GULU, Uganda (AFP) -- Thousands of cattle once grazed on the lush pastures of northern Uganda, but that was before the war, a ferocious two-decade insurgency that has decimated the already impoverished region.

After 19 years of conflict, scarcely a single bull or heifer can be found in or around this town, the epicenter of fighting where the heavy toll on human lives is perhaps only surpassed by economic misery.

Where livestock was once ubiquitous, a constant and steady source of protein and financial security for the region's ethnic Acholi people, the fields are weed-filled and barren, most cattle having been stolen or killed.

Local traders once bustled in busy markets and street stalls, but shop shelves are now largely bare, displaying goods with long passed expiry dates, and neglected roads and other infrastructure have collapsed.

"Because of the war, we have not engaged in any development activities but instead concentrated on fighting for survival and mitigating the suffering," says Gulu District chief Patrick Langoya Otto.

Tens of thousands have been killed and nearly two million displaced in the conflict between Kampala and the notorious Lord's Resistance Army, regularly described as one of the world's worst, and most-forgotten, humanitarian crises.

Yet there are now hopes the chronic insecurity that has ravaged Gulu and neighboring Kitgum and Pader districts may soon be at an end, as the government and the LRA continue efforts to forge a peace agreement.

Despite several setbacks, a landmark August truce is holding, LRA fighters have largely left this region for neutral camps in southern Sudan and the negotiations in south Sudan's capital of Juba are muddling along. "Since the start of the peace talks, we have seen a change," said Peter Ongee, 37, at the Gulu store he has run for 20 years. "We used to go to Kampala for restocking once a month, but now we have started going there twice a week."

He and others here are hopeful that long-elusive peace will revive shattered business and boost languishing agriculture in the once-verdant region where most now survive on meager rations from overstretched aid agencies.

Fears of attack by the notoriously brutal LRA -- infamous for atrocities committed against civilians, including massacres, rapes, mutilations, abductions -- have emptied many villages and forced many farmers to abandon their fields.

The Civil Society for Peace in Northern Uganda estimates the loss in peasant income at 212.5 million dollars (169 million euros), with more than 90 percent of Gulu's nearly 300,000 population living in squalid camps.

"Our productivity has been eroded because of the war," said Gulu District Commissioner Walter Ochola, noting the displacements as well deaths, injuries and disappearances of fighting age men.

"The work force has been lost, leaving behind women, children and the elderly," he told AFP in the district capital, about 360 kilometers (225 miles) north of Kampala.

The result has shattered not just the traditional subsistence farming economy but also left the regional administration with virtually no revenue to fund much-needed development and reconstruction projects.

Otto, the district chief, says his budget for next year is now estimated at the equivalent of 7.8 million dollars (6.2 million euros), but the local contribution will be only 2.6 percent of that, down from 7.4 percent in 2002. "We have a very low revenue base and this does not allow us to engage in development," he said. "More than 80 percent of our development programs are (federal) government- and donor-funded."

Indeed, the only businesses that appear to come close to thriving are those brought into the region from outside that cater to the large military and foreign aid worker presence here.

"The people who get salaries, like policemen and aid workers, are our only customers because others cannot afford anything," says Richard Omeda, a 53-year-old Gulu grocer.

"I hope when the war ends, people will be able to produce and sell their products and spend some of their income," he told AFP.

But even in the absence of a final peace agreement, conditions are slowly improving, according to residents who say the August 29 truce, however shaky, has brought down the price of moving goods into Gulu.

"Before, the truckers who ferried our goods from Kampala feared the security situation and hiked transportation costs," said storeowner Francis Okello. "Now, things are changing for the better."