I found a use for Peasants that is working great for me at the moment: morale killers.

When I have a high-command general leading an attack, I'll often follow-up with a bum run of Peasants, just flooding the battlefield and getting into all the cracks (behind the enemy, on their flanks, everywhere). If the Peasants are at 3-4 "trickledown valour", I find that their decent charge puts those enemy units one step closer to routing. I like to inflict as many morale penalties as possible.

I never used to use them for anything except garrison duty, but this recent discovery has changed my mind. Cheap as chips.

(I am playing on Hard, btw, not Expert)