
infrastructure, which is in sharp contrast to the situation in
the Mantaro region. Also, the small amount of new land brought
into cultivation in Cajamarca has only recently begun to be
leveled and prepared for planting.

In both areas, the presence of new or improved irrigation
will most likely stimulate, over the long run, increased crop
diversification and more double cropping. But, at this time,
the regional markets and the distribution mechanisms in place
appear to be influential factors leading to changes in cropping
patterns. In the Mantaro area, farmers interviewed cited the
high value placed on livestock and the proximity of the Lima
and Huancayo markets for vegetables as major influences on
their cropping decisions. In the Cajamarca region, farmers
mentioned the well-developed distribution system for milk
production and the relative inaccessibility of their farms to
the Cajamarca and coast markets for vegetables and other
perishable crops as factors affecting their cropping
decisions. Nevertheless, growing vegetables or corn would not
have been possible without irrigation reducing the risks. But
consistently, farmers mentioned marketing factors when asked
why they chose to cultivate a particular crop.


*W! ^aS~ty^'i










E-15


C. Crop Yields

An irrigation project such as Plan MERIS aims not only to
>ring fallow land into agricultural production and to diversify
droppingg patterns, but also to improve crop yields on the new
)r improved irrigated land. Table V illustrates how 1978
)re-project crop yields in the six subprojects compare with
1982 crop yields. This same table also includes a comparison
if Mantaro and Cajamarca subproject yields for 1978 and 1982,
4ith average crop yields for the regions as a whole for the
same time period.

From Table V, it is apparent that, for the majority of
subprojects, the 1982 yields were higher than the "before
project" state. The rise in yields, particularly of corn and
vegetables, was relatively large, ranging from 133 to 219
percent in corn, with the exception of Chupaca, and from 13 to
132 percent in vegetables. Also, in comparison with average
crop yields for the Mantaro and Cajamarca regions, as well as
for Peru as a whole, subproject yields are consistently higher.

Despite these positive indicators, the Plan MERIS project
performance in terms of crop yields is not as impressive as
these figures suggest. First, on-farm interviews and direct
observation of crops, usually potatoes, corn, or pasture
indicated that the improved yields cited by Plan MERIS were
probably overstated. Second, the increase to a yield level of
13.1 metric tons per hectare for potatoes is good, but not
outstanding. With the appropriate use of irrigation and other
agricultural inputs, the potato yields of small farmers, taken
from a sample in the lower Mantaro valley, increased from 17 to
29 metric tons.-/ Thus, in Chupaca, a subproject also in the
lower Mantaro valley, a rise in potato yields from 8.5 to 13.5
metric tons per hectare suggests that the appropriate mix of
inputs has not been realized in terms of crop yields. In other
words, crop yield increases in the Plan MERIS project are
mostly attributable to the availability of irrigation; however,
these yield increases appear to have been limited by the lack
of appropriate agricultural inputs and technical assistance.

In the Plan MERIS subprojects, there is also the strong
likelihood of a significant disparity in crop yields between
minifundistas or small producers, and medium-sized farmers with



2/The sample was taken from publication, "Tecnologia de la
Produccion de Papa en el Valle del Mantaro, Peru,"
International Potato Center, 1980.


more than three hectares (in the case of the Mantaro region)
and more than five hectares (in the case of the Cajamarca
region). In-depth, farm-level surveys of crop production --
potatoes ih M ntaro6/ and potatoes, corn, wheat, and barley
in Cajamarca_,' -- have found a positive correlation between
crop yields and the size of the production unit. Consistently,
the smaller producers have significantly lower yields relative
to larger producers. Given the large proportion of
minifundistas and small farmers in the Plan MERIS subprojects,
this finding may be relevant in estimating which farmers are
the most likely beneficiaries of the higher crop yields.

Minifundistas and small producers in the subprojects are
likely to be obtaining yields 15 to 20 percent less than those
obtained by medium- and large-sized farmers, if one accepts the
findings of the above cited farm-level surveys. This exercise
may help place the relative benefits accruing to the small-
andmedium-sized farmer in the subprojects in perspective. The
Plan MERIS statistics may also be skewed in favor of the larger
farmers. It is likely that the Plan MERIS staff used the yield
figures primarily from the medium and larger farms, rather than
from the minifundios, which are both more numerous and from
which it is more difficult to obtain sample yield data.

D. Livestock Production

Irrigation water is not only a significant input in terms
of improving crop yields. Also, irrigation has the potential
to keep pastures green year-round, which is especially
important at high altitudes and in the hot months between July
and January. Between 1978 and 1982, milk production doubled in
the six subprojects with two cropping seasons. Meat
production, though miniscule relative to the production of
milk, more than doubled in these same subprojects (see Table
VI). While the presence of water has not been the only factor
leading to improved livestock productivity, increased milk and
meat production has been a significant outcome in the
subprojects -- one unanticipated in the project paper.




&/ D. Horton, et al. "Tecnologia de la Produccion de Papa en
el Valle del Mantaro, Peru," International Potato Center, 1980.


7/ E. Franco, T. Haller, G. Gonzales, "Proyecto Cajamarca La
Libertad Programa de Estudios Socio-Economicos," 1976.


-~ara~-, =,~5lpa~----- _--C-


E-16











E-17


Livestock production is concentrated in the Sierra. The
Cajamarca valley is well known as a major dairy production
area, while the Mantaro region is a smaller but still
significant dairy production area. The large percentage of
cultivated land dedicated to pasture in the subprojects is a
reflection of this tendency. As was mentioned previously,
several factors have contributed to increased investment in the
production of livestock. First, in 1978, the Peruvian
government brought to a halt the agrarian reform on
dairy-producing land, which has encouraged reinvestment in
livestock. Second, in this same year, the government also
increased producer prices of milk by 64 per cent and
decontrolled the price of meat (U.S.D.A. Agricultural Situation
Reports). Third, medium-term credit from the Plan MERIS
project was available through the BAP for the purchase of
cattle; and an even larger amount was available by 1982.
Finally, the raising of livestock was becoming an increasingly
good investment because sales from milk production were able to
keep pace with inflation, often better than agricultural
produce from traditional seed crops.

An important issue for the Plan MERIS subprojects is which
farmers have benefited from this rise in milk and meat
production. Farmers in the Chupaca subproject were able to
increase their milk production nearly threefold and to increase
their meat production over 75 times -- from 38 to 2,901 metric
tons. The concentration of on-farm investment credit in the
Chupaca subproject (see section on credit fund), suggests that
this dramatic rise in milk and meat production has probably
benefited the farmers with sufficient land to engage in
large-scale livestock production. In the other subprojects, it
is likely that the medium-sized farmers have been able to
increase their production of milk and meat more than small
farmers, since they tended also to be the main beneficiaries of
the on-farm credit program.


IV. Lessons Learned

Several important lessons emerge from this overview of the
Plan MERIS project. First, for such irrigation projects to
have an impact on agricultural production, adequate attention
needs to be paid to the provision of essential agricultural
inputs. An on-farm medium-term investment credit fund is not a
cost-effective proposition for the small- and medium-sized
farmer is he lacks the capacity to purchase fertilizer,
pesticides, and other inputs. Production credit, as well as
sufficient agricultural extension, need to be available to


ensure that the multiplier effect of irrigation and
agricultural inputs on agricultural production is able to be
realized.

Second for an irrigation project to stimulate agricultural
production, it is crucial to recognize the importance of
existing land cultivation and production patterns. In the Plan
MERIS project insufficient attention was given to the
importance of pastureland in the subproject areas. As a
result, despite the intent of the project, on-farm credit was
used less for agricultural production and more for
livestock-related activities. Moreover, the role that
government pricing policies have played, particularly in
stimulating milk and meat production, was not sufficiently
recognized over the life of the project.

Third, irrigation projects -- large-scale or small-scale --
which aim primarily to increase agricultural production and,
ideally, to raise incomes have to carefully target the most
appropriate beneficiaries. In Plan MERIS, the identification
of farmers with less than two hectares of land was misplaced,
if the intention was to increase the land under cultivation, to
diversify the crop composition and to raise crop yields. The
construction of new or improved irrigation sites, the
establishment of an on-farm investment credit fund, and the
provision of limited agricultural extension were not sufficient
incentive for the minifundista to dramatically change his
manner of making a living. If the purpose was, in fact, to
improve the welfare of the minifundistas in the Sierra, another
approach is required.

To reach the minifundista in the Plan MERIS subproject
areas, it is essential to document comprehensively the various
sources of income of these farmers. For example, to what
extent is off-farm employment a primary source of income? Are
there sufficient incentives for the minifundista to engage
primarily in agricultural production? In short, increasing
agricultural production of the minifundista may not be the best
way to improve his welfare. More attention should be paid to
the linkages between on-farm and off-farm employment.

A fourth lesson of the Plan MERIS project is that new
construction or irrigation canals on previously unirrigated
land has the greatest capacity to increase yields. In the Plan
MERIS subproject areas, farmers on newly irrigated land tended
to have medium-sized farms and the greatest access to on-farm
credit. Moreover, the subprojects with the largest proportion
of new, as opposed to improved, irrigation registered the
highest yields.


..t.-S.-Wf.inUUi' 11 fmn.Li--.-*-*-. ..i * ...i...-.--.****------------ --


E-18














E-19



Also, canal construction per se is often not sufficient to ." U o- 4
reap the full benefits of irrigation. Especially for the > c c
minifundistas, many of whom are women, assistance in digging a
terciary canal is needed to ensure that those farmers will
benefit. C 4-

Finally, the Plan MERIS project demonstrates the importance U
of market demand as a key factor influencing the success or V
failure of the farmer to make effective use of irrigation. The
dramatic increase in yields of vegetables and pasture in the i a .
Mantaro region are testament to the stimulative effect that Mi cM
irrigation and the adjacent markets of Huancayo and Lima have c c -4
C c


had on production. )I.-
5--
.)

O01 0)


U H

U)s a a


0 CO



00
-J 4
So a



I0 .

a). C (V
aa o


o o *a




> U

(C 0
a aa ir






S >w 4-1o a

C 9 0 C X 3 0






C -J 0i M
a(
4 W3 O.H -










-5 o" ? Il f| Ork ~
C, O a m o m re
1 r 'T'E ^O m








Table II
Banco Agrario del Peru (BAP)/Plan ERIS Credit Fund
Number and Size of Medium-Tem Loans for Subprojects in
Mantaro and Cajamarca Regions (1979-83)


Distribution of'Loan by Size

$1,200 S/1,201 to S/2,401 to /4,001 to Over
Total Number or less 2400 4,000 8,000 S/8,000
Year of Loans (1.5 ha) (1.5-3 ha) (3-5 ha) (5-10 ha) (over 10 ha)


Mantaro Region Subprojects


Cajamarca Region Subprojects


Source: Banco Agrario del Peru (BAP), Huancayo and Cajamarca Regional Offices


Table III
LOANS DISBURSED AND CATEGORIES OF INVESTMENT USE
in Cajamarca and Mantaro Regions (1979-1983)
(In Thousands of Soles December 1982 constant)


Rural Construction
Number Total +Livestock as % of
Year of Loans Amount Total Loan Amount

Mantaro Region


Investment Uses


Rural
Construction


Land Clearing Equipment
Livestock Leveling Planting Machinery


1 1,400
26 52,557
7 22,450
7 69,500
4 15,100

Cajamarca Region

a n/a
a n/a
43,820
5 241,355
5 50,500


101
5,487
2,921
9,324
3,004


n/a
n/a
17,814
79,728
27,763


Total Plan MERIS Subprojects:

1979-80 80 511,777


702
15,571
9,150
26,100
6,600


15,920
46,800
7,350


148,358 134,810


-0-
12,167
3,759
3,102
1,988



n/a
n/a
3,518
31,616
2,925


344
3,432
580
3,799
1,633


5,362
37,942
-0-


61,061 58,348


* 1983 figures refer to loans in January-March 1983.
Sources: Documentation submitted on borrowers by Plan MERIS regional offices (1983)


-0-
6,953
4,282
19,316
201


Misc.



235
8,737
1,758
7,859
1,674


269 937
27,928 17,341
5,010 7,452



64,102 47,319


1979
1980
1981
1982
1983 *















Date Construction
Completed


April 1979
Dec. 1979
Dec. 1980
May 1982
July 1982
Dec. 1982


Table IV
LAND UNDER CULTIVATION
(in Hectares)


in Sub-Project Areas* without project (1978), with project (1982) and expected in year of consolidatic:.
Land Under Cultivation Land Under Cultivation Land Under Cultivation
Suborolects without project (1978) with project (1982) Expected Year of Consolidation


C--F
Mantaro Region
i. Chicche
2. La Huaycha
3. Chupaca
4. Yanacancha
5. Apata
6. Sincos


146
76
1,372
41
220
197


603
416
2,844
42
341
241


650
540
3,751
700
650
460


S162264030
Cajamarca Region 1,039 2,644
March 1981 7. Chingol 341 644
Not Completed 8. Carizal la Grama 31 210 21
Oct. 1980 9. Namora 122 601 954
June 1982 10. Santa Rita 616 654 954
Dec. 1981 11. Carahuanga 970311 311
Not Completed 12. Tabacal Amarcucho* 49 349
Not Completed 13. Cholocal** 445 1
TOTAL 5,227 8,295

*Infratin not available for land under cultivation for subprjects not completed including Cotosh, Huasahuasi, San Marcos, and
Granja-Porcon.
**Construction not completed.

Sources: PE-AMI Informe Anual-Ano 1982.
Peru Anuario de Estadistica Agricola, 1979
Boletin Estadistico de la Produccion Agropecuaria 1981


Potatoes
1978 1982 *

Mantaro Region Subprojects

Chicche 8.0 11.9
La Huaycha 9.8 13.4
Chupaca 8.5 13.5

Subproject yields 8.5 13.1
Regional Yields 8.5 9.6
Rainfed-Irrigated 8.1-10.5

Cajamarca Region Subprojects

Chingol 8.0 11
Namora 8.0 11
Carahuanga 8.0 10.5

Subproject Yields 8.0 11.2
Regional Yields 7.2 8.4
Rainfed-Irrigated 7.2-6.5


Yields


Table V
CROP YIELDS (metric tons/hectares)
In Six Plan fERIS Subprojects,
Mantaro and Cajamarca Regions, and Peru (1978-1982)

Corn Wheat Barley
1978 1982 1978 1982 1978 1982


1.4
10.8

9.7
1.0
1.0-1.2



0.9
1.1
1.2

1.0
0.7
0.7-1.0


6.9 8.4 1.0 1.1


1.5


1.5
1.2
0.7-0.9



1.0
1.0
1.3

1.0
0.7
0.0-1.3


2.0
2.1


2.0
n/a
1.2-1.1








n/a
0.6-0.7


Vegetables
1978 1982


10.0 15.6
13.0 28.1

13.0 27.9
n/a n/a
15.7-16.7


3.0
2.0
2.8

2.7
n/a n/a
5.3-6.0


1.0 1.2 0.9 n/a n/a n/a


Yields are not available for the Mantaro region for 1982. The figures in the yield column for 1982 under Mantaro Region are the
1981 yields reported for Junin Province. They are given as a basis for comparison with the Cajamarca Region.

Sources: Evaluation del Impacto Socio-Economico del Proyecto AID-Plan MERIS, 1983 and Peru Anuario de Estadistica Agricola, 1979.


Pasture
1978 1982


18.0
34.5


29.0
30.0
n/a-30


2.5 31.2
30.0 35.8
35.0 20.9

58.3 39.4
n/a n/a
30.0-33.4



n/a n/a


I











APPENDIX F

INSTITUTIONAL ISSUES

Dr. Barbara S. Nunberg
PPC/Office of Evaluation
C
o
-IM i1 r- -4\ 4 o -4 o From its inception, the Plan MERIS program was charged with
two principal tasks: the construction of small and medium
0 scale irrigation systems; and the complementary development of
0 o a system of agricultural practices in the Sierra which would
So raise production levels and hence increase social and economic
ma\ r- ~\ c-t 0o o welfare among peasant farmers. The requirements of the first
Si task were material and therefore explicit, requiring the
Transfer of financial resources and the application of an
-already existing technical capacity. The exigencies of the
Second task, however, were more complex and less
o straightforward; agricultural development required a
o constellation of goods and services depending not simply on
E- physical infrastructure, but also on support and stimulation
o from a.wide array of institutions ranging from government
o organs setting relevant macro-policies to community
w organizations or even family units working at the local level.
C \ 4 \ This appendix will examine the way in which institutional
Si C O factors affected the planning, implementation and eventual
4 O o impact of the Plan MERIS project.
oo\ 0
o o
Sor I. INSTITUTIONAL FACTORS: AID Procedures and Mission
m'l Management

.4 C\ ot Among the most important institutional factors affecting
d -H the project impact were the effects of a series of AID
'OK practices--both in the Mission and Washington. Some of the
cM problems generated by these procedures may be traced to the
S4c specific circumstances of the Plan MERIS project, but many
c 41 reflect more general weaknesses in the way in which AID does
a ma. business and could be usefully considered in the design of
C cMa projects of this type elsewhere.
U) W (u >1 M M 1-I ( > H
U o m Z First, the lack of continuity in AID design, implementation
.. E and evaluation activities was a serious problem plaguing the
o m c m M m m project throughout its life. For example, one major
0 C discontinuity stemmed from a succession of four project
o managers in addition to the original design officer over a
C) U) seven year period. This high turnover was probably linked to
the characteristic weakness of AID's personnel system, which
propels employees into rapid rotation just at the moment when
they have mastered the tasks of the previous job.











F-2


In this project, such discontinuities were exacerbated by a
bumpy transition from one manager to another. At best,
successive administrations learned the ropes through informal
means, and at worst, managers were installed without the
benefit of essential information necessary to carry out key
project tasks. Poor transition procedures became problematic,
for instance, when one incoming manager who was new to AID did
not act upon the GOP's letter of implementation requesting
funds disbursement for Plan MERIS' credit program for nine
months because he was not made aware of its importance by his
predecessor.

This manager complained, as well, that aside from the lack
of systematic transition procedures, project continuity was
also ruptured by his admitted inexperience and the negligible
management training he received from AID when recruited.

Lack of continuity also characterized the project's life
cycle. Though the project paper was written by a capital
development officer in the Mission, it was then shuffled
between the engineering section and the agricultural
development office. Thereafter, the capital development office
had virtually no input into project management or evaluation.
This procedure, reported as routine for most projects by
Mission staff, meant that no one person in the Mission followed
the project from beginning to end.

Of course, this management problem reflected larger
discontinuities within the Mission as a whole. From 1974 to
1983 there were four successive Mission Directors in Peru.
Though this rate of turnover was deemed by current Mission
personnel as fairly low in relation to overall AID averages, an
average tenure of 2 1/2 years cannot provide the necessary
continuity of leadership from inception to completion of
projects of this proportion. Moreover, with this changeover of
Directors, policy priorities within the Mission and in the
Agency as a whole shifted. Changes in Mission ethos can
negatively affect implementation of projects designed in an
earlier era. It was reported, for example, that the Plan MERIS
Project had been considered a high priority by the Mission when
rhetorical commitment to basic human needs ran high. With
changing AID values and without a routine management monitoring
system to focus and sustain attention on project
implementation, however, interest was drawn to those newly
generated projects elsewhere in the Mission portfolio which
responded more directly to what were perceived to be central
AID concerns.


The cyclical nature of Mission interest in this project was
explained by one informant as a function, as well, of exogenous
influences on the AID-Peru portfolio during this period. When
the Plan MERIS Project was initiated, it was one of only two
projects accepted and undertaken by the Peruvian military
regime after a hiatus of several years. Thus, any project
which could win approval by what had been considered a
government hostile to U.S. bilateral assistance would be viewed
positively by the Mission. All the more enthusiasm greeted a
project whose origin could be traced to the GOP itself rather
than one initiated by USAID. Thus, as an 11 million dollar
project in a small portfolio (outside of food aid), Plan MERIS
had a good deal riding on its success. Early attention to the
project was overshadowed, however, by the subsequent inflow of
nearly 120 million dollars to USAID/Lima's portfolio. Now the
pendulum may have swung back again. To reinforce what are now
friendly bilateral ties, USAID/Lima's interest in promoting
small- and medium-scale irrigation as a model for projects in
other areas of the country may be partially fueled by the
enthusiasm which the GOP has displayed in replicating this sort
of project elsewhere.

Finally, because the project development cycle in AID
emphasizes project initiation rather than implementation,
rewards within the bureaucracy are much greater for Project
Identification Documents and Project Papers than for successful
management performance. For one thing, there seems to be
little verifiable documentation of such performance, aside from
project evaluation summaries and Impact Evaluations--which,
while it may not be a universally-shared perception, one
mission staff person informed our team, "nobody reads or cares
about." Even in Peru, where the pipeline has grown
embarassingly large, the apparent emphasis on "implementation"
seeks to "move the money" but does not focus on management
issues. It is, in fact, viewed as an accounting problem,
perhaps reflecting inordinate stress on quantitative outputs in
place of long-term institutional objectives.


II. EVALUATION AND MONITORING

One element which might have provided continuity and
coherence to the management process--but didn't--was the
evaluation and monitoring procedure followed in the course of
this. project. Although two "mid-term" evaluations were carried
out--one in 1979 and the other in 1981--several factors
constrained their constructive utilization for management
improvement.


F-3















First, some conclusions drawn in the evaluations may have
seen in error, leading to false assumptions that all was well
eith the project when, in fact, it was not. The first
!valuation completed in 1979, for example, found "no disruptive
effects to (sic) the project as a result of Agrarian Reform."
rhis finding, which reflected a similar assumption in the
Project Paper, ignored the Agrarian Reform's significant impact
on land tenure and title, which in turn influenced credit
availability and incorrectly signaled AID management that land
entitlement procedures were not problematic. Indeed, the 1981
PES recognized that credit disbursement was not proceeding
properly but did not elaborate on the role of land title and
legal obstacles in the delay, thus leaving to chance the
removal of these constraints. Had some of these structural
problems been discovered and analyzed earlier, perhaps
solutions could have been found that would have enhanced the
effectiveness of the project at a critical stage.

Such findings highlight possible methodological flaws in
the execution of the mid-term evaluations. Although both
evaluation reports claim to have made site inspections, they
seem to have focused more on physical infrastructure than on
social or legal factors impacting the beneficiaries. In all
probability, interviews with minifundistas would have raised
questions about their access to credit and its relationship to
their legal status as land owners.

The mid-term evaluations seemed also to concentrate
excessively on the achievement of quantitative goals. Because
excessive attention was paid to meeting construction deadlines
without huge cost over-runs, sight was sometimes lost of
institutional and human impacts of the project. Because of
this focus, the alarm button is sounded only when clearly
measurable goals are not met, but not when social objectives
are not reached. The incorporation of institutional
considerations into the internal evaluation system would have
improved its utility. In addition, this monitoring process
should have been occurring with greater frequency than just
twice in seven years in order to provide useful feedback for
project management.

The evaluation process was also constrained by the quality
of the base-line data provided in the feasibility studies
commissioned by AID at the initiation of the project. Data
provided on production levels and income statistics, for
example, were unattributed and unverifiable. The methodology
used to gather these data was never fully explained and, as a
result, the credibility of all evaluations utilizing this


information as a point of departure is open to question. It is
difficult to judge progress when the starting point is, by and
large, an unknown. Thus, the evaluation process should
consider from the beginning the state of knowledge about the
project context, and feasibility studies which do not meet
minimal standards of rigor should not be accepted by AID as a
basis for projects.

Finally, mention should be made of the lack of
institutional and social diagnostic analysis which accompanied
the preparation of the documents for this project. Although
some five feasibility studies were done in preparation for
construction of canals and site selection, the bulk of the
studies related to site selection were underway only after the
project paper had been written and the funding approved by
AID. What would have been useful earlier was a social and
institutional profile, delineating those institutions which
would be most capable of carrying out specific development
tasks. This would seem to have been particularly important for
this project because of the relatively long hiatus without AID
involvement in Peru. Knowledge of GOP institutions was
undoubtedly rusty after this lack of contact, especially in
view of the major changes instituted by the military
government. An institutional profile before project initiation
might have enabled the Mission to avoid the delays caused by
the switch of implementing organizations from the DGA (General
Directorate of Waters) to the DGE (General Executive
Directorate) within the MOA (Ministry of Agriculture).

The above critiques notwithstanding, the two evaluations
did yield a number of useful policy recommendations: they
suggested, for example, that more emphasis be placed on
agricultural development by putting more extension personnel in
the Regional Offices and providing more support for research,
advisory and evaluation services; the Regional Offices should
emphasize the availability of the Credit Fund to the farmers,
and the processing of these loans should be accelerated. The
1981 evaluation also recommended that AID ascertain that the
requisite socio-economic data were being gathered to permit
measurement of project impact and also recommended a follow-up
evaluation of the project within six months.

Significantly, however, except for the credit component,
the bulk of these recommendations were not adopted, thus
illustrating another fundamental flaw in the
evaluation/feedback process. Indeed, aside from a Mission
review board which met irregularly to discuss projects, there
were no institutionalized mechanisms to ensure responses to













evaluation recommendations. This is not to say, of course,
that changes were not made along the way in project
administration. For example, modifications were made in the
credit program to adapt to changing realities. But this
flexibility was not systematically encouraged by the project
structure or by the structure of the evaluation process. In
addition, there was apparently no mechanism through which the
GOP counterparts could participate in the AID evaluation
process, nor were Plan MERIS personnel, at least at the
Regional Office level, informed of the results of these
evaluations. In this way, both sides lost valuable feedback
evabout project progress. Indeed, Plan MERIS staff seemed
about project progress. Ie o ke part in the impact
genuinely to welcome the opportunity to take part in the impact
evaluation in that it gave them a chance to express their views
about the problems they face and what sorts of changes are
needed in project administration.

III. AID PROJECT MANAGEMENT
AID management of the Plan IERIS project was found to be
lacking in other respects too. For example, field visits by
the current project manager to Plan MERIS sub-project sites
appear to have been made only infrequently. Indeed, in
discussions with the evaluation team, neither the Chief of the
Plan MERIS Mantaro Regional Office nor his staff could even
identify the current AID project manager, who has been in his
position for more than one year. Needless to say, Plan MERIS
sub-projects in the field have had even less contact with
USAID/Lima. Again, it seems clear that the high turnover in
project managers has contributed to this shortcoming, but
perhaps minimal field visitation requirements linked to an
on-going monitoring mechanism would help compensate for
variable management quality.

IV. TECHNICAL ASSISTANCE
possibly some of AID's project management problems,
particularly those stemming from lack of continuity, might have
been avoided by building a longer term technical assistance
component into the project design. Technical assistance was
provided with a loan-financed, host country contract between
DGE and the association of two Peruvian contracting firms and
the Consortium for International Development (ATA/CLASS/CID)-
This technical assistance was offered primarily in the areas of
water use research, construction and irrigation extension and
was aimed at supplementing GOP/DGE expertise in feasibility


study preparation and construction planning, as well as
training of DGE staff. Included in the long term consultant
team were an expert in planning, evaluation and management as
Project Chief, an expert in applied irrigation research, and an
expert in the development of extension techniques.

the consuls arrangement produced several problems. First, two of
the consultants (the team leader and the extension specialist)
did not speak Spanish, making them ineffective in their tasks.
This difficulty could have been avoided either through
pre-project language training or through the recruitment of
alternative team members with more appropriate skills.

Importing non-Peruvians to provide technical assistance
created other problems too. Settling-in difficulties such as
visa delays and household moves were time- and labor-consuming
and contributed to a delay of several months in the
commencement of technical assistance. These delays cut into
the already short amount of time allowed for these activities.
Clearly, a longer time frame should have been considered for
such services, or professionals whose adjustment would have
been easier, logistically and culturally, should have been
hired. Indeed, several months into the life of the project
these expatriates were replaced with Peruvian counterparts.
Furthermore, some of these difficulties occurred because the
contract with ATA/CLASS was host count ourred because While
this arrangement a.forde the OP ntryadministered. While
this arrangement afforded the GOP greater management autonomy,
government counterparts in the details of contracting with
consultants. Therefore, procedures which would have been
handled routinely within the AID system took longer to work
out. This, of course, implied a learning process for GOP
administrators, which is all to the good. But more time should
have been allotted for such a process.

Within these constraints--lack of appropriate skills and
lack of time--there were also serious problems with the quality
of technical assistance provided. As mentioned earlier, help
rendered on the early feasibility studies did not eliminate
methodological deficiencies in the data collection process.
The presence of a trained social scientist would have been
beneficial here.

In addition the technical assistance component in both
agricultural research and extension services may have been too
little too soon, reaching only the few initial projects and, in
some cases, beginning and ending before construction of canals
was completed. Indeed, although the agricultural














research-extensionist was highly regarded by sub-project
participants, there is little evidence that, other than for the
use of materials he prepared, his work was continued after his
departure.

Also, because there was no institutionalized monitoring
mechanism, there was no reliable way to determine the relative
effectiveness of this technical package. For example, although
the mid-term evaluations asserted that farmers did continue to
participate in field day demonstrations begun by the
research-extensionist, no systematic analysis of the technical
package was made in the PES; nor was its application by farmers
tracked in any rigorous way. Thus, it was difficult for the
Impact Evaluation team to determine its overall utility for
beneficiaries.

The Project's training component was also inadequate.
Approximately $300,000 was spent on training during the course
of the project. This amount represented a one month training
program for Plan MERIS employees from February to March, 1979
in which 154 professionals from DGE and MOA participated. No
records were available, however to indicate how many specific
Plan MERIS staff members took part in this program. Once
again, the content and impact of this training was unclear.
Standardized monitoring techniques would have been helpful in
determining the usefulness of the one month course. Also, it
is not clear as to how many of the original participants are
still working for Plan MERIS, or what sort of refresher program
might be appropriate midway through the project. In addition
to this short-term training, three MOA professionals (two from
the Lima office and one from the regional office) went to
Mexico for one year of academic training in irrigation use and
engineering. As of March, 1983 none of the trained individuals
was participating in the project and no documentation regarding
the content or utility of their training was available in
project files. In addition, it was reported that one of these
three trainees was a blood relative of the then head of the
project, and another was never, in fact, officially connected
with the Plan MERIS program. Clearly, whatever marginal
benefits were derived from the long-term training, they were
not far-reaching enough, nor continuous enough to have a
significant impact. The academic training of a few individuals
in Mexico must be viewed, therefore, as an unnecessary
component which had no appreciable effect on project progress.

Another problem relates to the time frame allocated for the
completion of project activities. AID scheduled a five year
termination date for this project (1976-1981) despite previous


experience with irrigation projects of similar scale and scope,
such as the IDB's Linea Global I, indicating that such projects
could take as long as ten years to complete. This prior IDB
experience, coupled with the numerous implementation delays of
the Plan MERIS project, suggest that this five year deadline
was unrealistic and responded more directly to the bureaucratic
concerns of AID/Washington rather than to the institutional
requirements of the project itself. A more flexible scheduling
system would have more appropriately addressed this problem.

AID's management performance also fell short in its efforts
to coordinate activities with other donors in the area of small
and medium scale irrigation in Peru. A number of international
donors have operated in this sector over the last twenty years,
including the United Nations, the Interamerican Development
Bank, the West German KFW, and USAID. Essentially, these
donors have created a market in which GOP planners have
competed for project funds, seeking money from the highest or
most willing bidder. This market effect can be seen as both
positive and negative. On the one hand, the nature of project
activity is diversified and GOP dependence on a sole donor is
minimized. In addition, the resourcefulness and coalition
building capacity of the Peruvian administrative and political
apparatus is sharpened in its search for financial support. On
the other hand, the lack of coordination among donors means
that planning in the irrigation sector as a whole is weak.
Also, as with the time frame issue just discussed, the lack of
coordination results in poor learning from past experience on
the part of each new donor entering the sector.

Coordination between AID and the GOP was also problematic
-- especially in the planning and design phase of the Plan
MERIS project. It is ironic that although the initiative for
the project appeared to come from the Peruvian government, in
fact the degree of cooperation between USAID project design and
GOP planning was limited. For example, Plan MERIS personnel,
at least at the Regional Office level, had never seen the
USAID-prepared project paper and had little knowledge of the
project development cycle within USAID. This lack of
understanding of the AID funding process opened up infinite
possibilities for confusion within the GOP about AID
expectations.

The lack of coordination among projects within the Mission
portfolio itself was also problematic. Plan MERIS' inability
to deliver a technical assistance package for small farmer
agricultural development, for example, was related to the
overall state of the research-extension system in Peru.










F-l1


Although midway into the life of the Plan MERIS project,
USAID/Lima began an effort to fortify the national research and
extension system that had fallen into disrepair, virtually no
attempt was made to integrate these two AID activities. Nor,
apparently, was thought given to the state of the
research-extension service in Peru before embarking on the
funding for the Plan MERIS project. This reflected not only
the lack of institutional diagnosis on the part of by the
designers of the Plan MERIS program, but also, again, the
inordinate attention focused on engineering infrastructure at
the expense of agricultural development. This lack of
intra-AID coordination was also evidenced by the minimal
attempt made to integrate the activities of Plan MERIS with
another relevant AID activity, the Integrated Regional
Development Project operating in both Cajamarca and Junin
(Mantaro) during the same period.

Still another questionable AID practice is the use of loans
rather than grants to host governments for technical
assistance. In the Plan MERIS project, funds from USAID
constituted $900,000 of the total loan disbursement and were
designed to be spent on technical services, training equipment,
and studies related to the project. No further specification
was made for the use of these funds in the loan agreement. The
balance of the total project cost, or an estimated $3,400,000
represents the costs of administering the project, including
personnel and local support, office facilities and materials,
as well as a reserve fund from which to finance cost increases
due to inflation. These costs were to be financed from the GOP
contribution.

The vagueness which characterized the allocation of these
funds meant that responsibility for technical assistance funds
was unclear and unspecified. As a result of a built-in bias
toward the infrastructural aspects of this project,
agricultural development activities got short shrift in project
implementation, especially when finances were strained,
beginning during the Year of Austerity in 1979, when the GOP
economic crisis required severe budget cuts. Had the USAID
contribution to the project more adequately covered technical
assistance, agricultural activities could have continued along
with the construction of irrigation infrastructure. Although
it is reasonable to look to the GOP to provide ongoing support
for these services, it is not realistic to expect, when
fiscally constrained, that the GOP make the hard choices
required to support technical assistance rather than
infrastructure construction -- particularly since the immediate


political payoffs from construction of canals may be so much
greater than from the intangible longer-term rewards of
technical assistance. If technical assistance for agricultural
development is to be assured, AID may have to re-examine its
reluctance to cover all costs, at least in financial situations
such as those faced by Peru.

The preceding discussion focused on AID's role in the
institutional development of Plan MERIS. Though AID's
activities were critical to project impact, they supply only
half the equation. Institutional and social factors operating
within the Peruvian national context, as well as at the local
level, were major determinants of project outcomes and, indeed,
remain the key which unlocks the possibilities for sustained
development through the Plan MERIS program in the future. This
section will examine institutional variables at three levels:
the national government level; the internal organizational
level of Plan MERIS; and the nexus between the project and the
client community at the local level.

V. INSTITUTIONAL CONTEXT: CENTRAL GOVERNMENT ARENA

At the central level, a wide constellation of
administrative and policy-making organs within the GOP were

influencing its performance. Indeed, some of the problems
affecting the project's early progress resulted directly from
its location within the GOP bureaucratic apparatus and from its
role in the internecine conflicts that characterized
agricultural policy in Peru during this period.

Forexample, from the beginning, the project's location
within the Ministry of Agriculture was complicated and
problematic. Project functions were slow in getting started in
part because implementation responsibilities within the
Ministry of Agriculture were transferred from the Direccion
General de Aguas (DGA General Directorate of Waters) to the
Direcccion General Ejecutiva (DGE) in 1977. This resulted in a
10 month delay in project activities. This shift from one
organ to another within the MOA was an early reflection of two
significant institutional issues: the tension between
proponents of a project emphasis on physical infrastructure and
the defenders of agricultural and social development; and, the
conflict between Plan MERIS' status as a special project
unit--separate from the MOA bureaucratic apparatus--and its
function within the line ministry as part of a network of
public organs working in the agricultural sector.


F-10





-- -S~it> Z~r r -


F-12


The first issue revolved around the conflict between the
)GA and the DGE.. In 1974, the DGA spawned a conception of the
;ierra irrigation project which was based on small scale
infrastructure whose construction and maintenance would be
performed predominantly by community labor. The integration of
agricultural technical assistance to the small farmer in these
works was considered essential to this concept. This emphasis
prevailed because the DGA was heavily staffed by agronomists,
rather than engineers as was the case in the DGE. The project
was shifted from DGA to DGE as a result of an essentially
political decision. With a changeover of Ministers of
Agriculture in 1976, the bureaucratic power of the DGA was
eclipsed by that of the DGE, which was led by a particularly
dynamic engineer. This individual found considerable support
within the government for the change in emphasis of the Sierra
Irrigation project from small scale construction coupled with
agricultural development assistance to medium scale
infrastructure with greater weight placed upon engineering
aspects.

The move from the DGA to the DGE, thus, was more than a
simple intra-agency shuffle. It constituted a significant
change in project conception and, therefore, the type of
personnel administering the project. Indeed, the recruitment
of engineers into key positions in central project management
has been a key determinant in the kinds of policies pursued in
Plan MERIS. The imbalance, for instance, toward physical
irrigation works and away from institutionalized agricultural
development might have been offset by a staffing pattern which
reflected the presence of more agronomists at the central
level. Although there were agronomists working at the regional
levels, their number was insufficient, and their power was
severely limited by lack of funds and by the highly centralized
management style of Plan MERIS.

The transition from the DGA to the DGE also meant the use
of a special project unit outside of conventional MOA channels
to implement project activities. The DGE was the unit
responsible for special projects with multinational funding.
The purpose of placing the Plan MERIS project under the DGE's
domain was to afford project management a greater degree of
financial and bureaucratic autonomy than would have been
possible had the project been centrally controlled within the
line ministry. Later, organizational changes in the MOA made
DGE the directorate for INAF (Instituto National de Ampliacion
de la Frontera Agricola National Institute for Agricultural
Zone Development). INAF is one of four semi-autonomous
institutes within the MOA which, though nominally part of the


F-13


line agency, independently administers project funds from
outside donors. It recruits its own staff and maintains
limited communication with other MOA offices. The relative
merits of "special project units" have been well debated. The
usual trade-offs are between project efficiency and
institutionalization of administrative capacity, but these
tensions seem less apparent in the Plan MERIS case. Here, it
would seem the benefits of this institutional arrangement
outweighed the negative effects. As a special project unit,
Plan MERIS was able to move more resources more rapidly in the
absence of MOA red tape. This was particularly true in 1979,
the "Year of Austerity" when government spending nearly ground
to a halt and after which GOP resources became increasingly
scarce. In addition, evidence to support the conventional
argument that special project units drain trained personnel
away from line ministries without contributing to the overall
learning process of line agencies is relatively weak in this
case. Indeed, there seems to have been considerable crossover
between line positions in the Ministry and Project personnel.

The .cdrrelary reasoning that special project units create
an internationalized technocratic class who may be lured away
by the highest bidder-often outside the host country-may have
more applicability. But, indeed, the principal attrition of
trained project personnel resulted more from the gradual
decline of bureaucratic salaries. This was the result of
policies during the last days of the military regime which were
reinforced by Belaunde's debilitation of the public sector
because of severe financial pressure on the economy as a
whole. Consequently, Plan MERIS staff had become, on the
average, younger and less experienced as the Project
progressed. As for the concern that special project units fail
to become institutionalized within the bureaucratic
mainstream, at the national level, at any rate, this seems not
to have been the case. One of the more successful aspects of
this project is the degree to which its model has been accepted
and emulated within the Peruvian government as an approach to
irrigation problems. Evidence for this institutionalization is
found in the recent decision of the Development Corporation of
Junin to reapply the Plan MERIS model of medium scale
irrigation to heretofore unreached areas of the region. The
German KFW's support of Plan MERIS II is another example, as
are GOP plans to build similar medium-scale projects on the
coast, jungle and elsewhere in the Sierra -- perhaps, with
additional AID money.











F-14


Clearly, the degree to which the Plan MERIS model has been
"institutionalized" is linked to what is perceived to have been
a relatively efficient and, despite delays, rapid
accomplishment of physical goals when compared to large-scale,
costly irrigation projects undertaken elsewhere in Peru. This
sort of project has appeal both for fiscal conservatives as
well as for engineers who seek the application of technical
solutions to developmental problems. The more penetrating
question, however, is not whether the project has achieved an
adequate level- of institutionalization within the public arena,
but rather whether such a model should be institutionalized, or
at least which aspects of its operations should be emulated and
which should be discarded or amended. In some respects, this
project may have been "over-institutionalized." Indeed, new
proponents of the Plan MERIS model may be embarking
unquestioningly on projects that repeat the planning and
implementation errors of the original model.

Of course, there were disadvantages to Plan MERIS' status
as a special unit. The extent to which the INAF/Plan MERIS
operation was unintegrated into the mainstream of the MOA may
have contributed to the atomization of Plan MERIS activities
from other governmental entities operating in the same regions
of the agricultural sector. An examination of Plan MERIS'
coordination with the other relevant agencies follows.


VI. ItTER-AGEHCY INTERACTION

A. Research and Extension

The area in which Plan MERIS coordination with relevant
others was most critical and most inadequate was that of
agricultural research and extension. Technical assistance to
agricultural development was an essential component of the Plan
MERIS program, but insufficient financial and policy support
from the central office made such activities the weak link in
project operations. Not willing or able to offer adequate
services on its own, Plan MERIS made little systematic effort
to coordinate its endeavors with other organs working in the
field.

Of course, Plan MERIS should hardly shoulder full
responsibility for this lack of coordination. After all, the
general environment for agricultural research and extension in
Peru was in extreme disarray during the life of this project.
The history of the decline of these services coincides with the
period of military rule. When the Junta came to power in 1968,


the organ charged with carrying out agricultural research and
extension, IRPA, (Institute for Agrarian Reform and
Agricultural Extension)--which had worked contractually with
the UNA (National Agricultural University) in an effective
national research program--was integrated into the Ministry of
Agriculture. As the military regime progressed, however,
research and extension became stepsisters to the top priority
policy in agriculture -- agrarian reform. Extension staff were
subsequently shifted to agrarian reform assignments, and budget
constraints coupled with the general neglect of extension and
research virtually destroyed these services which had been
successfully developed during the previous 25 years. The
de-emphasis of professional competence in research and
extension and a decline in salary scales, in real terms, in an
inflationary environment, resulted in a serious brain drain of
experienced agricultural scientists to appointments abroad.

Although the government made several institutional changes
in the mid-1970s in attempts to improve agricultural research
and extension, the problems of severe budgetary constraints and
the lack of sufficiently qualified personnel militated against
the desired improvements. The latest institutional change took
place in 1981, when, under Legislative Decree No. 21
"Agricultural Sector Organization Law", the Ministry of
Agriculture retained responsibility for policy planning and
administrative, regulatory and control functions in the
agricultural sector. Technical support functions and
activities were assigned to four semi-autonomous institutes and
two public enterprises. Among these, the National Institute
for Agriculture Research and Extension (INIPA) became the
principal central government organ providing research and
extension services in the agricultural sector.

INIPA's activities have been limited and very centralized
and its resources are only now being buttresssed by a sizeable
loan (approximately $60 million over four years) from the World
Bank, which comes on the heels of an AID five-year, $15 million
loan begun in 1981 (the Agricultural Research, Extension and
Education Project, 527-0192.) The decentralized units of INIPA
are the CIPAS (Agricultural and Livestock Investigation and
Research Centers), which administer field extension services
and carry out research on a regionalized basis. The CIPAS
operate in 18 Zonas de Promocion Agropecuaria around the
country, using a modified training and visit system. The ratio
of extensionist to farm families is approximately 1:11,500.
Although' INAF is planning a future affiliation with INIPA/CIPA
in the administration of agricultural field research and
extension.services in connection with Plan MERIS II, no


'~"~*~?"~'~NR(Wm*r~- -I


F-15











F-16


previous formal links ever existed during the Plan MERIS I
project. At the field level, communication between CIPA agents
and Plan MERIS personnel were negligible. For example,
although one Plan MERIS agronomist in Namora knew that a CIPA
agent was living in the community and conducting trials and
field visits, other Cajamarca area Plan MERIS personnel were
unaware of CIPA's activities in the sub-project. Indeed, in
general, Plan MERIS' information about the way in which CIPA
agents operated in the field was sparse and often erroneous,
mostly because of the limited degree of contact between the two
organs. The pity of this is that these institutions both were
plagued by extremely scarce resources which might have been
more efficiently stretched by a higher degree of coordination.

While INIPA/CIPA was not the only other organ providing
extension and research service to farmers in Plan MERIS' area
of operation, the Project's coordination with other entities
was not much better. Another organ offering technical
assistance to farmers in Cajamarca and Huancayo, for instance,
is FONGAL (Fomento Nacional de Ganado Lacteo National Milk
Cattle Development). This is an organization of cattle and
dairy farmers which is a cross between a semi-autonomous state
autarchy and a producers' cooperative whose principal function
is the marketing of regional products. FONGAL offers its
members technical assistance packages, including veterinary
services. Despite the growing importance of livestock and
dairy production in the regions where several Plan MERIS
subprojects are operating, there has never existed any formal
agreement between FONGAL and Plan MERIS I concerning the
delivery of technical assistance to farmers. Although informal
communication seemed somewhat better between FONGAL
extensionists and Plan MERIS field staff, these casual
arrangements could not achieve the level of coordination
necessary to provide adequate non-duplicative services to the
beneficiary.

This lack of coordination also affected the quality of the
technical assistance package delivered to small farmers.
Recently, for instance, the DGA, in connection with its
activities in its Department of Operations and Maintenance
engaged the services of CESPAC (Centro de Servicios de
Pedagogia Audiovisual para la Capacitacion Center for
Audiovisual Pedagogic Services) to prepare an audio-visual
training package for small scale irrigators, instructing them
in maintenance operations as well as appropriate agricultural
techniques to be used in conjunction with irrigation
activities. Although Plan MERIS has just signed an agreement
with the DGA to utilize this package, this is clearly an


F-17


activity which should have been undertaken long before this
point in the project. Moreover, neither Plan MERIS regional
staff nor local farmers themselves participated in the
preparation of, or planning for, this audio-visual package.
Consequently, the instructional units are often targeted either
above or below the cognitive level of beneficiaries, or else,
contain irrelevant information.

The same apparent lack of coordination characterized Plan
MERIS' relationship with ENCI (Empresa Nacional de
Comercializacion de Insumos National Enterprise for Marketing
of Inputs), the state enterprise responsible for the
distribution and commercialization of seeds and fertilizer
throughout the country. This undoubtedly inhibited the timely
delivery of appropriate inputs in conjunction with the increase
in water beneficiaries. In contrast, Plan MERIS did have a
formal agreement with INFOR (Instituto Nacional de Forestal y
Caza National Forestry and Fauna Institute), the MOA's
forestry unit. As a result, forestry planting and maintenance
appeared to be proceeding well. The potential difficulties
with regard to this activity were related not to present
performance but, rather, to the future capacity and willingness
of farmers to sustain and maintain plantings when the
INFOR/Plan MERIS contract was terminated. Though INFOR agents
had stimulated local interest and capabilities through various
successful outreach programs, particularly in the village
schools, the future institutionalization of these activities
without outside guidance or financial support remained in
question.

B. Credit and Land Title

Two other entities were of critical importance to the
success of the Plan MERIS program: the Agrarian Reform
Institute and the Agrarian Bank of Peru. The Agrarian Reform,
which took place in Peru during the 1970s overshadowed all
other activities in the agricultural sector. The Agrarian
Reform affected Plan MERIS project outcomes because of the
structural changes it brought about and because it drained
resources away from other important activities such as
agricultural research and extension. It was also important to
project operations to the extent that a significant
portion--twenty percent--of potential Plan MERIS project
beneficiaries' land tenure status was affected by the new
Agrarian Reform legislation. Peasants most directly touched by
the Agrarian Reform were those who had been working either on
latifundia expropriated by the state and then subdivided into
smaller plots, or those who colonized previously unincorporated











F-18


land which thus came to be administered by the Agrarian
Reform. For these Plan MERIS beneficiaries, the Agrarian
Reform not only determined the economic viability of a.given
farmer's plot of land by virtue of the size of the subdivision
he was awarded, but also the legality of his title which
determined the nature and quantity of credit he could receive
from the Agrarian Bank. Although the requirements for land
entitlement were more clear for those farmers under the
Agrarian Reform than for minifundistas whose property fell
outside of the legislation boundaries, nonetheless, obtaining
title which the Agrarian Bank would consider satisfactory for
credit was a cumbersome and costly juridical process whose
delay caused the exclusion of many small farmers from access to
loans.

Several governmental organs were responsible for carrying
out the agrarian reform, which was officially deemed completed
in 1973 but was still adjudicating titles as late as 1983.
Nominally, the Direccion General de Reforma Agraria y
Asentamiento Rural within the Ministry of Agriculture was in
charge of the policy. But the entitlement process actually
took place in the Agrarian Court System or the Fuero)Prvativo
Agrario (FPA) (as opposed to the common court system).J

A complicated'bureaucratic system in and of itself, the
Agrarian Court System not only dealt with the subdivision of
former haciendas into individual peasant plots, but also
adjudicated properties which were designated as various forms
of cooperatives (including both production and service
cooperatives which worked in conjuction with previously
existing peasant communities (comunidades).

Moreover, tribunal processes were made that much more
difficult by the presence of numerous interest groups exerting



1/ Peter S. Cleaves and Martin J. Scurrah, Agriculture,
Bureaucracy and Military Government in Peru; Ithaca, 1980,
Chapters 5, 6 and 7.


F-19

pressure on the policy bargaining process.2/ As a result of
the slowness and complexity of this policy-making process in
the court system, many peasant beneficiaries of the Plan MERIS
project were denied credit by the Agrarian Bank because they
did not have official title under the Agrarian Reform to
qualify for a loan. Such a title would generally require
cadastral surveys and lengthy legal procedures. Because of
theapparent lack of coordination and communication with
Agrarian Reform representatives, it was only in the last two
years of the project that a temporary certificate of possession
was developed by the Agrarian Reform to satisfy the conditions
of the Agrarian Bank in granting credit to non-titled farmers.
Coordination with the implementing agents of the Agrarian
Reform should have taken place before the Project began in
order to avert these difficulties.

The other institution with which Plan MERIS needed to
coordinate policy was the Agrarian Bank. The question of
entitlement to land was pivotal in the Bank's ability to
dispense credit to small farmers. The difficulties confronting
potential beneficiaries of the Agrarian Reform with regard to
land title procedures have already been discussed. These were,
however, only twenty percent of the beneficiaries of the Plan
MERIS program. Even greater legal and financial obstacles
faced minifundistas who were working land not under the
Agrarian Reform. These farmers' only recourse was to even more
costly, complicated legal processes in order to prove title.
The complicated hierarchy of title status and its
correspondence to different levels of credit granted by the
Agrarian Bank has been described elsewhere.

Although the Bank agreed in 1982 to recognize provisional
certificates of land possession as qualification for credit for
production purposes, this was a long, drawn-out resolution to a



2/ Cleaves and Scurrah chart the proliferation of competing
representative interest groups stimulated by the corporatist
Velasco regime which tried unsuccessfully to manage and control
them. Several, such as the National Agrarian Confederation -
encompassing agrarian production, campesino communities, and
associations of individual farmers and landless peasants the
FTAP (Federacion de Trabajadores Azucareros del Peru -
Federation of.Peruvian Sugar Workers), and the CCP
(Confederacion de Campesinos del Peru Campesino Confederation
of Peru), played an important role in the adjudication of
tenancy issues well into the Morales Bermudez period. See
Cleaves and Scurrah, chapter 5.










F-20


problem which should have been worked out between the Agrarian
Bank and the Plan MERIS staff on a national basis before the
project was ever begun. Moreover, the very choice of the
Agrarian Bank as the credit granting institution might have
been called into question had these preliminary negotiations
ever taken place. Indeed, the degree of risk aversion
demonstrated by the Bank was not evident just in its reluctance
to grant credit to minifundistas without clear title to their
land. This reluctance also hinged on the Bank's assumption
that the small farmer was, in general, not credit worthy
because his plot was too small to be economically viable. This
attitude brings under scrutiny the entire use of credit for
chsuch a peasant population. In any case, given the willingness
of USAID and the GOP to use credit as an instrument of
technical assistance in this project, it should have been made
clear from the start that the institution selected to dispense
that credit be willing to take unusual risks in order to do so;
especially in view of the fact that the Project Paper intended
the credit component to be directed at beneficiaries not
otherwise eligible for credit from existing sources of credit.
The choice of such an institution should have been based on in
depth pre-project negotiating in conjunction with a thorough
social and institutional diagnostic analysis of the project
context ./

The other significant set of institutions with direct
relevance for Plan MERIS were the Departmental Corporations
(CORDES) which function at the local departmental level.
(There are 24 departments and one constitutional province in
Peru.) Although the extent of their power within a rapidly



_/ Indeed, alternative institutional arrangements for credit
approval might have been appropriate here. For instance,
precedent did exist for the establishment of a credit committee
at the regional level, made up of representatives of line
ministries and local government, in addition to other relevant
institutions, to set the norms for the dispensing of credit.
This model was apparently used successfully by the Linea Global
project of the Inter-American Development Bank in an effort to
avert the domination of the credit granting process by a single
institution such as the Agrarian Bank.


F-21


changing politico-administrative system remains uncertain, the
CORDES have discretionary budgets from the Uational Treasury
and have been legally empowered by the Law of Corporations
passed in 1981 to act as a filter for all financial investments
made at the departmental level in Peru. As yet unenforced,
this law may turn out to have little impact in reality.
Informants seemed confused as to the potential ramifications of
such legislation, but if it took effect, the Departmental
Corporations would wield considerable power at the regional
level. Although there were very small scale irrigation works
being carried out under the auspices of CORDEJUNIN and CORDECAJ
(in Cajamarca), no systematic coordination existed between
these activities and those of Plan MERIS.

The impact of the potential power of the Departmental
Corporations has not been lost on Plan MERIS leaders. In
Junin, they have entered into an agreement with the CORDEJUNIN
(Departmental Corporation of Junin) to extend Plan MERIS
operations to eight additional subprojects in the region,
spending approximately 14 billion soles. Bureaucratically,
this arrangement makes sense for Plan MERIS personnel as it
ensures their continued employment and participation in
irrigation projects in the Huancayo area. And, as mentioned
earlier, the replication of AID-funded activities by a
locally-controlled body could be considered a sign of
institutionalization of the Plan MERIS model. But CORDEJUNIN's
continuation of Plan MERIS activities also meant the
institutionalization of many of the design and implementation
errors contained in the Plan MERIS project. In particular,
CORDEJUNIN was planning the construction of irrigation canals
without any prior arrangements for agricultural technical
assistance. CORDEJUNIN officials argued that, in contrast with
Plan MERIS, CORDEJUNIN did not possess a self-sufficient
special project status through which it might provide its own
technical assistance. This'was all to the good, they asserted;
they emphasized that an agreement would be worked out with the
appropriate GOP institutions to supply these services. But no
steps have been taken in this direction. Moreover, it is
unclear whether the capacity to provide these services exists
within the GOP at this time. Until the agreement with
CORDEJUNIN, Plan MERIS' relations with the Departmental
Corporations were, for most of the life of the project, only
informal.


* '*. V.











F-22


C. Project Organization and Management

INAF/Plan MERIS' own internal structure was also important
in shaping project impact. In particular, the extreme
centralization of project administration made the Plan MERIS
program less efficient in its operation and less responsive to
the requirements of its target clientele. Below, a brief
review of the structure of administrative responsibility is
followed by a discussion of the implications of the high degree
of centralization for project activities.

INAF was created by the Organic Law of the Agrarian Sector
in January, 1981 as a semi-autonomous autarchy within the MOA
to plan, execute and supervise multi-purpose projects in the
agricultural sector--especially those with international donor
funding. Within INAF, projects dealing with small- and
medium-scale irrigation are funneled through the bureaucratic
vehicle of PEPMI (Proyecto Especial de Pequenas y Medianas
Irrigaciones Special Project for Small and Medium
Irrigations), created in December, 1981 to encompass, at
present, three groups of projects. These were: Plan MERIS I,
financed with funds from AID and national GOP funds; Plan MERIS
II, financed with funds from the German KFW; and, Linea Global
de Riego No. 2, with funds from the Inter-American Development
Bank. Both the funds from foreign sources as well as those
from the national public treasury which go into these projects
are filtered through the Prime Minister's office and then go
directly to INAF, bypassing much of the red tape in the MOA.
INAF thus has considerable autonomy in the disbursement of
funds. Relatively speaking, the deconcentration of authority
within the MOA to INAF and other such autarchies gave it the
capacity to move money quickly. It also created the
possibility for more responsive action with regard to the lower
echelon staff of INAF/Plan MERIS, and, in turn, to the intended
beneficiaries of project activities. Unfortunately, the
principle of decentralized management was not applied to the
internal administration of INAF or Plan MERIS. Concentration
of authority in the center was a major source of difficulty in
project implementation. Control of virtually all key project
resources and operations resided in the central Plan MERIS
office in Lima. Although project monies were allocated on a
regional basis, the regional representative offices were unable
to disburse funds without Lima approval. For example, this was
so for all staff salaries and equipment, and even the purchase
of office supplies required central headquarters sign-off.


The effects of this rigid centralization of authority in
the Lima office were exacerbated by the remoteness of most of
the sub-projects even from the regional headquarters--and by
the fact that Lima personnel made only infrequent visits to the
field. The result was a low level of flexibility and
understanding by the Project planners of changing field
conditions; this was broadly perceived by field personnel as
Lima's insensitivity to client's needs.

This centralized style of management only reinforced the
already existing schism between engineering personnel and
agricultural development staff. The core of central
headquarters employees were engineers, whereas those
agronomists present in the Plan MERIS operation were staff
stationed in the sub-projects. The combination of centralized
administration and an emphasis on engineering affected nearly
every phase of the project.

In planning, for example, the engineering bias was
reflected in the heavy weight placed on the physical aspects of
the feasibility studies, largely at the expense of reliable
socio-economic or institutional data. It has been suggested by
one AID consultant that the physical aspects of these projects
were over-planned and that more simple formulae could have been
applied as effectively, and certainly more efficiently, in
terms of cost criteria. More resources could then have been
shifted to analysis of the socio-economic data provided in the
feasibility studies.

In implementation, the centralization and engineering
orientation nearly bankrupted operations at the regional and
sub-regional level toward the end of the project. Lima's
failure to develop and fund yearly budgets in a timely manner
sapped field staff almost totally of operational capacity. Not
only had local personnel not received salaries because of
budget shortfalls in the operations categories, but they also
had received no money for gasoline with which to travel between
and within sub-sites; nor did they have sufficient funds to pay
for minimal inputs for field trial demonstrations to support
extension work. This problem, of course, can be directly
traced to the GOP's extremely limited resource availability.

Overcentralization in Lima also resulted in staffing levels
in the field sub-project sites which were too low to offer the
necessary services for sufficient technical assistance to small
farmers. In light of this personnel shortage, the regional
office policy became one of rotating sub-project staff from one
site to another after initial activities had begun. Thus,


F-23





S.~Fey'tfLL>.iYLI" -.I-Ii


F-24


although a sub-project began with a full complement of social
and technical personnel, by its second year its staff was often
reduced to one technician or social worker charged with
supervision of all Plan MERIS activities in the sub-project.
Admittedly, though, this rotation was also a function of the
perception by technical assistance staff of some particularly
remote postings as hardship assignments. Thus, staff
frequently did not stay in a sub-project site long enough to
become part of the community; this was a major obstacle to the
institutionalization potential of project operations in any
given area. This should also be contrasted to examples of
successful irrigation schemes in other parts of the world. One
much touted "success story" is the case of the National
Irrigation Authority in the Philippines. This project
apparently promoted sustained community participation in
irrigation canal construction and maintenance. It also
promoted appropriate farming techniques successfully through
the installation, over a five year period, of organizers who
lived in the community, gaining the confidence of villages
while catalyzing their participation in the NIA program.-/

This is not to say that Plan MERIS regional and field staff
were not an extremely dedicated group whose commitment in the
face of severe shortages was nothing short of impressive.
Indeed, many instances could be found in which field personnel
paid for supplies and inputs out of their own pockets in order
to carry on essential activities. Still, there were several
ways in which the Plan MERIS project was conceived and
implemented which prevented the successful institutionalization
of those operations which would, in the long run, prove
beneficial to small farmers and which would be adopted by them
on a continuous basis. Indeed, despite the high level of field
staff commitment, project outreach to the community it sought
to serve was problematic. The following examination of the
institutional aspects of project-beneficiary interaction
elaborates upon the difficulties which attend efforts to make
project benefits sustainable among small farmers in the Sierra.

Focusing on institutional issues at the community level,
several critical questions emerge. What are the prospects for
the institutionalization of project benefits within the
community? That is, what institutional or organizational
capacity is in place to carry on the activities begun by the
project? What is the structure and nature of community



3/ Frances Korten, "Building National Capapcity to Develop
Water Users' Associaitonst Experience from the Philippines,"
Mimeo, 1981.


F-25


participation in those institutions; and finally, who is
benefitting from the project intervention and its
continuation? Taking into account the diversity of the
pre-existing political, social, cultural and organizational
contexts in which the Plan MERIS program operated, the
following section will attempt to address some of the queries
posed here. /

Factors of beneficiary participation in project design,
implementation and evaluation were important in assessing
potentialities for sustained participation and the development
of institutional capacity at the community level. Evidence
suggests that early and significant beneficiary participation
in the project and pre-project activities bodes well for other
forms of expression of interest and of responsibility on the
part of villagers later on.

In Plan MERIS, such levels of participation were not
attained. Initiative for project implementation and
conceptualization came from the government, not the community,
although interest may have been expressed previously by a given
village in having resources to construct irrigation canals or
improve existing ones.

Moreover, the design and planning phases of the project
were carried out with only minimal consultation with local
farmers. Although attention was given in sub-project selection
to socio-economic criteria, the principal basis for site
selection were the physical characteristics. These decisions
were made exclusively by Plan MERIS engineers and USAID



4/ A methodological caveat must be mentioned here. Because
the Plan MERIS project was not even physically completed at the
time of this evaluation, conclusions drawn about "sustaina-
bility" (sic) and "institutionalization" are made on extremely
shaky bases. Even five years hence, data on these sorts of
questions may not yet exist. The most this analysis can offer,
then, is to try to identify those conditions that we can assess
as most or least likely to lead to sustained participation in
project-induced benefits. Again, in the Philippine case, for
example, the communal assistance program of the National
Irrigation Authority implemented the participatory approach in
every stage of assistance: feasibility and site selection
pre-construction: construction and operation and maintenance,
affording a high level of interest and participation of local
beneficiaries all along the way.











F-26


personnel. Thus, valuable information about characteristics
--both physical and socio-institutional--of the areas to be
irrigated which could have been provided by local villagers was
not incorporated in plans. In addition, an excellent
opportunity to involve beneficiaries early in the project
development process was foreclosed. This one-sided planning
process probably helped preclude high community participation
levels later on; it also generated sources of conflict which
created impediments to timely canal construction in the first
phase of the project. In several instances, farmers who had
not been consulted previously could not be persuaded of the
merit of the irrigation canals and refused to allow them to be
built on their plots because the total area available for
cultivation would be reduced. These problems caused
construction delays and unforeseen detours. Korten reports
that such inefficiencies were averted in the Philippines by the
inclusion of the farmers into this early planning stage. The
engineers walked the field with the farmers, asking them to
help identify the best placement of irrigation canals; they
also held joint meetings in order to plan the project step by
step. Confusion and conflict about the goals and benefits of
the irrigation scheme among villagers were thus minimized.

In Peru, the pattern of low participation continued into
the construction phase of the canals as well. Although one of
the goals of the project paper was to generate employment
opportunities within the communities, on the average only 50%
of labor was provided by workers from the community on canal
construction. Indeed, occasionally, some of the local labor
that was used was taken to construct new projects rather than
remain in the village as a local resource. As a result, the
potential for fortifying local capacities was not fully
realized by this policy.


VII. STRUCTURES OF LOCAL PARTICIPATION

Despite the limited involvement of local farmers in the
early stages of project development, structures for peasant
participation do exist wherever the project is operating. The
standard mode of participation has been the water user's
association, or irrigatorss' committee" which, as indicated in
the body of this report, existed in every sub-project. In most
communities it was made up of approximately 10 members
representing, on the average, 30 families who lived within a
set radius of the cuartel, an area division which corresponded
to traditional land categories used by the community for
centuries in its internal regulations. In other, larger,


communities these committees were organized on the basis of
proximity to individual secondary canals. In many cases, the
irrigators' committees themselves were simply superimpositions
on already existing regulatory and representative bodies which
had supervised irrigation activities on a smaller scale. To
the extent possible, Plan MERIS personnel sought to utilize
these existing organizations rather than create new ones. This
would preserve community customs and also strengthen
possibilities for communal adherence to project norms. These
committees were chosen by community members themselves.

Representatives of the committees were then selected to
serve on a larger Commission or Junta of Irrigators which might
govern the irrigation behavior of the entire community or
several communities in an adjacent area. This Commission was
headed by a president--who might also serve as the t6mero (the
one who turns on the water): it also included a vice-president,
treasurer, secretary and two at-large delegates. The
relationship within communities and between committees and
commissions varied from one community to another. In general,
the committees seemed to be truly indigenous and reasonably
representative, but in areas with higher levels of social
stratification, the commission was likely to be headed by a
more affluent median farmer category whose interests might not
coincide always with the majority of minifundistas in the
community. In addition, despite the over-representation of
women as de facto heads of farms in the absence of males who
were pursuing off-farm employment opportunities elsewhere,
females were under-represented on irrigators' committees in
most communities.

Generally, the committees organized labor for canal
irrigation, water distribution, and canal cleaning and
maintenance. Depending on the strength of their ties to other
community institutions, the committees might levy fines for
non-compliance with irrigation regulations or maintenance
responsibilities. But in addition to serving a regulatory
function, they also acted as interest mediators and
articulators, airing complaints and registering them through
petitions to higher authorities such as the Plan MERIS office.
In one case, a commission of irrigators appealed directly to
the Ministry of Agriculture to resolve a problem regarding a
blocked intake on a main irrigation canal.

Committees might also supervise the administration of
user-fee systems. In many cases, no fee was being assessed but
was reported likely to be instituted in the future. In other
instances, fees were collected by the tomero; either annually


F-27











F-28


or by turn. Sometimes irrigation turns were used as payment
for day labor on canal maintenance or some other communally
beneficial activity.

The degree of autonomy of these committees vis-a-vis Plan
MERIS also varied considerably. In some cases, the Commitees
themselves selected a vigilante (water master) and/or a tomero
chosen from among their own ranks. In other cases, the Plan
MERIS would designate a vigilante and/or tomero to be paid by
the government to supervise water distribution. (This mirrored
the pattern in those older irrigation sites where a vigilante
was appointed and paid by the DGA local representative in the
Water District). In some cases where the vigilante was
government appointed, the goal seemed to be to provide a
transition to local control, but in other situations, the
presence of a public (probably through the DGA) vigilante to
oversee local water distribution is likely to continue. The
vagueness of future arrangements made sustained community
involvement in the irrigation program more uncertain.

The relationship between Irrigators' Committees and local
community leadership was also linked to project effectiveness.
In general, the working hypothesis that where communal
organization was strong, Irrigators' Committees were most
effective, held true. Sanctions against non-compliance with
maintenance duties or time limits on water use were most easily
enforced among communards who were well integrated into a
social and political system which they had accepted and
understood all their lives. In these cases, there seemed to be
considerable overlap between the community leadership and that
of the Irrigators' Committee. Municipal offices such as the
position of Mayor, for example, often interlocked with these
committees.

It would seem that areas with strong communal traditions
were more prevalent in the Huancayo sub-project region than in
Cajamarca, and limited investigation suggested that the former
region displayed greater strength among users' organizations
than the latter. Interestingly, as evidenced in Huancayo,
there seems to be little correlation between a greater level of
relative prosperity and effectiveness of the irrigator
committees. For example, agricultural production capacity in
Chicche, in the Mantaro highlands, is severely limited by its
elevation, and encouragement of pasture cultivation seemed the
best development strategy in connection with irrigation
provided by Plan MERIS. Although production levels in this
area left a great deal to be desired, communal traditions were


strong and irrigation committees were effective in operation
and maintenance activities/

Despite the relative strength of the communal institutions
in Chicche, though, results of irrigation were not particularly
favorable due to the difficulties imposed by the harsh
climate. Irrigators' Committees functioned well, but farmers
were discouraged from using irrigation for all agriculture
because of the marginal results they achieved for irrigated
crops. (It should be noted, however, that good results were
being obtained in irrigated pastures.) The beneficial effects
of well organized users' groups, then, are obviously limited by
the natural benefits improved irrigation can or cannot bring.

Irrigators' Committees, furthermore, often proved
ineffective in resolving conflicts over water--even where
strong community organization structures existed. In highly
stratified communities, committees might even become pawns in
local power struggles. As mentioned earlier, for example,
informants in La Huaycha reported that larger landowners were
able to intimidate or hoodwink small farmers into relinquishing
their "turn" for water in exchange for negligible favors. This
was possible not only because the small farmer did not perceive
the value of his water rights but also because the local
Irrigators' Committee was subject to the dominant power
structure within the community, which afforded special
privileges to affluent farmers. In many cases, these powerful



V/ Enrique Mayer, "Uso de la Tierra en los Andes: Ecologia y
Agriculture en el Valle del Mantaro del Peru con Referencia
Especial a la Papa," Centro Internacional de la Papa, Lima,
1981). In his discussion of the preeminence of communal
domination of land tenancy and agricultural decision making,
Mayer concludes that the degree to which the community
organizes agricultural production is greater in the communities
which are in higher zones rather than lower elevations and is
reflected in land tenure ownership patterns. Though he
concedes considerable variability within elevation zones, he
finds that there is a graduated scale of privatization, which,
by and-large, coincides with decreasing elevation, although at
equivalent elevations we find variations in the degree of
communal control of decision making with regard to production.
These differences seem to reflect the patterns of demographic
density, the intensity of the agricultural systems and the
historical circumstances which have weakened the communal
structure.


F-29











APPENDIX G

EFFECTS OF IRRIGATION ON SIERRA WOMEN

Caroline E. Well
PPC/Office of the Assistant Administrator


I. The Setting

In the Peruvian Sierra, the family is the fundamental
institution on which agricultural production has traditionally
been based. Unlike the Selva and the Costa regions, where
large haciendas and agribusinesses geared for export production
are operated primarily by men, the Sierra continues to rely on
the family unit for the administration, production, and local
marketing of agricultural goods.1/

Having traveled throughout the Cajamarca and Mantaro Valley
districts in the northern and central Sierra, the team found
this observation to be accurate. The constant presence of
women and children along the roadsides and in the fields,
carrying loads of fuelwood, pasturing cattle, preparing land
for cultivation, tilling soil, tending to field crops, drying
corn, selling agricultural produce, spinning wool, washing
clothes, etc., is evidence of their importance to Sierra
agriculture. Likewise, women are members of community
cooperatives, owners of land in their own right (typically of
extensions of 1/4 hectare or less) and often are, because of
migration and off-farm employment by the males, the de facto
heads of households, making all economic decisions. In the
daily ferias, the early morning markets where small amounts of
goods are traded or sold, one sees almost exclusively women
peddling potatoes, ollucas, and fruits. In the weekly markets,
at least 50 percent of the sellers are women and children.

In small communities in the Mantaro valley, between 40 and
50 percent of the men work in jobs such as mining, as laborers
in Lima or Huancayo, and in factories and milk processing
plants. Typically, they leave their farms in the care of the
women. / In Cajamarca, a similarly large percentage of the
men seek off-farm employment. Thus, while the men are working
away from their farms, the women are forced to head the
households. When men are present, however,, women typically
assume a secondary role.



1/ See Sara-LaFosse, Violeta, "Valor del Trabajo de la Mujer en
el Agro y en la Produccion Domiciliaria para la Industria de
Confecciones", 1981, Lima.

2/ ibid.


This role, however, is of no less importance in the area of
agricultural production. Women are usually charged with
looking after the cattle, helping out with seeding and
harvesting and marketing in the ferias, while also looking
after the children, clothing and food. But, when they are
present, men will usually make the major economic decisions for
the farm and the household.


II. The Benefits of Irrigation

A Women on Medium and Large Land Holdings

Inasmuch as the oldest of the Plan MERIS sub-projects are
only three to four years old -- and the bulk of them are two
years old or less -- the socio-economic impact of irrigation on
the beneficiaries, specifically the women, is still not fully
evident. The one immediate impact which may have an exclusive
effect on the women, however, is the physical proximity of
water provided by the irrigation system. Women, simply put,
have less distance to walk to collect water for their household
chores and for livestock. Based on conversations with some 15
to 20 Sierra women, the team can only make certain assumptions
and assertions about the likely longer-term impact on the
project. Only one fact, however, is clear: with irrigation
there is a potentially reliable source of water where there has
not been one before. Many of the beneficiaries, though, have
yet to accept the fact that the availability of water is likely
to be dependable.

To date, the majority of farmers have tended to utilize
irrigation primarily on their pastures, rather than on their
crops; they apparently prefer, at this time, to take risks on
their less delicate crops. Even with the short period of time
that irrigation has been provided by Plan MERIS, it is already
evident that the pastures are improved through the application
of water. This fact, furthermore, has been accepted by
virtually all of the farmers interviewed. Better pastures for
feeding cows and sheep and, at least for some farmers, the
availability of credit for the purchase of additional animals,
have helped improve the general welfare of the family as a
whole. Farmers are able to sell their milk to the regional
milk processing plants and receive a cash income.

For example, one woman in the Namora subproject, Cajamarca,
experienced a more stable and improved income through
livestock. She had recently bought a radio and built an
addition to her home; she was also keeping two.liters of milk














per day for her family's consumption. This woman, whose
husband owns eight hectares of land -- and is, therefore,
considered a medium- to large-landowner -- reported that
irrigation has helped her standard of living. Her own personal
workload, however, has increased because of the additional
responsibility of tending more cattle; but, her family's
general welfare is improving.

The presence, with irrigation, of a dependable source of
water also appears to have made home gardening of vegetables
another feasible means for the women to improve their families'
welfare. Another woman in the same community of Namora said
she and her husband were trying to grow a variety of hortalizas
(vegetables) for the family's consumption. This family, which
lives on four hectares of land, was able to purchase the
necessary seeds with credit made available by the Agrarian
Bank. She also indicated that the availability of water has
improved their lives.

Farmers with at least three to five hectares of land,
generally known as medianos or medium-sized landholders, appear
to be deriving the greatest benefits from irrigation. In
addition to the presence of water, credit is reaching them.
And, with credit they can purchase seeds, fertilizers and
pesticides, as well as more cattle. Thus, the general welfare
of the entire family in this group appears to be be improving.

In the Chingol subproject, an isolated site in Cajamarca, a
woman and her husband said their production of corn and
potatoes has improved since the project began. They own 13
hectares of land. The husband previously worked off the farm
but is now working on his land together with his wife, since
irrigation has made agriculture a more viable, secure source of
income. They own several farm animals and can cultivate
approximately 3/4 of their 13 hectares. They also have several
hired hands who help them with the manual labor. As a result,
the woman no longer has to bear the double burden of both
running the household and working on the farm to produce food
for the family's consumption.

One can speculate, however, that an improved general
welfare for the family may not necessarily mean an improved
welfare specifically for the women. Nevertheless, irrigation
should bring a change in the women's roles in agriculture. If
irrigation increases the attention that men give to
agricultural production and keeps them present on the farm, it
is likely that the women's roles in the household and in farm
management will change from what is typical of the Sierra.


With the return of men to the land, women will generally no
longer be making economic decisions for their households,
farms, families or themselves. In other words, irrigation ma
reinforce the patriarchal position of men in the community.

In addition, as agricultural activities are increased
through irrigation, it is likely that the tasks associated wi
women will also increase. For example, with additional farm
animals, women have greater responsibilities. Or, as the are
under cultivation increases, women and children, who
traditionally take part in the planting and harvesting of
crops, when labor needs are high, will probably be required t
help out to a greater extent.


B. Women on Minifundia and on Small Landholdings

While Plan MERIS has had a positive impact on women on
medium-sized landholdings, 80 to 95 percent of the small farm
in the Sierra are not in the medianos category but, rather, a
minifundios. These are usually defined as comprising 1/2 to
1/4 hectare of land or less. Most of the farmers living on
minifundios, furthermore, do not have title to their land. /
Although 1/4 hectare should be enough land to support either
cow, several sheep, a donkey or a few pigs, few minifundistas
have ever accumulated enough money to be able to purchase any
animals. Minifundistas tend to be the poorest, and the least
educated; and, when women, are often single or widowed. Wome
of the minifundios typically look old and weary after the age
of 18 or 20, by which time they usually have had several
children.

Without title or documentation to their land, most mini-
fundistas find themselves ineligible to obtain credit.
Furthermore, those who are eligible for credit frequently do
not want it because they fear that they will lose their land
should they default on the loan. Although there is a
misconception among many small farmers that the Agrarian Bank
will repossess their land, it is so widespread, despite denia
by the Agrarian Bank, that it has become a controlling
perception. Consequently, minifundistas as a group are buyin
few seeds and fertilizers for their crops and are unlikely to
make any longer-term improvements on their land. The latter



3/ Plan MERIS officials state that 80 to 95 percent of the
rural population of the Sierra are minifundistas, and that 80
to 90 percent of the minifundistas have no title to their lan


--















particularlyy true of the majority, which, without the necessary
Insurance of access to the land represented by a clear title,
Ire reluctant to make any capital improvements.-

Most of the Sierra women who live alone are either landless
>r live on minifundios. To assess the impact of irrigation on
:he minifundista women at this stage of the project is even
iore difficult than on the medianos. At this early stage, the
,nly apparent impact is the availability and proximity of
rater; its impact to date on minifundista incomes and on the
positionn of women in this group appears to be negligible. This
observationn is in keeping with the finding that, to this point,
:he project impact on minifundistas in general is limited.

For example, one woman in the Apata sub-project, in the
lantaro Valley, lives on 1/4 hectare that is irrigated; she
tlso has a second, slightly larger, plot that is not under
irrigation. She claims that her corn and potatoes are better
)n this larger, rainfed plot. She also stated that the
presencee of water on the smaller plot has not made a difference
since in her opinion, it was uneconomical to farm it in the
Eirst place. However, she was convinced that her husband, who
forks as a hired hand on other farms, would be able to find
nore work because of the increase in land under cultivation as
x result of irrigation. To provide enough for her family, this
4oman tends the rainfed farm while her husband works as a
temporary laborer. She also tends a small grocery shop and
4orks on the construction of the canals under a food-for-work
alan.

Furthermore, irrigation has not, in general, changed the
lives of other minifundista women who do not have the time,
resources, or the assistance to dig an access canal to their
plots. A wide-spread view among this group is that the
benefits obtainable from irrigation are not sufficient to
justify the explicit or implicit costs of digging an access
canal. For example, an old woman in the Chicche sub-project,
Mantaro, who farms a 1/4 hectare plot in the irrigated area,
said she has no help to build an access canal to her plot. In
fact, her main source of income, like that of many others in
her position, does not come from the land. Rather, it comes
from washing clothes for relatives and neighbors, which
provides S/1000 (approximately 85 cents) per day plus a meal
for each day she does washing.


II. Conclusions

*. those areas where the project has been most successful
to date, the general well-being of women is improving along
with that of the entire family. The project, however, has been
most beneficial to farmers on medium-sized farms, where farmers
have, in addition to a reliable source of irrigation water,
access to credit for capital improvements. This group,
unfortunately, represents only a small fraction of the
project's potential beneficiaries.

The types of benefits currently attributable to the Plan
MERIS project are: a more stable and secure income, as with the
medianos on 13 hectares in the Chingol sub-project who reported
improved corn and potato production; a higher level of income,
as with the family in Namora who recently added on their home;
and, improved nutrition levels, as with the woman in Namora who
is growing vegetables and legumes for her family's
consumption. It should be remembered, however, that the bulk
of the benefits have accrued to only a small proportion of
potential beneficiaries.

As the effects of irrigation-induced improvements become
more widespread, it is likely that a change will occur in the
role of women in farm management and agricultural production.
As the men are drawn back to their farms because of improved
opportunities due to irrigation (and, possibly, worsening
conditions in the Peruvian economy at large), women will no
longer be heads of households making all economic and
management decisions for the farm and family. Thus, if
irrigation increases the attention that men give to
agricultural production and keeps them present on the farms, it
is likely that the role of women in household and farm
management will change will change to a more patriarchal
pattern.

Where the Plan MERIS project appears to not be nearly as
successful -- among the minifundios and small farms -- there
has been no apparent change in either the status or the role of
women. Farmers in this group are not seeing improvements in
their crops because of a lack of credit, technical assistance,
and other related problems. Because of the lack of economic
opportunity on the land, there is a greater tendency for the
men to migrate. Women in this group, therefore, have greater
economic and family responsibilities due to the high percentage
of absenteeism among the men. But, they have these
responsibilities in the context of a much lower economic status
than is true of the median women.












APPENDIX H

REFORESTATION IN PLAN MERIS:
The Cajamarca Experience

Dennis McCaffrey
USAID/Lima


Within the Plan MERIS project in the Cajamarca region there
are seven sub-project sites that have reforestation
components. They are:


Subproject

Santa Rita
Carahuanga
Namora
Chingol
Carrizal-La Grama
Tabacal-Amarcucho
Cholocal


Area Reforested

68 hectares
31 "
130 "
134 "
24 "
5 "
4 "
396 hectares


The subprojects are divided, geographically, into two
groups: Santa Rita, Carahuanga, and Namora are close to
Cajamarca; the other four subprojects are southeast of
Cajamarca a distance of some 130 kilometers, in the valley of
the Rio Crisnejas.

Ecological Conditions: The subprojects in the vicinity of
Cajamarca are located at elevations of 2,800 to 2,900 meters
above sea level and receive annual precipitation of 850 to 1000
millimeters. The climate is cool and moist, giving rise to
dense natural vegetation. Climate in the Rio Crisnejas valley,
on the other hand, is warm and dry, supporting sparse, thorny
natural vegetation. Approximate elevations at these
subprojects are 2,000 to 2,200 meters above sea level, and
precipitation averages less than 500 millimeters per year.

Purpose of Reforestation: At all of the subprojects, the
principal purpose of reforestation is to protect irrigation
canals built under the project. The canals, constructed of
concrete, begin at convenient water intakes along permanent
streams and run at a gentle downgrade along valley sides,
periodically releasing water into lateral canals from which it
reaches cultivated fields.

Trees are not planted right on the canal banks. Rather,
they are planted in bands of variable width on slopes usually
above, but sometimes below, the canals. The function of the


trees is to hold soil so the canals are both supported from
below and protected against silting from above.

Site Conditions: Sites selected for reforestation tend to
have moderate to steep slopes, sometimes exceeding grades of 80
percent. The sites are usually rocky, with thin, fragile soil
and sparse native vegetation.

Plantation Establishment: Plantings are established by hand
as machinery is not available and most sites are so steep and
rocky that use of machinery would not be practical. Trees are
planted in individual holes 30x30 centimeters square and 40
centimeters deep. Holes are spaced between 2.5 and 3.0 meters
apart. This relatively close spacing was selected to attain
dense tree cover in a few years.

Planting stock is approximately one year old and comes
mostly from local nurseries operated at forestry centers
(Centros Forestales CENFORS) under the Forestry and Fauna
Institute (Instituto Forestal y de Fauna INFOR). Plan MERIS
has established its own small nurseries where there are none
from CENFOR.

It takes about 15 man-days to plant approximately 1200
trees per hectare. This means that a laborer plants roughly 80
trees per day, at an average daily wage of S/.1,600
(approximately U.S. $1.50).

Plantation Maintenance: At the Cajamarca sites, brush is
cleared from around each hole at the time of planting. No
clearing or watering occurs after planting. Areas where
survival has been poor are replanted.

At the Rio Crisnejas valley sites, brush is cleared at
planting and, if necessary, again during the first year after
planting. Young trees must be watered several times during the
first year and perhaps during the second year. This means that
these plantations require more total labor than do the ones at
Cajamarca sites. Also, labor at Rio Crisnejas sites is
required during the dry season, whereas at Cajamarca the entire
labor requirement comes during the wet season, when the trees
are planted.

Species: The plantations near Cajamarca are primarily of
Eucalyptus globulus, the most commonly-planted tree in the
Sierra, and Pinus radiata (Monterrey pine). This tree has
successfully adapted to the southern hemisphere and has become
the backbone of the forest industry in Chile and New Zealand.
V I


"2"~~~~~,la-~V L~SL I-















ipressus macrocarpa has also been planted fairly widely near
ijanarca and small amounts of Casuarina sp., Pinus
;eudostrobus and Pinus ayacaruita have been planted on a trial
isis. No native species are being planted near Cajamarca.

Native species are being planted in the Rio Crisnejas
ites, particularly Caesalpinea tintorea, known as "taya" and
nolle", and Schinus molle. Exotics planted in this area
include Eucalyptus citridora, E. globulus, Casuarina sp.,
ipressus sp., and small numbers of minor native species. No
ines have been tried here, as it is much too dry for them.

Success of the Plantations: The plantations near Cajamarca
ave been successfully established. Survival rate of pine and
ucalyptus exceeds 90 percent and cypress survives nearly as
ell. Some of the pines turn yellow and partially die back
after planting, but most overcome this. Eucalyptus plants
sometimes get off to a slow start, but most recover well.

Because Plan MERIS has been able to prevent grazing in its
ajamarca plantations, natural herbaceous and shrubby
egetation regenerates rapidly. The combined presence of the
rees and the native vegetation makes for a nearly continuous
round cover which controls soil erosion rather effectively.
hat, of course, is the principal purpose of having the
lantations. They, therefore, fulfill their purpose and,
additionally, provide future sources of wood, wildlife habitat
'nd esthetic appeal, as well as other benefits.

Plan MERIS, on the other hand, considers the plantations in
he Rio Crisnejas valley to be failures. Overall planting
survival rates are only about 50 percent and the high labor
requirements for both establishment and maintenance also
!etract from success. The trees which survive best are the two
native species, "taya" and "molle", followed by Eucalyptus
:itridora. Eucalyptus globulus and Casuarina show very poor
survival .

In spite of poor survival of the trees, the plantations at
:he Rio Crisnejas sites may be performing their soil
conservationn function fairly well if control of grazing is
allowing native vegetation to regenerate adequately. However,
if failure of the trees makes it impossible to control grazing
(people may feel there is no point in keeping livestock out of
the plantations if the trees are dead), the plantations are not
really providing their intended benefit.


Plan MERIS, therefore, intends to try to convert the
reforestation component at these sites from one that uses
timber trees to one that uses fruit trees. The idea behind
this is that farmers will be more willing to care for fruit
trees than for timber trees.

Public Reaction to Plantations: Public reaction to the
plantations, according to Plan MERIS personnel, has been
mixed. At first it was difficult to control grazing and it was
necessary to hire guards to prevent livestock from getting into
the plantations. Now, however, herders voluntarily control
their animals and there is little damage to the plantations.

Most of the trees have been planted on public or communal
land, rather than on private holdings. While a few private
landholders have welcomed plantations, many have been reluctant
to allocate any part of their small holdings to trees.

Although there is some awareness that plantations will
provide firewood, construction materials, and other products,
these benefits appear to be under-appreciated, perhaps because
they lie several years in the future.

Subsidiary Activities: Plan MERIS is beginning other soil
conservation measures in conjunction with tree planting. These
include: digging infiltration canals across planted slopes with
high erosion hazard, building check dams in gullies and,
beginning soon, terracing slopes before planting.


ANALYSIS

Overall, in the Cajamarca region, the reforestation
component of the Plan MERIS project has been successful.
Closer to Cajamarca, success consists of attaining good
survival with pine as well as eucalyptus. The plantations that
are two years old are becoming noticeable on the landscape,
attracting attention and approval. The trees and success in
controlling grazing, thereby allowing native ground cover to
proliferate, really do conserve soil.

Much of the landscape around Cajamarca is eroded and is
continuing to erode. Standing in the Plan MERIS plantation at
Namora, one looks out on a panorama of exposed slopes and
fields being lost to gullies. The Plan MERIS work stands out
against this as an example that even badly degraded sites can
be reclaimed.











H-5


One thing that would have improved the project near
Cajamarca would have been experimentation with native species.
South American walnut, an excellent timber tree, is common in
the area, as is a native cherry known as "Capulin". Both of
these species might have reforestation potential.

The markedly superior performance of native species in the
Rio Crisnejas sites constitutes a measure of success for the
reforestation project there. Although exotics, especially
eucalyptus and now pine, have been and will probably continue
to be the backbone of forestry in the Sierra, they are not the
complete answer to all the regions's forestry needs. Dry,
interAndean valleys can best be protected from erosion by using
native plants and controlling grazing. Similarly, at extremely
high altitudes, native species can provide wood, shelter and
erosion control.




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