US$ 428.34 million
Total Project Cost
US$ 194.33 million
Total IFAD financing
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.
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.
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.
- 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.
- Strong growth in employment and income has sharply reduced poverty rates in Peru. Moderate poverty fell from 45.5 per cent in 2005 to 19.3 per cent in 2015. Extreme poverty declined from 27.6 per cent to 9 per cent over the same period.
- Lack of opportunities for rural people has caused a massive migration to urban centres. Three out of four Peruvians reside in and around urban areas.
- Since 1980, IFAD has invested a total of US$172.5 million in 10 programmes and projects related to agricultural development in Peru, benefiting 186,380 households.
Projects and Programmes
Invitation to bid: Pro-poor agricultural innovation system for sustainable and resilient agri-food systems
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.