What role has the Ministry played in the development of the agricultural sector over recent years?
The agricultural sector has become one of the less volatile economic sectors, growing at an average of 4% annually over the past few years. We expect to close 2014 on more moderate 1.5% growth, but there are positive signs pointing to a fast recovery in 2015, with growth of 3% to 3.5%. Non-traditional agricultural exports, as well as the poultry industry, are two of the most dynamic segments within the sector. In terms of growing agricultural exports, there are strong products such as avocados and cinchona, where exports have grown by 70% and 200% YoY, respectively. There are alsoother Andean grains that show highly positive development signs. The private sector has played an important role in the development of the agricultural sector over the past decade, and the Ministry of Agriculture has focused on being a promoter. For example, we introduced the Law on Agricultural Promotion to render exports and labor regulations more flexible, and in doing so, boosted development of the agricultural sector in different regions of the country. This has also meant investments in irrigation and Public-Private-Partnerships (PPPs). These PPPs have, so far, focused on 200,000 hectares of wood production with a business plan for the next 10 years. The Ministry has also invested significantly in health and Free Trade Agreements (FTAs)–our goal has been to eradicate several diseases affecting livestock and fruits. In this context, the coffee segment has been one of our priorities, and Peruvian coffee exports currently total some $1 billion. Production has been affected over the past couple of years and we have set up a credit line to renew production areas. We also have increased investment ($1 billion for this government's term) to boost small and medium-sized producers' activities and help them with irrigation issues. This plan especially targets producers in mountainous regions.
What are some of the other near future priorities for the ministry?
The irrigation plan for producers in the mountainous regions is a crucial project. The ministry provides technical support to small and medium-sized producers, as well as support in terms of cooperation such that small producers can combine efforts to make their activities more profitable. Regarding livestock activities, we have as a main focus the promotion and development of alpaca, a type of meat the world has yet to fully discover. We also have plans to reforest some areas of the country for different purposes—wood production and simple reforestation of affected areas. The country has 18 million hectares, seven of which have already been awarded in a concession scheme. We also have 10 million deforested hectares. We currently work on potential credit lines for forestall production, after we developed a regulatory framework for this business activity. All in all, our priorities and investment target infrastructure, credit lines, disease eradication, and the simplification of administrative and bureaucratic processes. In addition, boosting exports is one of our top priorities, and we closely work with the Ministry of Foreign Trade. We take part in international exhibitions and fairs, as well as other promotional activities with the support of Peruvian embassies abroad.
What are some of the highlights of the Ministry's activities regarding the protection of the environment?
The country is in the process of adapting itself to climate change, especially in the agricultural industry. Peru is not holding back, and is investing heavily in related activities and policies. For example, we invest in large water reservoirs, especially at river headwaters. We also attend to vulnerable communities in the mountains who are affected by extreme weather conditions. Reforestation and agroforestry processes are another aspect of this drive, especially for coffee plantations; yet this also includes rice plantations along the coast, and promoting a change in cultivation and irrigation to foster greater efficiency.
What is your opinion on the ban on transgenic products?
We are keeping a close eye on transgenic products and evaluating their implications for Peru. So far, they do not seem to be something that would affect Peru in terms of export volumes, because we have a wide variety of export products, and as I mentioned, some with great potential for growth in the near future, such as avocado and cotton. We have several specific projects based on these products that have great potential. Developing these will boost R&D and generate added value to these products. This research is also aimed at reducing the usage of pesticides, and related costs. We have already done a great job with plantations of asparagus, for example, where the usage of high technologies has enabled us to reduce pesticides, optimize production, and become a world leader in this segment. Producers can make more informed decisions based on information derived from these technologies. We do a similar job in the avocado and grapes segments, for example. At the moment, we are looking at new markets for our products and expect important developments in that regard. We have already signed health protocols with countries like China and Japan, with Korea being the next in line. At the moment, we are evaluating a more global strategy for entering the above-mentioned markets, along with Colombia and Ecuador, as a global brand. We have already held some talks in this regard.
How do you see the Peruvian agricultural industry over the five years?
Agriculture, including forestry, is set to become the second most dynamic sector of the Peruvian economy after mining. It also driving the current government objective of economic diversification. Regarding competitiveness, we will continue improving as long as we continue introducing modern agricultural techniques. Our strategy is to boost cooperation between small and medium-sized producers, and link them to exporting companies. Peru has a true agricultural vocation, and we have a wide range of products and activities thanks to our 85 microclimates, which puts us in a highly favorable position to target foreign markets. I would like to invite foreign investors, whose arrival, since we are an open economy, is a smooth process. Peru has great agricultural potential, and businesses here enjoy a stable economic and political community.
© The Business Year - March 2015