The productive gap of Peruvian agriculture

  • The productive gap of Peruvian agriculture

    Heterogeneous agricultural productivity growth prevents the sector, which could represent 11% of GDP, making the most of it opportunities in the international market.

    Earlier this year an article appeared: “Building Momentum in Peruvian Agriculture”, which was published by the World Bank in collaboration with the analysis group „GRADE“. Surely it is a revealing study that analyzes the value and impact of agriculture on both social and economic spheres. It shows that agriculture is not only an important source of employment and a poverty reduction tool; but also their participation in the economy rises up to 11% if the economic value of underlying business activities in the value chain of the agricultural product are taken into consideration.

    The growing interest in recent years for agriculture is due in part to the brilliant performance of agricultural exports. Only in 2017 the FOB value of agricultural exports reached US $ 6.255 million, and it is expected that by the end of December, said value exceeds US $ 7,000 million. Indeed, for more than a decade, shipments of asparagus, avocado, blueberry, mango, grape, among others (mostly non-traditional) have presented an exponential growth, which has allowed Peru to become a major supplier of an increasingly demanding international market.

    Following the good reception of agricultural exports, agricultural productivity increased by an annual average of 2.1%, although not uniformly. Indeed, research demonstrates a productivity gap between the Peruvian coast (7.2%) and the mountains and forests (0.2% and -0.2%, respectively). The heterogeneous growth of this component would result from multiple factors, among them-climatological attributes of land and the proper management of it. The coast, for example, has more fertile land, access to water resources and a high degree of concentration of land (some few possess large tracts of crop), thus obtaining more value from the automation of production processes. On the other hand, agricultural production in the mountains might be seen as a means of livelihood for many families, but it is characterized by having much less technical support. Certainly, the high degree of atomization and dispersion of growing areas have contributed to it. In the case of the forest, the problem lies in the composition and properties of the earth, less suitable for cultivation; and inadequate management of its main crops: cocoa and coffee.

    Undoubtedly, the state has played a major role in the evolution of agriculture as well as in the international appreciation of agricultural and dairy products. It is because of these efforts that superfoods , fruits, among others, stand out in highly sophisticated markets. However, there’s still a long way to go. In light of this and in order to achieve a more diversified and less volatile economy, the state will continue to promote public investment in this sector.