In Peru, small-scale farmers struggle with the impacts of climate change

Droughts, heat waves, or extreme rainfall, the Andean and tropical regions are among the first to be affected by the uncertainties of climate change. In the face of increasingly unpredictable weather conditions, Peruvian agriculture is under pressure. A team of economists is using new data to measure the impact of these weather shocks and its negative consequences on Peruvian agricultural production.

Juicy mangoes, avocados, coffee, cacao, quinoa: our European market stalls are filled with tropical delights. But before reaching us, these crops slowly ripened under the Andean sun or in the shade of lush forests. Harvested by anonymous hands, they then embark on a long transcontinental journey. Today, this cycle is under threat as climate change disrupts agricultural calendars.

In Peru, agriculture heavily relies on Andean and Amazonian communities. Armed with their traditional knowledge, they practice terrace cultivation, community water management, and seed conservation. This way of life has allowed Peru to preserve exceptional biodiversity: more than 3,000 varieties of potatoes are cultivated there. The country is home to a wealth of ecosystems, leading to a wide variety of agricultural techniques depending on the region. On the coast, desert areas are used for intensive irrigated farming, while the Andean mountains and Amazon rainforest are cultivated by small-scale farmers.

In these two regions, the impacts of climate change are felt most severely, with severe droughts, torrential rains, and melting ice. In tropical areas, ecosystems are sensitive to temperature changes and highly dependent on rainfall. In the Andes, heatwaves weaken traditional crops like potatoes and quinoa. Farmers are sometimes forced to move their plantations to higher altitudes, destabilising the ecosystems of the less populated highlands and increasing competition for land. However, few alternatives are available to small-scale producers – who make up the majority in Peru – leaving them at risk of food insecurity and increased precarity. 

Terrace in the village of Pisac, Peru, Picture by Guiville on Unsplash

Shocks in the tropical belt

Adaptation is crucial not only for people but also for institutions; economic analysis tools help guide public policies. However, many studies on weather shocks focus on developed countries. In these countries, data is provided annually, aligning with the single harvest season per year. This annual data allows for studying the temperate climates of Western countries effectively. But what happens in tropical regions where harvesting occurs throughout the year, without a defined annual schedule?

Economists Cédric Crofils, Ewen Gallic, and Gauthier Vermandel offer new insights by using a method which captures the ‘granularity’ of data, reflecting production variations year-round. The research team relies on data from Peru's Ministry of Agriculture, which offers the rare advantage of monthly collection.

The researchers examined temperature and precipitation ‘anomalies’ that could affect Peruvian crops like rice, maize, potatoes, and cassava between 2001 and 2015. To quantify a climate shock, they first observed the average of the maximum monthly temperatures across different regions. A temperature shock is seen as a deviation from the average – a positive deviation indicates a higher temperature than the average for that month, while a negative deviation indicates a lower temperature than usual. A weather shock is defined here as an unusual climatic deviation for a given month compared to what was typically observed during the same period.

Thanks to their method, the authors can measure not only the impact but also its effects over time. They were able to show that a weather shock leads to reduced harvests, particularly of rice and maize. The effects on yields are long-lasting, as crops struggle to return to their previous state of equilibrium.

Picture by George Shepherd on Flickr

A reduction in agricultural production

Under the Andean sky, the potato reigns supreme. Cultivated for 8,000 years by the Andean peoples, the crop now epitomises agricultural vulnerability: after rising production between 2014 and 2022, there was a sharp decrease of 10% in 2023, a direct consequence of extreme climate events: a phenomenon which could easily extend to other crops..

The authors show that a deviation in temperature or precipitation leads to an 8% to 15% decrease in agricultural production for the four crops studied. This represents a significant impact for the country, with a 0.1% drop in GDP. In 2023, the agricultural sector accounted for 7.19% of Peru's GDP. Following the shock, the country is experiencing increased inflation and a decline in exports, while agriculture comprises 16.5% of total exports.

Analysing the impacts of climate change in tropical areas is essential for designing effective adaptation policies, yet research is still lacking. In the meantime, climate change data is increasingly influencing the monetary policy directions of international organisations, such as the European Central Bank. 

Picture by Aldo Nestares on Unsplash

Facing up to climate shocks

For their part, the Peruvian government has initiated adaptation measures to address climate change. These include reforestation projects, sustainable water management, and resilient agriculture. Examples include the introduction of drought-resistant crops, the implementation of soil conservation techniques, and the installation of irrigation systems to reduce reliance on rainfall. Improving farmers’ access to weather data is also under consideration. Taking climate change effects into account helps guide the course of action for the countries most at risk.

The method used by the researchers – which is adapted to multi-crop systems and tropical climates – can be combined with the growing availability of meteorological and agricultural data to quantify climate impacts whilst helping to identify the most vulnerable crop varieties.

Finally, the focus on tropical regions also highlights the resilience of local communities, who for generations have developed collective adaptation systems — such as community-managed gravity-fed irrigation or the installation of amunas (ancient hydraulic systems that store rainwater in the ground). Recognising climate-related hazards will enable the provision of enhanced support to populations and crops that have long been demonstrating their resilience.