In the Huánuco region of central Peru, where the Andes meet the fringes of the Amazon, farmers have grown potatoes for years. With the assistance of the USAID-funded Poverty Reduction and Alleviation project
, Peruvians are taking advantage of emerging market opportunities to increase their output — and their incomes.
Farmers in Huánuco traditionally have grown potatoes for local consumption, selling them in local markets at low prices. The project’s advisors saw an opportunity for local small producers to improve their livelihoods by switching production to the capiro variety of potato for industrial processing.
The project provided technical assistance to enterprises with identified markets to help them expand and improve their competitiveness. In the case of Huánuco, its unique climate and high elevation gave the region an advantage — production could occur during times of the year not possible in other areas of the central Sierra. Recognizing this niche, the project team conducted field tests to locate suitable areas for quality industrial potato production. At the same time, assessed small producers’ production needs.
The project’s economic service center team in Huánuco, which linked enterprises with producers across value chains, then put in place programs to instruct farmers on a variety of topics — such as crop management, harvesting, and post-harvesting techniques — to improve the quality and value of their output.
Small producers in Huánuco were eventually able to sign deals with a number of potato chip companies — notably Frito Lay — to sell their crops at higher prices than they had been receiving locally. For the Peruvian market, Frito Lay had used imported potatoes from Colombia due to a lack of high-quality local potatoes. The company now marks each bag of potato chips sold domestically with the slogan “Made in Peru with Pride.” In fact, within a few short years, the capiro potato became Huánuco’s biggest product, and the project’s efforts generated more than $1.6 million in sales.
Jorge Garay Portalatino is one small producer who has benefited from the project. A former day laborer, Jorge received training and credit assistance. From his first season planting the capiro potato in 2004-2005, he steadily expanded — from three hectares in 2004-2005 to 20 hectares in 2007-2008. Jorge’s hard work to expand and meet the standards of a demanding client such as Frito Lay improved his family’s quality of life. Jorge is able to dedicate a vehicle he purchased solely to his business activities. In addition, Frito Lay recognized Jorge as its “best farmer” due to the high level of quality and productivity he has achieved.