AGRICULTURAL INVESTMENT PIONEERING

IN PERU WBE

rSoMIMlS

I NATURAL RESOURCES • ACTIVITY SERIES No. 3
As regional office of the Technical Cooperation

Administration, the Institute of Inter-American

Affairs has responsibility for the Point Four

program of the United States Government in the

American Republics.

The reports in this series are concerned with

agriculture and the development of natural resources. Several agencies of the United States

Government are cooperating in this phase of the

activities of the Technical Cooperation Administration.

This, as well as those to follow, is an in-thefamily report taken almost verbatim from field

summaries for the sole purpose of relaying and

sharing information of mutual interest as quickly

as possible.
AGRICULTURAL INVESTMENT PIONEERING

IN PERU

SCIPA’s New Demonstration Farms in the Jungle and the Sierra

Point the Way for Capital Investment

Prepared by the

Servicio Cooperativo Interamericano de Producción de Alimentos

Lima, Peru

Issued by

Division of Agriculture and Natural Resources

Institute of Inter-American Affairs

Technical Cooperation Administration

Washington, D. C. November 1952

AGRICULTURAL INVESTMENT PIONEERING IN PERU

INTRODUCTION

On December 27, 1949 the government of Peru provided SCIPA* with an

initial sum of ^4, 000, 000 ($266,667 US) for the establishment of new livestock industries in the underdeveloped and potentially productive high Sierra

and in the jungle--two totally dissimilar areas . Hacienda Porcon, a 35,000-

acre farm in the northern highlands, established by royal grant from the

king of Spain about 300 years ago, and for more than 150 years a property

the Beneficiencia Publica of Cajamarca, was purchased by SCIPA to be

the sheep production demonstration farm. A tract of 8,000 hectares

(approximately 20,000 acres) of virgin Amazon basin jungle located 35

miles from the great upper extension of the Amazon river, the navigable

Ucayali, at a point 575 miles northeast of Lima on the Lima-to-Pucallpa

highway, was acquired for development of a cattle farm.

At the special request of the Peruvian government, which was financing

these projects in entirety, SCIPA regarded them not as experimental or

research undertakings, but as practical operations the success of which

would encourage the profitable investment of capital in similar enterprises

in the two areas, and would bring direct benefits to the nation’s total

economic structure as well. Specifically, the projects were to provide the

highest rate of return on investments at the lowest possible cost through

the development of the best managerial practices and application of modern

techniques.

Peru’s agricultural situation is not new. Nations throughout history

have faced the same situation. It is both simple and difficult. When lands

become incapable of supporting the populace new frontiers have to be conquered, colonized, and made to produce. Peru faces the problem of going

back and utilizing difficult areas that previously had been passed by because

of geographic and climatic conditions.

Furthermore, the Government of Peru is anxious to build up and

sustain its already profitable wool exports and to increase the production

of beef to meet the serious annual internal deficit--as well as supplementing its meat supply with greater amounts of mutton.

♦The cooperative agricultural program sponsored jointly by the U. S. Government through the Institute of Inter-American Affairs and the Peruvian Government through its Ministry of Agriculture. It

is financed by both governments and aided by an agricultural field party which provides technical

and managerial assistance. This is called SCIPA in Peru (Servicio Cooperativo Interamericano de

Producción de Alimentos).

1
Since 1946 Peru’s wool exports mounted spectacularly:

1946.............................................. 643,684 pounds

1947.............................................. 969,474

1948.............................................. 792,437

1949.............................................. 1,539,650

1950.............................................. 8,630,000

Importations of beef, however, revealed a discouraging picture for the

same period:

Live cattle imported

Frozen beef for slaughter

tons tons

1946.......... ...................... 6,006 62

1947.......... ...................... 2,189 68

1948.......... ...................... 14,020 2,231

1949.................................. 15,615 2,498

1950.......... ...................... 4,370 1,752

Both Hacienda Pore on and the jungle ranch--Granja San Jorge--shared

many common objectives. Each was confronted with special problems.

The establishment of a modern sheep industry in the high Sierra met

resistance at first from the local people who distrusted this intrusion and

feared the changes it might bring. The Peruvian Sierra when invaded by

the Spaniard Pizzaro in 1531 was supporting a highly cultured Indian

population of more or less 7,000,000 people. These citizens of the highly

conventionalized Inca Empire had, in the course of hundreds of years of

peacefully ordered development, attained a balanced self-sufficiency not

duplicated in our modern world. This planned economy was destroyed by

the gold-greedy Conquistadores, and within 125 years of the conquest,

four-fifths of the population had disappeared, largely as the victims of

starvation and disease--the result of a disrupted economy.

The social reorganization developed during the Spanish colonial

conquest and largely effective today, follows the pattern of large land grants

that in effect gave title to the land and established the tenancy of the Indians

who lived on it to selected landlords and their families. The pattern is

typical of the patroncito system common to most Spanish countries

settled during the 16th century. An important variation is found in Peru,

however, where very large areas were granted to cooperative communities, comunidades, of Indians and that even today continue in the indoctrination of their ancestors, to operate the land as a cooperatively

shared legacy within a very well defended structure of common and

statutory law.

The Peruvian hacendado in the Sierra has usually rented a subsistence

tract to his “tenant” and has provided open pasturage for the tenants’

2
small herds of animals. Pasturage for tenants’ flocks is commonly confined exclusively to specified areas in the less productive portions of

the great farms.

The tenant pays cash rent, but is obligated to earn his rent money by

working for wages on the lands directly operated for the account of the

owner; i.e., the hacendado. The tenant is tied to the- farm only because he

has on that farm the only security he knows. He has a living of sorts

there.

The owner usually does not reside on the farm. It is operated through

an administrador responsible for all financial accounting of the farm, and

by capataces, or foremen, specialized in the technical activities of livestock production, crop production, etc. The administrador is usually

accountant, business agent, storekeeper, doctor, and judge for the farm

c ommunity.

Nearly 300 Indian families were living on the land purchased for

Hacienda Porcon. Most of them were relocated from the central pastures

to other areas which did not interfere with operations of the ranch. Some

60 families were retained on the Hacienda to act as sheep herders and to

provide the necessary labor for the successful operation of the ranch.

Today, the attitude toward Hacienda Porcon and SCIPA has had an

about-face. The Indians have seen sheep, not unlike their own in the

beginning, fatten while theirs remained scrawny and often sickly; they have

seen lamb crops far exceed anything they had dreamed possible; they have

seen heavier, cleaner wool fleeces; they have seen their friends enjoy a

steady and dependable income.

Objectives

Both Hacienda Porcon and Granja San Jorge pursued the same objectives.

They were :

1. To develop patterns of modern economic progress for the Sierra

and the jungle in the production of livestock.

2. To apply modern range management methods, including methods of

pasture control and the protection of native grass cover, the seeding of

pastures with suitable grasses and plants not native to the areas, and the

control of erosion.

3. To establish practices in the control and prevention of both internal and external animal parasites.

4. To calculate the economic efficiency of supplemental feeding of range

livestock.

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5. In areas requiring it, to provide drainage or irrigation where

economically feasible, and to arrange for potable stock water in pasture

areas.

6. To develop the breed of animals most suitable for the economic use

of the various pasture areas.

7. To provide the equipment, buildings, fences and other facilities

most suitable for the areas in question.

8. To provide for the full development of new supplemental agricultural

possibilities on the ranches, in order that such agricultural production will

be complementary to the livestock production, and inorder that such agricultural development may tend toward the rehabilitation of resident farmers

now on the land.

9. To determine economic practices in the preparation of animals or

animal products for market, and in the ultimate movement of animals and

animal products to market.

10. To establish and maintain on the ranches such technicians and such

laboratories, particularly those concerned with the development of adequate

systems of control of diseases in animals, as may be deemed essential to

the full development of information relative to technical problems concerned with livestock production generally in the Sierra and the jungle.

11. To maintain complete and adequate cost accounting records of such

a nature that adequate and accurate information may be made available to

livestock producers and farmers in all similar areas, relative to the real

costs in time, in labor, and in materials of each of the various operations

and of each of the various capitalizations in the course of the development.

12. Ultimately, and only after satisfactory progress in development has

been made, to so manage the farms that foundation breeding animals, both

male and female, may be made available at reasonable commercial prices

to farms in the region for the improvement or the replacement of inferior

animals now found in the local flocks and herds. Particular attention will be

given to providing animals for such improvement in the herds of the small

farmer-owners.

HACIENDA PORCON

The principal sheep producing areas of Peru are in the Sierra region.

The whole mountain area, called the Sierra, consists of from three to five

distinct ranges, roughly parallel, with a general north-to-south direction.

The mountain ranges have an east-we st depth of 100 to 450 miles, and

many thin, jagged peaks reach altitudes of 22,000 feet. Between these

mountain ranges are valleys and extensive plateaus, or punas, at altitudes

of from 10,500 to 15,500 feet. Since the time of the Spanish Conquistadores

the central and southern highlands of Peru have been used for sheep pro4
duction, and have been developed more extensively than the northern portion.

Hacienda Porcon is located on a high plateau in the northern zone of the

Sierra.

The grass vegetation covering the punas is more suitable for sheep,

and the native llamas, alpacas, and vicunas, than for other types of

livestock, and these animals are adapted to that region, with abundant

wool coats to protect them from the low temperatures and the dry winds.

Perhaps the most common pasture grass throughout the uplands of Peru

is Stipa ichu, a coarse bunch grass, which the sheep like best when it is

young. Many other species of short grass, such as Agrostis, Poa, Festuca,

Calamagrostis, and Muhlenbergia, are also found.

The climate at such altitudes is cool throughout the year, though,

because of the latitude, perhaps not so cool as might be expected. During

the warmer season from October to May, there are rains and infrequent

snow storms, but at altitudes lower than 14,000 feet the temperature

seldom drops below freezing. From May through September, and particularly during June, July, and August, temperatures below freezing are not

unusual, and the ranges become very dry.

Development

Hacienda Porcon was purchased in September of 1950. The average

elevation of the 35,000 acres is 13,000 feet. Much of the land had been

over-grazed by the flocks of nomadic Indians, which had roamed over the

section for more than 300 years with little or no restriction. It provided

an almost ideal demonstration ranch, for there are tens of thousands of

hectares in northern Peru in similar condition.

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The nomadic herds of sheep were removed, and 2,500 head of new

sheep purchased in Peru were moved to the ranch. Securing the 2,500

sheep within a reasonable budget was no small undertaking in itself.

Animals were purchased from other flocks within Peru at an average cost

of $4.40 per sheep. This low price was possible because most of the sheep

procured were in poor condition and even poorer appearance. The animals

were heavily infested with scab (Sarna soroptica), the wool was dirty, and

they were in poor flesh.

Upon arrival at Porcon, the sheep were sheared and dipped to control

scab. Many of the Indians working on the Hacienda contended at the time

that this process alone would be enough to kill the sheep. But that was only

a beginning of the sanitation and management practices necessary to bring

the flock to a standard by which Hacienda Porcon could begin to produce

economically. Those lambs and sheep which had not been docked and all the

wethers which had been poorly castrated were operated upon at once. In

addition, the entire 2,500 head of sheep were dosed to control internal

parasites, and were vaccinated for hemorrhagic septicemia, malignant

edema, and blackleg. The weaker sheep were separated into a flock which

was kept near the center of the working quarters and given daily treatment

in order to save as many as possible. Autopsies were performed immediately on animals that died to determine the type of internal parasites and

the cause of death.

Nevertheless, despite the necessary dipping, dosing, docking, castration, and handling of the sheep, the mortality rate did not exceed ten percent.

This success was attributed largely to the supplemental feeding. The following ration was given, on a head basis:

100 gms. of cottonseed meal

5 gms. of salt

4 gms. of Fosfo-Infa

1 gr. of phenothiazine

2 gr. of copper sulphate

The supplemental feeding was continued until the sheep had made

sufficient gain to sustain themselves on existing pastures.

One lucky break for Hacienda Porcon was the complete absence of liver

fluke. Liver fluke was not found either in the SCIPA flocks or in the native

Indian flocks which were on the Hacienda, although almost every other

parasite was found.

Adding to the difficulty of introducing a flock of sheep to new terrain,

and a mixed flock at that, was the bad weather. The sheep arrived during

the rainy season, and the normally expected bad weather was exceptionally

bad. During the 35 days of intensive work after the sheep arrived, it

rained almost every day, and the hail and severe cold caused the death of a

number. Nevertheless, the mortality rate was low.

6
Contrest the flock of a native Indian (above) with the sheep at Hacienda Porcón (below) after a

year’s good management.

7
Wool Production

Approximately 1990 sheep were sheared in 1951. Total production was

5,100 pounds, making an average per head of 2.6 pounds. In 1952, total

number of sheep sheared was 3,129

for a total wool production of 13,424,

averaging 4.3 pounds per head. Sheep

that had been on the Hacienda the

full twelve months previous to the

last shearing averaged 4.7, compared to last year’s figure of 2.6

pounds per head--almost twice as

much.

Progress at Hacienda Porcon

By November 1, 1952 Porcon

farm can report substantial progress, social as well as material.

The material progress may be

briefly summarized as:

1. The farm boundaries have for

the first time been properly surveyed, land marks established and

legalized, and the more than 53

square miles included in the farm

have been mapped. The costs approximated $4,000.

A 1951 lamb 2. An area headquarters located

adjacent to the Cajamarca-Chota

highway has - been established on the farm, 25 miles north of the city of

Cajamarca. At that point living quarters for manager and workers, warehouses, corrals, shearing pens, and dipping vats were constructed, and

have been in use for the past 18 months. The cost has been $14,500.

3. The sheep number more than 5000. There are 4300 crossbred

Corriedale-criollo animals native to the area; 400 purebred Corriedales;

200 purebred Romney-Marsh ewes and 20 rams from Argentina; 80 pure,

selected Rambouillet rams from New Mexico; 12 purebred Hampshire rams

from south Peru; 60 selected crossbred Corriedale-Romney-Marsh rams,

and 70 selected Corriedale rams from Central Peru. There are also 12

purebred Brown Swiss cows and one Brown Swiss bull, the essential cadre

of saddle horses, mules and burros, on the farm and in service. Total investment in livestock is $60,000.

4. Eight miles of year-round penetration road have been constructed at

a cost of $4,800.

5. Transportation equipment, machinery and supplies valued at $8,000

are on the farm and in use.

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6. Steel posts, woven wire fencing, and other materials for 40 kilometers (25 miles) of sheep-tight

fence have been purchased and are

now in Peru. Cost value of the materials was $14,000.

7. Irrigation ditches have been

dug at a cost of $2,200, and 250acres

of pasture are being irrigated during

the dry season.

8. Plans are completed and materials assembled, including 35,000

adobe bricks, to provide for the early

construction of a permanent modern

headquarters near the center of the

farm. This planned development, to

cost $20,000, will be completed by

October 1953.

On the social improvement side

. of the ledger it may be noted that:

1. The essential personnel has

been assembled, trained and inFrom left, Ing. Abel Pimentel, form manager;

John R. Neale, director of technical cooperation

in Peru and chief of agricultural field party;

Enrique Labarthe, director of extension for Peru;

and-Juan Bazo, special assistant to the chief of

party and director of the demonstration farm projects.

stalled to create a modern operating organization. This managerial organization is comprised entirely of Peruvian nationals. The farm manager,

Ingeniero Abel Pimentel, is now in the United States for three months as

the result of a TCA training grant, to study range sheep management

methods as practiced in New Mexico, Colorado, Wyoming, and Idaho. He

will return to his duties at Porcon Hacienda about January 1, 1953.

2. Sixty Indian families living on the farm provide the permanent farm

labor force. These people, at first violently anti-SCIPA, are now interested

and loyal workers in a reorganized farm organization, earning more than

they dreamed of, and improving their own flocks by copying the new practices and by taking advantage of the farm’s facilities. They are optimistically awaiting the school for their children that SCIPA will establish at the

new farm headquarters.

3. Through range control and pasture’improvement practices, the volume

of feed available has already been increased to such an extent that the original estimates regarding carrying capacity of these lands have been revised

upward.

An organized commercial enterprise has been created thatpromises not

only extremely large increases in gross animal production in this area,

with, of course, highly satisfying earnings for investors, but, of equal or

perhaps greater importance, a useful and significant new pattern in social

and economic advancement that will do much to make the Indian of the Peruvian Sierra a happier, more prosperous, and more useful member of the

society of which he is so substantial a part.

9
The jungle as clearing began (above) Partially cleared section (below)

After a good burn there are still stumps and tree trunks to be removed

10
"Gramalote” (Paragrass) on the newly cleared land (above). George A. Neale, Project Manager, in

foreground. Elephant grass being cut for feed (below). It grew 8 to 15 feet high in a year and yielded

up to 40 tons of green feed per acre.

11
GRANJA SAN JORGE

The Andes mountains, which rise so abruptly from the sea along the

West Coast of Peru, slope more gently to the east, merging finally with the

jungle, or selva. The great rivers that drain the eastern slopes of the

Andes cut the extensive tracts of flat jungle lands and flow into the Amazon.

Most of this region, which comprises 40 percent of the total land area of

Peru, averages less than 1500 feet in altitude, and all of it lies within the

heavy rainfall zone, annual figures ranging between 70 to 150 inches. Iquitos,

the trading center for this vast region, is located on the Amazon River. Although it lies nearly 2630 miles from the Atlantic Ocean, the city is often

called Peru’s Atlantic seaport, since the Amazon is navigable to that point

by ocean-going steamships.

Development

Granja San Jorge consists of 20,000 acres of typical jungle land, bounded

on the north by the Neshuya River and intersected by several smaller

rivers. The first step in development of this farm was to clear the land of

the dense jungle growth to make way for planted pastures and feed crops.

SCIPA contracted for clearing the first 250 acres of the farm in May of

1950, and actual clearing work began June 1, 1950. Between June and October of that year 135 hectares (335 acres) were cut, dried, and burned.

Standard jungle practice was followed. First, a crew with machetes cut all

brush and small growth close to the ground. Then, other workers with axes

felled all but the largest trees, stripped them of branches, and cut them into

sections to facilitate burning. After a thorough drying period, four to six

weeks when possible, the tree sections and remaining brush were burned.

Unfortunately, rains made a good burn impossible over the last 75 acres cut

that year, and that portion was not available for use until recleared and

burned in June and July of 1952.

During 1951 only 25 additional acres were cleared, that season having

been devoted largely to building permanent farm and labor headquarters,

installing a sawmill, opening roads, building fences and related internal

developments.

Of the several sub-projects developed for convenience and to help defray

expenses, the sawmill has been the most profitable. It has provided all the

lumber used in construction of the buildings at San Jorge, and surplus

lumber for sale.

The jungle trees suitable for wood that were available on the farm include several varieties of Moena (much like the soft pine of the United

States), Machinga (also a soft wood), Tornillo (a harder wood, similar to

walnut), Peruvian mahogany, and several species that have not been classified in Peru.

As an example of the volume the sawmill handled, 98,600 feet of lumber

were cut from the beginning of operations in July of 1951 to the end of

December that year. The sawmill has been working steadily since it was

installed and is now manned by a permanent crew of seven.

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Native, or “criollo” cattle

By February of 1950 the first

pastures were ready to receive

animals. Since this was the middle

of the rainy season, the farmmanager began buying cattle, ofwhatever

quality available, along the rivers

and transporting them by boat, raft,

or on foot to the pastures. Some 50

head of “criollo” cows were

gathered in this manner. In August

of 1951, forty purebred Brahman

cows purchased from breeders in

Florida and Texas a year earlier

were moved by SCIPA truck from

SCIPA’s Lima demonstration and

animal acclimatization farm, over

the 600 miles of mountain and jungle

road to San Jorge. By the end of

1951, some 125 head of cattle were

on the farm.

During the last half of 1951 the farm manager assisted by IIAA’s veterinarian, Dr. G. Carl Thompson, and other technicians, devoted a great

deal of time to developing management methods suitable to the profitable

control of the health and well-being of the animals. This included not only

development of economical and effective methods for controlling internal

and external parasites but also analyzing feeds and soils to determine the

necessity for supplemental mineral feeding, medication for infectious disImported Brahman cattie upon arrival

ease control, shelter against

weather, the finding and training of

herdsmen, etc.

In 1952 between June and October

an additional 110 hectares (275

acres) of jungle were cut, cured, and

burned. By early November more

than 100 acres of this newly cleared

land had been planted to corn,

and the remainder was being planted

to pasture, fruit orchards, and vegetable gardens to provide subsistence

not only for the animals but for the

farm people as well. Twenty-five

additional purebred cows with their

calves were moved to the farm in

September 1952.

During 1953 it is planned that 200

hectares (500 acres) more of jungle

will be cleared and that in May or

June 80 Brahman cows imported

from Brazil will be taken to the farm.

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Summary of Progress at San Jorge

As of November 1, 1952, San

Jorge farm inventory included:

1. Nearly 20,000 acres of virgin

jungle land surveyed and marked,

with 700 acres cleared and planted

or being planted to crops and pastures. Valued at $ 651,000 ($42,500

US)

2. Installations (total cost about

$70,000)

a) Managerial headquarters,

workers houses, and barracks for 200 people.

b) Two wells encased in brick

and cement.

c) A school house equipped

and in operation; attended

regularly since June by 26

boys and girls below the

fifth grade; more than20 of

them had never been in

school before.

d) Cattle sheds providing

more than 15,000 square

feet of roqfed shelter for

animals.

e) Two and a half acres of

^»ole corrals; warehouses,

offices, commissary store,

insect and weather-proof

storage for 60 tons of grain,

corn, beans, rice, etc.; 12

kilometers of barbed wire

fence; 16 kilometers of

farm road; and more than

30 kilometers of trocha

(foot trail).

f) A sawmill and planes, with

700 logs at the mill for

sawing.

g) Four farm tractors, two of

them heavy tracklayer

types; a walk-in refrigerator; shop equipment, tools,

etc.

Top: Main building and guest house, during construction, built of native wood with brick foundation and tile roof.

Center: Wooden silos, air-tight, but with thatched

roofs for protection from rain.

Bottom: Warehouses (silos in background).

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3. Livestock: 275 cattle, approximately 100 of which are purebred

Brahmans of the finest blood obtainable in the United States; 12 horses and

mules for saddle use. Investment in livestock, approximately $65,000.

In assessing social progress at San Jorge account must be taken of an

important difference between the people of the jungle and of the Sierra. In

the jungle the driving necessities of food, shelter, and clothing are more

easily provided than in cold climates, and the jungle people have seldom

been obliged to depend entirely on wages for security. When they have

worked for wages, they have been exploited. Inconsequence of these things,

they have worked at a job no longer than was required to provide the few

necessities, and any jungle enterprise has been faced with the problem of

a high labor turnover. At San Jorge, in the early stages, the turnover was

as high as 90 percent at times. Now, not quite two years later, a new community of more than 200 persons has been established, and the farm has

the facilities to provide for their daily living and working. It is a primitive

community as yet, typical of any pioneering venture, but it comprises the

essential base from which this jungle farm can now begin to expand and

produce, in an area where there has never before been any production

useful to man.

GPP-83.44380

15



A limited number of additional copies of ActivitySeries publications are available for individuals

or institutions interested. Requests should be

addressed to the Division of Agriculture and

Natural Resources, Institute of Inter-American

Affairs, 333 Third Street, N. W., Washington 25,

D. C.

Now available:

No. 1 Servicio de Semillas--Paraguay’s Seed

Testing and Distributing Service.

No. 2 Forestry in Honduras

No. 3 Agricultural Investment Pioneering in

Peru