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Peru

11

Projects Includes planned, ongoing and closed projects

US$ 428.34 million

Total Project Cost

US$ 194.33 million

Total IFAD financing

186,380

Households impacted


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The Context

Peru has been one of the best-performing economies in Latin America, enabling continuous recovery of Peru’s per capita income, growth in employment, decline in poverty rates and a small decline in inequality.

It is estimated that from 2004 to 2010, about 4 million people exited poverty, with the poverty rate falling to 31.3 per cent. However, poverty rates in rural areas remain high.

Six out of 10 poor people in Peru reside in rural areas, and extreme poverty is mostly a rural phenomenon. Over 60 per cent of those living in the highlands or sierra region are poor.

Lack of opportunities for rural people has caused a massive migration to urban centres, where market activity offers greater livelihood options. Today, three out of four Peruvians reside in and around urban areas.

But while both urban and rural poverty affect Peru, food insecurity is chronic in rural regions, where many smallholder farmers produce basic food crops at a subsistence level. For this reason and others, people born in Lima can expect to live almost 20 years longer than those born in the southern highlands.

Rural development is constrained by limited linkages to markets for rural products and the structural characteristics of rural areas, including: fragmentation of ownership; limited cooperation between producers; organizational weakness; geographical dispersion; vulnerability to external, market and climate shocks; limited access to financial services and innovations; absence of public goods and services such as electrification, rural roads, highways and telecommunications services; and the lack of appropriate national, regional, local, public and private institutions.

The Strategy

In Peru, IFAD loans work to address the needs of small-scale farmers in the southern highlands, the country's poorest region, and major challenges regarding natural resources, technical assistance, financial services and production management.

Activities include:

  • enhancing smallholder farmers' property and resources through better natural resource management, land-titling and resolution of conflicts over land tenure;
  • improving smallholders' access to technical assistance and financial services by developing markets, increasing local capacity to contract services, and strengthening institutional and private-sector service providers;
  • promoting rural-urban linkages by helping small-scale entrepreneurs expand their non-agricultural activities, and by supporting farmers who establish agriculture-related enterprises in nearby small and medium-sized towns; and
  • fostering development by making local institutions and communities responsible for decisions on project funds and implementation.

IFAD has also introduced awards for innovation and conservation of traditional knowledge in Peru. Among the innovations are public competitions to assign development resources and manage natural assets, savings accounts for rural women, and direct money transfers for project participants to hire technical advisers.

Such socially inclusive mechanisms have become part of Peru's national strategy to reduce rural poverty. They are being replicated in IFAD-funded projects in other countries, including Bolivia, Colombia, Ecuador and Viet Nam.

Results-based country strategic opportunities programme (COSOP) Arabic | English | French | Spanish

Country Facts


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Related news

Invitation to bid: Pro-poor agricultural innovation system for sustainable and resilient agri-food systems

October 2018 - NEWS

This Call for Proposals is intended to select a recipient or consortium of recipients to receive IFAD grant financing to implement a project on Pro-poor Agricultural Innovation System for Sustainable and Resilient Agri-food Systems.

Independent evaluation shows that IFAD's support to Peru has achieved significant impacts in reducing poverty in rural areas

February 2018 - NEWS
The Independent Evaluation Office (IOE) of the International Fund for Agricultural Development (IFAD) has evaluated six IFAD-supported projects implemented between 2006 and 2016 in Sierra Sur, Sierra Norte, Selva Alta and the area of Apurímac and Mantaro rivers – some of the poorest and most remote rural areas in the country.

Presentation of the results of the first evaluation of the activities and investments of the International Fund for Agricultural Development in Peru

January 2018 - NEWS
The Peruvian government and IFAD are presenting an analysis of the achievements in their fight against rural poverty and the challenges that lie ahead in the country.

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Related publications

Investing in rural people in Peru

March 2018
Peru has made great strides in poverty reduction over the past decade, leading to a significant decline in the national poverty rate from 42.4 per cent in 2004 to 20.7 per cent in 2015. Nevertheless, by 2016 the gap between rural and urban poverty had tripled, at 44 per cent versus 14 per cent. Income inequality among Peruvian households remained virtually unchanged between 2004 and 2015. The most salient result is differential access by urban and rural people to education, health care, financial services and productive assets.

Occasional paper 4: The importance of scaling up for agricultural and rural development

July 2013
The thesis of this article is that governments of countries that plan their agricultural and rural development programmes on a large scale – typically covering the entire agriculture sector and including all or most of the important ingredients for agricultural growth and rural development – do better in terms of agricultural production and reduction of rural poverty and hunger than do country governments that do not invest broadly and at scale in such development.

Scaling up note: Peru

December 2015
Peru is an upper-middle-income country with one of the fastest-growing economies in the region. In the last decade, the country more than halved its poverty rate, which fell from 59 to 24 per cent. Reduction was uneven geographically, however. In the rural areas of the highlands and the rainforest areas, poverty still affects about 53 and 43 per cent of the population1 respectively, and particularly indigenous communities. 

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