Mitigating Deforestation in Peru through Land Use Formalization

Half of Peru’s GHG emissions come from the land use sector. Most of these emissions are a result of deforestation processes related to smallholder agricultural producers in the Peruvian Amazon. A major driver of deforestation is the lack of land tenure rights for smallholders which reduces their commercial opportunities, makes access to financial resources difficult, and increases overall risk. To address this issue, the Government of Peru has developed an innovative land tenure mechanism to formalize smallholder farmers called the Agroforestry Concession (AfC). AfCs offer a renewable usufruct contract for 40 years to thousands of eligible farmers currently encroaching on public forest domain in the Peruvian Amazon. Upon award, farmers commit to avoid deforesting, conserve remnant forests, maintain or establish sustainably managed agroforestry systems, and implement soil and water conservation measures. Public financial incentives need to support the small-scale farmers that choose to enroll in the AfC system and comply with its environmental requirements, but they are currently not aligned towards this goal. A key challenge for AfC adoption is ensuring that tangible incentives are in place. Providing secure land tenure through AfC contracts alone will not be enough to ensure widespread adoption of the AfC system and compliance with its environmental terms. If current public agricultural programs were to support this new mechanism, it would offer increased opportunity to actively engage more smallholder producers than at present. More importantly, support through public funds will lower overall risk in zero-deforestation supply chains of small-scale producers and provide the foundation for green private investment.