In just over two decades, Peru has increased its agricultural exports from $748 million in 2002 to $12.3 billion in 2024. The country is now the world’s top exporter of blueberries and a leading producer of popular superfoods such as asparagus and avocados. Today, the agricultural sector contributes six percent to GDP and employs over 25 percent of the economically active population.
Peru’s achievements are attributed to its agricultural products adhering to stringent quality and safety standards for export. Since 1998, the IDB has collaborated with the country on five projects to enhance its National Agricultural Health Service (SENASA), improving animal and plant health and food safety. This initiative catalyzed the country’s export growth by complementing earlier public investments in irrigation, stronger regulations, and free trade agreements, as well as private investments in agriculture technology.
Increased productivity
Improved disease and pest control has also boosted producer productivity. For example, the fruit fly is a highly destructive pest that damages agricultural crops. An impact evaluation of an IDB-supported fruit fly eradication program (2008-2014) found that in the short-term, farmers in treated areas increased fruit production and sales by 65 percent. A decade later, satellite imagery confirmed lasting productivity gains of 37-49 percent among farmers in treated areas. Building on this strong evidence, the recently completed IDB-SENASA program continued eradication efforts, reducing fruit fly rates in a third of the country’s departments, benefitting 900,000 small-scale producers directly and indirectly.
Private investment in the agriculture sector
A healthier, safer and more productive agriculture sector with increasing export opportunities has also encouraged private investment. IDB Invest has been backing the growth plans of fruit and vegetable-focused agribusinesses in Peru through both financing and technical expertise. From 2017-2023, its $230 million portfolio of seven projects supported 34,000 jobs, 43 percent of which were for women, and improved access to services and finance for more than 500 farmers. They also promoted over $2.4 billion in exports, representing five percent of Peru’s non-traditional agricultural exports over the same period.
However, the sector faces increasing risks from adverse weather events, including stronger El Niño and La Niña cycles that affect production, as well as market volatility and long crop maturity timelines. These challenges highlight the importance of IDB Invest’s long-term financing for agribusinesses to fill the gap in adequate local commercial credit. To further mitigate these risks, this experience has shown the importance of geographic and agricultural product diversification, strong corporate governance structures in a sector with many family-owned businesses and aligning repayment schedules with companies’ cash flows under new crop yield cycles.
Promoting sustainability among small farmers
The IDB Group is also promoting sustainable agriculture practices among small farmers to build their resilience. For instance, with current IDB Invest support, Danper, a leading exporter of non-traditional agricultural products, is measuring the multidimensional poverty of its artichoke suppliers[1] to better target its technical assistance and strengthen the supply chain. Likewise, the recently completed IDB-SENASA program trained 60,000 family farmers in good agricultural practices. A key lesson from this experience is that farmers may be hesitant to invest resources in soil and water testing and other requirements for certification in good agricultural practices without understanding the longer-term value of doing so. Therefore, the new IDB program with SENASA, which is implementing an official certification system for good agricultural and handling practices, will carry out a pilot initiative to support farmers in obtaining certification, as well as impact evaluations to measure the effects of certification on sales, access to markets, and other areas.
Infusing ag-tech innovations
Building resilience also calls for infusing ag-tech innovations into the sector. An IDB Lab project with Netafim is promoting smart irrigation technologies including fertigation systems to help small cocoa producers in the Peruvian Amazon adapt to drier climate conditions. Partnering with a local agroexport cooperative and a digital solutions company, the project combines technical and financial assistance to encourage adoption. In its first year, 300 farmers were trained, and it aims to install 200 systems over three years. To increase uptake among farmers, the project is adapting by expanding its reach to more cooperatives, regions, and crops. IDB Lab is also working with Abonos Vivos, a Peruvian agricultural input company, to introduce biological fertilizers that enhance soil restoration for export crops such as berries, cocoa and avocados. As of 2024, fertilizer sales were up nearly 60 percent and 500 small producers were using the product, halfway to the project’s target. The IDB also has a new program to promote innovation and technology adoption in the agriculture sector.
For more information, see the project pages for PE-L1023, PE-L1229, PE-L1280, PE-L1270, PE-L1289, PE-L1287, 12015-02, 12180-01, 12217-01, 13286-01, 13487-02, 14022-01, and 14468-01, and the Project Completion Report for PE-L1023.
[1] These builds on joint IDB Invest-Danper efforts to measure the multidimensional poverty of its workers and their families to better target the company’s social programs. For more information, see this study, DEBrief, and blog.
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