Family farmers are the gatekeepers of one of the world’s most important national resources: the Amazon rainforest. Historically, family farmers in San Martin, Peru have contributed greatly to deforestation rates in the region. Most farms feed those who operate them and their families, and most farmers have little access to credit, technology, or tools to increase their production capacity. Factors such as low productivity and improper land titling lead to a cycle in which farmers exhaust the quality of the land and they move on to clear a new tract of forest and begin the cycle again.

The government of San Martin has worked hard to implement policies and support mechanisms to reduce levels of deforestation but a large financing gap still exists. This report investigates strategies for increased market development of sustainably produced, high-quality agricultural products and opportunities to implement innovative blended finance mechanisms.

Key Findings

• Increasing family farmer participation in cooperatives can lead to increased technical, business, and financial support.
• Larger cooperatives have better options for large-scale investment projects, so fostering cooperative growth is an important area of focus.
• Differentiated, high-quality production of commodities leads to higher prices for producers, which leads to higher incomes and greater margins for further investment into sustainable production methods.
• Increased and more efficient avenues for formal land titling are essential to increasing farmer participation in producer cooperatives, as well as decreasing the risks associated with lending to family farmers.
• Public support is essential to stimulating private investment when risks are high and infrastructure development is low.

Strategies for increased market development are created by assessing the unique obstacles and opportunities facing family farmers, producer cooperatives, and the regional government of San Martin. The region’s 2030 development plan serves as the source for regional goals and objectives and the strategies proposed aim to assist in meeting them. This report also explores similar projects that employed blended finance mechanisms to achieve positive outcomes and increased investment. The report will be available in both Spanish and English.