Peru, situated on the western coast of South America along the Pacific Ocean, produced limited agricultural products primarily for domestic consumption until the 1990s. In the 1990s, Peru embarked on a significant agricultural expansion by irrigating coastal desert areas. This effort began with water management from coastal rivers flowing from the Andean Highlands to the Pacific Ocean and was later supplemented by transferring water from Atlantic-bound rivers through extensive tunnels to the Pacific Coast.
The agricultural revolution was further propelled by the enactment of a new Constitution in 1993, which reformed the economic chapter and encouraged investment across all industries, including agriculture. These constitutional changes, alongside additional laws, promoted investments in the agricultural sector, particularly targeting foreign markets.
Over the past 30 years, Peru has emerged as a prominent global player in the fresh and processed fruit and vegetable markets. The transformation of former deserts into productive fields of fruit and vegetables, and the implementation of advanced agricultural technology have created employment opportunities for residents of previously neglected coastal towns and migrants from the Andean Highlands and the Amazon Rainforest. This shift has provided dignified and profitable jobs, enabling many to support and educate their families. Consequently, a thriving and entrepreneurial middle class has emerged, benefiting from the agricultural boom.
The world’s most important media outlets quickly began reporting on the green revolution, which was happening with great success in Peru.
1. Overview of the Peruvian Agriculture Industry
Peru, spanning 496,226 square miles, comprises three natural geographic regions: the Coast (Costa), the Andean Highlands (Sierra), and the Amazon Rainforest (Selva). According to the Ministry of Agriculture, Peru’s agricultural surface covers approximately 44,980 square miles; however, only 8.9% is utilized for agricultural purposes due to the lack of water on the Coast, rugged terrain, inhospitable climates in the Andean Highlands, and limited connectivity in the Amazon Rainforest. The Peruvian Coast is predominantly desert, with valleys irrigated by rivers originating from the Andean Highlands, which are abundant during the rainy season (September to March) and scarce for the remainder of the year. The Coastal region experiences temperatures ranging from 53ºF to 86ºF, suitable for growing a wide variety of plants but constrained by water scarcity.
In the Andean Highlands, agriculture is primarily practiced at elevations of 11,500 feet above sea level (ASL) or lower, in inter-Andean valleys carved by rivers. Agriculture is also carried out on the Andean plateaus, which lack permanent natural irrigation and can only be sown during the rainy season. Lands at elevations of 12,500 feet ASL or higher produce pastures during the rainy season, which are used for raising cattle such as cows, sheep, alpacas, and llamas; however, the productivity of cattle is limited by the lack of water and extreme weather conditions, especially between June and August. At elevations below 11,500 feet ASL, crops such as corn, potatoes, ulluco, wheat, and barley are cultivated. In the inter-Andean valleys, at elevations below 6,500 feet ASL, a variety of fruits including peaches, apples, pears, and avocados are grown.
The Amazon Rainforest, located in the eastern part of the country, is irrigated by Amazonian rivers originating from the Andes peaks. The rainforest benefits from abundant water from these rivers, which flow into the Atlantic, and from high rainfall. Over time, agriculture in this area has expanded, often at the expense of deforestation. This region is highly suitable for cultivating coffee, cocoa, fruits, and plants for local consumption, such as cassava and plantains, which are staple foods for the Amazonian population.
Source: https://www.peruaves.org/map-of-peru/
2. Agrarian Reform and Background
The year 1969 was pivotal for Peruvian agriculture, marked by General Juan Velasco Alvarado of the Peruvian Army enacting the Agrarian Reform Law on June 24. This controversial law received both praise and criticism. Before the law, Peru’s farmland was concentrated in the hands of very few, a situation that has persisted since the conquest of Peru in 1532. Large estates in Coastal valleys coexisted with medium and small farms, following a system of land ownership inherited over generations. This system, established during the Spanish viceroyalty, remained unchanged even after Peruvian Independence in 1821.
Medium and small Coastal farms produced goods primarily for the domestic market, including fruits, vegetables, poultry, and dairy products. Some medium-sized farms also engaged in large-scale agriculture, cultivating crops like sugar cane and cotton. While large farms employed peasants, compensating them with wages and social benefits, and providing housing and education for their children, medium and small farms often did not extend these same social rights to their workers.
In the Andean Highlands, the situation differed significantly. The productive system was quasi-feudal, known as “yanaconaje.” Peasants lived within the haciendas (agricultural estates with a main house and associated buildings), cultivating plots temporarily assigned by the “hacendado” (hacienda owner). Production was shared between the peasants and the hacendado, and peasants, along with their families, were often required to perform unpaid labor in the hacienda’s main house or in the city residence of the hacendado.
The Amazon Rainforest was colonized in the mid-1800s by settlers from the Andean highlands, who began growing cocoa, coffee, and sugar cane, and engaging in cattle ranching. Expansion was limited until the 1950s, when the construction of penetration roads facilitated access. Few haciendas were established in the Amazon Rainforest because of the lack of workers; most settlers became landowners.
Former wood and rubber barons’ families, residing in cities like Iquitos, Pucallpa, and Madre de Dios, founded by missionaries during colonial times, maintained haciendas producing for personal and local market consumption. With the construction of roads like the “Marginal de la Selva Road,” towns began practicing agriculture for national and international markets, leading to increased production of cocoa, and coffee and intensified wood exploitation.
3. Agrarian Reform Effects
The Agrarian Reform Law of 1969 ordered the expropriation of all lands, haciendas, plants, machinery, equipment, and animals from the haciendas on the Coast and in the Andean Highlands to be handed over to the peasants. This transfer was not an individual distribution to the peasants, rather the haciendas were converted into Agricultural Production Cooperatives (CAP) and Agricultural Societies of Social Interest (SAIS), with CAPs established on the Coast and SAIS in the Andean Highlands.
General Juan Velasco Alvarado, President of Peru from 1968 to 1975, sought to implement social justice in the countryside. His agrarian reforms were reflected in phrases such as: “Peasant, the boss will no longer eat from your poverty,” and by socialist ideas prevalent in Latin America in the 1960s.
Source: http://www.cna.org.pe/legado-juan-velasco-alvarado-esta-vigente-la-agenda-agraria-e-indigena-la-cna/, https://redh-cuba.org/2018/10/velasco-alvarado-mas-alla-del-mito-por-manuel-robles/
CAPs and SAIS were socialist organization models in which peasants became partners and elected leaders to manage them. Unfortunately, these elected leaders often lacked technical and administrative training, resulting in poor management. Consequently, these organizations experienced a significant decline in production and many faced immediate bankruptcy. Fields were left unsown, mills deteriorated, and animals disappeared as peasants consumed or sold them. Very few CAPs or SAIS managed to survive.
Peru experienced a total collapse of its agricultural industry: sugar exports ceased, cotton production was reduced to meet only local demand, and the country began importing many products it previously produced domestically. This failure prompted massive youth migration to large urban centers, particularly Lima and other Coastal cities such as Tacna, Arequipa, Ica, Trujillo, Chimbote, Chiclayo, and Piura. Some migrated to the High Amazon Rainforest (Selva Alta) for better opportunities or to engage in coca leaf production, raw material to produce cocaine, which gained popularity in the United States and Europe.
The question, “In what moment did Peru fucked up? (¿En qué momento se jodió el Perú?)” from a novel, it could be applied to the moment when the agrarian reform was enacted. Instead of bringing prosperity to the peasants, it led to widespread poverty. However, the reform did achieve social justice, particularly for the peasants in the Andean Highlands who had lived under a quasi-feudal system of exploitation.
Interview: Former Deputy Secretary of Agriculture of Peru Eng. William Arteaga worked directly to lay the foundations for the Green Revolution in Peru.
4. The Peruvian Green Revolution
Before the coup d’état of President Juan Velasco Alvarado in 1968, Peru’s agricultural production was primarily for domestic consumption. The rural sector mainly produced cotton, sugar cane, coffee, rice, beans, corn, potatoes, wheat, barley, cassava, and livestock such as cattle, sheep, pigs, and poultry. Only cotton, sugar, coffee, and some fruits and vegetables were exported.
The export of new agricultural products from Peru, like fresh fruits and vegetables, began somewhat by chance. In the 1950s, a U.S. oil company operating in Piura, Peru, needed to transport equipment, machinery, spare parts, and other supplies from the U.S. to its oil fields in Piura. The oil company arranged weekly flights, which returned to the U.S. empty. Seeking to optimize his flight operations, the airline owner encouraged local farmers in the San Lorenzo Valley, Piura, to export their highly aromatic and sweet mangoes to the U.S. The airline even assisted in finding an importer for the mangoes. These small-scale operations rapidly expanded due to the high quality of Peruvian fruit, which was well-received by U.S. consumers. Soon, mandarins and oranges joined the export list; however, the agrarian reform in 1969 and subsequent crises in the Peruvian agricultural sector significantly slowed these exports. The growth exports of fresh fruits and vegetables, sugar, and coffee during the 1970s and 1980s remained stagnant. It wasn’t until 1994 that substantial investments began transforming extensive and productive fields, previously dominated by sugar cane and cotton, into more profitable crops such as fruits and vegetables.
The most important driver of the growth of fresh fruit and vegetable exports to the US was the signing of the Peru-U.S. Trade Promotion Agreement, which took effect on February 1, 2009, followed by several other trade agreements that Peru signed with the European Union, China, Canada, the United Kingdom, and others. These agreements played a pivotal role in boosting the global export of Peruvian fruits and vegetables.
Soon after, various other fruits and vegetables were added to Peru’s production and export list, including grapes, artichokes, avocados, peppers, raspberries, strawberries, onions, garlic, and organic bananas; in 2015, blueberries were added. Within a few years, Peru became the world’s leading exporter of asparagus, avocados, table grapes, and blueberries.
Source: Ministry of Economy & Finance of Peru
Dutch fruit buyers visiting a grape farm in Lambayeque
Source: Promperu
Coastal producers utilized all available agricultural land, including previously barren desert areas, converting them into productive farmland. To achieve this transformation, companies enhanced the management and use of coastal river resources, discharged into the Pacific Ocean during the rainy season. They built reservoirs to store water during periods of abundance and employed controlled irrigation technology. Additionally, they replenished aquifers during wet periods to utilize the water through wells during drier times.
Former desert converted into a paprika farm, La Libertad department, Peru
Source: Promperu
Investment in the countryside expanded the agricultural frontier and led to the importation and development of agricultural technology. However, in some regions, coastal river water could not reach high coastal areas or vast deserts, or it was insufficient.
Consequently, the government initiated large-scale irrigation projects and resumed those halted for a long time. For instance, the Olmos irrigation project used a transfer tunnel to channel water from the Utcubamba River (which flows to the Atlantic) to the Pacific basin, thereby irrigating an immense desert in northern Peru and incorporating for agriculture more than 106,000 acres of land.
Agricultural companies, receiving larger orders, had to subcontract small and medium-sized farmers nearby, training them to produce fruits and vegetables meeting market standards and paying them competitive prices, often in U.S. dollars. Since fruit and vegetable prices are published on specialized websites and are public information, independent farmers selling to large exporters can base their prices on international rates. Thus, independent farmers benefit from technical training and better prices.
Even small independent farmers with 1- or 2-acre plots receive benefits, as long as they are interested in producing. However, not all small producers have joined the production and export chain; those far from production centers do not receive the same benefits. Therefore, it is essential to continue efforts to incorporate all small producers into the export chain.
Small producer of Kent mangoes in Yautan, Ancash, Peru. Italian buyers from Altromercato supermarket, looking to buy specialty mangoes, directly from small producers.
Source: Promperu
As large farms received more purchase orders and needed to expand their production areas, they hired new workers, often young people from nearby rural areas. As demand for workers increased, unemployed youths from coastal cities took jobs in production fields, sometimes migrating from cities to the countryside, reversing past trends. The countryside thus began to offer employment with better pay, social rights, health insurance, and other benefits. Today, the regions of Piura, Lambayeque, La Libertad, and Ica boast full employment rates.
This transformation is evident in the new brick-and-mortar houses that have replaced the cane and mud structures in the slums of large coastal cities and the old adobe and tile houses in the coastal villages near major plantations.
Landing in Chiclayo, Peru, one observes brick-and-mortar houses lining both sides of unpaved streets. While the private sector is advancing rapidly and successfully, the lack of roads highlights the government’s inefficiency.
Fuente: https://www.youtube.com/watch?v=svrKJFS22nI
The green revolution in Peru’s coastal areas has also spread to the Andean Highlands and Amazon Rainforest, where agriculture faces more significant challenges due to terrain and distance from export ports. Crops like quinoa, maca, and other superfoods native to the Andean Highlands, as well as fine coffees and aromatic cocoas for chocolates native to the Amazon Rainforest, have rapidly expanded. Palm trees producing oils and butter for cosmetics, plants used for essential oils and dyes, and fruits such as avocados and blueberries, suitable for Andean Highlands climates, have brought economic development to remote towns that previously practiced subsistence agriculture and now engage in export-focused agroindustry.
Mr. Wilson Sucaticona and Mr. Raul Mamani, world champions in specialty coffee production, met with a buyer from the renowned Italian roaster illycaffé. Despite being small-scale producers, Mr. Sucaticona and Mr. Mamani directly export their coffee beans to some of the most prominent roasters in the world.
Source: Promperu
As a result of this green revolution, Peruvian agriculture exports have soared from USD 469 million in 1994 to approximately USD 10 billion in 2023, making an impressive growth of 2,064.2%.
Peru, which in 1990 was considered an unviable country, has been transformed, embarking on a path of growth, development, and prosperity. This remarkable progress is attributed to accurate economic policies, modern agrarian regulations, and the industriousness of its people. Despite the persistent involvement of the government in corruption scandals and displays of near-total incapacity, the country has moved forward. Certain government agencies, such as those responsible for Foreign Trade, Agriculture, Mining, Treasury, and the Central Bank, stand out as exceptions. These agencies boast professional teams comparable to the most competitive government agencies worldwide.
It often seems as if there are two countries: one, where the government engages in corruption, and another, where the modern, innovative, and successful private sector competes globally, generating employment, foreign currency, and taxes.
A common saying in Peru is: “The private sector and the economy run on automatic, regardless of the government’s performance”.
What is missing?
- Modernize the government: If the government utilized tax resources appropriately, Peru could reach an even higher level of development.
- Integrate a significant number of small farmers into the agro-export value chain, assisting them in adopting modern and more profitable agricultural practices, focusing on farmers in remote areas of the Andean Highlands and the Amazon Rainforest.
- Improve Agricultural Health: It is crucial to control or eliminate pests that affect Peruvian fields to gain access to more international markets. For instance, Peru can export Hass avocados to the U.S.: because their thick peel does not host the “fruit fly” Anastrepha fraterculus. Conversely, despite its extraordinary flavor and aroma, Peru cannot export the Green Skin avocado to the U.S. -because its thin peel could host the “fruit fly”. Cultivating many fruits and vegetables requires stringent sanitary controls, it is the government’s responsibility to implement these measures.
There is no doubt that the green revolution will continue to bring greater satisfaction and prosperity to Peru and its people.
New York, December 11th, 2024
References:
https://es.wikipedia.org/wiki/Historia_de_la_Agricultura_en_el_Per%C3%BA
https://agraria.pe/columna/la-sierra-tiene-potencial-agricola-ganadero-forestal-y-pasti-19049