INCAGRO

Converting Ideas into Values

“To survive in the current environment, agricultural producers must optimize results
and add value. The only way to add this is through innovation. To innovate is to
convert ideas into value. The ideas that people generate.”

José R. Benites and Hugo Wiener

INCAGRO

Lima, October 2008

 Executive Summary
Nearly eight years have passed since the Peruvian government with the support of the
World Bank began the project PIEA – INCAGRO of the Ministry of Agriculture that
has the objective of establishing a modern system of science, technology and
innovation, decentralized, plural, and oriented by demand and leadership through the
private sector.

Since 2001, INCAGRO has shared innovative experiences with thousands of producers,
research organizations, private sector civilian organizations, professional organizations
and successful companies in the country. With these alliances, INCAGRO has
performed co-financing to the order of $ 36,000,000 to make more dynamic the system
of agrarian innovation (livestock, agriculture, fish farms, forest grazing, forestry and
others). All these sectors have to do with the great limits that still exist that Peru be
ranked not only as a producer of food in the world but also with potential as an
agricultural exporter of competitive strength.

This challenge has not been easy but the strategy used to generate incentives that the
various agents participate and make the innovative system dynamic have been the major
accomplishment of INCAGRO.

As is well known, one of the accomplishment of INCAGRO has been the advanced
institutional development which has defined clear playing rules in fomenting the wide
participation of producers, businessmen, NGOs, state organizations and international
institutions which have animated or reanimated agrarian innovation in this country. On
the other hand, among the strengths of INCAGRO stands out the quality of the
professionals joined with INCAGRO who daily bet on an innovative nation with great
ethical value and respect for the rights of their countrymen who every day assume the
risks which the country and its surroundings generate.

INCAGRO, with a modest number of decentralized professionals throughout the 24

regions of Peru, has managed to anticipate the new policy of decentralization and has
successfully provided co-financing for more than 500 innovative projects. These
projects have animated the principal agricultural and livestock activities of the country.
Main promoted products were asparagus and other food crops; mango, avocado, grape,
banana, chirimoya and other fruits; coffee and cacao, native potato and tubers such as
sweet potato, milk derivative products such as from ranch vicuña and sheep, fiber
derivatives from alpaca and vicuña, guinea pigs, forest products and other species of
high value in developed countries.

Currently, INCAGRO continues to co-finance innovative projects but with a focus more
oriented to the development of added value and the associated training to guarantee the
sustainability of the competitive capacity of the country.

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 Introduction
Innovation and competitiveness, the challenge of Peruvian agriculture
Throughout the world there are millions of people acting on their own behalf or
organizationally, determined to sell to others the fruits of their labor. To do so, they are
concerned with obtaining products at the lowest possible cost, because they have a
better quality, because they are more quickly available or because they look better to
potential consumers. They all know they are not alone or cannot be alone for long in
the markets and for this reason must better their goods and services offering more value
for a lower price. This is the great benefit of competition and this is that supports and
reinforces people to innovate; it is the lifeblood, the sustenance essential to reach
competitiveness and success in everything. The globalized world we know could not be
so without having accelerated these processes and driven forward the ingenious person.

In the field of agriculture, to treat with the most basic of the means of human
subsistence, competition is even more intense. The efforts to raise the performance and
productivity were the standards, which marked the “Green Revolution.” Today, with
new concepts regarding the sustainability of agricultural systems and the environment,
with the search for healthier and more diverse products, with the demand for
certification of processes and products, new and ample challenges and opportunities
have opened for innovation and competition.

The place that Peru occupies in the international context in the coming years will be
owed in great measure to the administration of its commercial opening to the rest of the
world but in a very specific manner: the offering of products and services of quality,
certified and competitive.

In recent years, production and especially export of agricultural products has had a
notable growth. The re-conversion today in progress means greater volume but more
than anything greater value-added and greater product knowledge. In a word:
innovation.

The increase in the relative prices of “commodities” and, in general, of agricultural

products, is an opportunity to invest in technology and innovation which permits a
sustainable development for thousands of producers in the field.

To confront these challenges a new agricultural policy for the country has defined six
main strategic ideas: (1) agricultural innovation; (2) access to markets; (3) agricultural
information; (4) agricultural capitalization and insurance; (5) water management; (6)
rural development,

The strategic idea of agricultural innovation leads directly to agricultural modernization

and competitiveness. The definitions of this point have been united in Legislative
Decree 1060 that regulates a National System of Agricultural Innovation as a group of
institutions, principles, standards, procedures, techniques and instruments through
which the State can promote and develop the activities of research, training and
technology transference in the area of agriculture.

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The Ministries of Agriculture and Education, the Agricultural Health Service,
applications of both regional and local governments, universities both public and
private, private businesses dedicated to agricultural activities, agro-industrial and
technological development, agricultural producers organizations, legal entities
connected to agricultural research and training and INDECOPI (to assist in the
protection and announcements of intellectual rights in agricultural matters) all
contribute. Furthermore, the National Institute of Agricultural Research (now the
National Institute of Agricultural Innovation) has been designated the governing entity
of this system.

This article seeks to explain the importance of agricultural innovation and

competitiveness in Peru, using as reference the world environment as well as
endogenous factors. Likewise, it describes how INCAGRO, imbued with this delicate
responsibility, promotes a culture of quality and the emulation which strengthens
scientific research, technological development and the joining of forces oriented to
innovation and competitiveness in Peruvian agriculture.

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 Concepts and Principles of Innovation,
Competitiveness and
Competitive Funding

Concepts and Principals of Innovation and Competitiveness

Innovation is an essential component for the production and competitiveness of farmers
and of agro-industry. This produces innovation in processes, in products and in the
market.

To innovate is to transform knowledge into money; to research is to transform money

into knowledge. Innovation implies change but not all change is innovation. When the
change is valid, you have welcome and demand in the markets and, therefore,
innovation.

You innovate to compete with better advantages in the market but also to offer public
goods with a better cost effectiveness relationship. Innovation can be based on the
result of scientific research about processes or the attributes of a product, or about new
organizational arrangements that optimize production, management or administration.
But there are innovations which have little or nothing to do with technical or scientific
research but which refer to the form of organization of the production or distribution
chain or the presentation of the product.

Innovation comes to a head when a good service allows better satisfaction of a need,
whether for better production, more quality such as flavor, fragrance and color, better
results in the pot, packaging that protects the nutritional content, a commercial
arrangement for distribution that better serves the consumer or a cost system that allows
one to establish more attractive prices. Though innovation is related to research, they
should not be confused because they are different and fulfill distinct roles.

INCAGRO is -- day to day -- one of the principal animators of agricultural innovation.

Even though its resources are modest, the project has arranged through strategic
alliances that other entities seriously assume the work of research and innovation, such
the demand for quality services. It has significantly contributed to the development of
the associability of producers, to empower them as executing entities and leaders in the
contracting of services for innovation. Thanks to it, for example, more than a thousand
organizations have formulated - together with their allies – business plans detailing the
services required to develop such plans and at least a third of them have put their plans
into action.

The procedures which INCAGRO uses to activate an innovative system are totally
distinct from interventionist schemes employed by other national programs in various
countries in this region and throughout the world. INCAGRO administers and manages
competitive nature to co-finance innovative projects and to sponsor strategic alliances
so that innovation (the conversion of knowledge into money) will be attractive for all
who participate in a business, including the nation of Peru.

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Competitiveness

Competitiveness and innovation are every day more closely associated. Day to day no
productive activity can be competitive -- that is to say, continuing to attend to a market
-- if it does not constantly renew itself in answer to the expectations of the consumers or
users – be they people or businesses – and if it does not incorporate new knowledge.
All nations which have prospered in the last 50 years have invested in education,
science and technology for innovation. There is no exception to this rule.

Competitiveness always depends on value which adds to knowledge and, therefore,

helps to construct a system of innovation which has as its goal to accomplish said
competitiveness. The answer is oriented to demand through a decentralized system and
leadership through the private sector. This is a theme which, as you can see in the
experiences of other nations, requires reconsideration at the end of which MINAG
through INCAGRO, plays the most strategic role, inducing the demand for certain
innovations.

Competitive Funding

Competitive funds to finance innovative projects have various decades of antecedents,

but recently, at the end of the 90s, have been viewed with increasing interest, especially
in the field of assignment of public funds for technological development, particularly
for research and extension of the service of agriculture and “ruralness.”

For “competitive funding” understand a quantity of financial resources assigned to help

specific initiatives, resources for which distinct social actors can compete, adjusting to
specific “rules of the game,” expressed in the terms of reference of a public and open
announcement.

In the operation of competitive funding to co-finance innovative agricultural projects, a

series of principles have been agreed on such as the following: transparency, inclusion,
synergy and technical rigor. Transparency in the access, assignment and use of public
resources. Inclusion of all public actors who wish to participate in competition for the
funds ensuring that there are compensatory elements to overcome inequalities and reach
a better fairness of assignment in regional terms or for segments. Synergy between
actors who work in teams and add value to their contributions, mutually reinforcing and
complementing their strengths. And technical rigor in the selection and prioritization
of the proposals with the most merit, those which should be complemented with
technical rigor in their follow-up and evaluation.

Among those instruments which have been shown to contribute to the effectiveness of
the operation of competitive funding have been: a) the open and public announcement;
b) a focus of demand or conditions which assure that they take in the demands or
expectations of the actors; c) cooperation among consortiums; d) the free agreement of
the proponents; e) the qualification and prioritization by panels of independent and
highly qualified experts; and f) the management of the fund through a directive body
with wide participation of civil social actors, honorable and competent in the material
which corresponds to the nature of the projects.

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The project as a unit of analysis and execution

The unit of analysis and execution is the project. In a competitive funding scheme, the
application of financial resources can operate as well for projects stimulated by demand
(from below to above), for offer (from above to below) or through combinations of both
forces.

The project is a coordination and promise of different sectors. In this they try to define
how joining will occur, for example, between the actors in the productive chains and
different organizations and regional and local, public and private programs.

The projects are qualified by panels of experts of specialists who regulate the terms of
reference and make comparable their qualifications through the application of explicit
criteria.

For the qualification and prioritization of the projects, the expert panels apply their
expert judgments with a base scale equal for all projects for each announcement. The
scale has to have been approved previously by the directive body of the fund. In this
scale, the relative emphasis regarding distinct criteria must be expressed in the form of
points. The scale can vary from one announcement to another, but in search of
transparency, must remain immutable within each announcement competition.

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 The INCAGRO Model
INCAGRO has contributed to a modern, plural decentralized system of agricultural
innovation, in accordance with the demands of a vigorous and growing competitive
sector, succeeding in the implementation of efficient and transparent processes and
methodologies.

Through the rigor of its performance, it has created within the sector the capacity to
prepare quality projects, canalizing external resources. Furthermore, it has consolidated
its credibility with all actors in the sector (public and private institutions, academic
organizations, the private sector and producers of little resources) bringing together their
participation.

The projects co-financed through INCARGO propose to achieve changes in the income
and economic level of the lives of producers. With its intervention methodology, it has
promoted hundreds of networks among producers, universities, businesses, and local
and regional governments; it has made links between offers and demands for innovative
services which are the institutional fabric which agriculture requires to better its
competitiveness and to create a great movement toward innovation. It has enriched
regional competition to invest in specialist training in projects which accompany the
organizations during execution of the projects.

The social construction which INCAGRO has and continues to contribute to since its
creation eight years ago is the cement in a “national system of agrarian innovation.”
The relations among producers and with technological service providers are the essence
of the system of agrarian innovation.

In summary, INCAGRO has been successful in the establishment of a new focus of

agrarian innovation. It has developed a model without antecedents in the country which
have been replicated in others areas of the government and even the Agriculture
Minister has created various funds for the promotion of scientific and technological
research for productive innovation and to help businesses to which INCAGRO has
provided assistance for methodic development and for administration.

Forms of INCAGRO Intervention

INCAGRO has intervened centrally through three competitive funds: The Fund for the
Development of Strategic Services (FDSE); The Agrarian Technology Fund (FTA);
and The Fund for Awards for Quality in Innovative Projects (Moray).

The execution of these projects and the evaluation of their results is part of a complex
system of accompaniment developed by INCAGRO to promote thematic and regional
cooperation and the diffusion of experiences through which these are thus replicable.
The Fund for Awards was set up in that sense: the recognition of achievements reached
and the contribution of the solutions to problems to the betterment of competitiveness.

The general strategy of INCAGRO is summarized in Figure 1. INCAGRO offers co-

financing for specialized services to the end of fomenting competitiveness through
FDSE and FTA. In the first case it generates public goods through applied basic

8
research projects and training for competition. In the second case, it promotes
profitable businesses through extension services and adaptive research. In this form,
INCAGRO seeks to contribute to the services market, training development and the
creation of networks.

Figure 1. INCAGRO’s Strategy

The INCAGRO Model

Co-financing Innovation services

FTA for competitiveness FDSE

Agrarian Strategic Services
Technology Fund Development Fund

Approve Business Generate Opportunities

Opportunities

Projects Projects
EXTENSION ADAPTATIVE BASIC AND TRAINING FOR
SERVICES RESEARCH APPLIED COMPETITION
AVAILABLE SPECIALIZED RESEARCH
SPECIALIZED KNOWLEDGE
KNOWLEDGE TO ADAPT

Product: Profitable Business Product: Public Good

Public Competition

Table 1 Types of Extension Projects 2008

Type Product Market Type of Product Type of Activity Type of Number of
Organization of Producers
Producers
I External For Export or Farms, livestock, Legal model Allowances for
(export) chains of agro- industry, which best 100 or more
Exporters forestry, fish adjusts to the producers
farming form of work
II Internal For bread basket Farms, livestock, Allowances for 75
(national market) (vegetables, fruit agro-industry, or more
and other fish farming producers
products)
III External or diverse Farms, livestock, Preferably Allowances for 30
Internal agro-industry, peasant or more
forestry, fish community, producers
farming and organizations for
rural crafts natives and
women

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Project Cycles

INCAGRO has two responsibilities in the cycle of the projects which it supports. The
first is to select those proposals which have during the previous evaluation shown the
most promise and innovation. This evaluation is entrusted to a technical evaluation
panel (PET) formed of specialists from outside the program. However, INCAGRO
personnel intervene in the selection process monitoring the work of the panel providing
complimentary information and, eventually, historical information regarding the
proponents and the theme. Finally, in this phase they negotiate the contract to
determine a common agreement with the project proponents, the critical course for
establishing a sequence of indicators which in the next period act as instigators or
persuaders.

All of these are incorporated into an annual operative plan when the project extends for
more than one year. INCAGRO defines it as such from the beginning and focuses on
results and impacts.

Once there is an agreement of co-financing and expected results as expressed in the

intermediate and final indicators, INCAGRO accompanies the execution process,
disbursing in sections promised resources based on verification of technical advances of
the project in the first term.

The concept of accompaniment underlines the sense of identification with the seeking
of the project objectives. INCAGRO recognizes that projects fail or stray from their
objectives, not reaching their own objectives.

To this measure, the Program is co-responsible for the achievements and failures and in
this it is understood that it should lend maximum attention to the indicators in the
critical phase which constitute early warning signs to begin corrections in execution.

For this consideration as for the high cost implied in the selection process, INCAGRO is
reluctant to close projects other than when conditions of execution do not permit one to
visualize the desired achievement or when there is a diversion in the use of resources to
the advantage of institutions or personnel.

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Figure 2. Project Cycle

Basis and Notification

Closing Profile

Technical Panel
Evaluation
Final Evaluation

Project Project
Quality Control Cycles Business Plan
Experimental Plan

Negotiation and
Awarding

Disbursement
Contract
Subscription
Technical and
Financial Follow-up

The growth of INCAGRO supporting subprojects with both funds can be appreciated in
Figure 3, the most obvious being the expansion of projects in the years 2006 and 2007.

Figure 3. INCAGRO Expansion 2001-2007

Number of projects assigned by Contested Fund

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In Figure 4 it can be seen the number of types of projects is extremely great, but almost
27% of the resources have been assigned through FTA for agricultural projects.

INCAGRO - Ministerio de Agricultura

MINAG-INCAGRO-FASE II :
Distribución deof
Distribution categorías por
categories by fondo concursable
Contestable Fund

FDSE-Recurso nat ural

FDSE-Plant as y fibras renovable,
industriales, S/. 3,597,880, 3%
S/. 6,736,241, 6%

FTA-Agrí cola,
S/ . 27,596,702, 27%

FDSE-Pecuario y acuí cola,

S/ . 15,269,207, 14%

FDSE-Cult ivo indust rial, S/ .

4,424,981, 4%

FTA-Pecuario,
S/ . 12,395,678, 12%

FDSE-Cult ivo aliment icio,

FTA-Procesados,
S/ . 16,165,403, 15%
S/. 4,596,622, 4%

FTA-Acuicult ura,
S/ . 2,240,649, 2%
FDSE-Bosques
amazónicos, FTA-Forest al,
S/. 3,097,947, 3% FDSE-Árboles frutales, S/ . S/. 532,612, 1%
8,070,802, 8% FTA-Ecot urismo,
FTA-Art esaní a,
S/ . 232,725, 0%
S/ . 1,059,140, 1%

INCAGRO shows as one of its achievements its contribution to the development of the
institutionalism of a scientific, technical and innovative agricultural system for the
development of the capacity and maturity of services for agriculture. However, it has
recognized that its accomplishments in each of these aspects require better
documentation.

In relation to the service market, INCAGRO should be creating bases to stimulate the
demand for services to support solutions to the fixed needs explicit in the business
plans. For its part, the offer has been given on the regional level although it recognizes
there is a way to better the quality of its services.

Associativity and Strategic Alliances

One of the most important factors in the strategy of INCARGO has been associativity
and strategic alliances. 67% of the FTA’s projects have been based on strategic
alliances. Another aspect emphasized in INCAGRO’s strategy it that it is contributing
to the awareness of ecosystem stability as an indispensable element of lasting
sustainability. In similar manner, it has given a significant response to the demands of

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traditionally marginal groups like peasant communities, native communities and
women’s organizations; to date 21% of the projects in the second phase are managed by
these groups.

INCAGRO has valued the importance of depending on a network of these allies which
participate greatly in the processes of formulation as well as in the implementation of
projects. The portfolio of allies is approximately 500 persons and organizations.
Through these links, AGRORED PERU has built a place for the meeting of innovators
and researchers who share common challenges.

In Peru the focus of food farmers has extended and enthusiasm for agricultural product
export has grown. Taking into account the chains which MINAG promotes and given
the potential of the agricultural exporter, INCAGRO has supported diverse initiatives
linked to chains for the national markets as well as for export.

Difficulties of the INCAGRO Model

The work of INCAGRO has not been without its difficulties, as well as for its own
strategies and modus operandi as for other external factors. For example, INCAGRO
shows among these difficulties the weakness of the producers organizations, which
retards the executions of their projects; the difficulties in achieving financing for fixed
costs and complimentary investments, which inhibit a more extended adoption of
innovations; the high levels of informality in agriculture which makes difficult
accreditation of the organizations as businesses; the still low level of knowledge of
digital media, the limits of public information systems and others which offer
information about business opportunities.

As reflections and themes which should be taken into account in the revision of its
strategy, INCAGRO points to fragmentation, dispersion and educational level of the
producers organizations while at the same time maintaining interest to assure the
participation of those groups most excluded. The growing opening of commerce which
offers opportunities, but for which it is indispensable to have more and better
information regarding the markets, goods and technological services as well as the best
diffusion of successful cases of innovation. In its operational strategy, INCAGRO
recognizes the importance of considering decentralization, the role of the allies and the
strengthening of the producers organizations.

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 Participation in the Innovation of Private
Businesses, Unions and the Public Sector
To make possible the innovative processes in the chains and in specific territories in the
long run, it is important to take into account the role of at least four groups of actors: a)
the private businesses that are in the business of agriculture as either providers or users
of technological goods; b) the organizations which invest to generate technological
goods and services; c) the unions; d) the State entities which support the process.

In the case of private businesses which participate in the generation of innovations,

there are few, but it is necessary to document them. These include businesses which
produce or acquire potato or corn seed, nurseries, which produce and freeze semen and
embryos. It is here it is necessary to put more attention because private investment
must be greater and at the same time serve to motivate the growth of businesses in the
area of innovation. This requires incentives and a framework of protection of property
rights which causes more innovative businesses to penetrate especially the area of
taking advantage of biodiversity and biotechnology. The market for the goods they
generate should be valued on an international level. In the same way that Peru is a great
importer of technological goods for agriculture, it could, on the other hand, be an
exporter.

With respect to organizations which perform basic research, we emphasize the

universities and some institutes. It is in general there that the generation of knowledge
and formation of highly specialized human resources are centered. Their role has been
very important but they now require a substantial renovation to the tune of a national
context with more institutional actors, new opportunities and requirements and an
international context. The principal change must focus on valuation of technological
goods resulting from research and experiment. In this sense it is important to find an
equilibrium between public good and those which, for their characteristics, should be
strategic goods. The second change must give long range administrative aspects to
innovation chains. In this territory, the universities and research institutions such as
IIAP, IVITA and some experimental stations of INIA have great potential. There must
be a search for opportunities to construct international alliances for them.

The support of the producers unions for the generation and transference of technology
was very important many years ago. But public policies discouraged these initiatives.
The weakening of the unions has been massive. Some union organizations are
developing the investigation and transference of technology (asparagus, avocado, etc.).
It must be recognized, however, that some unions are more interested in market research
and the seizure of technology for which they have international links. The role of
unions has a great potential more than in other areas to include their associates for
investment through self-taxing and through paid services. Without these resources it is
not feasible for them to have neither adequate performance nor the right to demand.
The Boards Regents can become involved in research projects like service centers on
the valley level, creating transferable and easily replicable technological options.

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With regards to the support of public institutions, note that there exists a great dispersal
of forces among entities which apparently have the same objectives but which do not
compliment each other. The vision which prevails among State entities is to attend
directly to the producers instead of creating a critical mass of actors who could deliver
goods and services. In this area massive changes are needed. On one hand, the State
should maintain its support for basic research with preference for those programs
adequately oriented toward processes of innovation and not for research per se. As an
alternative to public extension, the State could subsidize those producers with greater
economic limits to acquire services, but the offer cannot be directly from the State
because it would be expected to be free and this creates dependence and is not
sustainable.

In addition to the measures needed to democratize the benefits of innovation, the best
support the State could give with clear standards is to penalize corruption and pirating
and would be a substantial force to correct informality. These are the conditions
necessary to increase private investment in innovation for the long run.

The role of the State, which has been retiring from the direct offering of services for
private actors in agriculture, has not always fulfilled the function of facilitator of the
development of the market for goods and services. This has resulted in the market, for
many technological goods and services, for innovation and administration, has been
little developed. In other cases these markets have developed notable when there has
been a growth of demand in some significant form, because there have been forces
which encouraged, for example, the demand for quality control services for export
goods.

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 Strengthening the Market for Innovative Services
To refer to the market of goods and technological services and of administration for
agriculture and agro-industry implies recognition of the existence of specialized
markets, for specific goods, for example, for specific seeds, or for laboratory service or
veterinary service or for the certification of processes. It should be recognized that in
each case the market forges an answer to a demand and that the respective offer is
different according to geographic spaces, production chains and segments of actors.
The markets of technological goods and services have a very differentiated development
level, very dynamic for the asparagus sector in the central coast or the rice in the coast
and the jungle and very little developed in the alpaca herder sector of the southern
mountains.

Two active processes have had an enormous influence on the development of the
markets for goods and services that support agricultural innovation and agro-industry in
Peru. On the one hand, gradual changes, although not always well oriented, regarding
the role of the State, and on the other, globalization. In this sense, the decision of the
Peruvian State to retire from the provision of services gave cause to private businesses,
NGOs and unions to enter, although timidly, in the offering of services to farmers. The
timidity was due, in part, to the fact that the State maintained some level of delivery of
free technical assistance services with special projects. In other cases, the State retired
in an orderly manner and accredited other actors to offer services, as in the case of
various services in the areas of sanitation.

The Peruvian experience regarding actions to foment a services market for agriculture is
still beginning. Between 1993 and 1999 the FEAS project was implemented in the
mountains; its objective was to foment the technical services assistance market to attend
to the necessities of producers in the mountains. A short while after the close of the
project, neither the majority of the micro-businesses which had been helped nor an
effective demand for technical assistance services had been consolidated. The cases in
exception were those of micro-businesses offering veterinary services, which had the
peculiarity of offering services that “solved problems.” Many of the lessons learned in
FEAS were used to advantage in the MARENASS project.

In the case of PSI, the component PERAT promoted the creation of a demand and the
ability to offer technical assistance services for irrigation. The program depended on
direct subsidies and State support for its promotion. In this case also there was
insufficient advance in the development of the market for technical assistance services
for irrigation.

The most recent experience, that of INCAGRO, shows that a temporary direct subsidy
on the part of the State and the demands of the co-financing of the interested parties
achieves agreements between offerers and demanders of research services, technical
assistance and training. However, it cannot yet be affirmed that these organizations
operate within the frame of genuine relations of the market for specific services of
research and technical assistance. This appears to be a gradual process which should be
conducted between those who require the services they seek for themselves and pay the

16
estimated cost of the offerer or even better when various offerers compete for clients.
This is already given in some cases when the service shows its effective contribution to
resolve concrete limitations.

The fundamental processes activated for the development of the services market have
unchained a series of processes aligned with the objectives and mission of INCAGRO,
which are enumerated below:
a. Confidence to encourage service businesses. The projects co-financed
by INCAGRO constitute important steps in the establishment of confidence
between offerers and demanders, which require a service market for good
fulfillment and consolidation.
b. The coming together of offer and demand. The FTA strategy was to
promote reduction of the breach in the market of intervening services: a) a
process of bringing together demanders (producers organizations) and those
who offer technological services, of administration and marketing, being
those organized producers who seek allies and offerers; b) participation of
the “projector,” who acts as an ally of the producers organization,
materializing in the form of the project the demands of the last and concurs
competitively.
c. Separation of offerers and demanders. The separation of demanding
producers and technical offerers is a basic principal of the services market
and strategic alliances lead the producers to assume responsibility for the
project and, like real clients, choose the offerer with the best options in value
and price. Additionally, celebrating the contract with INCARGO, an
organization avoids the influence of the technology of the offerer and
confirms the independence of both actors which the services market requires.
d. Organized producers, innovation and local development. It is not
frequent in this country that producer organizations and agricultural
businesses invest in research for innovation. But the tendency is for the
associations of small farmers to do so more frequently. Adaptive research is
revealed to be the nexus between the market demand and the generation of
science and technology for the science of research, development and
innovation. The absence of adaptive research generates enclaves wherein
some businesses import technologies without sharing them or developing
local capacities.
e. Regional priorities, competitions and the new business culture. The
principal crops and attentions prioritized by regional governments to
encourage agricultural development coincide with projects co-financed by
INCAGRO and are an expression of the real abilities of producers’
organizations and entities offering technology. Additionally, these have
been the winners of public competition (something not publicized in this
country). They elevate significantly the guarantee of the investment of the
Peruvian State funds. The investment in these subprojects is confirmed by
formal transactions registered by SUNAT.
f. Empowered producers innovate and manage agro-business. The
producers’ organizations have invested in their formalization to lead the
strategic alliances and conduct their own projects, which permits them to
contract for specialized services, activating the service market. These
organizations have contracted with entities offering technology and experts
in the required services. This unprecedented process has been selective and

17
 despite being a “first experience,” has shown that the producers’
organizations have used entities which offer technology (generally NGOs).
g. Empresarial attitude and strengthening organization. To conduct and
administer their own projects ¡, the strengthening organization has
demonstrated that the rendition and vigilance over the quality of technical
and financial execution of each project is in direct relation to the
Decentralized Unit or INCAGRO and the producers’ organization. The
strategy of FTA can construct the real business practices the producers’
organizations need to respond to the tendencies and forces of the
environment.
h. Regional competition and basic and applied research. The key problems
of regional competitiveness come in the reception of projects of basic and
applied research. The evolution of institutional and professional competence
in the ability to compete has permitted the co-financing of subprojects of
research in themes which affect the regional competitiveness.
i. Additionally, we have in line a system of competitions, the decentralization
of execution and the national technical evaluation panel guaranteeing the
presence of evaluators in the majority of the regions of the nation.

18
 Follow-ups and Evaluation of Results and Impacts
For follow-ups on the projects, INCAGRO established that each of them according to
its particular characteristics be organized in critical steps which are periods comprised
among one or more intermediate relevant results and whose fulfillment describes the
route of impact created in the project design. For the recovery of this information,
INCARGO designed a system of digital formats denominated Technical Financial
Reports (ITF) which are structured through the indicators critical steps and the goals of
the execution of the activities included in the operating plans of the project. This
information system also permits the reprogramming of activities and to include baseline
and exit information which are then stored in the Administrative Information System of
INCAGRO.

This follow-up and evaluation system is focused on results and these describe an impact
route. Promoting the best sustained and accumulative in provision of co-financed
projects in the manner of these supplies lessons to the gathering of actors in the system
of science, technology and agrarian innovation. In this manner INCAGRO promotes,
among the actors of the system, shared criteria of efficiency, feasibility, or, more
generically, quality in the execution of their activities.

The performance of the projects is evaluated not only with relation to their specific
proposals but also with respect to other similar projects, thereby establishing and
environment of emulation, cooperation and learning subject to public vigilance.
Beginning with the follow-ups and evaluations of the projects, they identify standards
which give account to the best practices, the diffusion of themselves and their
recognition, establishing better indicators through the selection of the proposals more
promising at the moment of assignation of resources whether they be from the private
sector or public.

Documentation
All the critical processes of the project cycle have been adequately documented. You
can cite the following documents:
1. the technical and financial proposal which for part of the Awards Contract as
an annex.
2. the act of negotiation including critical steps.
3. the Base Line, established at the beginning of the project.
4. operation plans.
5. technical financial reports which are presented at each critical step. This is
an electronic format which arranges specific sections for the INCAGRO
evaluator. These should be accompanied by physical documents,
publications, articles, photos, videos or other materials.
6. the Exit Line, done at the end of the Project.
7. the Closing Report is done by the strategic alliance and can eventually
receive the advice of INCAGRO or of consultants.

Changes in activities such as revision of goals and objectives are authorized by

INCAGRO when they are sufficiently substantiated in a manner which gives the
executors sufficient flexibility to adapt to changing environments.

19
The last purpose is to diffuse the information and access to the knowledge. In this way
INCAGRO understands that the private benefits are converted into public benefits
available to many and this graphs mainly as information patrimony which is the most
visible form of a system of science, technology and innovation. In this orientation,
INCAGRO does not only manage all aspects of the competitions through Internet, but
also its web page publicizes the information regarding advances in the projects and all
the relevant publications they generate within the concept of the Open Archive
Initiative.

Evaluation of the INCAGRO Project

Evaluation of the impacts of the INCAGRO Project is in process. To evaluate the

impact at the level of the clients and users of the diverse services of the program,
estimations have been made of economic impact, adoption rates and distribution by
region and by user type to analyze the distribution potential of the benefits generated by
INCAGRO. Thus we can analyze the economic surplus at the national level and by
department where results of the program are occurring. It is possible that specific
projects co-financed by INCAGRO have benefited regions of the country that were not
considered in the execution. If this is the case, we must say that these regions have
benefited from spillovers or effects that overflowed from INCAGRO.

The cost-benefit analysis or profitability of the INCAGRO interventions will be realized

calculating the flow of net economic benefits, which is to say, deducting from the
realized economic benefits the annual investments made, annually. In the construction
of the flow of net benefits, we use as a unit of measure the units of economic benefit per
hectare, discounting the participation of temporary partners, multiplied by the sum of
annual rates of estimated adoption at the level of each of the regions where the program
has intervened. In the analysis of the profit for the investments of INCAGRO, three
indicators have been used: the internal rate of return (TIR); the benefit/cost ration
(B/C); and the actual net value (VAN).

As for the analysis of the sustainable social impact, the impacts of determined factors of
income levels of beneficiaries according to the profile, the change in employment level,
the impact on the organization and associativity of the producers and the change in the
quality of employment will be considered. Another indicator considered very important
in the evaluation of social sustainability or fairness is what is referred to as the
conditions or labor relations on the farms and other segments of the productive chain
affected by the program.

An analysis of the environmental sustainability impact will also be done. The

difference between this and the economic evaluation is that the evaluation of
environmental impacts derived from scientific and technological development is
something very recent in the context of studies of impact at the level of agricultural and
livestock research.

As for the contribution of technology, the indicators of technological efficiency used

are: the use of agro-chemicals, the use of energy and the use of natural resources. The
use of agro-chemicals includes: a) the use of pesticides evaluated for the alteration (due
to the application of technology) of frequency, variety of active ingredients and toxicity

20
of the products; and b) the use of fertilizers, evaluated for the alteration in the quantity
of water-soluble fertilizers, liming and micro-nutrients applied as a consequence of the
technology being evaluated. The use of energy includes the change in consumption of
a) fossil fuels (expressed as combustible oils, gasoline, diesel fuels and mineral coal), b)
biomass (expressed as alcohol, firewood, cane shuck, vegetable remains), and
electricity; the use of natural resources is evaluated in terms of the necessity, imposed
by technology, of water for irrigation and processing, and dirt for planting.

In addition to the analysis of the profitability of the INCAGRO investments and the
social and environmental sustainability, other impacts are measured and analyzed based
on reports to be collected according to the themes and sub-themes specified in the
questionnaire.

The analyses should seek to identify the role of INCAGRO in the strengthening of the
system of innovation and regional development (changes in the organization and
coordination of the regional systems), in the scientific and technological development
and the generation of innovation in the agrarian sector (changes in capacities), in the
propensity for innovation (changes in the degree of interest in innovation), in the
competitiveness of producers and in the changes in the services market for technology
and innovation (volume, diversification and quality).

21
 INCAGRO in the Regions and the Cities
The territorial dimension

Agricultural innovation develops in territories and these are organized into regions and
localities. It is there where we find the producers and all the actors directly involved.
That is where it is necessary to form and consolidate networks to generate
competitiveness in value chains regional clusters.

Happily, Peru is advanced in its process of regionalization. Regional and local

governments have resources from various places. In some cases we have registered
important participations regarding these resources in the financing of agricultural
innovation. It is foreseeable that these participations will increase. INCAGRO has
deepened its relationships with these instances of sub-national governments. For this,
the Decentralized Units are adequate, with strengthened capacities and with specific
mandates in this area.

Decentralization toward the regions and the cities determines the possibility of a new
development strategy which comes from below, impelled by the same local actors
which tries to activate the existing potential in the territory and avoid dependence on
central decisions. In this situation, the role of the institutions, public and local private,
and their ability to implement a politic of this type, means the real possibility of
confronting the restrictions on employment and the low quality of life which have
affected the majority of regions with new politics of local development which
effectively articulate the trio: territory, innovation and competitiveness so they reflect a
major penetration into the regional and national space.

The importance of the territorial focus

The territories of all of Peru are generous and offer a rich diversity of landscapes and
resources inhabited by people of many cultures expressed through their cuisine, their
folklore and their ancestral traditions. A territory includes the familiar undertakings
which always combine the ancestral systems of elaboration with advanced production
technology combining tradition and science. Local actors are also components of a
territory – the State, businesses, workers, academia – who are that which identify the
potentials and the needs of the territory as regards its productive development.

The long term success of territorial management is determined by:

Knowledge of the territory
Links with industries and consumers (market niches)
Relationship with science, technology and innovation (available options)
Leadership and social cohesion (underlying social mobilization)

In a regional or municipal territory, the Title of Origin constitutes a key instrument that
gives recognition to many products which enjoy special characteristics and which also
account for market potential. In Peru, despite a wide biodiversity, there exist only two
products protected by a Title of Origin: pisco, which was the first to be so protected,
and now the giant white corn from Cusco and thus their profitability.

22
Other products with the potential for Title of Origin are pallares from Ica, the ceramics
of Nazca, the cheese from Ambar, the tiles from Ica, ceramics from Chulucanas 42 and
Maca. Also: cheese from Cajamarca, filigree from Catacaos, flat engraving from
Huancayo, ceramics from Quinua, ceramics from Pucará, pottery from Simbilá, olives
from Acari and Yauca, tapestry from San Pedro de Cajas, alfajores from Lambayeque,
coffee from Convención, coffee from Chanchamayo, coffee from Canchaque, oranges
from Palpa, hot chocolate from Cuzco, among others.

The Role of INCAGRO

INCAGRO is better attending the uncertainties distinguished in a country with great

internal diversity through competitions for the presentation of regional projects with
territorial focus, through chains or problems. For the identification of particular themes
and for a relationship with the actors of the local innovation system, INCAGRO uses
regular consultations.

The systemization of processes, results and impacts at the level of the region are an
additional medium to mobilize innovative actors and to replicate experiences, creating a
greater density of intervention areas, better complementation between projects and
better relationship on the local level.

Since 2006, INCAGRO initiated an aggressive functional decentralization. This began

with transference of follow-up work which currently is completely in the hands of the
Decentralized Units. Additionally, INCAGRO has transferred the substance of the
competitions process, especially the crucial stage of contract negotiation, the moment in
which the critical steps are elaborated. These negotiations are carried out as closely as
possible to the actors (in situ) to avoid intervention of service providers or managers.

Knowledge

Information

UPS Evaluation

UPS Following up

Support

Projects

23
The goal which INCAGRO pursues is that innovation and competitiveness are the
fundamental axes of the policies of the regional and local governments and that for their
implementation the regional governments agree with the creation of innovative and
competitive units within the structures of the regional and local governments. This
decision should serve to analyze the adaptation of the territories to new agricultural and
industrial technology situations must be an effective instrument for planning. Activating
and making competitive territories through interaction, mobilization and regulation of
agents, resources and infrastructures. On the other hand, they must be distinguished
from the supplies or political measures which the agents and administrations carry out
and which are products of the system which are objectives within reach. Thus, an
innovative of competition system is that which shows abilities to acquire some
successes which guarantee a better standard of living for the society.

INCAGRO Contributions
AGRORED Peru

Agrored Peru is a tool in the Internet for the diffusion of information about Peruvian
agriculture. It has generated great hope and enthusiasm among public and private
entities which wish to see such information gathered and presented in an orderly manner
for the search engine. Until now it has given transcendental steps to articulate an
extensive net of entities of the private agrarian sector, academia, development
promoting NGOs, unions and producers organizations, agricultural service
organizations and others throughout the country. This is a great opportunity to
consolidate the cooperative inter-institutional force which is reach for maturity.

This tool packages perfectly the priorities of the new agrarian policies of MINAG and
specifically attends to one of the central objectives of the National System of Agrarian
Innovation which was established to promote the interchange of information between
public and private entities about their respective programs and research projects in the
area of agriculture to the end of facilitating general coordination of scientific and
technical research in said area (Number 8.2 of DL 1060 which regulates the National
System of Agrarian Innovation). This is just what permits AGRORED PERU.

Ag. Public
Sector

Researchers and
academic sector

Other private and

public organizations

24
Projects for competence training for extension agents

In the projects for competence training for extension agents, the impact should be
measured in the field and the population attended, not in the total amount of knowledge
acquired by the extension agent. Many of the training projects financed by INCAGRO
have components of extension practice and are clearly focused beginning with the
demand which facilitates the application of the method described, realizing a previous
evaluation of the effectiveness of the training for the extension agents to establish the
causality of the events.

Awarding quality in agrarian innovation projects

Since 2007, INCAGRO has depended on a new tool to promote innovation. In this case
also there is a Competition for Quality in Innovative Agrarian Projects. The awards
granted in this competition are provided by the Awards Fund MORAY. They are
assigned annually by means of the competition on a national level.

The Awards Fund defines as Innovative Projects those oriented to the creation,
development, validation, use and diffusion of a new product, process or service. The
innovation includes knowledge, technological goods, processes, changes in the forms of
organization and administration, quality control, marketing technique whose products
are accepted in the market but calls for projects which have ended a term of existence
and have accomplishments to show. In this way, the society recognizes their efforts and
awards them. Also, this diffuses these accomplishments like the Memorial Competition
in 2007 and makes possible that other people are encouraged to participate and emulate
the successes.

INCAGRO: the farmer’s partner

INCAGRO in seven years has accompanied and accompanies the initiatives and dreams
of 36, 749 producers throughout Peru. Of them, 7,015 cultivate the parched lands of the
coastal border with crops like hard yellow corn, legumes. Rice, asparagus, artichoke,
paprika or fruits such as mangos, grapes, olives, bananas, avocados, tangerines and
other citric fruits and others which each day acquire more importance in the country and
in the world market.

Rising to the mountains, in the valleys and buttes of the Andes, in the high plains where
all the conditions are harder and the restrictions more severe, INCAGRO has come to
agreements with 12, 543 peasants who cultivate these lands raise potatoes, white corn,
cereals like quinua and kiwicha, where herdsmen raise alpaca and vacunos, sheep and
cuyes or who work in the manufacture of fine handcrafted textiles or who comparatively
produce the protein food of the Incas, the charqui, and other native species which are
only produced in the Peruvian Andes like maca and other species which are open to the
export market.

In the extreme east of the nation, from the high jungle to Amazonian plain, INCAGRO
has associated with 17,191 producers dedicated to the cultivation of coffee, cacao, sacha
inchi, camu camu y aguaje among other crops, breeding and adequate management of
the biodiversity sui generis of the Amazon region which is categorized as one of the

25
most diverse in the world and to which INCAGRO contributes to the national
utilization.

In all 222 associations or producers committees, 48 producers and service cooperatives

and the respective centers, 10 peasant communities and 51 business organizations
among businesses, associations or agrarian service businesses have participated actively
in the activation of the strategic services of the agrarian sector of the country. These
organized forms administer a range of services for 40 transitory crops, 26 permanent
crops, 10 types of animal farms, 11 types of fish with either closed or controlled
growing areas, 18 activities of transformation or service. In this extensive list is
included the principal products of agricultural export, the most important chains of
agricultural foodstuffs, the traditional food crops and some of the examples of the most
notable of the organic production such as mangos, bananas, cacao and the biodiversity
of flora and fauna.

INCAGRO has not only worked with producers with initiatives which contract
extension services, but has also supported research for added value. It has amplified the
knowledge in the genetics and characterization of alpaca and sacha inchi, both natives to
Peru. It had developed varieties of better production and less susceptibility to plagues
and diseases of legumes, grains, tubers and other crops oriented for the local market and
for export. It has contributed to the adaptation of crops or new agro-ecological
conditions as in the case of long fiber cotton, sweet potato and grape, the identification
of plant-attacking insects as well as insects useful for the biological control of fruit
plagues and forest species which enables the free commerce between Peru and other
nations which register phytophagous and insects; to the specialization and diffusion of
livestock growers for milk production and rabbit species with better characteristics and
selected offspring in agreement with characteristics in demand both internally and for
export; a new presentation of traditional products such as coffee and cacao which have
been revolutionized in the last decade in the Peruvian position in world markets, the
development of organic agriculture and the diffusion of good practices to farms,
livestock growers and manufacturing, obtaining products which are harmless and
healthy and which do not only open new markets for national products but also position
Peruvian products among the most competitive in the world context.

Producers’ organizations, associates of INCAGRO, have been the central protagonists

in the development of innovative services. They have shared in and exploited the work
of agrarian researchers, they have directly contract extension services to innovate the
form of cultivation and raise species which have a market demand, presenting better
products not only to traditional markets but also to specialized markets. In addition to
partner, INCAGRO has fulfilled a role of promised friend to reduce the uncertainty
which traditionally accompanies the man of the countryside.

Peruvian farmers have gained much in their competitiveness. Notable examples are
offerings of organic coffees and specialty coffees; organic cacao and bananas; the
production of potatoes to include native varieties for the “snack” industry; artichokes,
avocado, peppers, piquillo, paprika, Andes cereals, camu camu, cheeses, Guinea pigs
with special cuts, etc.

In the world environment, the most dynamic innovative sector is the cultivation of
vegetables and fruit, expressed in the betterment of the lives in the most prosperous

26
societies and an important segment of emerging economies. The most prosperous
farmers are those of vegetables and fruit.

There is room for differentiation and this is important for a country with tremendous
diversity such as Peru, where areas for large scale production are limited. In other
words, we distinguish products of agricultural origin or we condemn ourselves to low
profit margins.

The numbers talk

After almost eight years of operations, the principal products and results can be
synthesized into the following global ciphers which refer to the subprojects co-financed
during the period 2001 – 2008:

a. Between 2001 and 2008 we brought about 57 different competitions on the

national level. Said competitions have promoted the development of the
services market not financial for the agrarian sector of the country, focusing
on the co-financing of subprojects of strategic research, adaptive research,
extension agent training through competence training and subprojects for
extension.

Year of Agrarian Technology Strategic Services Total

Competition Fund Development Fund
Extension Adaptive Strategic Extension
Services Research Research Training
2001 3 3 1 1 8
2002 3 3 1 1 8
2003 2 1 1 1 5
2005 1 1 1 1 4
2006 3 1 1 1 6
2007 18 6 1 1 26
total 30 15 6 6 57

b. Between 2001 and 2007 INCAGRO has received 2468 project profiles of
proposals for innovative agrarian technology projects in the entire country. The profiles
and proposals which the diverse regions of the country presented in 2007 tripled the
number registered in 2001, which reflects how INCAGRO has mobilized the private
and public capacity to activate the innovative system in the country.

27
 Competition Demands
Year Extension Adaptive Strategic Extension Total
services Research Research Training
2001 64 35 94 73 266
2002 86 33 8 18 145
2003 160 32 26 75 293
2005 237 78 140 29 484
2006 246 29 93 56 424
2007 418 74 266 98 856
Total 1211 281 627 349 2468
Judged
2001 18 9 14 1 42
2002 8 9 7 7 31
2003 28 7 6 9 50
2005 20 9 21 7 62
2006 120 14 32 15 181
2007 136 22 19 12 189
total 330 70 99 51 550

c. in the eight years of operation, INCAGRO judged through the competitions

and for merit 550 innovative projects. Said projects mobilized the investment
of 43.7 million dollars, of which INCAGRO supported 23.1 million. This
represents co-financing of 52.8%.

28
 Monto de proyectos (Millones US Dólares)
Project Amount (Millions USD)
Millones
30.7
35.0

30.0
25.0
16.8
20.0 13.0 13.9
15.0
8.1
4.9
10.0
5.0

0.0
Total FDSE FTA

Fase 1 Fase 2

Aporte de INCAGRO
INCAGRO Contribution

70.0% 67.8%
61.5%
60.0%
43.4%
50.0% 44.5%
53.8%
47.5%
40.0% 43.2% 51.2%

30.0%

20.0%

10.0%

0.0% Fase 2
CC Fase 1
IE
IA
SE

d. On the average, to activate the agrarian innovation in the nation, for every
dollar support through INCAGRO, the executing entities (strategic alliances)
have supported 0.92 dollars. This reflects the strong engagement of
monetary participation as well as no monetary of the entities which execute
the projects following a policy of co-financing to develop new knowledge
and, when that exists, to transform knowledge into money (innovation).
e. Between 2001 and 2008 38,347 producers have become involved as clients
of the services of projects which INCAGRO judged.

Productores clientes de servicios

Producer Customers of Services
INSERT TABLE

Tipo III 3,834

f. 2697 extension agents have been formed or are in the last stages of formation
throughout
Tipo II the nation who were trained through extension agent training
8,497
programs following the methodology for competence.
6,352
g. Hundreds
Tipo I of strategic alliances have been promoted between service
provider 298
businesses, NGOs, government entities and formalized producers’
Huchuy Ayni
associations which have fomented strengthened associative experiences to
obtain the advantages of a scaled economy in a nation where the producers
No differentiation
Sin diferenciación
7,739
of low and medium scale predominate.
Adaptive Research
Investigación Adaptativa 7,332

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000

29
h. The projects which INCAGRO co-finances promise an agricultural and
livestock area of approximately 130,890 hectares. It is estimated that the
livestock areas involve some 98,500 head of cattle, andean camels and
swine.
i. The average investment was $516.42 for extension services per producer, the
investment of the adaption of technology rose to $995.41 per producer and
the investment for the formation of extension agents was $1576.17 per agent.
j. The projects co-financed by INCAGRO have achieved a good level of
empowerment for the executing entities. To date, 435 different executing
entities execute or executed the subprojects in the nation. 239 projects were
or are conducted by formally constituted associations or committees of
producers, 49 projects were or are executed by cooperatives of producers, 11
by peasant or native communities, 47 by businesses or organizations of
different agricultural businessmen, 83 by different NGOs, 108 by different
research institutions, 34 by eight universities in Lima and 34 principally for
strategic research by 6 universities in the provinces.
k. In the mountain has concentrated the greater amount of projects co-financed
by INCAGRO (45%), followed of the jungle (34%) and the coast (21%).

30
 Entidades
Service deofservicios
Organizations
Organizations Services

Otros, 14
ONG, 74

Emp. Agrarios, 51

Comunidades, 10 Cooperativas, 49 Org. productores,

224

Entidades de investigación
Research Organizations

Ins. Investigación,
Universidades, 34 28

INIA, 25
IIAP, 16

l. The total investment of the innovative projects in the mountains was 14.5
millions of dollars, in the jungle it was 17.9 millions of dollars, and on the
coast it was 11.2 millions of dollars. Of the total amount co-financed by
INCAGRO for subprojects of innovation, 34.3% was oriented to projects in
the mountains, 39.6 for projects in the jungle and 26.1% for projects on the
coast.

31
Distribución
Distribution de productores
of producing clientes
clients por regiones
by natural regionsnaturales

Cost,
Costa,16.7%
16.7%
Jungle,
Selva, 49.5%
49.5%

Sierra, 33.8%33.8%
Mountain,

Actividades
Activities ofde proyectos
projects

60.0% 53.3%

50.0%

40.0%
29.0%
30.0%

20.0%

10.0% 5.0% 4.8% 4.4% 2.5%

1.1%
0.0%
ral
a

ra

a
a

io

t al
t ri

m
ru
ol

ltu
ar

cli
us

res
ríc

o
cu

cu

ism
ind

Fo

oy
Ag

Pe

ui
ro

Ac

ur

eg
Ag

yt

Ri
ía
an
tes
Ar

32
 m. The producing clients of the projects in the mountain range add 13.107, in
jungle 17.592, and coast 8,041.
n. the client producers of projects in the mountains were 13,107, in the jungle
17,592 and on the coast 8,041.
o. In accordance with the non exclusive categorization of projects, 41% of them
were for export products, 24% for products of biodiversity, 15% for sensitive
products, 12 for organic products, 10.2% focused on production chains, 2.1%
the incorporation of good practices, 5.1% dealt with sanitation and 5.1%
dealt with genetic engineering.
p. Additionally, 65% of the projects dealt with technologies for development of
production, 23.4 dealt with product improvement, 14.5% dealt with better
presentation and 9.3% dealt with agro-industry.
q. We have executed or are executing projects in all the departments of the
nation. However, the investment has been most notable in the departments
of Junin, San Martin, Huancavelica, Puno, Piura, Lambayeque, Cajamarca,
Lima, Loreto, Arequipa and Huanuco. INCAGO invested 13.5% of the
resources in the five poorest departments (Amazonas, Apurimac, Ayacucho,
Huancavelica and Puno). Said investment was 3.2 millions of dollars.
r. In the same way, in Huancavelica there are 43 producers associations which
have executed or continue executing co-financed projects for INCAGRO; in
Puno there are 30 executing associations; in Junin 22 associations and in
Piura 19 associations. In Junin 17 producers cooperative participate in
fomenting the improvement and competitiveness of coffee and cacao.
s. The projects co-financed by INCAGRO deal with or dealt with 94 different
crops, 27 types of livestock growers including fish farming, 19
transformation products or sub-products and 19 forest or pasture species.
t. The facts before expressed are referents or indicators which serve for an
appreciation of the generation, activation and mobilization of the agents,
technologies and products which have a determined effect on the system of
innovation in the nation. For this reason, there is currently and evaluation of
the impact INCARGO has had in the fomenting of capacities of innovation
taking as examples the achievements of the sub-projects.

In particular, signs of INCARGO support:

a. its contribution in the creation of a service market around agrarian

innovation bring providers and producers together, interesting research
groups, consultants and NGOs to the resolution of problems of product
chains, privileging the mobilizing factor of the demand,
b. its capacity to identify relevant actors in agriculture and livestock innovation,
promoting its capacity for formulation and execution of projects. Its
contribution to the entire and the collaborative action among universities,
public and private research centers, NGOs, producers’ organizations and
regional and local governments has been significant, the evidence being the
established alliances and the sub-projects executed together.
c. The promotion of associativity and the process of the formalization of
producers’ organizations.
d. The support of resources for the mobilization of established but under used
capacities.

33
 e. The demonstration of the viability of co-financing on the part of the private
sector through actions of research and transference.
f. The constitution of networks of actors which permits the interchange of
information and experiences, the identification of common problems and the
undertaking of shared projects, as evidence being the constitution and
functioning of AGRORED Peru; and
g. It has gained the recognition of the agrarian sector for its manner of rigorous,
objective, participative functioning submissive to social control. INCAGRO,
as a project of the Agriculture Ministry, impulses the productive
reconversion of the nation’s agriculture. It has animated the services market
for innovation and strengthened producers’ organizations which demand
these services.

From the institutional point of view, it is notable that INCAGRO:

a. has contributed to decisions of the Agriculture Minister which lead to the

strengthening of the policy of technological agricultural innovation. within
the process of restructuring the sector, it has initiated the reorientation of the
INIA toward innovation and its future conversion as a promoter and
coordinator of the National System of Agrarian Innovation (DL 1060);
b. it impulses and has compromised the regional governments of the nation in
the promotion of agrarian innovation as part of the regional policies. This
has been realized through conventions and involvement in the projects and
activities which INCAGRO co-finances. Also, it has compromised many
local governments as co-financers and collaborators of projects which
INCAGRO pushes.
c. The experience of INCAGRO in competitive funds administration and the
principal instruments managed through the program, has been very useful to
many institutions projects of public investment, generating an important
savings in the development and implementation of projects and decisions. In
respect to this: i) the transference of experience, the institutional knowledge
and the important administrative instruments to FINCYT: all the
methodology of competitions and the evaluation of proposals has been
transferred to said Fund; ii) the transference of the project administration
information system (SIGER) to MARENASS (allied project); iii) the
support given to PROSSAMER in the elaboration of it institutional operative
manual; iv) the transference to PSI of the administrative information system
for projects (SIGER), v) the support to DGPM/MEF in the design of
administrative instruments and the evaluation of technological innovation
projects; vi) transference of the methodology of competitions for innovative
technological projects to the Program Sierra Export;
d. The strengthening of the formulation and administration of projects of R & D
+ 1 of important institutions such as INIA, IIAP, the Agrarian University of
the Molina, the Private University Cayetano Heredia, among others. This
has permitted many of these institutions to positively qualify in the FINCYT
competitions with amounts superior to those which finance the program and
better notably its efficiency and effectiveness in the administration of
projects of science and technology;
e. INCAGRO Phase II, has participated in the elaboration of the first study of
the prospects of what it has done in this sector, generating an institutional

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 “know how” which should translate into an improvement of the quality of
strategic administration in this sector and certainly to a government level;
f. INCAGRO has been a substantial factor in the formalization of hundreds of
producers’ organizations on the national level. All the institutions which
have participated in the INCAGRO competitions have been supported in
their formalization and are currently entities registered in SUNAT and
SUNARP;
g. The strengthening of the associativity between producers associations has
been a very important activity of the program;
h. INCAGRO has permitted that the technology services market be socially
activated. On the one side we have producers who have increased their
disposition to pay for innovative services and better their knowledge of
regarding their needs and about the offer of regional services for innovation.
On the other, we have improved the qualifications of important service
providers through training programs which focus on competence. This
reflects a betterment signifying the quality of the services for innovation in
agriculture in many regions of the nation;
i. It has designed and implemented an administrative information system for R
& D + 1 projects which monitors the projects from presentation as proposals
in the competition phase until the execution and closing in the
accompanying phase. Today we find a phase of technological realization.

Conclusions

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INCAGRO could continue managing public funds with international cooperation,
programs of business responsibility, of producers’ union self-assessment.

There exists much hope, optimism and confidence. The bases have been set and have
begun to change the focus of the producers. Today there exist many organized
innovative groups. They are present in an awakening of research in the universities, in
the consolidation of the research programs of INIA, IIAP and the conversion of NGOs
into research entities and in the articulation of innovations.

A new public institutionalism with a subsidized role is needed, a catalytic agent and
promoter of the State and a firm decentralization of the decision making process.

The competitive funds for the co-financing of projects for agrarian innovation are one of
the systems used by various nations to strengthen research and technological
development in agriculture and natural resources.

This is not a panacea for all problems. As a consequence, its establishment must
functionally deal with each specific situation.

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