The efficiency of the rural economy: concept applicable in Peru

Abstract

​In the present paper the authors explore the economic efficiency of the peasant agriculture in the high lands of Peru. They try to rescue the theoric bases of the “Efficient but Poor" hypothesis of Theodore Schultz. After clearly defining the concept of economy efficiency and making a linear programming exercise, they conclude that in some regions it is not possible to increase the peasant income or it is possible to increase it very little with the production factors at hand. In others, it is possible providing that there are productors who are clearly "leaders" in managing the production factors available and whose technology could be expanded. the peasants need of "adopting new technology" or "expanding the existing technology" (practiced by the leaders) to increase their income depends on the ability to deal with the desequilibria the have to face, for which education is very important. Finally, some recommendations of agriculture policy are suggested based on conclusions found.