As the high-quality agricultural products in Peru become more known to the world, exports have risen and consequently, innovation is taking a leap.
Technologies such as drones, data-collecting sensors, and water irrigation tools are boosting efficiency in the agricultural industry locally. As Peruvian superfoods and other organic products are gaining more attention, opportunities to grow the industry are becoming more apparent.
In this article, we outline how technology is optimizing agriculture in Peru, driving a greater number of diverse business opportunities in the industry.
Rising agriculture exports in Peru
The main products exported were asparagus, organic banana, avocado, artichoke, mango, blueberry, and grapes. In addition, the main buyers were the United States, Netherlands, Spain, UK, Ecuador, China, Germany, Chile, Colombia, and Canada.
How does Peru invest in Agritech?
Peru’s government initiated a plan of over US$ 177 million from 2015 to 2019 to specifically develop technological innovation in the agricultural sector. The portfolio of projects is directed by the National Institute of Agricultural Innovation (INIA) who has consciously engaged diverse regions in the country to be part of it.
The current projects involve systems to manage water scarcity, biotechnology, data collection, and drones.
1. Water scarcity
Given that an important issue affecting agribusiness in Peru is water scarcity, INIA funded the implementation of systems that spare water with drip technology. A project being developed alongside private entities is “Perú Smart Agro 4.0”.
Currently, Peru Smart Agro 4.0 is working with cotton farmers to fix water scarcity. Three pilots have been implemented in the regions of Pisco, Ica and Lambayeque. According to the reported data, productivity has the potential to increase up to 35% and will generate great savings on water resources. These optimization projects have the potential to boost the supply of exports in Peru.
Innovation not only occurs in the development of tools but in Biotechnology as well. Peru is set to sign an agreement with China to improve the quality of Andean and Amazonian seeds.
The Ministry of Agriculture recently announced that the Rural Affairs of China will sign a deal promoting bilateral cooperation on agricultural science and technology, specifically targeted at seeds.
Further details are yet to be specified but the aim of the project is to raise the sustainability, productivity, and competitiveness of small to medium-sized producers. Upon the invitation of the Peruvian government, a Chinese delegation will visit Peru to understand how productive operations take place so that the research and development on seeds follow the Peruvian national systems for production.
– Peru: Biotechnology helps create sustainability in the midst of climate change
If not already, climate change is set to greatly impact agricultural activities around the world. Peru knows by experience just how much harm nature’s volatility can do. For instance, the 2017 “El niño disasters” destroyed 671 kilometers (417 miles) of irrigation canals and as many as 23, 000 hectares of crops were damaged, including grapevines, mangoes, and bananas.
Peru has been investigating the impact of climate for a couple of years now, however, a major focus on biotechnology as a remedy to climate change effects has just taken place.
– A first-rate laboratory in Peru
In December 2018, the Peruvian president inaugurated the first Technological Research Laboratory on climate change for the agricultural sector. This laboratory will carry out scientific research to minimize the effects of climate change in agricultural production and thus guarantee food production security.
The laboratory has the capacity to recreate a range of climatic scenarios within Peru’s regions, such as droughts and frosts. As a consequence, it has become possible to identify which crops and plants have the capacity to survive in extreme conditions as well as finding their optimal production environments.
This climate laboratory is the most advanced in South America. It is composed of 6 specialized environments that have bioclimatic chambers and allow the crop to be subjected to various climatic situations, as well as equipment that measures the physiology of the crop at the level of photosynthesis, vigor, leaf area and biomass.
There are rooms for DNA extraction that allow different types of research and experimentation. As explained Peru is undergoing its sustainable biotechnology revolution in order to safeguard its precious agricultural industry.
The benefits of drones for agriculture are widely acknowledged. They offer advanced solutions to soil analysis, pest control, and fumigation.
Today, as a consequence of the often dramatic landscape, agricultural drones are becoming more commonly used in the country. However, the wider use of drones in Peru could significantly improve agricultural efficiency and hence boost production.
Global demand for superfoods
Following the global trend for healthy food consumption and well-being, the demand for superfood and organic products has considerably risen.
The forecasted market size for superfoods is expected to increase by US$ 201.67 billion from 2019 to 2023. According to market observers, this market is growing at a compound annual growth rate (CAGR) of 17%, a percentage significantly impacted by trends in the U.S.
Superfoods are not only used as food but also increasingly used as key ingredients for beauty and personal care products. According to market observers, the market is fragmented and only a few players are occupying the market share.
Early entry to the superfood market can become a great advantage against future competition. Peru has the appropriate environment to grow the agribusiness industry: a solid economy, fertile soils, inexpensive land as compared to other countries, numerous trade agreements and government support for technological advances.
The Peruvian Agricultural industry creates opportunities for business development
Peru boasts a diversity of superfoods that are yet to be more extensively introduced to the world and many factors favor this industry. Some of the Peruvian superfoods are maca, camu camu, golden berries, yacon, chestnuts, and sacha inchi. Additionally, the profitability of agricultural land is inexpensive as compared to other countries.
On top of all the above-mentioned advantages, the country has over 20 free trade agreements and other international treaties with Europe, North America and Asia and the South Pacific countries. Being a key factor in the growth of exports in Peru.
An important contributor to the agricultural industry is the government. For instance, Peru participated in the 2019 Anuga fair in Germany. Peruvian agricultural workers secured financial commitments from investors for a value of US$211 million dollars. The countries that reported interest were Germany, France, South Korea, Russia, the United Kingdom, Turkey, India, and Poland.
The high-quality superfoods, access to international markets and technological advances for the development of the agri-industry make Peru an appealing point for investment.
Biz Latin Hub can help you to enter the Peruvian Market
Peru is rapidly developing technologies to protect its agricultural industry in the midst of climate change. Not only that but, the country has a variety of superfoods to contribute to the growing demand for superfoods.
As the Peruvian government invests heavily in the future of their agriculture with research, technology, and innovation, now is the time to join Peru’s agricultural revolution.
Investors interested in incorporating a business in Peru should obtain assistance regarding business incorporation and due diligence. At Biz Latin Hub we have vast experience assisting businesses to incorporate internationally, our team of Peruvian lawyers and accountants can help you register your company, contact us at [email protected] and get started with your agricultural venture.
Learn more about our team of expert authors.