Ucayali

Ucayali demonstrates the ecological succession from coca to legal cultivation—palm oil expansion here was directly stimulated by UNODC and USAID spending hundreds of millions redirecting coca farmers to alternative crops. The first oil palm project in 1991 established 3,000 acres near Pucallpa for 270 families, largely refugees fleeing Shining Path guerrillas. Today, around 7,000 families run small-scale palm oil farms in Peru's largest palm oil-producing region, with Ocho Sur claiming to be the Amazon's largest formal employer at 2,000 jobs after $160 million in investment.

Pucallpa, the regional capital of 300,000 on the Ucayali River, served as host for the 2024 GCF Task Force Annual Meeting, advancing a "Blueprint for the New Forest Economy" that showcases sustainable palm production, forest restoration, indigenous entrepreneurship, and certified timber. Ucayali's indigenous communities have pioneered certified timber production, creating models for legal forest extraction that could scale. Peru's palm oil market reached $183.58 million in 2024, projected to grow to $264 million by 2034.

Yet the transition from illicit to licit cultivation carries its own risks. Between 2012 and 2021, an estimated 13,000 hectares of forest in Loreto and Ucayali were cleared by palm oil and cacao companies. Oil palm has not yet been a dominant deforestation driver in Peru, but the sector is industrializing quickly and becoming profit-oriented—conditions that elsewhere have driven massive forest loss. Cocoa cooperatives like Colpa de Loros combine cultivation with conservation, but the fundamental competition for forest land continues. Ucayali's future depends on whether alternative development creates sustainable economies or simply replaces one form of extraction with another.