Aug 27, 2010

Peru’s agriculture gets a boost from IDB-backed projects

Five days a week, Liz Villanueva, a biologist at Peru’s Agricultural Health Service (SENASA), oversees the care of a few hundred million of fruit flies. Less than a quarter inch long, these insects are one of the world’s most dreaded pests, and were once responsible for millions of dollars in crop losses in Peru every year.

Villanueva is producing sterile male fruit flies using a sugar rich diet and radiation as part of an ongoing project supported by the Inter-American Development Bank (IDB). Millions of these flies are then released into Peru’s rural areas. When they mate with females, they will produce infertile eggs. The project has been successfully eradicating fruit flies in key agricultural regions in the Andean country and has contributed to an increase in exports of fruits and vegetables in recent years.

“A year ago, the fruit looked nice from the outside but inside it was all wormy, rotten,’’ said Jose Davalos, a farmer in Ica Valley, one of Peru’s most important agricultural areas. “This year the fruit is beautiful. It’s all clean.”

This is one of several projects the IDB has financed over the past 15 years that are contributing to boost output and income for millions of poor farmers. Since 1995, the IDB has approved over $140 million to finance projects to improve the competitiveness of Peru’s agricultural industry, a sector that accounts for 8.3 percent of the country’s gross domestic product and employs nearly a third of the workforce.

“Agriculture is a strategic sector for the Peruvian economy and our programs are helping the country  tap into its competitive advantages,’’ said Hector Malarin, head of the IDB’s Rural Development, Environment and Disaster Risk Management Division. “We are seeking to ease poverty for millions of small and poor farmers by helping them access new foreign markets.”

The IDB has been working with Peru on projects to control and eradicate specific pests and diseases, particularly fruit flies. It has supported measures to restructure SENASA to offer quality agricultural health services in central, regional and local levels as well as financed the purchase of equipment and training to improve its surveillance, quarantine and laboratory services.

As a result, Peru has become free of foot-and-mouth disease* and several regions and provinces have been declared free of bovine tuberculosis and brucellosis. The IDB has also supported the expansion of biological techniques for pest control to over 250,000 hectares of land from 12,000 hectares 15 years ago.

Fruit flies have been completely eradicated in the southern coast of the country. According to an independent impact evaluation study prepared by GRADE, a Peruvian think tank, producers in areas where the fruit fly was eradicated had an increase of 19 to 41 percent in their annual income, agricultural production increased 18 percent, and land prices rose on average 13 percent compared with similar areas that didn’t benefit from any pest control intervention.

“The impact of this project has exceeded our expectations. Now, with a third phase of the program, we are working to eradicate fruit flies in other regions of Peru, including Lima, Ancash and La Libertad,’’ said Alfonso Tolmos, the IDB’s rural development specialist in Peru.

In addition to working on agricultural pest control, the IDB has also financed projects to regularize land tenure and increase land titling and registration. The Bank has financed the creation of information systems and the hiring and training of the personnel necessary to carry out these efforts,  particularly those in charge of visiting farms to verify land ownership.

This project has given legal certainty to property ownership to a majority of farms in the coastal and part of the Sierra (highland) regions, and has promptedlocal farmers to increase investment , according to another impact evaluation study by GRADE. Since 1995, this project has given out more than 1 million titles and provided titles to more than 500 communal lands, many of them made up of indigenous populations.

The IDB is also working closely with the Ministry of Agriculture to support services to access rural markets. The IDB, for example, has helped improve production and pricing data of agricultural goods significantly over the past years. The Bank has also provided financing for small farmer associations to hire consultants that will make them more competitive and better prepared to market their products abroad and domestically.

Moreover, the IDB has supported the decentralization process of the agricultural sector, strengthening both the national and local institutions to ensure a more efficient provision of services and transfer of resources.

Over the past decade, Peru’s agricultural sector has grown 4 percent annually, benefitting from better agricultural health and increased international demand for fruits, vegetables and other non-traditional agricultural commodities. Peru’s agricultural exports have jumped nearly three-fold in the past 15 years and are expected to rise further as trade agreements take effect.

(This version corrects information in 7th paragraph.)

*Currently, the World Organization of Animal Health has declared 88% of the country’s territory free from foot and mouth disease without vaccination. The rest of the country has had no incidence of the disease and it is in the process of obtaining international recognition.

More information

Alfonso Tolmos
IDB Rural Development Specialist
(51) 1-4423466

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