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[Agricultural Investment Pioneering in Peru]
[From the U.S. Government Publishing Office, www.gpo.gov]

﻿AGRICULTURAL INVESTMENT PIONEERING IN PERU WBE
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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-the-family 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 dis similar 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).
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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’
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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 pro-
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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.
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Contrest the flock of a native Indian (above) with the sheep at Hacienda Porcón (below) after a year’s good management.
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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 in-
From 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 SC IP A 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.
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The jungle as clearing began (above)	Partially cleared section (below)
After a good burn there are still stumps and tree trunks to be removed
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"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.
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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 farm manager began buying cattle, of whatever 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 dis
Imported 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
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A limited number of additional copies of Activity-Series 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
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