Envolving From Farming Systems Research Into A More Holistic Rural Development Approach: Experiences in The Andean Region.

2008-1 Working Paper
Evolving from farming systems

research into a more holistic rural
development approach: Experiences
in the Andean region
Carlos U. León-Velarde, International Potato Center (CIP)
Roberto A. Quiroz, International Potato Center (CIP)
Roberto E. Valdivia, International Potato Center (CIP)
Jorge Reinoso, Centro de Investigación en Recursos
Naturales y Medio Ambiente (CIRNMA)
Miguel Holle, International Potato Center (CIP)
ISBN 978-92-9060-346-7
Natural Resources
Management Division
Working Paper
No. 2008-1
C I P • N A T U R A L R E S O U R C E S M A N A G E M E N T W O R K I N G P A P E R 2 0 0 8 - 1
Evolving from Farming Systems

Research into a More Holistic Rural
Development Approach: Experiences in
the Andean region
Farming System Analysis and Rural Development
From farm to market
ii E V O L V I N G F R O M F A R M I N G S Y S T E M S R E S E A R C H I N T O A M O R E
Working Paper
Evolving from farming systems
3
research into a more holistic rural
International Potato Center • Working Paper 1

development approach: Experiences
in the Andean region
Carlos U. León-Velarde, International Potato Center (CIP)

Roberto A. Quiroz, International Potato Center (CIP)
Roberto E. Valdivia, International Potato Center (CIP)
Jorge Reinoso, Centro de Investigación en Recursos
Naturales y Medio Ambiente (CIRNMA)
Miguel Holle, International Potato Center (CIP)
The Natural Resources Management Division Working Paper Series comprises preliminary research results published to encourage debate and
exchange of ideas. The series also includes documentation for research methods, simulation models, databases and other software. The views
expressed in this series are those of the author(s) and do not necessarily reflect the official position of the International Potato Center.
Comments are invited.
This series is available on the internet at www.cipotato.org
Evolving from farming systems research into a more holistic rural

development approach: Experiences in the Andean region
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International Potato Center • Working Paper 1
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ISBN 978-92-9060-346-7
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Table of contents
Acknowledgements vi
Preface vii
Evolving from farming systems research into a more holistic rural development approach: Experiences
in the Andean region 1
Introduction 1
The Systems Approach 3
Implementing the farming system analysis research approach oriented to rural development in the
Altiplano 14
Creating producers’ capacity and linkages with the private sector for rural development 23
Challenges for the Natural Resources Management (NRM) Division of CIP to reduce poverty at farm level 26
A few lessons learned in the process 28
Concluding remarks 30
E V O L V I N G F R O M F A R M I N G S Y S T E M S R E S E A R C H I N T O A M O R E v
Acknowledgements
The authors are indebted to the peasants of different communities of the Altiplano who actively
participated in the work that inspired this paper. Due recognition is also given to the International
Development Research Center, IDRC-Canada, the Instituto Nacional de Investigación y Tecnología Agraria
y Alimentaria of Spain, INIA-Spain, and the Canadian International Development Agency, CIDA, for their
generous financial contribution to the work in the Altiplano. We also gratefully acknowledge the valuable
comments and suggestions of Dr. Victor Mares on the technical aspects of this document.
vi E V O L V I N G F R O M F A R M I N G S Y S T E M S R E S E A R C H I N T O A M O R E
Preface
This document describes the evolution of the Farming Systems Research (FSR) approach into an expanded
development framework that takes into account the chain of activities from the farm level to the
processing of products and access to markets. The development framework includes the identification of
commodities with a comparative advantage in effectively contributing to poverty reduction.
The evolution of the original FSR methodology into a more holistic rural development approach
proceeded during a long process of research for development carried out in the Peruvian Altiplano, where
CIP and its partners have conducted a string of projects. The evolution described in this document is a
significant contribution to the robustness and scope of FSR; it is not one of those slight changes of
denomination that are frequently presented as new or alternative approaches (but that are, in essence, the
same FSR with the convenient addition of new methodologies and tools). It is important to recognize the
difference between a new approach and the enrichment of an old one by the addition of tools and
methodologies. The evolution here is the result of incorporating the analysis of the continuum from farm
to markets and identifying agricultural products with comparative advantage as contributors to poverty
reduction.
The authors, based on their experience in conducting several agricultural projects in the Andean Altiplano
and other regions, hope that this document will help clarify the conceptual framework of the systems
approach and integrate it into multidisciplinary efforts to generate, through research, adequate
technological alternatives for rural development and so contribute to poverty reduction.
E V O L V I N G F R O M F A R M I N G S Y S T E M S R E S E A R C H I N T O A M O R E vii
Evolving from farming systems research into
a more holistic rural development approach:
1
Experiences in the Andean region
INTRODUCTION
The Andean region is a mountainous area of around 1.5 million km2 and is well endowed with
natural resources. Its population is estimated at more than 115 million, most of whom depend on
agriculture for their livelihood. Over 60% of the population lives in rural areas, although this is
changing as urbanization increases, with related increases in unemployment and the demand for
services. In rural areas the main agricultural systems are mixed crop–livestock farming; extensive
livestock grazing predominates in drier areas. Subsistence farming, where animals play
complementary roles as a source of food, traction, asset building, insurance against climate
shocks and food security, is a trademark of those systems.
Due to limited market access, lack of appropriate technologies, and increased population growth,
the deterioration of natural resources – mainly soil and water – and the loss of fauna and
palatable native grass species of the high Andes are evident. This degradation threatens the
capacity of the land to provide environmental services and sustain the growing human
population. It also fuels rural poverty and migration to urban areas, which exacerbates urban
unemployment and poverty.
In the search for technological options for small farmers of the Andean region, many projects
were implemented to enhance crop and livestock production at the farm level. However, some
projects also focused on consolidating participatory research methodology for rural
development.
These projects originally took a collaborative approach, focused on fieldwork with farmers to
solve identified agricultural problems. They promoted adoption of new technologies generated
at experimental stations, with the assumption that they would produce almost immediate results.
Technology adoption by users was promoted by support in terms of inputs and infrastructure.
1
International Potato Center, CIP.
2
Centro de Investigación en Recursos Naturales y Medio Ambiente, CIRNMA.
Document prepared on the basis of information from different projects carried out in Puno, Peru by the CIP, in close
collaboration with CIRNMA and other partners and collaborators.
E V O L V I N G F R O M F A R M I N G S Y S T E M S R E S E A R C H I N T O A M O R E 1
The first steps in the work were the analysis and characterization of the farming systems and
households.
However, project progress showed that problems were very complex, and required further
analysis and synthesis. Therefore, both biophysical and socioeconomic studies were emphasized
to produce a synergism between both fields. These conjoined studies improved understanding of
the problems limiting farm production and technology adoption by the farmers, and helped
formulate mathematical models to simulate and test scenarios and hypotheses regarding the
operation of production systems.
The use of participatory methods fosters producer-oriented research that solves problems
prioritized by the farmers themselves, as opposed to a top–down approach that imposes
technologies based on results from experimental stations. Contests among farmers such as those
promoted in “seed fairs” generate a more fluid dialogue between farmers and scientists, and
contribute to exchange and mutual assessment of experiences in seeking joint solutions.
However, since this approach limits the extrapolation and adaptability of results, and may
influence the objectivity of the explanation for particular phenomena, the extensive use of
simulation models was progressively introduced into our research activities. This allowed
treatments or technological alternatives to be simulated before implementing them on farms; it
also allowed for ex-ante and ex-post analyses of systems (Dent, 1993; and León-Velarde and
Quiroz, 1994). Models were valuable tools for professionals who were inclined to assign special
importance to traditional practices of production management. Also, the capacity of the models
to handle variables which are difficult to measure but amenable to be simulated (e.g. potato
tuber development), helped explain the rationale of farmers. The results of the evaluations were
positive, indicating that both approaches (on-farm trials and simulation models) could be used to
validate technology options that had broad acceptance.
Nevertheless, surplus production without the market capacity to absorb it is a problem that
should be addressed. Likewise, problems of land tenure, equity, property rights and product
transformation should be addressed to understand the dynamics of evolving agricultural
production systems. Consequently, the technologies and strategies used, as well as the policies
and capacity building that link research and development, must be based on the following: (1)
adequate use and conservation of natural resources, (2) market-oriented agricultural production
systems, and (3) improved post-production processes. Also needed are policies that promote
trade and regional integration.
2 E V O L V I N G F R O M F A R M I N G S Y S T E M S R E S E A R C H I N T O A M O R E
This paper describes experiences in the Andean region, from the perspective of some members
of a group that initiated the work as a Farming Systems Research (FSR) team. Highlights of the
evolution during the last fifteen years are presented.
The paper is divided into three parts. In the first is an overview of systems and the FSR approach
and its evolution. It was important to present some details since the methods and experiences
from this phase were the basis for and the theoretical framework behind the move to a different
paradigm.
The second part is related to the implementation and evolution of the farming systems approach
within some Altiplano projects, where members of the original FSR team developed "more
holistic approaches" towards the Systems Analysis Research and Rural Development (SAR&RD)
approach.
The third part presents case studies focused on sustainable natural resource management (NRM)
based on innovative methods of empowering farmers/resource-users and communities.
Emphasis is given to efficient learning, monitoring and evaluation of the learning process, and
the effect that learning has on decision-making and the impact of that decision-making. The
cases examined deal with our experiences on how to involve the producers and bring them and
the private sector together in order to increase investment in the agricultural sector.
Finally, a short concluding section shares some of the lessons learned with the reader.
The Systems Approach

The systems approach is critical to our modern views on agriculture and rural development.
Particularly as researchers and developers currently seek to intervene in agriculture via
technology, policy instruments, education and market support programs, and to improve the
welfare of disadvantaged rural people by increasing income, improving health and nutrition,
providing education and facilitating fair access to markets (Bertalanffy, 1968). Thus, in work
oriented to improving agriculture using the systems approach, the classic way of conducting
analyses and interventions is by focusing on farms as the unit of analysis. In other words, the
systems approach attempts to study total-system performance rather than its components.
Understanding the performance and rationale of farms and farmers can provide a means of
gauging their reaction to different conditions and, hence, of predicting the consequences of
policy interventions (McGregor et al., 2001). This systems concept is used by many disciplines, as
it contributes to organizing and understanding a complex situation (Shannon, 1975). In
agricultural production research, the systems thinking helps incorporate the farm components
into a conceptual framework defining the FSR approach. Its use began in Latin America in the
early 1970s and since then its adoption, adaptation and evolution have been highly variable
across the continent (Hart, 2000). In some cases the development of a new approach that
rendered the systems approach “obsolete” was claimed. However, in many cases, this simply
involved creating a new name after researchers had integrated some tools and methods (such as
modeling or stakeholders’ participation) into the basic conceptual framework of FSR.
Consequently, there are different research groups that are implementing the original approach
used by some of the pioneers in the 1970s, while other groups are moving into allegedly "more
holistic" approaches, which at their core are methodologically and conceptually the same as the
“Systems Approach”.
Nevertheless, to apply the original FSR approach or any variant (Hart, 1982), it is necessary to start
by defining a “System” and the hierarchal level in which the system stands (Fresco and Westphal,
1988). A system is an arrangement, set or collection of physical things connected such that they
form an entirety or act as an integral unit (Hart, 1982; Conway, 1985). Therefore it is possible to
define its structure, function and objective. Basically each system has a limit, components, inputs,
outputs and relationships among components, commonly denominated interactions
Figure 1A shows, schematically, a system and its components that can be easily related to a
particular commodity like potato; thus, the system becomes a “Potato Production System”.
Figure 1B shows a general crop–livestock production system, a common production system in
the Altiplano, which is more complex due to an increased number of components. This
complexity helps to define certain characteristics of a system related to the environment,
organization, change, interdependency, counterintuitive behavior and drift to low performance
(Shannon, 1975).
Figure 1.
Component,
Component, C C Schematic
Inputs representations of a
system; 1A shows a
Interrelations
system and its
Outputs
components that
Component,
Component, S S
can be easily related
A Limits
to a particular
commodity, like
Precipitation potato or sweet
Solar Energy potato. 1B shows a
Potato crop–livestock
Varieties
Potato
Potato
production system -
Technical a common
Manure production system in
knowledge ∑ the Altiplano (León-
Others Velarde et al., 2000).
Other crops Milk
Forage
Forage Cows
Cows Meat
Fertilizers
?
Since the system approach can be applied to different situations it is necessary and fundamental
to define the operational level. Thus, it is necessary to define the level of work by defining the
hierarchal level.
Countries Figure 2.
1 2 3 n Schematic
representations of
the hierarchal level of
Eco-regions work related to
1 2 3 n agricultural systems.
Basins
Each level can be a
system by defining its
1 2 3 n Farms physical components
and the relationship
among them.
Crops Production Systems

- Livestock
Crop-
nn (particular technology)
Livestock
Water Soil
Soil Animal
nn Physical components
Plant
Plant
Figure 2 shows the hierarchal levels related to agricultural systems. Once the level is defined it is
not possible to describe other systems within the system. However, it is possible to define a
subsystem, which becomes a system if we separate it for a specific analysis. However, this
subsystem should be always located within the system to which it belongs.
Once the hierarchal level of work is defined it is necessary to characterize the studied system by
describing its components and their relationships. Figure 3 summarizes, graphically, the
subsystems and their components of the agricultural production systems in the Altiplano. This is
done through the characterization phase, which implies the use of several techniques and
adequate procedures to collect relevant information to diagrammatically represent and analyze
each component.
Figure 3.
Schematic
representation of an
agricultural production
system in the Altiplano
showing the
subsystems and their
components with the
relationships among
them. Bio-economic
and social information
for each component
contributes to the
analysis of the system
as an initial step to
determine products
with comparative
advantage in relation
to market
opportunities and to
set up new
technological
alternatives.
The analysis of subsystems and their components is based on the definition of both their static
and dynamic representations. The first representation is a graphic model of an actual system
(Figure 3), and the second involves a computer program that deals with dynamic changes. This is
one existing option that can be used to formalize the knowledge generated by research in a
manner useful for designing, testing, and implementing technology innovations and knowledge.
In their scientific endeavors, agricultural researchers applied the scientific method to search for
answers to factors limiting agricultural production. The scientific method is a valuable process
that utilizes knowledge to generate new knowledge (Cañas and Lavados, 1989); however, its
application in isolation is not enough to solve technological problems (Figure 4).
Knowledge generation
PROBLEM Application of Knowledge
Scientific method
Knowledge generation PROBLEM Application of Knowledge Figure 4.
Scientific method
Schematic
representation
ANALYSIS
OBJECTIVE
OBJECTIVE
linking a problem
with knowledge
KNOWLEDGE generation by
AVAILABLE NO scientific method
HYPOTHESIS YES Is technology NO
available? and its application in
BIO SOCIO ECONOMIC Systems Analysis
EXPERIMENTATION constraints Portfolio Research and Rural
of solutions Development
(SAR&RD)
RESULTS Land tenure methodology,
Credit EXANTE
Analysis considering the
Market
main limitations and
NEW Education constraints (adapted
KNOWLEDGE
Best Solution
NO EX-POST from Cañas and
viability Lavados, 1989).
TECHNOLOGICAL CHANGE YES
TECHNOLOGICAL CHANGE
Problem solving requires adaptation of knowledge to overcome limiting factors. The successful
use of technology to solve major limitations to agricultural production relies upon an adequate
acquaintance with the problems within a specified context (i.e. environment) and a good
application of available knowledge. When this interface is used to solve agricultural problems of
small farmers with their active participation, we say that we are applying a holistic methodology
to SAR&RD.
In the Altiplano the application of the FSR approach was initially oriented to solve the food
security problem and producing, whenever possible, a surplus for the market. The details are
presented elsewhere (INIA-PISA, 1992 and 1993; Quiroz et al., 1994; León-Velarde et al., 2000).
Dent (1993) and Thornton (1991) discuss general problems in the implementation of the
approach.
Figure 5 shows the original approach with its methodological steps: characterization, research,
validation, and the production programs. These are oriented by the analysis of the target area
and opportunities related to surplus production for the market, to increase income.
Figure 5. Farm - Market

Farm - Market
Production - Consumption
Production — Consumption
Schematic flow
diagram of Farming
Systems Research
(FSR) and its
modification in
relation to market Production
Production
Characterization
Characterization
orientation and rural programs
programs
development.
(PRODASA/CIP,
1994).
Validation
Validation Research
Research
Technological
Technological
options
options
Thus, farm income is one of the main factors analyzed and evaluated in agricultural systems.
Considering the factors involved in income generation, it is then possible to determine the points
of interventions to enhance it. Figure 6 shows farm income determinants and constraints, the
research issues addressed by most rural development efforts. Due to the complexity of
agricultural systems, the majority of agricultural projects aimed to increase production per unit of
land area (t/ha). The other two factors, “total area” and “price” were not considered since the area
is fixed, as determined by the system limits, and price is highly variable depending on the
demand and supply. However, the income generated by any agricultural production system,
particularly those managed by small producers, requires a more comprehensive analysis because
it is also considered a poverty indicator. Figure 6 relates farm income to some production system
components and shows that any increase in income depends on increases in production by unit
area as well as on the cost of production and the market price of the product. Since market price
could be fixed it is also necessary, in any kind of intervention, to reduce the production costs.
Thus, increasing the productivity and increasing the difference between sale price and
production cost will result in a better gross margin, benefits and total income. However, when
market competition increases, the price of the commodity could be reduced, bringing down farm
income. This effect can be minimized when the products with comparative advantage in the
market are well defined.
Figure 6.
==
$ ha plants / ha kg / plant $ / kg
= Main factors and
constraints
related to the
Income = Area x Current capacity x Animal production x Sale price - income from
or plant density or crop production production cost agricultural
production
systems.
heads / ha $ / kg
==
$ ha kg / head
=
Size of operation Technology Technology Market

Land tenure Police Capital Policy
The definition of products with comparative advantage is related to the market opportunities.
Analyses of production cost, sale prices and time series of total production and internal gross
product in relation to market demand help identify those products. Likewise, optimization
methods can allow the generating of bio-economic scenarios to determine future interventions
with adequate technology to improve technical and economic efficiency (León-Velarde and
Quiroz, 1994).
Table 1, which is related to Figures 5 and 6, shows the different techniques and procedures
utilized in the SAR&RD. They all require an adequate group of human resources within a
particular institution. Nevertheless, continuous training and integration of new knowledge
(Figure 4) contributes to technological change.
To initiate a technological change, adequate technological alternatives must be implemented for

each production system identified, including the market opportunities. Preferentially, the
alternatives should have low input requirements for an increased production at a lower unit cost.
Figure 7 shows an integration of the phases and possible results in each phase.
Table 1. Phase Methods and procedures Observations/procedures

Main methods Characterization, defining:
and procedures Target and base line Secondary information Statistics/compilations, charts, figures
utilized in Needs and opportunities Static and dynamic surveys Farmer participation; depending on
participatory Rapid rural appraisal the dynamic of the variables
agricultural GIS & remote sensing Farmer participation
Satellite images; ground truthing;
system analysis maps
research by a Analysis, defining:
partnership of Products with comparative Principal components & Definition of farmer strata and target
different advantage cluster analysis population
institutions. Linear and non linear Trends; sustainability (logistic, linear
mathematical models and non-linear models)
Econometric models and Comparison of scenarios (current
simulation models and potential production); risk
analysis
Cost–benefit analysis Economic response; profitability; risk
analysis. Linear and multiple goal
programming
Research, defining:
Technological alternatives Experimental designs Cause–effect response
or innovations,on farm/on (classic)
station Central composite design Response surface; bio-economic
scenarios; cost–benefit analysis
Experimentation and Trials farmers vs Validation on farms/linking adoption
validation alternatives
Diffusion, promoting
capacity building; Fields days; short courses Farmers’ participation/linking
adoption
Farmers, researchers and Seminars; workshops; Description of technological
extension agents technology contests alternatives or innovations
Publications; manuals Researchers and extension agents
Communication media Radio, television (documentaries and
case studies), Internet
To implement the different phases of the farming SAR&RD, both financial and skilled human
resources are required. In many projects the work has focused on the system’s characterization
phase, which includes defining the target area and identification of the needs and opportunities
through system analysis. Nevertheless, many projects have excessive work in characterization
and definition of a baseline but define neither the products with comparative advantage nor the
technological alternatives, which could benefit the target households. Likewise, the adoption
phase usually has insufficient funding or the technology dissemination process is inadequate.
Consequently most of the work remains in pilot sites, which are described as case studies in final
reports.
Rural
Rural
Ecoregion
Ecoregion Farms
Farms Systems
Systems Components
Components
Figure 7.
Phases of the
factors
factors
implementation
of the System
Analysis Research
Area selection -- producers
Site
Site // area
area for Rural
Development,
SAR&RD.
Characterization Information
Information
P
O
L
Description
& analysis
GIS/RS Case Systems Experimental
Experimental
I studies analysis
Station
Station
C
E
S Defining products Research
Research / Commodities;
/ Commodities;
& alternatives
Technological alternatives
Technological alternatives or
or innovations
Experimentation Experimentation
Experimentation & &
&Validation
validation
validation inin farms
farms
Use & Adoption Diffusion
To avoid concentration on one particular phase of the approach or a bias for a particular
discipline it is necessary to identify the phases and their objectives. Thus characterization
includes defining a target area and a clear set of needs and opportunities for a particular product
with comparative advantage related to market demands. This phase also includes a complete
analysis of perceptions and aspirations of farmers, who need to recognize that some
interventions or modifications to improve the production system are required. In a similar way,
the research phase includes model simulations to evaluate the integration of technological
options or alternatives of low production cost into well-defined production programs. This
includes linkages for dissemination as well as a good evaluation program to assess the impact of
the interventions in the targeted production system. Figure 8 summarizes the relation between
phases and objectives. This scheme has been modified and is described in summarized form by
the International Potato Center (CIP) as the pro-poor cycle for rural development.
Figure 8.
Schematic flow
diagram presenting Farm - Market Target areas
Production - Consumption
an analogy between
the main steps of the Characterization
farming System
Analysis Research for Needs and
Impact opportunities
Rural Development assessment
assessment
(SAR&RD) approach
and the phases of the
pro-poor R&D cycle. Models and
Production simulation
programs Technological Research
options
Linkages
Linkages forfor
dissemination
dissemination
Validation
Nevertheless, one of the lessons of the application of FSR in Latin America in the 1970s is that
farmers do not adopt complete technological packages, but components of them (León-Velarde
and Quiroz, 1994; PRODASA/CIP, 1996; Collinson, 2001;Tinsley, 2004). Unfortunately, this message
has not reached key research and development decision-makers, since most of the limited
agricultural extension and development projects in the region tend to promote technological
packages to small farmers. Changes in productivity of a small farm from a low level to its potential
level might be pictured as an ascending spiral (DASA-CIP, 1997; Quiroz et al., 2000) with actual
production level at the lower end and potential at the upper end (Figure 9).
Figure 9.
Systems
hierarchies and
research
methods
utilized in the
SAR&RD.
The number of turns required to go from the actual to the potential level differs among
agricultural production systems. Results are not expected in the short term. Technological
alternatives will be incorporated on each turn depending on their profitability (increased cash
flow). It can be envisioned that a complete turn of a cycle requires the application of several
methodological steps (Figure 9) and the participation of several agents. At the level of the
agricultural scientist a high level of precision is demanded, which apparently decreases in each
turn, but the demand for better policies to obtain equity and natural resource conservation
increases. The role of institutions and policy makers increases with each turn. A balance of
integrated planning and responsible decision-making in each turn is necessary considering a
bottom-top and vice versa planning of activities (adapted from Quiroz et al., 2000).
In some cases, institutions applying the system approach or any modification of it tend to
organize networks or other types of partnerships. This approach is correct and valid when there is
no bias in the objective of the targeted system. However, some research institutions that retain a
disciplinary or commodity orientation for their work are convinced they are using the system
approach for conducting applied research, but by considering the mode of production of the
isolated commodity as a production system, the analysis of the whole farming system is
incomplete or missing altogether (McGregor et al., 2001). Consequently, there is not the required
emphasis on the farm as the unit of analysis and intervention, which hampers the generation of
relevant research outputs and the improvement of the livelihoods of smallholders with complex
agricultural systems. Thus, in any intervention it is necessary to recognize and identify the actions
that could maintain the “status quo” of the system, enhance one or more of its components or
change the system altogether - which is the most difficult action (León-Velarde and Quiroz, 1998).
Therefore, in any case it is necessary to clearly identify the research needs and opportunities to
apply the adequate knowledge generated for a particular situation. When an institution
implements the approach described above, there is a need to recognize that the work is dynamic
and continuous; since in some cases the activities apparently do not have a beginning or an
ending, thus distorting the approach. For each activity it is necessary to recognize the phase and
the level of work that is being executed within the SAR&RD approach.
Implementing the farming system analysis research approach oriented to rural

development in the Altiplano
The Altiplano is a special ecoregion in South America, covering approximately 180,000 km2
between Peru and Bolivia at an altitude of 3,800 masl. Some of the area is well endowed with
natural resources. However, it is also a region with high climatic and economic risks. In addition,
due to historical, cultural and political reasons its population has a quality of life well below its
potential. Poverty, a very slow rate of development, an increasingly high population growth rate,
unequal distribution of wealth, and natural resource degradation characterize the region. In
recent years, government policies have promoted the development of large urban centers and,
as a result, most of the population is now found in major cities. It is estimated that by the year
2025 over 75% of the population will be urban (IICA, 1994; Winograd, 1995). Although extreme
poverty is common in city outskirts, the majority of the poor are in rural areas, and most are small
farmers.
Most farmers are smallholders and they comprise over 70% of the Altiplano farm population
practicing a highly diversified agriculture to cope with both climatic and economic risk. Within
these diversified farming systems, crop–livestock production systems are critical, as they provide
valuable products to contribute to a sustainable agricultural system, but are well within
agricultural subsistence farming. Therefore, these farmers demand options derived from a clear
problem solving focus to improve livelihoods, while preventing natural resource deterioration.
For decades the usual approach has been to improve the system by increasing productivity.
However, such an approach did not necessarily improve the overall system. Figure 10 shows a
simplification of the poverty cycle in relation to the natural resources in the region. The scheme
indicates that poverty is not related to only one factor or indicator. Therefore a clear intervention
on exogenous factors to reduce the effects of migration, malnutrition, poor education and poor
health is needed (IICA-RISPAL, 1996). It is also necessary to recognize the comparative advantage
of other institutions, thus a clear and strong horizontal collaboration should be organized.
Likewise, a holistic approach integrating other disciplines, various sectors of the economy and
policy studies must be organized and oriented towards rural development.
Low Budget for

productivity rural
Figure 10.
development
Education
The vicious cycle of
Health deterioration of
Household Nutrition
income natural resources,
Roads
Agricultural Research & low agricultural
technology Development productivity, poverty
Poverty
and violence.
(Adapted by CIP-
NRM from INIA-PISA,
1993, and
Migration to PRODASA/CIP,
Use of Child tropical areas
hillsides for malnutrition Capability to
to 1994).
agriculture & mortality large cities & buy goods &
foreign Services
developed
countries
Erosion of
natural
resources
Social Foreign
problems investment
(lack of
Security).
Increase
Region’s
food Decrease
production
Figures 8 and 9 jointly describe the integrating methodology used at different hierarchical levels,
as well as the institutions necessary to complete each turn of the pro-poor research and
development cycle. The classical scheme of FSR includes diagnosis, experimentation, validation
and diffusion (Zandstra et al., 1981, Hart, 1982; Conway, 1985; INIA-PISA, 1992; León-Velarde and
Quiroz, 1998). These research phases, have been commonly applied by most research teams
following FSR methodology or its modifications during the last decade. However, in many cases
the diffusion phase is the most difficult step. Usually, constraints by land tenure, size of operation,
access to credit, market opportunities, education and health prevent adoption of technological
alternatives or innovations.
A brief description of each research phase in the generation of technological alternatives or

innovations for a specific agricultural product with comparative advantage in a specific market
was provided in the previous section. Thus, several technological alternatives were developed for
each product and integrated so that each farmer could use a combination of them according to
their resources (capital and land) to improve the productivity of the commodity with more
comparative advantage and so enhancing their income (see Figure 11). The agricultural system
includes crops and livestock and not all farmers have the same ability or adequate resources for
both activities. Consequently, in the analysis of the agricultural system it is necessary to consider
the skills and aspirations of the farmers.
Therefore, it is necessary to identify the crop and livestock products with comparative advantage
from the point of view of the farmer and the region. Thus the productivity of those products can
be improved to enhance their access to markets and income generation. In this scheme the
organization of producers is important, because most production is collected by aggregation.
There is a need to create solid farmers’ organizations linked to the market, to obtain better
commodity prices and farm income.
Alternatives of Production
Figure 11.
Schematic
representations of Analysis
Analysis &&Research
Research
optimal Potato,
Potato, P P FF
Agricultural systems / family farm
combinations of Ag Quinoa,
Quinoa, Q Q
products with ric
Oca, O O
Oca, PP FF
comparative market
ult CC
ur
Forage, F F
Forage,
advantage based on al
Optimal F
F QQ
sy Optimal PP
adequate st Cattle, C C
Cattle, combination
combination
technological e
of
of Production AA -- SS
Sheep, S S
Sheep, production OO
ms alternatives O
O
alternatives or /
alternatives
innovations fa Alpacas, A A
Alpacas, TT
mi
generated by ly
Trout, T T
Trout, ot
ot CC -- SS
research. (Adapted far Vegetables,
Vegetables, H H C
C
by CIP-NRM from Other, ot ot

Other, Technological
Technological Farms production
Farms production
INIA-PISA, 1993 and alternatives
alternatives systems improved
systems improved
PRODASA-CIP,
1994).
The level of farm income is usually a criterion to group producers for research purposes. However,
in many cases it is necessary to include other factors related (or in addition) to income. These
include land size, number of children, level of education and assets; they can be integrated using
cluster and principal components techniques. Figure 12 shows a summary of a cluster analysis of
communities in the Altiplano and Ecuador. The Altiplano community is grouped by area and
assets (animals: alpacas, llamas and sheep) and the Ecuadorian community is stratified by family
components (children) and assets (land area and animals: cattle and swine).
Figure 12.
Group IV A Schematic representations
500 of categorization of farms in
the Apopata community
Component 2 (area, ha)
Puno, Peru (A) and Cañar,

400 Ecuador. (B) by using
Group III principal component and
cluster analysis. The
300 Altiplano community shows
four groups based on
200 animals and area. The other
Group II communities were stratified
Group I by family (children) and
100 assets including land area
and animals. For each region
0 or zone the classification of
producers by type of group
0 50 100 150 200 facilitates a definition of the
Component 1 (Alpacas) beneficiaries, allowing clear
+ technological interventions
3
3 with selected technological
Group 2 alternatives adequate to
Co their resources and products
Component 2 (Family; children)
m 22 + B with comparative
po + +
advantage. (Adapted by CIP-
NRM from INIA-PISA, 1993;
+ + +
ne 11 + León-Velarde and Barrera,
nt + + 2003).
++ + ++ +
Group 1
2 + +
(F 0
0
+ ++ + +
am +++Group 3
ily --11 ++++ + +
+ + +
;
+ + + +
chi +
ldr --22 -2
en) -2 --1
1 --0
0 1 2 3 4 5
1 2 3 4 5
Component 1 (area and livestock)
Component 1 (area and livestock)
The categorization of farms allows a clear intervention on the way of producing the commodities
with main comparative advantages. The result is reflected in income, one of the main poverty
indicators. Table 2 shows the income range in the Altiplano (Ilave and Mañazo zones), from an
analysis of five components: crops, livestock, processing, labor off the farm, and external support.
The average daily gross income range is US$1.46–2.81 per day and, when expenses are deducted,
the annual gross margin is $US70–97, which puts these farmers within the category of ‘poor’
(World Bank, 2004). Consequently they have a very low or no level of investment.
Table 2. Sources Range Contribution

Sources of income
and expenses in Income US$ per year %
typical small farms Crops (potatoes, quinoa, oca, barley, others) 109 240 22.36
in the Altiplano.1
Livestock production 378 458 53.56
Processing (handicrafts, animal products, jerky, meat) 10 107 7.50
Migration and trading 0 60 3.84
External support (food aid, others) and credit - loan 37 162 12.75
Total gross income 534 1027
Expenses
Own consumption of products 240 393 45.41
Food and supplies 140 340 34.43
External support (food aid and others) 19 62 5.81
Other cash expenses 20 32 3.73
Credit -Loan 18 130 10.62
Total gross expenses 437 957
Gross margin 97 70
1
PRODASA–CIP,
1996; CIRNMA-CIP, 2004
Therefore, the approach was oriented to identify products with comparative advantage to
enhance farm income by improving crop and animal productivity and access to markets whilst
improving household health and nutrition. Figure 13 shows the biophysical components for
which research has generated technological alternatives adequate to farmers’ resources. Some of
the appropriate technological alternatives generated for the Altiplano are summarized in Table 3.
These technologies cause no deterioration of natural resources. There was a study on farmers’
assessments of these technologies (INIA-PISA, 1993) and the evaluation of the interventions was
reported by De Los Rios and Diaz (2003).
Methodologically, the application of the farming SAR&RD approach to generate technological

alternatives, besides a clear participatory process with partners, allows the introduction of
process-based simulation models and decision support systems. A step-wise description of the
Andean experience in systems analysis is presented in Quiroz et al. (2000). Simulation models
were used to select treatments for on-farm experiments, perform ex-ante evaluations of
technology options, conduct simulated experiments whenever biophysical or economic
limitations existed, understand the farmers’ rationale on specific production decisions, and assess
the sustainability of practices and options. The process, including farm interventions, is
conducted with full participation of farmers. Several examples are given elsewhere (Arce et al.,
1994; León-Velarde and Quiroz, 1994 and 1998; León-Velarde and Quiroz, 1999; Quiroz, et al.,
2003).
Figure 13.
POLITICAL DECISIONS FARMER DECISIONS
Scheme of biophysical
Land Use components for research
interventions to generate
N-fixation technological alternatives
CROP GRASSLAN ANIMALS
Grazing adequate to farmers’
ANNUAL FORAGES resources and production
E
N
alternatives.
V MANURE
MANURE
I URINE
URINE
R CROPS
O RESIDUES FORAGEFORAGE
RESIDUES
N RESIDUES
M
E
N SOIL Nutrients
FERTILIZATION Availability Losses through
T Organic; inorganic Denitrification
Drainage, others
ANIMAL
CROP
CROPPRODUCTION
PRODUCTION
grains, tubers PRODUCTION
ANIMAL PRODUCTION
grains, tubers
roots, others
roots, others meat,
meat,milk, wool
milk, wool
fiber, others
INCOME
Nutrition Market
and health Transformation
Transformation Market
Alternative of Technological alternative Impact on traditional use Result

production
Potato Use of manure; decomposition/mud Increase water retention and nutrient 14% increase on potato and quinoa crop
Compost from crops residues availability rotation production; reduce the use of
fertilizer by 30%
Use of bitter potato varieties clean of Availability of healthy product and better Increase of 20% on bitter potato production
virus quality
Quinoa On conventional production the use Increase quinoa production from 0.62 to 1.3 Increase production by 110% and family
of improved varieties, and fertilizer t/ha income by 82%
NPK 80-40-80 or 40-20-00 per hectare
Organic fertilization and use of Improve production to 1.1 t/ha and quality Increase production by 77 % and family
biocides grain increasing demand for organic income by 84% protecting the environment
product.
Oca Use of genetic variability and Increase quality product and production Increase production by 34% and family
adequate storage (rustic shelter) of from 6.5 t/ha to 8.2 t/ha improving demand income by 62%
tubers combining with compost and
organic fertilization
Cattle Use of improved forages and forage Increase forage production and availability Increase production by 35% Minimize
conservation (silage and hay) climatic risk while maintaining production
levels
Meat Forage budgeting; use of perennial Increase forage availability and weight gain Forage increment 38-96%
Milk and temporal forage base (improved Reduce age at first mating weight gain increase 53%
pastures Increase milk production 18-20 months
45-75%
Use of aquatic forage; llachu-totora 0.584 g/day Increase income by 142%
Use of shelter Climatic risk minimization; increase of milk 53% on weaning weight
and meat production 25-35% milk increased
Crops/ Use of vegetables/ horticulture Potato 2.8 kg/m2 minimizing climatic risk on Availability of seed for conventional
Greenhouses seed production production
Increase mixture of vegetables Improved the family diet and increase family
income by 58%
Alpaca fiber Alpaca management production Increase: Fiber production 12-15%
system; fiber-interchange of sires Birth weight 18%
Income (US$1980/year) 55–104%
Trout Use of natural and artificial ponds on New alternative and source of protein and Improve availability of family diet and
alpaca highlands farms family income income
Use of floating cages and adequate New alternative oriented to national and Improve the trout farm and family income up
feeding strategy and management international market to more than 300% by market articulation.
oriented to intensify trout production
It is clear that the implementation of technological alternatives requires a strong linkage between
production and consumption, where markets are important as the driving force of the farming
SAR&RD approach.
Figure 14 shows the components of this orientation aimed at improving production at low
production cost to generate a surplus. This includes an adequate process of transformation to
generate an added value product that responds to demand, which can be local, regional, national
or international. The production to market chain should be analyzed with respect to costs of
production and transport to the market. In some cases the processing should occur in other areas
with the infrastructure and marketing connections.
Figure 14.
Production
Production Consumption
Consumption Schematic representation of
the market oriented
production by the farming
System Analysis Research &
Transformation
Transformation
Rural Development
(SAR&RD) approach. Main
components in the process
Production
Production Post
Postproduction
production Agro industries
Agro industries Market
Market are the production,
postproduction agro
industries and market. The
system moves from a
Storage
Storage subsistence level to a market
Processing and
Processing Producer
Producer
Animals
Animals and oriented one, responding to
Crops Transformation
Crops Transformation a market demand for
Planting Local
Local market
market
products with comparative
Planting Planting Sales
Sales
Planting advantage but without
leaving aside food security.
Consumption
Consumption Thus, a farm can gain one
Regional market
Regional market step in the intensification
Ag
Agricultural
ric pr process while maintaining

practices
Market
Market
ultac other products to complete
ur tic Sales
Sale National market
National market
al
es an adequate level of family
food intake.
Self
Self International
International
consumption market
consumption market
To complete the cycle of the farming SAR&RD approach (Figure 5), production programs must be
implemented. Without the implementation, the population benefiting from outputs of the
SAR&RD approach is limited to a small number of farmers, mainly those participating in the
process, as the dissemination reaches a very low percentage of the population. This is
exemplified in Figure 14. Note that since a long time is required to reach the total population, so
E V O L V I N G F R O M F A R M I N G S Y S T E M S R E S E A R C H I N O A M O R E 21
immediate impact can be limited. The presented case on potato seed production in rustic
greenhouses involved the use of fertilizer and plastic, materials that negatively affected the rate
of dissemination of the technology after the project activities ended (SEIMPA, 1995). A similar
experience was documented for the commercial greenhouses producing vegetables in the
Altiplano (CIRNMA, 1999) and mixed forages in Carchi, Ecuador (León-Velarde and Barrera, 2003).
Figure 15.
Rate of technology c
dissemination. 1.0
b1t
b0e
A) Shows the potential
0.9 yt = b
to increase the rate of
adoption by using a 1 − b 0 (1 − eb t ) 1
Producers; percentage
0.8
participatory method
among farmers; It is 0.7
more important the rate
of communication than 0.6
the initial number of
farmers adopting a 0.5 a
particular technological
alternative; the use of 0.4
farmer collaborators
and contests among 0.3
farmers contributes to 0.2
an increase in the
adoption rate.
B) Shows a particular 0.1 A
case study on rustic
0
greenhouses to produce 1 2 3 4 5 6 7 8 10
seed potato; during the
first three years an B
average of 88% of the I
objective (goal) was 1.0
reached, which 0.9
represents the 18% of II
Producers; percentage
the total population 0.8

(target). The question
0.7
remains on the
continuity of actions to 0. 6
reach the total
population; some cases 0.5
do not consider linkages 0.4
with other institutions
and the diffusion rate 0.3
decreased. Population
0.2
objective
0.1
goal
0.0
0 6 12 18 24 36
Months
In the Andes, the possibility of initiating and maintaining effective production programs through
conventional means is very low (Figure 15). Local and national governments have neither the
level of financial support required nor the infrastructure to implement them. Innovative methods
to attract producers and the private sector with cost-effective mechanisms to increase the
adoption rate of good technological practices are required. In addition to solving the productivity
problem other important issues must be included in the new paradigm: the protection of the
natural resource base, market competitiveness and the generation of rural income and
employment. Empowerment of farmers’ organization and participation of private enterprises
under well-defined market rules consolidate the impact at the farm and regional levels.
In this way, the integration of the knowledge and experience within the SAR&RD approach is
shown in Figure 16, which summarizes a representative scheme and results obtained in the
Altiplano, where a sort of activities were concatenated to achieve an impact at the regional level.
The defined objective to work from production to consumption, including products
transformation, created the necessity to promote capacities in a step-by-step mode. During this
time many projects with specific roles and locations were carried out, representing a continuous
line of action with several partner institutions, which contributed to attaining the objectives and
the goal of the research for rural development, creating producers’ capacity and linkages with the
private sector.
Creating producers’ capacity and linkages with the private sector for rural development.
Micro enterprise
Figure 16.
Schematic
forms of
association of
Nucleus the small
of producers Association of producers of
Producers Market products that
Micro have a
enterprise comparative
advantage.
Private enterprise
Private enterprise
The opportunity to expand the area of crop–livestock systems, thus increasing the size of
operations, can only be realized if concrete measures are taken. Given the circumstances, a large
challenge of the rural sector is the incorporation of underutilized land to increase the cultivation
area as well as to generate new jobs, protect natural resources and produce sufficient to
guarantee food security. However, the incorporation of new land is constrained by topography,
type of soils and water availability among other physical factors. Consequently, the discussion
about the evolution of agriculture should be focused on the economic competitiveness of the
crop–livestock production systems as compared with other ways of employment generation
(rural tourism, agro-industry, construction of roads, etc.) and other uses of natural resources
(protection of water sources, capture of CO2, construction of terraces, etc.). Thus it is necessary to
incorporate producers with the capacity to invest in efficient technological alternatives for
producing commodities with comparative advantages. This implies assessing the potential for
added value and generation of employment and income of different commodities. Figure 17
shows the relationship of production at different levels with the market demand (local, regional,
national and international).
Figure 17.
Schematic Basic
Basic
integration of Profit
Profit
human
human
natural resource needs
needs
management
with production, Contracted
Contracted Unsatisfied
Unsatisfied
income and Family work
family Local, market,
Local, regional
market, regional
needs
needs
work force
market demand force
regulated by
economic Resources
Resources
soil, water,
soil, water,
control and energy
PP
energy II
investment to Family
Family R
increase Regional
N
N R
Regional P
P
I
I Demand
productivity. Supplies
Supplies C Demand
U
U
Weather
Weather
T EC
PRODUCTION
PRODUCTION T E
S
S
S
S
Technological
Technological
Development
Development
(bio -physical)
(bio-physical) Investment
Investment
Input
Input
Fixed assets
Fixed assets
other inputs
other inputs
Economical
Economical
Control
Control
The dotted area represents the link with the demand of products. However, the economic control
includes mechanisms of liberalization to support the primary sectors that are most affected. This
dislocation was so significant that none of the Andean countries have been able to allocate
enough resources to cope with those effects, leaving the mixed systems at a disadvantage
compared to other production systems (i.e. intensive production systems). Contrary to
expectations, the Andean countries increased their public expenditures creating fiscal deficits
that were impossible to handle rationally in the following years (gross domestic product debt
service increases from 1% to 6%). Consequently, limited resource availability makes the political
cost of investing in poor areas very high, drastically limiting government willingness to invest
directly to help small producers. Likewise, the pressures of the services and industry sectors
maintained the exchange rates below equilibrium level, in favor of imports of crop–livestock
products, showing a clear bias toward the consumers. With that exchange rate management,
public debt increased disproportionately and there were no possibilities of exporting crop–
livestock products. Other structures created by state modernization reforms were expected to
contribute to developing the agricultural sector, but have had limited success. The semi-fiscal
funds are interested in state-of-the-art technology and very few are willing to invest in
infrastructure and/or support for small-scale production systems and much less in mixed systems
(Estrada and Quiroz, 1999).
Nevertheless, through different projects the NRM Division of CIP is exploring the possibility of
bringing together the small producers and the private sector to invest in rural areas. The strategy
is based on the premise that there are low-cost, underutilized products with comparative
advantages. This is particularly true in areas of Peru and Ecuador. The following paragraphs
summarize what NRM/CIP is implementing in some areas. The main objective is to help the
producers solve their problems through sound management of natural resources, and for them
to achieve technical and economic efficiency and social equity.
There are producers, landowners and investors that want to enter in strategic alliances to ensure
possession of land and/or production of raw materials. However, under the current situation:
Few producers in different areas are keen to finance the establishment of a farming
business of necessary scale to guarantee adequate market price for their products.
The availability of land has been reduced, and the lack of income makes it impossible for
producers to accumulate capital to purchase more land and thus expand operation size.
With the current levels of unemployment the cost of capital has increased for the small
producer.
The government or private banks are neither willing nor have the available capital to
finance the establishment of rural micro enterprises, even if it is demonstrated as one of
the best investment alternatives.
With this scenario, one viable solution is to create groups of producers to promote commercial
alliances between farmers, entrepreneurs and large producers. These alliances should promote
the development of business capacity among the farmers.
There is a consensus on the need for making the change through strategic alliances. This
consensus is based on the required better administration, vertical integration of the production
chain, and agreements on prices in critical periods. An absolute necessity is to have objective
criteria to prioritize investment, so that it fulfills partners’ expectations.
Each member of the alliance plays a complementary role. National research institutions and
universities are important in technology generation. Non-governmental organizations, which are
in contact with farmers, contribute to the implementation of activities. In the Altiplano, CIRNMA
was responsible for creating the farmers’ associations and managing the credit fund. In this case,
the project provides technical assistance to farmers in the different stages of the research and
development process, including marketing of farm products. Farmers sign an agreement of co-
responsibility to pay the loans provided by the project through a voluntary credit scheme based
on revolving funds, oriented to facilitate access to markets.
Challenges for the Natural Resources Management (NRM) Division of CIP to reduce poverty
at farm level
The NRM Division conducts several projects in the Altiplano, which have activities oriented to:
Designing case studies within the project that would be attractive to farmers and other
actors,
Promoting the creation of farmers’ associations and a credit fund,
Creating a strategic alliance among producers and the private sector based on actual
revenues for all the partners,
Helping negotiate the financial support and link with the market,
Creating financial mechanisms that can stimulate participation.
To illustrate the work that NRM/CIP is doing we include a summary of the on-going program
“Poverty reduction in the high Andean region through the production, transformation and
marketing of agricultural products” (Figure 16). This program integrates several projects in a
horizontal collaboration manner based on the comparative advantage of each project, all
with a similar general objective. Thus, there is an integrated effort, pooling funds towards the
same objective to minimize transaction costs and conduct more activities.
Production
Production Consumption
Consumption
Transformation
Transformation
Technological
Technological
Production
Production Organization Models
Models of
of Market
Market
Watershed
Watershed Alternatives/
Alternatives/ Organization
Productivity
Productivity of marketing
Marketing and Local
Local
Commodities of producers
producers
Commodities transformation
transformation Regional
Regional Figure 18.
National
National Representative results on
Fertilization
Fertilization International
International
Actions
Actions the Altiplano, where
Organic
Organic Normalize
Normalize Differentiates
Production
Production • Capacity
Capacitybuilding
building
Differentiates concatenated activities
Varieties Products
Products
Varieties • Consolidation
Consolidationof of Standardize
Standardize were implemented for
GIS Irrigation
Irrigation organizations
organizations
GIS
Microenterprises
• Micro enterprises
creating producers’
Remote
Remote Integrate
Integrate Aggregate
Aggregate
Sensing pest
Individual
Individual capacity and linkages with
Sensing pest control
control Collective Value
Value
Collective
Mixed(private)
(private)
the private sector for rural
Greenhouses
Greenhouses Mixed
Nutrients
Nutrients Marketing development.
Marketing
Recycling
Recycling Shelters
Shelters Connections
Connections
Agro
Agro Offer of
Offer of
ecological Silage --Hay
Silage Hay
ecological volumes of
volumes of
Zones
Zones Trout/jails
Trout/jails products with
products with
comparative
comparative
Others
Others
Differences
Differenceson
on advantage
advantage
Livestock &
Livestock &
Potential
Potential Processing
Processing
current capacity
current capacity
Productivity
Productivity Lost energy
energy Cheese
Lost Cheese
Agricultural
Agricultural Textiles
Textiles
Model
Model
Characterization
Characterization
Simulation
Simulation M ii cc r ro o C Cr ér dé id t i t
M
Activities are based on the SRA&RD approach, which facilitates different types of associations
of small producers. Figure 18 summarizes three main types of association based on the
population of producers. From this population, one individual producer can create a micro
enterprise, such as the case of the dairy farmer who is now producing cheese. Also from the
population, a group of farmers could constitute a micro enterprise, which is the case of oca
farmers who now produce oca marmalade. Another type of association links a group of
producers with the private sector. This is the case of trout production, textiles (sweaters) and
other handicrafts. Table 4 describes the different stages of the production to consumption
chain for three products with comparative advantage in the Altiplano, oriented to different
markets. The table shows the gain that each segment obtains. The first step is to increase
production with low-cost inputs, which increases the producer’s income. This is facilitated by
technical assistance and supervised credit. The other stages add value through processing
and facilitate access to markets.
Table 4. Product Production Production Gate Intermediary Agro Broker;

Improving Cost Price Marketing Industry National
$/kg $/kg $/kg $/kg International
production and
Markets
income on each $/kg
segment of Quinoa;
marketing Traditional 0.650 t/ha 0.30 0.34 (13%) 0.40 (18%) none none
model applied in Improved 1.300 t/ha 0.34 0.44 (29%) 0.50 (13%) none none
the Altiplano 1.300 t/ha 0.34 0.48 (41%) none 0.8 (25%) 0.96 (30%)
Organic** 1.200 t/ha 0.39 0.54 (39%) none 0.96 (23%) 1.13 (32%)
Milk; 3.2 kg/cow 0.22 0.25 (13%) 0.31 (24%) 1.08*** 1.24 -none
Traditional (18%)
Improved 5.8 kg/cow 0.15 0.25 (66%) none 1.96*** 2.48 3.34 (24%)
(27%)
Oca;
Traditional 4.5 t/ha 0.16 0.19 (19%) 0.21 (14%) none none
Improved 7.5 t/ha 0.15 0.20 (33%) 0.24 (16%) 1.35****1.73 1.97 (14%)
(28%)
Organic 7.5 t/ha 0.22 0.30 (36%) none 1.35****1.73 1.97 (14%)
(28%)
* Values between brackets indicate benefit percent
** Production obtained in transition to organic
*** Cheese production; fresh cheese and cheese improved
**** Production cost of a kg of Oca marmalade
A few lessons learned in the process

During many years of continuous implementation of different projects in the Andes some lessons
were learned and applied in the new agricultural project. Among them we can summarize:
The operational size of the participating farm is critical. The size should be as efficient as
possible to minimize fixed costs.
The geographical coverage should be selected to include as many small farmers as
economically viable. It is required that the alliance be effective in a great scope of action
without significantly reducing profitability. This is necessary so that the alliance can
select areas with biological potential that guarantees productivity and in turn includes
an adequate number of small farmers in areas where a large impact on environmental
externalities is expected.
It is of outmost importance to generate income in the shortest time possible. This is most
attractive to the private sector and ensures future investment that benefits a larger rural
population. Products with periods of less than 18 months of production have a clear
advantage.
Fast implementation should be a priority. To do this, the selected product should have a
consumer demand and be linked with private sector partners. Partners from the private
sector strongly linked to local, regional and international markets facilitate fast
implementation of the project.
A very important part of the economic and social benefit is related to evolution of the
existing alliances. It is expected that the alliances by product should increasingly evolve
toward niches of poor population with environmental impact. Government is willing to
invest to achieve this change, whenever ex-ante analyses show the alternatives produce
a large total benefit (economic and social). Some products are more suitable than others,
but in most cases the evolution depends on the convening capacity and leadership of
the entrepreneurs and managing partners.
Timely investment is required. The long-term products that are those which currently
have better profitability are subjected to cyclic price fluctuations in both the national
and international markets. The profitability of the investment and the cash flows are
closely related with the time the activity is initiated, and as a result it should be regarded
as a key element to identify the niches of investment available in the Andean countries.
Defining the optimal time of investment involves a complex analysis that requires long-
term information and studies of cycles of production and prices. Entering in these
businesses without knowing these fluctuations in depth might make the difference
between project success and disaster.
Maintaining or creating rural employment, as investment necessary for generating
permanent employment is a major issue. Unemployment is one of the main problems in
rural areas and this indicator is valid for identifying niches where government
investment is more effective. There are good opportunities to invest in smallholders’
farms that could increase profitability in response to minor management changes.
Equivalent income of the producers that enter in the alliance: the shadow prices for the
farmers, adjusted for the costs of the basic services, would be an indicator of the regional
niches to which investment should be oriented. The shadow price of the wage is one of
the most decisive factors in the profitability of the alliances. The critical economic
situation in the Andean countries is making farmers enter in alliances where they
contribute labor for 12 months, without receiving a cash payment, expecting only the
income at the harvest.
Strategic alliances with the private sector require government funds to cover a percent
(around 30-40% of the total amount required). To achieve this, projects must include
governmental priorities such as generation of rural employment or the protection of the
environment.
The fund should be initially managed by the private sector and then transferred to
farmers. The process should include the training of farmers in managerial skills.
Alternative financing sources for small producers. Large export companies have access
to credits, provided the government policies are clear and stable; therefore, they will be
able to atract new capitals.
CONCLUDING REMARKS
The challenge to rural agriculture in the Andes is no longer limited to productivity. Other
elements such as global competitiveness, the conservation of the natural resource base, and the
generation of rural employment, among others, are becoming more relevant. These changes
imply that the scientific community must also evolve to provide the answers needed by the rural
farmers.
Research based on farming systems analysis, oriented to rural development, is an approach that
has contributed to overcoming limitations in the productivity of rural farms. Some of the tools
introduced through this approach, such as systems analysis, have been instrumental not only in
solving local problems but also as a repository of knowledge management systems. The
information and knowledge generated in a specific environment can be encapsulated,
transported and adapted to other situations thus minimizing the cost of searching for specific
answers.
Due to the localized impact of the technology generated and validated following the farming
SAR&RD approach, new complementary methods with more participation of other actors –
policy-makers, NGOs, groups of farmers, private sector, etc. – have been tested. The paper focuses
on examples where the so-called more holistic approaches are being tested. All cases are highly
participatory without free-gifts to farmers. Farmers must pay their way to solve their problem. In
both cases systems analysis tools have played an important role. In the first case, the models built
were used to show to the national institutions and donors the expected feasibility of the project
under the SAR&RD approach. In the case of scenario analyses, it had to be very convincing for the
private entrepreneurs to buy-in. We strongly believe that more holistic approaches are viable
with good scientific backstopping, and that those more holistic approaches, formerly known as
production programs, are a necessary complement to SAR&RD.
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2008-1 Working Paper

Evolving from farming systems

Evolving from Farming Systems

Farming System Analysis and Rural Development

From farm to market

International Potato Center • Working Paper 1

Carlos U. León-Velarde, International Potato Center (CIP)

Comments are invited.

This series is available on the internet at www.cipotato.org

Evolving from farming systems research into a more holistic rural

© International Potato Center (CIP), 2008

CIP publications contribute important

International Potato Center

Produced by the CIP Communication and Public

Design and Layout

Printed in Peru by Comercial Gráfica Sucre

The Systems Approach

Crops Production Systems

TECHNOLOGICAL CHANGE YES

Figure 5. Farm - Market

Size of operation Technology Technology Market

To initiate a technological change, adequate technological alternatives must be implemented for

Table 1. Phase Methods and procedures Observations/procedures

Use & Adoption Diffusion

Implementing the farming system analysis research approach oriented to rural

Low Budget for

A brief description of each research phase in the generation of technological alternatives or

by CIP-NRM from Other, ot ot

Puno, Peru (A) and Cañar,

Table 2. Sources Range Contribution

Methodologically, the application of the farming SAR&RD approach to generate technological

Alternative of Technological alternative Impact on traditional use Result

ric pr process while maintaining

the total population 0.8

Table 4. Product Production Production Gate Intermediary Agro Broker;

A few lessons learned in the process

Bertalanffy, L. von. 1968. General System Theory; Foundations, Development, Applications.

Centro de Investigación de Recursos Naturales y Medio Ambiente (CIRNMA). 2004.

Centro de Investigación de Recursos Naturales y Medio Ambiente (CIRNMA). 1999.

Conway, G.R. 1985. Agro ecosystem Analysis. Agricultural Administration 20:31-55.

Desarrollo Agropecuario Sostenido en el Altiplano (DASA-CIP). 1997. Informe de progreso.

Instituto Nacional de Investigación Agropecuaria (INIA-PISA). 1992. Proyecto de

Instituto Nacional de Investigación Agropecuaria (INIA-PISA). 1993. Proyecto de

Proyecto de Desarrollo Agropecuario Sostenido en el Altiplano (PRODASA/CIP). 1996. Puno,

Quiroz, R. 1994. Metodología de Sistemas: Una herramienta para la solución de problemas

Winograd, M. 1995. Indicadores ambientales para Latinoamérica y el Caribe: hacia la

World Bank. 2004. World Tables. World Bank, Washington D.C.

The CIP Vision

CIP is supported by a group of governments, private foundations, and international and

International Potato Center

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