Agricultural Policy Monitoring and Evaluation 2026

23. Peru

Main findings

Support to agriculture

Peru’s Producer Support Estimate (PSE) declined significantly from 23.7% in 2000‑02 to 6% in 2023-25, well below the OECD average. Market price support (MPS) dominates Peru’s producer support and in 2023-25 represented around 80% of the PSE.1 It was generated mainly by the Peruvian price band system for rice, yellow maize, sugar and milk. The remaining 20% of the PSE comprises budgetary support, primarily payments based on input use (16%, notably for on farm irrigation infrastructure), with small shares for emergency assistance (1%) and environmental services (1%).

Consistent with this decline, the producer Nominal Protection Coefficient (NPC) fell from 1.32 in 2000‑02 (indicating that domestic prices on average were 32% above world prices) to 1.05 in 2023‑25, pointing to reduced price distortions and a stronger role for market signals. The reductions in PSE and NPC reflect Peru’s trade liberalisation strategy since the 1990s, including the dismantling of border protection and price controls, as well as the signing of multiple free trade agreements. Although overall support has declined, MPS remains the dominant component of PSE.

Consumer support in Peru is mainly provided through targeted food assistance programmes such as Qali Warma, Cuna Más and Glass of Milk. Despite these programmes, the Consumer Support Estimate (CSE) has been negative throughout the period analysed, indicating that overall, agricultural and food policies effectively taxed consumers. The Total Support Estimate (TSE) declined from 2.2% of GDP in 2000-02 to 1.1% in 2023-25, above the OECD average, and has remained relatively stable over the past two decades.

Key policy changes in 2025-26

The new Law No. 32434 (September 2025) focuses on modernising agriculture through greater public investments in infrastructure and the formalisation of agricultural land property rights and employment. It also promotes cooperatives and associative value chains. The new 2025 National Public Investment Policy Guidelines prioritise climate‑resilient infrastructure and the use of agroclimatic information platforms to reduce production risks. In 2025, institutional reforms emphasised producer associations, access to finance and insurance, and greater land and labour formalisation among smallholders.

A large‑scale irrigation investment programme was approved by 15 departments targeting more than 1.2 million hectares through infrastructure upgrades, advanced technologies and farmer training. Implementation in 2025 and early 2026 focused on project structuring, procurement and initial construction phases supported by the national agricultural budget and complementary irrigation schemes.

In 2025, MIDAGRI partnered with SERFOR to accelerate the process of land titling in areas overlapping with Permanent Production Forests, particularly in the Amazon region, and in early 2026, advanced implementation and updating of the National Agricultural Policy 2021‑2030 within the framework of the Country Vision to 2050.

In 2025, AGROMERCADO strengthened its operational role, focusing more on promoting value addition, facilitating certification processes, enhancing market intelligence, and improving access to both domestic and export markets. In parallel, AGRORURAL scaled up support instruments for vulnerable producers, including access to financing mechanisms such as seed capital, revolving funds, and community-based financial schemes. Lastly, trade policy focused on deepening existing partnerships, with progress towards an FTA with India, an upgraded agreement with Thailand and with the People’s Republic of China (hereafter “China”), and the signing of a Comprehensive Economic Partnership Agreement with Indonesia in 2025.

Assessment and recommendations

• Prioritising long-term structural reform by increasing public investments and expanding the financial capacity of key institutions will help create an enabling environment for the sustainable development of agriculture. Policies should prioritise funding for key public goods such as rural and irrigation infrastructure, extension services, animal and plant health, agricultural innovation, and market information, particularly for subsistence and small-scale farmers.

• Accelerate and simplify land registration and titling, while strengthening land rights, particularly for Indigenous Peoples, and develop a modern land registry for agricultural and forest land. Informality remains widespread in Peru’s agricultural sector, which limits access to credit, public programmes, existing support instruments, markets, and sustainability initiatives. More broadly, Peru needs to develop a comprehensive, regionally tailored strategy to formalise land and agricultural employment.

• Strengthen private sector engagement and consolidate governance platforms to align agricultural innovation with national priorities and international standards. A coherent, multi-level governance framework, supported by participatory approaches and stable leadership, will be essential to reduce fragmentation and drive a resilient agricultural transformation.

• Prioritise conserving and restoring ecosystems, while strengthening governance, policies and investment to curb agriculture-driven deforestation and protect biodiversity, forests and water resources. At the same time, scaling up climate adaptation through targeted investments against droughts, floods and land degradation will be critical to build a diversified, environmentally sustainable and resilient agricultural sector.

• Expand and integrate local, regional and national food supply chains through targeted investments in transport infrastructure and stronger urban–rural linkages, building on and extending existing logistics corridors. Strengthened collaboration among public authorities, farmers and local communities will be essential to create more resilient, inclusive and adaptable food systems.

Key indicators on agricultural support

Table 23.1. Peru: Estimates of support to agriculture

Million USD

	2000-02	2023-25	2023	2024	2025p
Total value of production (at farm gate)	4 175	24 973	22 619	24 631	27 668
of which: share of MPS commodities (%)	73.55	72.47	72.99	73.80	70.62
Total value of consumption (at farm gate)	4 278	22 406	21 210	22 439	23 570
Producer Support Estimate (PSE)	994	1 639	1 738	1 197	1 982
Support based on commodity output	868	1 048	1 103	846	1 196
Market price support¹	868	1 048	1 103	846	1 196
Positive market price support	893	1 205	1 225	1 013	1 376
Negative market price support	-26	-157	-123	-167	-180
Payments based on output	0	0	0	0	0
Payments based on input use	121	493	442	318	720
Based on variable input use	16	89	88	68	111
with input constraints	16	89	88	68	111
Based on fixed capital formation	90	290	246	173	451
with input constraints	90	290	246	173	451
Based on on-farm services	16	115	108	77	159
with input constraints	16	115	108	77	159
Payments based on current A/An/R/I, production required	5	77	178	14	40
Based on Receipts / Income	0	0	0	0	0
Based on Area planted / Animal numbers	5	77	178	14	40
with input constraints	5	77	178	14	40
Payments based on non-current A/An/R/I, production required	0	0	0	0	0
Payments based on non-current A/An/R/I, production not required	0	0	0	0	0
With variable payment rates	0	0	0	0	0
with commodity exceptions	0	0	0	0	0
With fixed payment rates	0	0	0	0	0
with commodity exceptions	0	0	0	0	0
Payments based on non-commodity criteria	0	20	17	19	25
Based on long-term resource retirement	0	2	1	2	5
Based on a specific non-commodity output	0	0	0	0	0
Based on other non-commodity criteria	0	18	15	17	21
Miscellaneous payments	0	0	0	0	0
Percentage PSE (%)	23.10	6.40	7.47	4.79	6.97
Producer NPC (coeff.)	1.32	1.05	1.06	1.05	1.06
Producer NAC (coeff.)	1.30	1.07	1.08	1.05	1.07
General Services Support Estimate (GSSE)	132	700	577	397	1 125
Agricultural knowledge and innovation system	60	255	162	178	427
Inspection and control	52	106	97	81	139
Development and maintenance of infrastructure	19	315	292	128	524
Marketing and promotion	2	24	26	10	34
Cost of public stockholding	0	0	0	0	0
Miscellaneous	0	0	0	0	0
Percentage GSSE (% of TSE)	11.18	21.03	17.99	15.68	26.88
Consumer Support Estimate (CSE)	-1 039	-1 077	-921	-1 115	-1 194
Transfers to producers from consumers	-1 001	-1 265	-1 261	-1 093	-1 443
Other transfers from consumers	-213	-982	-698	-1 191	-1 058
Transfers to consumers from taxpayers	59	970	891	940	1 078
Excess feed cost	117	201	147	229	228
Percentage CSE (%)	-24.62	-5.02	-4.53	-5.19	-5.31
Consumer NPC (coeff.)	1.40	1.11	1.10	1.11	1.12
Consumer NAC (coeff.)	1.33	1.05	1.05	1.05	1.06
Total Support Estimate (TSE)	1 185	3 308	3 206	2 534	4 185
Transfers from consumers	1 214	2 248	1 959	2 284	2 500
Transfers from taxpayers	184	2 043	1 945	1 441	2 742
Budget revenues	-213	-982	-698	-1 191	-1 058
Percentage TSE (% of GDP)	2.24	1.12	1.20	0.88	1.27
Total Budgetary Support Estimate (TBSE)	317	2 260	2 103	1 688	2 988
Percentage TBSE (% of GDP)	0.60	0.76	0.79	0.58	0.91
GDP deflator (2000-02 = 100)	100	229	217	228	241
Exchange rate (national currency per USD)	3.50	3.69	3.74	3.75	3.57

.. Not available

Note: p: provisional. NPC: Nominal Protection Coefficient. NAC: Nominal Assistance Coefficient.

A/An/R/I: Area planted/Animal numbers/Receipts/Income.

1. Market Price Support (MPS) is net of producer levies and excess feed cost. MPS commodities for Peru are: rice, maize, potatoes, avocados, grapes, asparagus, mandarins, blueberries, bananas, coffee, cocoa beans, palm oil, sugar, milk, beef and veal, poultry, pigmeat and eggs.

Source: OECD (2026), “Producer and Consumer Support Estimates”, OECD Agricultural policy monitoring (database), https://data-explorer.oecd.org/.

Policy landscape

Peru’s agricultural policies are centred on promoting the development of small-scale farmers, while strengthening and expanding the export-oriented agricultural sector. The country’s main policy framework, the National Agricultural Policy 2021-2030, focuses on the challenges faced by small-scale agricultural producers. The policy has three key objectives: increasing producers’ integration into value chains. facilitating the transition from subsistence to commercial farming and promoting sustainable natural resource management. The Ministry of Agricultural Development and Irrigation (MIDAGRI) is Peru’s lead authority for the agricultural sector, responsible for designing and implementing agricultural policies. Its mandate covers the management of agricultural land, agriculture and livestock activities, forest resources and biodiversity, as well as animal and plant health, research, extension, and technology transfer services.

For the export-oriented sector, the public sector acts as an enabler of agricultural export development through investments in GSSE, such as in infrastructure on irrigation, road and port infrastructure projects, improvements in logistics chain infrastructure, maintenance of the animal and plant health system, and trade promotion. Furthermore, Peru’s tax framework provides targeted incentives to promote export-oriented agriculture under the Agricultural Promotion Law (27360). The law provides tax benefits such as reduced income tax rates and a special labour regime tailored to the specific demands of agricultural work, such as seasonality and daily work hours.

The AGRORURAL programme focuses on improving agricultural and livestock productivity and reducing rural poverty among small-scale and vulnerable producers, particularly in the Sierra and Selva regions. AGRORURAL provides input subsidies, on-farm irrigation infrastructure, technical assistance, capacity building, risk reduction measures, and support for value chain integration. It also promotes natural resource management, disaster risk mitigation, such as compensation for damages or agricultural infrastructure reconstruction, and access to financing mechanisms such as seed capital, revolving funds and community banks, often in co-financing arrangements with international partners.

The PSI provides support for on-farm irrigation systems, rehabilitation and improvement of irrigation infrastructure, strengthening of water user organisations, and promotion of modern irrigation technologies. PSI operates through a shared financing model involving farmers, user organisations, and the state.

Peru’s programme for competitiveness enhancement, AGROIDEAS, delivers support to organised small and medium farmers through co-financed business plans that combine non‑reimbursable grants with beneficiary contributions for three main types of investments: modern and environmentally sustainable technologies; professional services for business and organisational management; and conversion to higher value or more sustainable crops. The programme includes a dedicated budget component targeting women farmers.

AGROMERCADO, the commercial arm of MIDAGRI, delivers support by directly linking small and medium agricultural producers to domestic and export markets through coordinated commercial services and technical assistance. Its services include market information and research, trade promotion support, training and technical assistance, development of productive and post-harvest infrastructure projects, support for certification and value addition, and coordination of financial tools across agricultural value chains.

AGROBANCO is Peru’s public agricultural development bank. Its mandate is to improve access to credit and financial services for agricultural producers, with a strong focus on small and medium-scale farmers. AGROBANCO provides working capital, investment and marketing loans at preferential rates, individual and associative credit lines, and specialised products such as credit for women farmers. It also implements debt restructuring and write-offs, and channels subsidised interest rate support through dedicated public funds.

The Catastrophic Agricultural Insurance (SAC) is a publicly funded scheme that provides basic protection to smallholders in vulnerable regions, offering fixed compensation per hectare for crop losses caused by climatic and natural hazards. Complementing this, the Agricultural Insurance programme (SAGRO) targets more commercially oriented small farmers (up to 10 hectares) with subsidised insurance products, covering crops and livestock through a premium subsidy of around 80%. Together, SAC and SAGRO form a two-tier system: SAC ensures universal, minimum risk coverage for the most vulnerable, while SAGRO supports broader risk management and market integration for small-scale commercial producers.

Peru’s main trade-related policy instrument is the Peruvian Price Band System (PPBS). The PPBS applies to four product groups, including rice, yellow maize, sugar, and milk powder, and is designed to stabilise domestic prices in the face of short-term volatility in international markets. It operates through a variable tariff mechanism, raising the ad-valorem tariff when the global price is below a predefined floor price level and lowering it to zero when the international price is above a predefined ceiling price. Through these automatic adjustments, either import surcharges or tariff rebates, the system seeks to cushion domestic markets from external price fluctuations. In practice, the application of variable duties has been infrequent since its inception.

Peru’s network of bilateral and regional trade agreements (around 53 countries including 27 of the EU) underpins its trade policy framework. Approximately 90% of agricultural export value is destined for countries with which Peru has an active trade agreement. Major partners include the United States, China, the European Union, and CPTPP members.

Recent policy developments

Domestic policy developments in 2025-26

In September 2025, Law No. 32434 strengthened the agricultural policy framework by promoting formalisation, associative production models and increased investment in infrastructure, reflected in expanded support to producer organisations and the scaling-up of irrigation and rural infrastructure projects. In parallel, the National Public Investment Policy Guidelines introduced stronger project requirements, including climate-risk screening, prioritisation of climate‑resilient infrastructure, and the integration of agroclimatic information tools into agricultural decision‑making. Together, these reforms are shifting programme delivery towards more structured investment planning, sustainability criteria, and data‑driven, market-oriented support for producers.

In 2025, MIDAGRI’s mandate was expanded to strengthen agricultural development, irrigation and water management, and family farming areas. This led to institutional reforms focused on strengthening producer associations, improving access to finance and insurance, and promoting formalisation, particularly among smallholders.

A large-scale irrigation investment package covering projects in 15 departments was approved in 2025. This investment package aims to improve and expand irrigation across more than 1.2 million hectares through infrastructure development, adoption of advanced technologies, and farmer training. MIDAGRI also partnered with SERFOR to launch a joint programme to accelerate the titling or providing legal property rights of Indigenous lands in areas overlapping with Permanent Production Forests, with a focus on native communities in the Amazon region.

At the beginning of 2026, MIDAGRI advanced the implementation of the National Agricultural Policy 2021‑2030 by scaling up its operational rollout across regions and stakeholder groups, while initiating a formal update of the policy framework in response to emerging challenges such as climate risk and evolving market requirements for sustainability. This process included wider communication and rollout of the policy throughout all government levels and producer organisations, and is aligned with the National Strategic Development Plan to 2050.

In 2025, AGROMERCADO strengthened its operational role through activities focused on promoting value addition, facilitating certification processes, enhancing market intelligence, and improving access to both domestic and export markets. In parallel, AGRORURAL scaled up support instruments for vulnerable producers, including access to financing mechanisms such as seed capital, revolving funds, and community-based financial schemes, increasingly delivered through co-financing arrangements with international partners. Together, these changes reflect a shift towards more structured, market-oriented support and expanded access to finance for small-scale farmers.

The role of subnational governments in agriculture was expanded by Law No. 32513 (December 2025), which authorises the use of Canon resources like mining, fishing, and forestry for land formalisation and disaster prevention, strengthening local capacity in land governance and risk management. Furthermore, policy co-ordination was further reinforced through the continued rollout of Regional Management and Articulation Offices (OGAR), which function as integrated service hubs. Together, these changes improve the delivery of agricultural policies through improved alignment between national, regional, and local agricultural interventions.

Trade policy developments in 2025-26

In November 2024, a renegotiated free trade agreement (FTA) with China was signed. Pending ratification by both parties, the agreement is expected to enter into force in 2026. This renegotiated FTA focused less on cutting tariffs and more on making agricultural trade smoother and faster. Since most Peruvian agro-food exports already enjoyed low or zero tariffs under the original agreement, the upgrade mainly improved sanitary and phytosanitary (SPS) rules, customs procedures, and product approval systems. This is especially important for products such as blueberries, grapes, avocados, mangoes, and seafood. The updated agreement also expanded phytosanitary access for additional Peruvian products, including frozen fruits, nuts, pork, and beef, while improving cooperation on food safety and inspections.

In August 2025, a Comprehensive Economic Partnership Agreement (CEPA) with Indonesia was signed, providing for progressive tariff elimination on a large share of bilateral trade and strengthening links with Southeast Asia.

Policy context

Key economic and agricultural statistics

In 2025, Peru had a population of around 34 million people and was an upper-middle-income economy in Latin America. Agriculture plays a relatively important role in the economy, accounting for about 7.3% of GDP in 2024. The sector also remains a major source of employment, representing around 23.4% of total employment. Trade is an important driver of Peru’s economy; in recent years, total trade has represented around 22% of GDP. Agro-food trade represents a significant share of total trade, particularly on the export side (19%), reflecting the strong growth of Peru’s agro-export sector over the past two decades (Table 23.2).

Table 23.2. Peru: Contextual indicators

	Peru		International comparison
	2000*	2024*	2000*	2024*
Economic context			Share in total of all countries
GDP (billion USD in PPPs)	133	609	0.3%	0.4%
Population (million)	27	34	0.6%	0.6%
Land area (thousand km2)	1 280	1 280	1.5%	1.5%
Agricultural area (AA) (thousand ha)	22 918	24 386	0.8%	0.8%
			All countries1
Population density (inhabitants/km2)	21	27	52	64
GDP per capita (USD in PPPs)	5 012	17 802	9 508	31 740
Trade as % of GDP	13.3	22.3	12.3	15.0
Agriculture in the economy			All countries1
Agriculture in GDP (%)	8.1	7.3	3.0	3.6
Agriculture share in employment (%)	31.2	23.4	-	-
Agro-food exports (% of total exports)	17.7	19.2	6.4	8.3
Agro-food imports (% of total imports)	12.4	12.3	6.1	7.5
Characteristics of the agricultural sector			All countries1
Crop in total agricultural production (%)	66.9	70.7	62.1	60.4
Livestock in total agricultural production (%)	33.1	29.3	37.9	39.6
Share of arable land in AA (%)	18.2	16.1	33.0	34.0

Note: *or closest available year.

1. Average of all countries covered in this report.

Sources: OECD statistical databases; International Labour Organisation (ILO); UN Comtrade; World Bank, WDI; FAO database and national data.

Over 2000-25, Peru experienced generally strong economic growth, with real GDP peaking at about 8-9% in the 2000s, slowing during the 2009 global crisis, and stabilising at around 2-3% toward the end of the period following a sharp contraction in 2020 and a brief rebound in 2021. Inflation remained low for most of 2000-19, typically within the 1-3% range, but rose markedly in 2021-22 to around 7-8% due to global price pressures, before easing back toward 2-3% thereafter. Unemployment was relatively stable at 3-5% before the pandemic, increased sharply in 2020, and declined gradually during the recovery, remaining slightly above pre-pandemic levels by 2025.

Figure 23.5A shows a strong and sustained expansion of Peru’s agro-food trade, driven mainly by exports. Agro-food exports rose steadily from around USD 1 billion in 2000 to about USD 14 billion in 2024, reflecting the rapid growth of export‑oriented agriculture. Imports also increased, from less than USD 1 billion to roughly USD 6-7 billion, but at a slower pace. As a result, Peru’s agro-food trade balance remained positive and widened over time, particularly after 2015 and again after 2020. Peru’s agro-food exports in 2024 were dominated by primary products for consumption, which accounted for just over half of total exports, reflecting the strong role of fresh and minimally processed products in export markets. Processed products for industry and consumption together represented a smaller share. In contrast, agro-food imports were largely composed of processed and primary products for industrial use, together accounting for roughly two-thirds of imports, highlighting Peru’s reliance on imported inputs for agro-industrial processing and food manufacturing (Figure 23.5B).

Figure 23.6 shows that Peru’s agricultural output growth over 2014-23 was higher than the global average and was driven primarily by total factor productivity (TFP) gains. Productivity improvements accounted for a substantial share of output growth, while additional contributions came from increased use of primary factors and intermediate inputs. In comparison, global agricultural output growth was more modest and relied relatively more on input accumulation, indicating that Peru’s performance over the period was more strongly underpinned by efficiency gains than the world average. For the period 2014‑23, agricultural GHG emissions represent 27% of the country’s total, which is higher than the OECD average (10.3%), while agriculture only represents 0.8% of total energy use in the country for the same period (Table 23.3).

Table 23.3. Peru: Productivity and environmental indicators

	Peru		International comparison
	1991-2000	2014-23	1991-2000	2014-23
			World
TFP annual growth rate (%)	2.6%	1.8%	1.8%	0.8%
			OECD average
Environmental indicators	2000*	2024*	2000*	2024*
Nitrogen balance, kg/ha	..	..	32.3	29.0
Phosphorus balance, kg/ha	..	..	3.3	2.3
Agriculture share of total energy use (%)	2.8	0.8	1.7	2.0
Agriculture share of GHG emissions (%)	36.3	27.0	8.7	10.3
Share of irrigated land in AA (%)	8.8	10.6
Share of agriculture in water abstractions (%)	..	..	46.1	47.7
Water stress indicator	..	..

Note: * or closest available year.

Sources: USDA Economic Research Service, Agricultural Productivity database; OECD statistical databases; FAO database and national data.

Historical trends in agricultural policies

Peru’s agrarian reforms of the 1960s, culminating in Decree Law No. 17716 of 1969, marked a decisive break from a system of highly concentrated, colonial‑era land ownership that excluded Indigenous and rural communities. The reform dismantled large estates and reorganised agriculture around cooperatives and peasant enterprises, redistributing approximately 9.5 million ha, about 85% of privately held agricultural land, to over 400 000 families, mainly in the Coast and Sierra. Its objectives were to stimulate agricultural growth, reduce inequality, strengthen internal markets, and promote rural agro‑industrial development.

The reform was embedded in a broader socio‑economic strategy that combined land redistribution with credit and technical assistance and introduced important institutional changes. Large estates were converted into co‑operatives (CAPs and SAIS) to preserve scale and efficiency, a specialised agrarian judiciary (Fuero Agrario) was created, land rental was restricted, and farmers were required to participate directly in farm management and profits. However, the collapse of many co-operatives during the 1980s led to land fragmentation, declining productivity, and reduced profitability, which ultimately constrained the long‑term effectiveness of the agrarian reform.

From the 1980s, Peru undertook a major policy shift toward economic liberalisation, reversing key elements of the agrarian reforms of the 1960s and 1970s. Agricultural co‑operatives were dismantled, private land markets were restored, and policy priorities moved toward efficiency, competitiveness and agribusiness development, particularly to promote agricultural exports. These changes mainly benefited export-oriented production along the coast, while public spending on rural areas and agricultural extension services declined sharply.

Institutional and legal reforms reinforced this reorientation. The Agrarian Reform Law was repealed, transforming the Ministry of Agriculture into a regulatory and advisory body and eliminating direct state intervention in production and marketing. Financing structures were reconfigured through the closure of the agricultural development bank and the creation of rural savings and credit banks. Land tenure reforms strengthened legal security, facilitated individual ownership, and enabled the free transfer and formalisation of land, laying the groundwork for a market-based land system.

From the 2000s onward, policy frameworks increasingly supported agro export growth and private investment, notably through the Agricultural Promotion Law (27360), which introduced tax, labour and investment incentives for export-oriented agriculture. At the same time, newer policy initiatives sought to rebalance the model by addressing social inclusion and rural development, including the National Agreement (2002), Agricultural Policy Guidelines (2014), and recent laws to strengthen producer associativity, agricultural co‑operatives, and family farming, signalling a gradual shift toward combining competitiveness with inclusive agricultural development.

Peru’s current agricultural policy framework is built around two complementary priorities: supporting the development and inclusion of small-scale farmers, while continuing to consolidate and expand the export-oriented agricultural sector. Efforts to address the constraints faced by small producers are anchored in the National Agricultural Policy 2021‑2030, which seeks to raise incomes and improve livelihoods by enhancing farm competitiveness, strengthening service delivery and institutional support, and increasing agriculture’s overall contribution to national economic and social development.

Table 23.4. Peru: Agricultural policy trends

Period	Framework	Changes in agricultural policies
Prior to 1980s	Import substitution model	Strong state intervention and protection of domestic agriculture; food self-sufficiency strategy; price controls and guaranteed minimum prices; large input subsidies (fertiliser, irrigation, credit); state-led agrarian reform (1969) and creation of cooperatives; high tariffs and quantitative import restrictions; state marketing boards controlling procurement and distribution; expansion of public agricultural research and extension systems. Key institutions strengthened/created: Ministry of Agriculture (central planning role); agrarian reform cooperatives (CAPs and SAIS); Banco Agrario (state agricultural credit); public irrigation authorities; early agricultural research bodies (precursors to INIA).
1980-2010	Trade liberalisation	Structural adjustment reforms; reduction of tariffs and elimination of quantitative restrictions; deregulation of agricultural markets; removal or reduction of generalised subsidies; promotion of agro-exports; privatisation or dismantling of state marketing boards; encouragement of private investment; decentralisation of agricultural governance; compliance with WTO agreements; increased integration into global value chains. Peru’s tax framework promotes export-oriented agriculture under the Agricultural Promotion Law (27360), which reduces income tax rates and provides a special labour regime tailored to the unique demands of agricultural work, such as seasonality and daily work hours. This Law has been extended until 2031. Key institutions created/restructured: INIA (Instituto Nacional de Innovación Agraria) strengthened as an autonomous public research body; SENASA (Servicio Nacional de Sanidad Agraria) strengthened (created 1992) to ensure sanitary and phytosanitary standards for exports; AGROBANCO (Banco Agropecuario) created in 2001 to provide agricultural credit after the closure of Banco Agrario; regional governments gained agricultural responsibilities under decentralisation reforms.
2010- present	Reforms to target and tailor direct payments to smallholders	Shift from broad subsidies to targeted income support and productivity programs; financial inclusion strategies; climate adaptation and water governance reforms; support to smallholder integration into markets; sustainability and environmental regulation; strengthening farmer organisations (cooperatives and producer associations); public–private partnerships in irrigation and agro-export infrastructure. Key institutions created/restructured: ANA (Autoridad Nacional del Agua) created in 2008 (strengthened in the 2010s) to manage water resources under integrated water resource management; consolidation of AGROBANCO with restructured mandate to focus on smallholders; strengthening of SENASA for export compliance and food safety; expansion of INIA’s innovation and technology-transfer role; creation/strengthening of AGRORURAL, AGROIDEAS, PIS, AGROMERCADO, reflecting expanded rural development focus.

Peru provides relatively low levels of support to its agricultural sector, and this support has generally declined over time. However, in 2023 and 2024 there was a notable increase, mainly driven by higher market price support (MPS). Until the late 1990s, the Peruvian Producer Support Estimate (PSE) consisted largely of market price support. After this period, the share of market price support decreased while budgetary support increased. This trend continued until 2016, when market price support and input-based support once again became the main components of producer support (Figure 23.7).

Note

← 1.  The agricultural products on which Peru’s commodity MPS calculations are based include rice, maize, potatoes, avocado, grapes, asparagus, mandarins and clementines, blueberries, bananas, coffee, cocoa, palm oil, sugar, milk, beef, pig meat, poultry and eggs.