Peru benefitting from modern farming

Peru's agricultural sector is growing strongly, and its future looks bright overall despite a rough patch expected ahead as el Niño intensifies. Last Thursday Peru's Agriculture Minister Juan Manuel Benites announced that the farming sector expanded by an annual average of 3.1% between 2011 and 2014. He added that Peru has consolidated to become the world's largest producer and exporter of asparagus, quinoa, and maca. (It also ranks third globally for Hass avocado and artichokes exports.) Among other things, Benites credited Peru's position among the world's top 10 food-supplying nations to trade openness and export promotion.
The country's agricultural bloom has been many years in the making. Since the 1990s, the productivity of Peruvian agriculture has more than doubled compared with the average for Latin America, according to a study by Apoyo Consultoría for the Association of Agricultural Producer Organisations of Peru. And the income per hectare generated by modern agricultural products has been much higher than that of traditional ones. For instance, the income generated by asparagus reached $9,500 per hectare, making it no surprise that it achieved nearly 3% annual growth between 2000 and 2013. Furthermore, this modern farming boom has directly led to a significant reduction in poverty. "In ten years, 800,000 direct jobs and another 900,000 indirect jobs have been created in the coastal part of Peru," the report stated.
And growth has continued this year, according to a government report issued in early November. It stated that farming production rose 2.2% between January and September this year compared to the same period last year. And while September's production was up 3.4% overall, there were several extraordinary standouts, like yellow corn increasing 36% and paddy rice rising by 17%.
Agricultural exports totaled $3.5 billion over the first nine months of this year, netting Peru a sizeable agricultural trade surplus of $423 million. And although these exports were down 0.3% from the same period in 2014, due to a still-sluggish global market, some "non-traditional" agricultural exports had exceptional growth. For example, fresh asparagus exports were up 26% to $278 million, and cocoa grain exports rose 18% to $139 million. (Consumers in wealthier countries are willing to pay more for such premium products; Peru's top export destinations are the U.S. and the Netherlands, accounting for 28% and 14% respectively.)
And Peru's arid northern region of Piura may also be on the verge of reaping the benefits of technology. Israel, a pioneer of highly-efficient drip irrigation in its own desert region, sees attractive opportunities to achieve similar successes in Peru. Ehud Eitam, Israel's ambassador to Peru, recently led an entrepreneurial delegation to Piura, representing organizations related to technical irrigation, agriculture, mapping, security system, and telecommunications sectors. Eitam announced Israeli businessmen have already started investing in Piura region's agricultural field; in fact, over a one-year period investments in different sectors totaled $1.5 billion. He also mentioned that a Free Trade Agreement between both nations is expected to be consolidated in 2016.
The only thing that could put a damper (literally) on Peru's agricultural expansion is el Niño and the unusually rainy conditions it will bring as it intensifies in the Pacific. The country's multi-sector committee tasked with studying the weather phenomenon reported last week that the chance of a "strong or extraordinary" el Niño in December to March had decreased slightly from its previous estimate but still remained at a formidable 50%. Flooding is feared in low-lying agricultural zones, as are droughts in high-elevation areas.
Still, even if the sector takes a big hit this time around, chances are it will grow back before too long.

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