Peru's main power driving its economy: The agricultural sector
The performance of the agricultural sector in Peru has been surprising in many aspects. However, there is still a long way to go and there are many challenges in many areas that must be addressed. The income levels of farmers' households are stagnant, and poverty rates in rural areas remain very high. The marked territorial imbalances in the pattern of development are evident, with some regions flourishing and others languishing.
The 80% of agricultural units have less than five hectares, and a large number of these small farmers' agricultural units develop low-input agriculture. Many agricultural production systems remain extremely vulnerable to exogenous impacts, especially of extreme climatic events associated with the El Niño phenomenon and long-term climate change.
On the other hand, 1 of each 4 informal urban jobs comes from agriculture and the agricultural sector could contribute to the economy of the country more than is traditionally estimated. According to the report "Taking momentum in Peruvian agriculture" from the World Bank, the economic contribution of agricultural activity to Peruvian GDP is 7,3%. However, the same report indicates that if the services associated with the entire food chain are calculated, the contribution of the agricultural sector could be estimated at 11,3% of GDP.
As these facts indicate, Peruvian agriculture has performed well together. Growth in the sector has been strong and constitutes an important part of the economy, as well as being the main source of livelihood for many of the poorest households in the country. This agricultural growth has been driven to a large extent by a remarkable expansion of the agro-exports sector, especially the production of a variety of non-traditional products, a fact that has resulted in the sector becoming an important generator of export earnings.
Training
According to the World Bank report, education and training can play a fundamental role in reducing inefficiencies in Peruvian agriculture, because better educated and informed producers make better decisions about their productive and marketing activities, thus achieving better agricultural results. . To this we must add other variables, which represent technical, economic and institutional factors, among which we can mention economic diversification, land titling, irrigation coverage, access to markets and commercial information, among others.
Like many other export-oriented countries, Peru seeks to incorporate small-scale producers in the markets for highly specialized products that can be sold in highly differentiated niches and it does so because these products can have a very high value and seem to offer better opportunities to producers. to capture added value.
Coast, mountains and jungle
It must be remembered that agriculture in Peru is composed of three widely different worlds. Due to spatial differences in the allocation of resources, climate, location, demography and application of political measures, among other factors, the coastal, mountain and jungle regions offer widely different experiences and present different challenges, so development strategies They must be different.
Six aspects to grow
According to the report of the international organization, there are six priorities to boost productivity and increase competitiveness: 1. Promotion of 2 innovation. Strengthening the distribution of supplies and advisory services 3. Capacity building through training and training 4. Improved connectivity and access to the 5 market. Promotion of 6 land markets. Facilitation of risk management. These six axes depend on services that are currently very scarce in Peru.
With political reforms, institutional changes and better levels of investment, agricultural GDP growth in Peru could reach 4% or 5% per year. As the agricultural sector has a significant participation in the economy, this will give an important boost to GDP growth in general. Everything indicates that in the next ten or twenty years, the contribution of agriculture to the Peruvian economy will be much more important, becoming a fundamental factor in the reduction of poverty and the main source of employment and development.
Source: Martín Carrillo O. - Blueberries Consulting
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