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Numerous authors have pointed out the importance of recuperating and giving its due worth to peasant and aboriginal knowledge when rural development initiatives emerge. Nevertheless the problem area related to the local knowledge concept continues presenting some dark points. Therefore, with the purpose of contributing to the topic, this paper analyzes local knowledge dynamics, particularly its value increase and reconfiguration based on the involvement of technical advancement and scientific knowledge. Keeping in mind the said purpose, this article presents the results of a research curried out in a peasant community of the Northeastern part of Argentina, where small producers' knowledge and lack of it were studied, as well as local knowledge invention, circulation, and consolidation processes from a historical perspective. Thus the dynamics involved are conceptualized with the support of frames of reference originated in social psychology, and a comprehensive model destined to describe and explain communal processes for inventing knowledge and the relationship between local knowledge and scientific knowledge has been proposed. [ABSTRACT FROM AUTHOR]