The Inter-American Development Bank to Boost Agricultural Productivity in Peru

The Inter-American Development Bank (IDB) has approved an $85 million loan to increase productivity in Peru’s agricultural sector by giving producers better access to innovation, technology transfer, and agricultural extension services.

The agricultural sector is Peru’s second largest in terms of total exports, and as of 2022, it employed 25.6% of the country’s workforce. One of the sector’s challenges is low productivity in highland and jungle areas, which are home to 85% of family farmers. The project also aims to mitigate other weaknesses, like low investment in agricultural research and underdeveloped technology transfer.

Using the loan, which has been approved by the IDB’s Board of Executive Directors, the Institute for Agricultural Innovations will be able to strengthen its research capacities to offer a more diverse range of technological solutions. The funding will also expand the coverage of agricultural extension services, with a focus on family farms.

The project will benefit over 6,000 agricultural extension service providers and approximately 92,000 farmers. Around two million Peruvian smallholders will also indirectly benefit from the research findings, which will be shared countrywide.

In its efforts to diversify technological solutions, the project will particularly focus on the challenges of climate change and on creating jobs for rural women and ethnic groups. The investments will target a network of six agricultural experiment stations—in Andenes, Baños del Inca, el Porvenir, Illpa, Santa Ana and Vista Florida—that span the country’s three main ecosystems: jungle, highlands and coast.

The initiative will also bolster the technology transfer capacity of the Institute for Agricultural Innovation, and the project will finance, implement, and validate six technology transfer and six agricultural extension models for the same institute.

The IDB loan has an 18-year repayment term and a six-year grace period.