Projeto Paraiba is a local development programme being carried out in partnership by a Brazilian NGO-AS-PTA4- and several farmer organisations from three municipalities of the Agreste area in Paraiba State, Northeast Brazil. This case study is about innovation management by smallholders in the context of this initiative. The paper traces how innovation management has evolved and grown to be a main focus of the programme. It analyses the methods, results and limits of a pioneering local initiative, conceived as a means to support a farmer-led innovation process.