Policies for the Future of Farming and Food in Peru

Assessment and policy recommendations

Assessment

Peru has made significant socio-economic progress, but disparities remain

Progress has been unequal between urban and rural areas

Peru has made notable socio-economic strides over the past two decades, enabling it to become an upper-middle-income country. Following a period of macroeconomic instability in the late 20th century, the country implemented a series of market-oriented and trade-open reforms that fostered sustained growth, including in the agricultural sector. Alongside GDP growth, the country’s sound fiscal and monetary policy, expansion of basic services and infrastructure have yielded progress in employment, poverty reduction, and public service availability.

However, key challenges remain, in particular an urban-rural divide across many dimensions, including poverty, access to public services, infrastructure development, employment, income, and food security. Most rural households depend on agricultural income and subsistence farming.

The agricultural sector is of strategic importance for Peru, but its structural transformation remains challenging

The agricultural sector is characterised by buoyant export-oriented agriculture and a large number of small-scale subsistence farms

The dual structure of the farming sector serves distinct roles: on the one hand, small-scale agriculture plays an important role in ensuring food security and is a major source of employment and income in rural areas. On the other hand, the highly technological export-oriented agriculture concentrated in the coastal region has transformed Peru into a leading agro-food exporter for high-value products. This presents a challenge where productive large farms co-exist beside a majority (95.4%) of small-scale farmers. Around 79% of farms are smaller than 5 hectares, and a small group of large farms (0.2%) account for more than half of the country’s agricultural land. The sector faces a low level of land titling or formal land rights, with 74% of agricultural producers not holding a property title.

The vast majority of small-scale farms can be considered subsistence farms, which have limited technologies, limited access to credit, and face market exclusion. Only 33.7% of small-scale producers allocate their production for sale. In addition, the low level of labour and land formality in agriculture hinders the formalisation of the sector and complicates effective land-use management.

Peru has diversified and upgraded its position in global value chains

Transitioning from an agro-food importing country to an agro-food exporting country, Peru has become a key global supplier of fresh grapes, green asparagus, blueberries, avocados and other fruits and vegetables. Peru’s agricultural sector has significantly increased its reliance on foreign demand over the past two decades, whilst the foreign value-added of food exports (21%) is almost double the share seen in the Peruvian economy. The United States is Peru’s main agro-food export market (32.8%).

The agricultural sector faces participation inequalities

While women’s position in the sector has seen improvements concerning education, land ownership and agricultural income, gender disparities persist in all areas. Indigenous Communities remain heavily engaged in agriculture, fisheries and mining sectors, and have the highest labour informality rates. The historical exclusion of Indigenous Peoples from land ownership during the colonial era continues to shape socio-economic outcomes for these communities, underscoring the need to further build on efforts for inclusive rural development strategies. Furthermore, the agricultural sector has significantly aged over the last decade, with a declining share of farmers under the age of 30.

Agricultural policies focus on supporting small-scale subsistence farms, while continuing to facilitate the expansion of the export-oriented sector

Agricultural policy has increased its focus on small-scale farmers

Peru’s agricultural policies are currently oriented around two main areas of action: promoting the development of small-scale farmers while strengthening and continuing to promote the expansion of the agro-export sector. The former aim to address the challenges of poverty, low access to input and output markets, limited access to financial services, and low productivity, among others, faced by subsistence farmers and smallholders. For the latter, the government continues to play the role of enabler by creating conditions that facilitate private sector development. This includes investing in infrastructure (primarily irrigation systems), improving logistics chains, ensuring animal and plant health, and trade promotion, among others.

For the development of small-scale farmers, the National Agricultural Policy 2021-2030 aims to raise incomes and improve livelihoods by increasing farm competitiveness and integrating small-scale farmers into markets, while reducing their subsistence-level farming and enhancing natural resource management for sustainable agricultural growth.

As Peru’s economy has developed, the need for more coherent and effective agricultural policies has grown in importance. Although the government has introduced multiple initiatives to develop the agricultural sector, such as policy frameworks and instruments aimed at addressing bottlenecks, these efforts have not yet been transformative. Most interventions remain small in scale and are generally restricted to predefined groups based on location, producer characteristics, or short-term conditions. Moreover, many initiatives do not address the structural challenges that constrain the sector’s long-term sustainable development, such as the need for substantial investments in general services or public goods. Many policy instruments addressing agriculture in Peru have a restricted impact due to insufficient resources and limited co-ordination among national, regional, and municipal governments. Programmes are often fragmented, scattered across themes and territories, and frequently do not adequately address the needs of the farmers. Limited institutional co‑ordination further undermines the effectiveness of payments, services, and investments, which ultimately reach only a small share of farmers.

Governance challenges are a recurring issue for the agricultural sector

Peru has designed multiple comprehensive policies and strategic plans that address the complex challenges facing the agricultural sector. However, there is scope to improve the implementation of agricultural policies to ensure measurable outcomes. Constraints in institutional capacity, fragmented co‑ordination across ministries, despite the presence of co-ordinating institutions, overlapping mandates, and limited accountability mechanisms contribute to challenges in governance across multiple agricultural policy domains.

Agricultural support is relatively low

In 2022–2024, total support to agriculture (TSE) accounted for 1.1% of GDP, nearly double the OECD average of 0.54%. While this share is below that of Colombia (1.13%) or Korea (1.26%), it exceeds the levels observed in Chile (0.26%), Mexico (0.69%). Peru’s TSE averaged around USD 3 billion per year in 2022-24.

The Producer Support Estimate as measured by the %PSE, during the period 2022-24, was 6.2% of gross farm receipts (%PSE), well below the OECD average of 13.2% and the 12.2% average (from the positive PSE only) for emerging economies. Peru’s support level is comparable to that of the United States (7.1%). Market price support accounted for the bulk of this assistance (82%), mainly through the price band system applied to groups of products of rice, yellow maize, sugar, and milk. The remaining 18% came from budgetary transfers, with most directed toward input subsidies and on-farm services (16%), while smaller amounts were allocated to emergency support (1%) and environmental services (1%). Budgetary transfers in Peru are limited, with half directed to variable input subsidies and fixed capital investments, such as on-farm irrigation, while the other half finances general services. MPS levels have shown an upward trend since the mid-2010s, with sharp decreases after the pandemic in 2021 and 2022, but important rises in 2023-24. MPS is mostly created by the Peruvian Price Band System (PPBS) implemented for rice, maize, sugar and milk. The average percentage of CSE for Peru was estimated at -5.1% during 2022-24, suggesting that consumers were, overall, taxed through agricultural and food policies that increased consumption expenditures by 5%. In addition, the country provides consumer support through food aid programmes targeted at its poorest populations.

There is scope to improve general services (GSSE) for Peru’s agricultural sector. GSSE expressed as a percentage of the value of agricultural production was 2.1% in 2022-24, lower than the OECD average of 3.2% in the same period. This shows that public expenditures for general services have not kept pace with the increase in the value of production. Although the government has increased the budgetary allocations to general services over the years, this has been outpaced by the sector’s growth. Key areas such as extension services, rural infrastructure, land tenure, and marketing infrastructure have received very limited support. Of the funding available, the majority has been allocated to infrastructure development, primarily for irrigation (41%), followed by agricultural knowledge and innovation systems at 34%, and inspection and control services at 18%. In terms of the Total Support Estimate, General Services accounted for approximately 17.4% in 2022-24.

Agricultural productivity gains are driven by export-oriented farms

Since the early 1990s, agricultural output has grown substantially, driven by diversification into high-value export crops. Agricultural productivity levels have seen periods of rapid growth, and although total factor productivity (TFP) growth has moderated in the most recent decade, Peru continues to outperform many regional peers and the OECD average.

Increasing productivity levels are largely attributed to large-scale export-oriented agriculture in the Costa region, reflecting the expansion of high-value crop production and integration into local and international value chains. However, the rest of the country, dominated by small-scale farmers, generally experiences persistently low productivity levels due to limited expansion of technologies, machinery and technical irrigation systems, as well as access to key inputs such as improved seeds, fertiliser and agro-chemicals, and credit. Policies targeting TFP growth via improved efficiency are important, although structural issues in the sector also need to be addressed.

Peru’s agricultural sector is currently characterised by low GHG emission intensity; in fact, considerably lower than that of OECD Members. This represents an important asset to safeguard as the country strives for greater competitiveness. That said, this indicator captures only on-farm emissions and excludes land-use change that is partly resulting from agricultural expansion. Overall, emissions from land use, land use change and forestry (LULUCF) remain the country’s largest source of emissions.

Peru is richly endowed with natural resources that reflect its agricultural potential

Peru is one of the most mega-biodiverse countries in the world, defined by three distinct regions: the desert landscape of the Costa, the mountainous Andean highlands of the Sierra, and the vast Amazon basin of the Selva, which covers over half of the country’s territory. The country is endowed with extensive agricultural land (24.6 million ha) and abundant freshwater resources, making it exceptionally rich in natural resources. The diverse climate and topography permit the cultivation of a wide variety of crops, with Peru being the centre of origin of several crops, most notably potatoes. Peru has taken action to mitigate environmental pressures by designating 22.5% of its land area as protected, higher than the OECD average of 16.9%.

The agricultural sector is responsible for the majority of Peru’s forest loss

While Peru’s overall emissions represent only 0.4% of global GHG emissions, deforestation is the largest contributor to Peru’s greenhouse gas (GHG) emissions, accounting for 43.5%, with the agricultural sector driving an estimated 75% of forest loss. While the emission intensity of agriculture has improved significantly since 2000, with output more than doubling while emissions rose by less than 20%, and has introduced agricultural mitigation measures, these have yet to fully address the indirect drivers of agricultural land expansion. Enteric fermentation stands out as the primary direct emission source (53%) of agricultural emissions, while direct on-farm energy use remains significantly lower in Peru than in OECD countries.

Pressures from agriculture impose environmental pressures related to deforestation, ecosystem degradation, soil erosion and desertification, high water stress, and agrochemical contamination. Simultaneously, the agricultural sector is vulnerable to the impacts of these environmental challenges, most notably the increase in extreme weather events, soil desertification and water stress. Peru is one of the Latin American countries most significantly affected by the El Niño phenomenon. The National Adaptation Plan offers strategic guidance for climate change adaptation planning, implementation and monitoring, complementing the more specific objectives, measures and targets outlined in Peru’s National Determined Contributions (NDCs).

Peru has established a comprehensive monitoring system of land degradation and forest loss. Moreover, the country’s nutrient inputs and surpluses, both phosphorus and nitrogen, remain comparatively low and are generally below the levels of regional peers and OECD averages for comparable metrics.

There is scope to improve water management and investments in view of water stress constraints

Despite Peru’s abundant freshwater resources, these are unevenly distributed, with the coastal region’s higher population density and extensive export-oriented agricultural production contributing to extremely high water stress levels in these areas. Peru’s freshwater withdrawal for agriculture is high (85%) compared to the OECD average (49%). A lack of inter-sectoral co-ordination and limited capacity to set up basin authorities significantly hinders coherent water resource management.

The prevalence of pressurised irrigation infrastructure for small-scale farming is low, and 57% of the country’s existing irrigation and drainage infrastructure is in poor condition. With the majority of farmers relying on rainfed agriculture, the sector is highly susceptible to climate variability and extreme weather events. Recent irrigation programmes have focused on the modernisation and resilience of small-scale farming, with 64% of local governments’ agricultural budgets assigned to water resources development for agriculture in 2023.

Effective monitoring of environmental impacts requires more and better data

Assessing agri-environmental trends and impacts is complicated by a lack of data across many environmental domains, with scope to improve data on the status of soils, ammonia emissions, and water quality. Data monitoring on GHG emissions has become more consistent for the preparation of Peru’s NDC, whilst a comprehensive monitoring system of land degradation and forest loss data has been established. However, the overall availability of data for the assessment of environmental pressures remains to be improved.

The Peruvian agricultural knowledge and innovation system (AKIS) is at a relatively early stage of development

Despite some impressive examples, the lack of investment in R&D&I is hindering Peru’s overall innovation performance

While Peru’s innovation performance shows some impressive examples, it remains overall low. Notably, export-oriented agriculture in the Costa region has greatly benefited from technological advances, leading to improved crop productivity, crop resilience and efficient water management for key products. However, in the Selva and Sierra regions, innovation in the agro-food sector is limited and faces structural challenges, such as low levels of public investment in agricultural research and development and innovation (R&D&I). Peru’s public agricultural research system is led by the National Institute of Agricultural Innovation (INIA), complemented by various national and regional institutions; however, co‑ordination across these entities remains limited. Moreover, significant regional disparities remain in access to innovation, infrastructure and technical assistance.

INIA, in its dual roles as a generator of R&D&I and extension services and as a facilitator of the National Agricultural Innovation System (SNIA), currently demonstrates insufficient capacity to fully meet system objectives. Challenges remain in public-private co‑ordination, territorial leadership, and the adequacy of governance instruments. Institutional capacity is limited, and mechanisms to stimulate private sector engagement are not yet sufficiently developed to support long-term agricultural development. Similarly, Agricultural Experimental Stations (EEAs) face constraints related to their roles, funding, and functions, which restrict their ability to undertake regional research at the necessary scale and to reach a broad base of farmers.

Agricultural extension services would benefit from significant expansion and improvement

The agricultural extension system has low coverage (3.8% of farmers) and, despite the overall focus of budgetary support on general services for the sector, has not received the investment required to meet the sector’s demands. Although Peru’s broadband coverage, internet connectivity and access to agricultural information have seen improvements, the insufficient investment and development of extension services have hindered their impact. Limited infrastructure in rural areas, the geographical dispersion of production units and poor co-ordination among system actors have also contributed to low coverage, most notably for small-scale farmers.

There is insufficient integration of skilled labour in the agricultural sector, amplified by a significant urban-rural divide in educational attainment and professional training opportunities. Peru’s higher education and training systems face persistent challenges in quality, accessibility, infrastructure and alignment with innovation priorities. These issues are compounded in rural areas, where deep educational inequalities hinder the development of future farmers and call for targeted reforms in university governance and extension services to better address local needs.

Co-ordination of the AKIS requires strengthening

Peru’s AKIS operates within a fragmented institutional landscape, marked by limited co‑ordination among public, private, academic, and regional actors. Despite the existence of R&D&I frameworks, inter-institutional collaboration remains limited, and there is scope to improve strategic alignment. The system is further constrained by a sector-driven culture and insufficient leadership, hindered by high staff turnover, resource shortages, and political instability. Private sector engagement remains limited, and governance platforms have suffered from a lack of continuity and effectiveness. Strengthening multi-level, participatory governance and adopting innovative, context-sensitive approaches will be essential to drive a resilient transformation of agriculture in line with international standards and national development priorities.

Challenges in food systems include food insecurity and the need to expand participation in value chains

Value chain development still varies across regions

While value chains in the export sectors and areas are well developed, most farmers in the Sierra and Selva regions face structural barriers to market integration due to underdeveloped road networks and limited transport infrastructure. In these areas, the absence of adequate storage facilities, cold chains, and specialised logistics contributes to high levels of post-harvest food loss, income instability, and increased vulnerability to food insecurity. These logistical constraints also result in long transportation distances between production and urban markets, limiting the links between rural producers and markets. Improvement of small-scale farmers’ position in the value chain could be supported by seeking to increase their currently low participation (7.5%) in co-operatives, producer organisations and other associative forms.

Peru faces a significant challenge of food insecurity

Around 40% of Peru’s population suffers from food insecurity. This is comparatively high in the Latin American region, with underlying issues further exacerbated by the COVID-19 pandemic. Food insecurity and malnutrition are most prevalent in rural areas. Targeted food assistance programmes such as the national school meal programme and conditional cash transfers have shown measurable progress, most notably in chronic child malnutrition. Nonetheless, there is scope to increase the reach and consistency of food security interventions.

Efforts on dietary habits have been put in place

Peru’s urban areas see the opposing issue of obesity, with around 30% of adults being obese or overweight. This trend is lower but increasing in rural areas. The authorities have established a number of policies, such as restrictions on advertising of unhealthy food and beverages, and front-of-package labels, aimed at encouraging healthier diets.

While new regulations have been introduced, improving data is central to addressing food loss and waste

Like many countries, Peru’s capacity to monitor food loss and waste (FLW) reduction goals, evaluate policy actions, and compare their performance against peers is constrained by a lack of FLW data. While efforts are underway, such as regulations facilitating food recovery and donation, their impact to date appears to be limited.

Policy recommendations

This review proposes recommendations on how Peru could improve its policies and practices in the agricultural sector in alignment with OECD best policies and practices. Key recommendations are set out below.

Prioritise agricultural policy efforts toward long-term structural reform

Increase public investments in general services and expand the financial capacity of key institutions

Ensure sufficient financial resources for institutions that create the enabling environment for the sustainable development of agriculture. The total support estimate for agriculture is relatively low, and half of the budgetary transfers component of support is directed to the most beneficial investments for the development of the sector, such as general services. Policy efforts should therefore continue to concentrate on building a strong, comprehensive enabling environment for agriculture, with an emphasis on those strategic investments that remain underprovided. This includes investments in a national system of extension services, strengthened innovation capacity, robust plant and animal health protection and control services, land titling, transport infrastructure, irrigation systems, and market information systems, among others.

Allocate financial resources amongst key institutions. Creating the enabling environment for the sustainable development of the agricultural sector requires expanding the financial capacity of MIDAGRI and its attached institutions, working for the agricultural sector, especially those providing public goods and services in rural areas, such as agricultural infrastructure, extension services, animal and plant health and land titling.

Foster and accelerate formalisation in the sector

Simplify and accelerate the registration and allocation of land titling (land property rights). As around 74% of producers do not hold a property title, it is important to speed up the process of formalisation, while strengthening the protection of land rights, particularly for Indigenous Peoples. Land titling is an important step in combating deforestation, whilst simultaneously incentivising long-term investment in land and better use of land according to sustainability and competitiveness. Titling stimulates structural reform and growth in the agricultural sector, attracts private investment and helps promote the development of rural areas. Peru would benefit from the development of a modern land registry covering agricultural and forest land, and accelerate land categorisation and titling.

Establish a comprehensive strategy to foster the formalisation of the agricultural sector. Peru’s persistent informality in the sector (e.g. agricultural workers) results in the exclusion of most farmers from access to credit, subsidies, employment benefits, market opportunities and training and public programmes. It also obstructs effective sustainability efforts in the sector. A long-term formalisation strategy should include region-tailored outreach.

Strengthen support to smallholder farmers and expand access to finance

Expand microcredit and insurance schemes and finance facilities tailored towards smallholders. This supports farmers in becoming commercially oriented, fuelling the structural transformation of the sector, increasing agricultural productivity and improving employment opportunities. Expanding credit and insurance schemes requires incentivising more financial institutions to develop flexible financial schemes. The government should avoid crowding out financial markets while incentivising the private sector to reach small-scale agriculture, by, for example, covering transaction costs.

Strengthen administrative capacity and co-ordination of policy design and implementation for the agricultural sector

Reform and strengthen the institutional framework for designing and implementing agricultural policies

Ensure programmes, projects, and plans have concrete implementation strategies. Peru’s policy implementation is frequently undermined by limited execution and accountability, leading to a lack of tangible results. Implementation could be strengthened by establishing clear mandates, resources and performance indicators, complemented by integrated monitoring and evaluation systems.

Enhance inter-ministerial co-ordination for agri-food policies. There is a need to adjust communication channels for effective co-ordination and implementation of regulations, strategies and policies. Without co-ordination and proper channels of communication, it is difficult for strategic interventions across the agricultural and food sector to be effective. Current communication channels should be reassessed and improved to foster effective co-ordination.

Harmonise national plans with subnational strategies. A flexible structure of policy design and implementation between national, regional and local governmental levels should be ensured, with harmonised timeframes for budget planning and execution. This is particularly important for the development of national infrastructure planning, where regional and local governments bear the responsibility of implementing infrastructure projects, but face budget execution challenges and misalignments from national plans. While the National Centre of Planning is in charge of this, improved co‑ordination and consistency of national plans with local infrastructure project implementation are needed.

Strengthen the capacity and reach of local governments. Adequate institutional representation at departments and municipalities is needed, with sufficient resources allocated for implementing programmes that go beyond policy cycles. This largely includes providing adequate human and financial capacity to implement agricultural policies and programmes.

Strengthen the evaluation and monitoring stages of the policy cycle

Improve data collection of agri-food indicators. Currently, available statistical data across the agricultural and food systems, including farm-level data, agri-environmental impacts, health indicators and food loss and waste, is limited. Systemising the collection of data is a vital step in improving evidence-based policy formulation and decision-making. This includes building local capacity for monitoring systems based on standardised protocols. Peru should aim to conduct an agricultural census every 10 years; the last census was carried out in 2012.

Establish a coherent system of monitoring Peru’s agricultural policies. There is a need for a systematic evaluation of agricultural and food systems policy performance. Whilst Peru has developed a wide range of comprehensive regulations and policies, the evaluation of their performance is frequently lacking. The involvement of stakeholders in the evaluation process is important to comprehensively identify the outcomes of policies and continuously adapt them to address remaining challenges. It is also important to develop metrics of success to measure progress.

Adopt an integrated policy approach to stimulate productivity, sustainability and resilience in the agro-food sector

Establish a comprehensive strategy to better integrate farmers in the value chain

Target investment for developing value chain infrastructure. Farmers in the Sierra and Selva regions are currently largely excluded from domestic and international markets due to gaps in basic infrastructure. Investment is particularly important for developing road networks, facilitating cold chains and specialised storage and transportation infrastructure in rural areas.

Develop local, regional, and national food supply chains. This requires decreasing transportation distances, creating stronger linkages between urban and rural areas and boosting food supply resilience in rural areas. While Peru has established a logistic corridor network, this needs to be further developed and expanded. Effective collaboration amongst government officials, local communities and farmers is vital to achieve adaptable, sustainable and resilient food systems at local, regional, and national levels.

Encourage farmer organisations or associations. A very low level of farmers’ association participation among small-scale farmers is observed. Assess current and previous measures to promote different types of organisations to understand their low rate of success and inform future interventions. Various forms of associations or public-private co-operation schemes, such as co‑operatives, can be promoted. Promotional campaigns can be used to increase awareness of the benefits of participating in associative forms and formalisation. The national farmers registry can be useful in this case.

Conserve, restore, and sustainably use Peru’s unique environment

Strengthen governance, policies, and investments to effectively curb deforestation associated with agriculture

Conserve Peru’s rich biodiversity, forest cover, and water resources to promote a diversified and environmentally sustainable and resilient agricultural sector. Strengthen climate resilience in agriculture by investing in adaptation strategies to mitigate the impacts of droughts, floods, desertification, wildfires, and other climate-related risks.

Strengthen forest land property rights. This is closely linked to the need to simplify and accelerate the allocation of land rights. Most deforestation occurs on land that has not received any territorial categorisation. Land rights incentivise owners, including farmers, to invest in the profitability and sustainability of their own land and can thus disincentivise the expansion of area into forested land. Furthermore, it sets out clear, legally enforceable boundaries and allocates jurisdictions.

Implement stronger policies and incentives to curb agriculture-driven deforestation in the Amazon, reducing its role as the leading source of GHG emissions and biodiversity loss. Strengthen land-use management by integrating land-use change into the agricultural sector’s climate change mitigation strategy, reinforcing forest property rights, and improving monitoring and enforcement to combat illegal deforestation.

Improve co‑ordination within MIDAGRI by clarifying mandates, reducing institutional overlaps, and enhancing inter-agency collaboration for more effective agricultural and forestry governance. Ensure the effective implementation of Peru’s agri-environmental laws and policy instruments by closing regulatory gaps, securing adequate funding, and strengthening monitoring and enforcement mechanisms. Moreover, it would be advisable to develop a comprehensive forest management strategy by re-evaluating and clearly defining its cross-sectoral objectives and strategies to ensure that addressing deforestation is considered systematically in agricultural policy design.

Implement strict monitoring and enforcement systems, most importantly against the widespread issue of illegal logging, and coca activities. Significant investment in human and financial resources is encouraged to enforce an effective monitoring system, accompanied by adequate penalties to combat illegal deforestation and ensure that its comprehensive legal framework is implemented.

Improve information and assessment of agri-environmental impacts. A valuable effort has begun to systematise the collection of data for deforestation. This needs to be extended to other environmental issues, such as soil degradation, water quality and ammonia emissions. Further investment is also required in using these data to monitor and analyse policy performance.

Invest in off-farm irrigation systems and strengthen water management

Expand coverage of off-farm climate-smart irrigation systems. Invest in the rehabilitation of existing off-farm irrigation systems, as well as the expansion of off-farm climate-smart irrigation systems across the country, to reduce pressure on freshwater resources and increase agricultural water-use efficiency. Creating incentives for operation and maintenance is important to ensure widespread coverage and increase farm resilience. All this, while addressing regional natural resource challenges by adopting targeted sustainability measures, focusing on areas where intensive water use threatens already stressed ecosystems.

Strengthen regulatory oversight of water management. Water supply, water storage and water usage need to be effectively monitored and regulated through harmonised institutional co-ordination. Long-term water demand assessments should inform future investment decisions. Caution should be paid to preferential water rates.

Encourage the adoption of sustainable farming practices

Expand economic incentives for ecosystem services schemes. Implementing payment for ecosystem services, particularly in the Selva and Sierra regions, that reward farmers for implementing sustainable agricultural practices, can improve the environmental performance of the sector. Moreover, Peru should combine such schemes with knowledge transfer measures, whereby advisory services raise farmer awareness of environmental pressures, particularly on deforestation and biodiversity loss, and provide advice on best practices and compliance with environmental standards.

Focus on productivity growth and improved input use efficiency. Whilst the use of agro-chemical inputs remains relatively low, and organic fertiliser (guano) is widely used, input intensification is expected as the sector becomes more competitive. The low rates of farmers adopting best practices for fertilisers and pesticides highlight the need for comprehensive training and support across the country. More efforts to implement good agricultural practices (GAP) via technical assistance and incentives can be used.

Strengthen climate mitigation and adaptation, and improve risk management of farmers

Establish a comprehensive policy package to mitigate agricultural GHG emissions. Most notably, prioritising efficiency in the livestock sector to reduce the emissions from enteric fermentation, the primary contributor. This includes scaling up extension services for best practices in grazing and herd management, introducing economic incentives to reward farmers who implement methane-reduction measures and fostering R&D&I of enteric methane-reduction technologies.

Prioritise climate adaptation in an inclusive strategy. A broader adoption of risk management instruments in agriculture is crucial to limiting the adverse effects of natural disasters on agricultural production. Support measures for insurance for crop and animal production should be complemented with an emphasis on increasing prevention and preparedness across all governmental levels. This should include resilience to short-term shocks, adaptive capacity through medium-term changes in behaviour, and transformative capacity to facilitate the sector’s ability to undergo structural change.

Expand and facilitate the adoption of risk management tools. As a country highly vulnerable to climate change, it is vital to enhance information and support to farmers with localised insights on climate risks- such as El Niño events, water stress and soil degradation- and promote early adoption of resilient practices. This can be done through agricultural extension services aided by incentives, focusing on efficient irrigation systems and improved soil conservation practices. Prioritising resilient infrastructure in areas most exposed to floods, droughts, and glacier loss is important.

Invest in a strong and effective agricultural innovation system

Greater public investments in the AKIS are needed

Establish a budgetary plan for allocating government funds to R&D&I in the agricultural sector to ensure the continued investment and development of the AKIS. Investment in agricultural innovation would need to be scaled up through direct public funding, but also by offering incentives that attract private-sector participation. This should be based on demand-driven mechanisms, whereby funds are allocated based on the needs of farmers and accounting for regional differences.

Strengthen Peru’s public agricultural research system by increasing financial allocations to the National Institute of Agricultural Innovation (INIA) and improving co‑ordination with regional institutions. Enhanced funding and collaboration should be prioritised as this helps to reduce regional disparities in access to innovation, particularly in technology transfer, technical assistance, and technology adoption. The role of Agricultural Experimental Stations (EEAs) would also benefit from additional financing, enhancing their capacity and broadening their functions to engage and support a larger number of farmers across the country.

Extend successful initiatives such as the temporary National Agricultural Innovation Programme (PNIA), which has strengthened INIA’s research capacity through researcher training, scholarships, and funded innovation projects. Where extension is not feasible, design and implement similar long-term programs to ensure sustained capacity building and innovation.

Strengthen Peru’s AKIS by establishing effective, multi-level governance mechanisms that foster co‑ordination among public, private, academic, and regional actors. Promote participatory and context-sensitive approaches, ensure leadership continuity to reduce fragmentation and instability. Greater private sector engagement and the consolidation of governance platforms will be essential to align R&D&I efforts with international standards and national development priorities, driving a resilient transformation of agriculture.

Invest in farmers’ skills and capacity to innovate

Use all policy levers to strengthen agricultural extension services. Create a well-functioning network of advisory services, especially for small-scale farmers. Given the current low level of participation in agricultural extension services, these need to be re-evaluated and adapted to existing needs. A robust extension system should integrate both locally developed innovations and appropriately adapted foreign technologies to ensure that services remain relevant, region-specific, and impactful for farmers. Furthermore, overcoming potential barriers to accessing these services, such as infrastructure, land tenure and access to finance, is essential. This will require effective collaboration between the national government, local governments and stakeholders.

Invest in education and skills strategies for the agricultural sector. Qualified labour is lacking in the sector. Peru needs to focus on spreading information on available programmes and services, increasing funding for agricultural programmes and institutional public-private partnerships. This includes funding research into locally adapted technologies and practices. Complement this with enhanced agricultural education that promotes applied research tailored to local contexts and establishes institutionalised mechanisms for impact evaluation to improve accountability and continuous learning.

Improve the design and implementation of food system policies

Systematically address food security issues

Expand resources for food assistance programmes. Current fragmented budgets limit local capacity, and governance gaps undermine the effectiveness of current programmes. Ensuring resources are aligned with the required scope of assistance programmes is vital to effectively combat food insecurity across the country. Providing targeted capacity-building support to local governments is also important.

Create a comprehensive strategy to encourage healthier food choices. Single-policy interventions have delivered limited results. A multi-ministerial approach that combines regulation, economic incentive and education is more effective in promoting healthier diets. Explore the development of demand-side policy interventions to encourage environmentally sustainable food choices, building on experiences from OECD countries.

Adopt a comprehensive national plan to combat food waste. This includes establishing a robust monitoring system, time-bound reduction targets and clear baselines to track progress on the SDG 12.3 target for food loss and waste. Encourage local initiatives to reduce food waste and increase treatment.

Strengthen food safety in Peru, particularly within informal markets, by improving institutional co‑ordination to reduce overlaps and close enforcement gaps. Complement this with increased investment in hygiene education, modern surveillance systems, and accredited laboratories to enhance the detection and control of chemical and microbiological hazards.