Peru’s agricultural policies aim to improve the dual structure of the sector by promoting the development of small-scale farmers and strengthening and facilitating the continued expansion of export-oriented agricultural production. While investments have facilitated the success of the export-oriented sector, government policies have had limited effectiveness to date in addressing small-scale farmers’ challenges. This chapter outlines the institutional framework governing the agriculture and food sector, reviews the evolution of its agriculture and food policies and analyses their effectiveness in addressing these objectives. The evaluation of policy is supported by a comprehensive examination of government support to agriculture and its comparison with OECD countries.
Policies for the Future of Farming and Food in Peru
Abstract
Peru’s economic liberalisation in the 1990s fostered the emergence of a dynamic, export-oriented agricultural sector that competes successfully on the global stage. However, trade benefits have been unevenly distributed, as most subsistence farmers and smallholders were left behind, and poverty and inequality remain widespread.
In this context, Peru’s agricultural policies have two areas of action: promoting the development of small-scale farmers and strengthening and facilitating the continued expansion of export-oriented agricultural production. Differentiated approaches are taken to this end.
Targeted and tailored policy instruments are used to support small-scale farmers with the objective of enhancing farm competitiveness by integrating smallholders into markets, while reducing subsistence-level farming and promoting natural resource management for sustainable agricultural growth.
The government remains an enabler of agri-food exports by creating conditions that facilitate private sector development. This includes investing in infrastructure, improving logistics chains, ensuring the application of phytosanitary standards, conducting trade promotion, and applying a specific labour regime for agriculture.
While Peru is an export success story, government policies have, however, had limited effectiveness to date in addressing small-scale farmers’ challenges, due to insufficient resources and weak co‑ordination among national, regional, and municipal governments. Programmes are fragmented, scattered across territories, and often deliver low-quality services. Institutional incoherence further undermines the effectiveness of payments, services, and investments, which ultimately reach only a small share of farmers. Coverage is often capped at around 15% of eligible farmers and is generally restricted to predefined groups. Moreover, many efforts do not tackle the structural challenges that limit the sector’s long-term sustainable development, such as lack of substantial investments in general services or in public goods.
In terms of agricultural support indicators by OECD, between 2022 and 2024, the average level of producer support in Peru was estimated to be 6.2% of gross farm receipts (%PSE), well below the OECD average of 13.2% and the 12.2% average (of positive PSE only) for emerging economies. Peru’s support level is comparable to that of Brazil (5.4%) and the United States (7.1%).
Market price support accounted for the bulk of producer support (82%), mainly through the price band system applied to rice, yellow maize, sugar, and milk.
The remaining 18% came from budgetary transfers, mostly in the form of input subsidies, particularly for on-farm irrigation systems, on-farm services, and variable inputs like fertilisers, which together account for 16%, with limited support for emergencies (1%) and for environment services (1%).
In addition, the country provides consumer support through food aid programmes targeted at its poorest populations.
General services (GSSE) for Peru’s agricultural sector remain limited. It primarily finances infrastructure development, mostly irrigation (41%), followed by agricultural knowledge and innovation systems (34%) and inspection and control services (18%).
Peru’s Total Support Estimate (TSE) averaged around USD 3 billion per year in 2022-24, which amounted to 1.1% of GDP. While this share is below that of Colombia (1.13%), Korea (1.26%), and China (1.65%), it exceeds the levels observed in Chile (0.26%), Mexico (0.69%), and Brazil (0.7%) and the OECD average of 0.54%. TSE expressed as a percentage of GDP indicates the burden that the support to agriculture generates for the country’s economy.
Over the last 50 years, Peru’s agricultural policies have been centred around four major themes. These include redistributive action, marked by the agrarian reform in the 1960s, the liberalisation of the economy at the beginning of the 1990s within the structural adjustment framework, the promotion of agricultural exports that began in the early 2000s, and the growing attention to family farming promoted since 2015. The latter two themes coexist as critical issues of the country’s agricultural policies.
2.1.1. The agrarian reforms of the 1960s and 1970s
The structure of land ownership in Peru has seen drastic changes throughout the country’s history. Prior to the agrarian reforms of the 1960s, Peru’s agricultural sector was shaped by highly concentrated land ownership rooted in colonial structures. Indigenous and rural communities that previously owned the lands were unpaid or underpaid workers on agricultural estates with no rights to land ownership.
Reforms addressing this started to formalise in the 1960s, which led to the key reform, Decree Law No. 17716, implemented in 1969 (MIDAGRI, 2023[1]). Key elements of the 1969 reform included: 1) the elimination of latifundos (large estates), minifundios (small estates) and all forms of land tenures; 2) the establishment of peasant-based companies of an associative nature; 3) the restructuring of traditional peasant communities; 4) the establishment of an organised agriculture based upon the associative effort of farmers; 5) the creation of new markets through distribution of income that increases the purchasing power of marginalised communities; 6) the parallel development of the processing of primary products industries in the countryside.
The reform led to the redistribution of around 9.5 million ha from 10 000 landholders to over 400 000 families, representing 85% of all privately held agricultural lands (World Bank, 1992[2]). The success of its implementation can be attributed to institutional support, especially that given by the Peruvian Armed Forces (Eguren, 2006[3]). Furthermore, the implementation of the reform was one of the government’s highest priorities due to its potential to promote agricultural growth while also creating a fairer redistribution of agricultural benefits among the rural population (Horton, 1975[4]). The application of the 1969 reform was mostly seen in the Coast and the Sierra, as most of the rural population and most of the agricultural sectors were based in these regions (Eguren, 2006[3]). Moreover, the reform was also a mechanism to develop Peru’s internal markets whilst supporting the industrialisation process within the agricultural sector (Velazco and Pinilla, 2017[5]).
The 1969 reform was part of the government’s wider socio-economic policy. This included the acceleration of land redistribution as well as the provision of credits and technical assistance to the beneficiaries of the land reforms (Horton, 1975[4]). One of the main goals of the land reform was to create agricultural co-operatives and associations, with the Cooperativas Agrarias de Producción (CAP) in the large coastal plantations and Sociedades Agrarias de interés Social (SAIS) in the Sierra haciendas. Large landholdings were organised into these co‑operatives rather than broken up into small units, in order to maintain technical and productive efficiency. Around 40% of redistributed land was given to peasant communities and groups (World Bank, 1992[2]). However, many co-operatives collapsed during the 1980s, and the land was shared among their members or taken over by peasant communities. This land fragmentation caused levels of productivity and profitability to decrease.
One of the main changes brought by the 1969 reform was the establishment of a specific branch of the judiciary, El Fuero Agrario, tasked with dealing with all legal questions and proceedings related to the land reform. Second, the reform did not allow any form of land rental, as it required that all landowners reside and work directly on their properties. Third, the reform highlighted that all agricultural workers had to participate in the management and profits of the farm on which they worked (Horton, 1975[4]). The execution of this strategy became the main responsibility of the Ministry of Agriculture, with the financing of all public agencies linked to agriculture centralised within the ministry.
In 1979, a constituent assembly and a new Constitution were established. The Constitution has two chapters that focus on agricultural policies. Chapter VII is about the farming regime. It contains articles 156 to 160, which state that the State prioritises the comprehensive development of the agricultural sector and guarantees the right to private property over land, which also includes supporting the development of co‑operative enterprises and other freely established associative forms for the production, processing, marketing, and distribution of agricultural products. Chapter VIII discusses peasant and native communities. The State recognises them as having legal existence and autonomy in their organisation. The state also promotes their development and prohibits them from being subject to seizure or prescription (Sueiro, 2020[6]).
2.1.2. Economic liberalisation
Policies of the 1980s and 1990s were focused on opening markets and replacing the land reforms of the 1960s and 1970s. Changes in land ownership were implemented that led to the dismantling of agricultural co‑operatives. The government focused on supporting agribusiness, which spurred the development and growth of agricultural exports. These policies mostly benefitted the trade-focused production along the coast, whilst government spending on rural areas declined dramatically from USD 970 million per year in the early and mid-1990s, to USD 367 million in 1999 (World Bank, 2017[7]). Agricultural extension services were significantly scaled back.
By repealing the Agrarian Reform Law 17716, the government intended to encourage efficiency and competitiveness and create conditions for a stable agricultural policy. The Ministry of Agriculture (MIDAGRI) became a regulatory and advisory institution, rather than being able to directly intervene in the production or marketing of agricultural goods (INEI, 1997[8]). With regards to financing, the development bank was eliminated, and Cajas Rurales (rural savings banks) were formed to meet the requirements of the poorest peasantry. Furthermore, government organisations were decentralised, including the National Agricultural Health Service of Peru (SENASA), the National Institute of Natural Resources (INRENA), the National Institute of Agricultural Research (INIA) the National Council of South American Camelids (CONACS) and the Special Project for Land Titling (PETT).
The 1980 Law of Agricultural Promotion and Development enabled former members of co‑operatives to transfer from the co‑operative agricultural production system to individual plots. The law also allowed for the division of co‑operatives if at least two-thirds of the members at a general assembly requested it and all other requirements were met.
The 1986 Agricultural Reactivation and Food Security Programme (PRESA) aimed to ensure growing demand at profitable prices for agricultural producers and was accompanied by a credit programme that aimed to increase the financial resources channelled to this activity substantially. PRESA policy aimed to enhance the profitability of agriculture by reducing costs, improving prices, ultimately increasing yields and to ensure that food is available to the public at reasonable prices. PRESA consisted of three central measures: 1) the establishment of the National Input Marketing Company (ENCI), which exclusively imported major agricultural products such as wheat, maize, sorghum, dairy, and oilseeds; 2) implementing an additional 15% tariff on the CIF value of those goods; and 3) the establishment of the National Fund for Agricultural Reactivation and Food Security (FRASA) to provide producers with a profitable margin, regulate agricultural supply, and stabilise prices of farm products and inputs.
The 1991 Law on the Promotion of Investments in the Agricultural Sector replaced Decree Law 17716, the Agrarian Reform Law. The law provides legal certainty on land tenure and water rights to private agricultural property to promote private investment in the agricultural sector. Another vital regulation was Legislative Decree 667, commonly known as the Rural Property Registry Law, which was enacted to regulate the process of formalising ownership of properties that were not affected by the agrarian reform.
After the April 1992 coup, changes were made to agrarian laws. Decree-Law 25902, the Organic Law of the Ministry of Agriculture, was promulgated. It included the establishment of the Special Project for Land Titling and Rural Cadastre, aimed at promoting and perfecting the titling and registration of rural properties that were confiscated and awarded during the validity of the Agrarian Reform Law. This decree laid the groundwork for selling land through the free market. The government also declared the dissolution of the Banco Estatal de Fomento Agrario (State Bank of Agricultural Development) and the definitive liquidation of its assets and businesses. Months later, the rural savings and credit banks (CRACs) were created through Law 25612 to fill the financing gap for the agricultural sector. The CRACs were established as private companies with shareholders who were typically local businessmen. Their corporate purpose was to provide financial intermediation to support economic activity in rural areas where they operate (Busqueda, 2006[9]).
In 1996, MIDAGRI was authorised by Legislative Decree 838 to distribute rural properties to people and communities affected by displacement. This decree allowed for the free allocation of land the State previously owned. The Law of Economic and Financial Sanitation of Sugar Agricultural Companies dismantled sugar agricultural co‑operatives (CAA). The government established mechanisms to pay the tax debts of the CAAs. As a result, the tax debt of co‑operative companies was substantially reduced, provided that they changed their model from a co‑operative society to a public limited company (Sueiro, 2020[6]).
In 2000, the government introduced the Agricultural Promotion Law (Law 27360). This law created a favourable environment for agro-export companies by granting them certain privileges. Companies enjoyed a reduced income tax rate of 15%, could depreciate their investments in hydraulic and irrigation infrastructure works by 20% annually, and could contribute less to employees’ social security (Congreso de la Republica, 2000[10]). Furthermore, labour contractors benefited from this law by being allowed to hire personnel for indefinite periods, establish cumulative workdays, take a 15-day vacation break, and receive compensation of 15 daily wages in the event of arbitrary dismissal.
In 2002, Peru signed the National Agreement, which proposed state policies to guide the country towards sustainable development. One of the policies in the agreement was Policy 23, the Agricultural and Rural Development Policy. This policy aimed to promote the profitability and growth of the agricultural market, enhancing its competitiveness for export. The policy also sought to improve the social conditions of the rural population.
In 2014, Ministerial Resolution 0709-2014-MIDAGRI approved the Agricultural Policy Guidelines. These guidelines serve as a framework for public and private decision-making at the sectoral level. The general objective is to achieve sustained growth of the income and livelihood of agricultural producers, with a primary focus on family farming. This is based on more outstanding capabilities, more productive assets, and the sustainable use of farm resources within the framework of growth processes. The guidelines aim to promote the rural population’s social and economic inclusion, contributing to food and nutritional security (MIDAGRI, 2014[11]).
In 2021, Law 31335 was enacted, the “Law for the Improvement of the Associativity of Agricultural Producers in Agricultural Cooperatives” to strengthen the organisation and development of agricultural co‑operatives, creating the National Registry of Agricultural Cooperatives under the responsibility of MIDAGRI. Likewise, the resolution No. 218-2021-MIDAGRI was approved, establishing the guidelines for implementing business associativity processes in the agriculture sector. In 2022, the resolution No. 086-2022-MIDAGRI approved the regulation for the use of the certification mark “Family Farming of Peru” (El Peruano, 2021[12]; MIDAGRI, 2021[13]; MIDAGRI, 2022[14]).
2.1.3. The current agricultural policy framework
Peru’s agricultural policies are currently oriented around two main areas of action: promoting the development of small-scale farmers and while continuing to strengthen and expand the agricultural export-oriented sector. To address the challenges faced by small-scale agricultural producers, Peru’s agricultural sector is currently shaped by the National Agricultural Policy 2021-2030 (Table 2.1). The Policy aims to increase incomes and improve livelihoods by boosting farm competitiveness, by improving service delivery and institutional support, with the overarching goal of strengthening agriculture’s contribution to national development. The goal is to increase the competitive development of the sector by 36% by 2030. This Policy has three key objectives:
Increasing producers’ integration into value chains. Strengthening Peru’s agricultural sector requires improving access to markets while enhancing commercial capacities for both family and corporate producers. Reducing dependence on intermediaries through the development of direct marketing channels can enable farmers to capture greater value from their production. Expanding access to digital information systems is also essential, as these tools support effective production planning, market-oriented strategies, and timely access to data on prices and other key variables for informed decision-making.
Facilitating the transition from subsistence to commercial farming. The policy emphasises integrating small-scale family farmers into productive supply chains, particularly those oriented toward higher-quality and more profitable products. This transition employs targeted actions to strengthen agricultural health systems, improve direct access to markets, and increase the availability of reliable agricultural information. Timely data throughout the production cycle helps producers plan better, align with market demand, and improve overall competitiveness.
Promoting sustainable natural resource management. The policy prioritises the adoption of environmentally responsible practices in crop, livestock, and agroforestry systems. By safeguarding soil, water, and biodiversity, Peru seeks to prevent environmental degradation while supporting long-term sectoral competitiveness. Sustainable resource management underpins the growth of farming and irrigation systems, ensuring output expansion remains ecologically sound and resource efficient. Table 2.1 summarises the institutional objectives of the National Agricultural Policy (El Peruano, 2021[15]).
For the export-oriented sector, the public sector continues acting as an enabler of agricultural export development through investments in infrastructure on irrigation, road and port infrastructure projects, improvements in logistics chain infrastructure, maintenance of the animal and plant health system, trade promotion abroad, etc.
In 2025, Law No. 32434 was enacted, which promotes a productive, competitive and sustainable transformation of the agricultural sector with social protection. The objective of the law is to foster a modern agriculture that enables employment and investment; promote formalisation with emphasis on small agricultural producers, ensuring agricultural property rights and a favourable environment for carrying out activities in the agricultural sector; promote integrated production chains based on co‑operatives and associations; and enhance the capacities of small agricultural producers to improve their productivity and access more profitable markets (MIDAGRI, 2025[16]). Another relevant law is Law 31339, for the promotion of agricultural industrialisation, which aims to stimulate diversification, strengthen the economic base of the agricultural sector, and increase productivity. It also seeks to foster formal, quality employment and promote long-term sustainable growth (El Peruano, 2021[17])
Source: El Peruano (2021[15]), Decreto Supremo que aprueba la Politica Nacional Agraria 2021-2030, https://busquedas.elperuano.pe/dispositivo/NL/1975873-14; MIDAGRI (2021[18]), Decreto Supremo N.° 0017-2021-MIDAGRI, https://www.gob.pe/institucion/midagri/normas-legales/2061745-0017-2021-midagri.
2.1.4. Institutions governing the agricultural sector
The Ministry of Agricultural Development and Irrigation (MIDAGRI) is the primary institutional actor in the agricultural sector and is responsible for designing and implementing agricultural policies, working together with various other actors. The ministry is responsible for managing lands for agricultural and grazing use, forest lands, and uncultivated lands with agricultural suitability; agriculture and livestock; forest resources and their sustainable use; wild flora and fauna; health, safety, research, extension, technology transfer, and other services linked to agricultural activity.
Additionally, MIDAGRI oversees water resources, irrigation, irrigation infrastructure, and water use for farming purposes and infrastructure (see Chapter 3). Its main functions include formulating, planning, directing, co‑ordinating, executing, supervising, and evaluating national policies applicable to all levels of government. It also monitors the performance and achievements of agricultural management at the national, regional, and local levels and adopts corresponding measures. Additionally, it collaborates with regional and local governments to implement national policies within their jurisdiction and assesses their compliance, among other responsibilities (MIDAGRI, 2025[19]).
MIDAGRI has undergone several changes in its mandate and actions in recent years. Previously, the ministry’s primary focus was on providing services and support to agricultural products. However, in 2002, it lost some of its powers to regional governments as part of the decentralisation process. In 2013, MIDAGRI became responsible for managing investments to ensure that producers have access to water resources. Finally, in 2020, the ministry expanded its scope and commitment to promoting broader agricultural development, with a focus on family farming (MIDAGRI, 2025[19]). Moreover, as part of the reorganisation process, MIDAGRI created the General Directorate of Associativity, Financial Services, and Insurance, responsible for leading the implementation of actions to promote associativity, business development, and financing in the sector, facilitating the linkage of the productive and commercial chain with the financial and insurance system (MIDAGRI, 2025[19]).
MIDAGRI has a range of programmes and initiatives aimed at promoting agricultural development. However, these programmes often need to co‑ordinate with other sector actions and operate independently or in collaboration. In compliance with Law 29158, the Organic Law of the Executive Branch, and current regulations, MIDAGRI has the following public organisations attached to it: the National Institute of Agricultural Innovation (INIA), the National Water Authority (ANA), the National Agricultural Health Service (SENASA), and the National Forestry and Wildlife Service (SERFOR). According to MIDAGRI’s organisational chart, the sector has line directorates responsible for policy formulation and monitoring, with a set of programmes, attached organisations, and special projects serving as its primary instruments of action. MIDAGRI also has two vice ministries. Key programmes within MIDAGRI that implement and execute policy instruments and projects are AGRORURAL, PSI, AGROIDEAS, AGROMERCADO, etc. (see Annex 2.A for the full organisational chart of the sector) (MIDAGRI, 2025[19]).
INIA is responsible for promoting research and development (R&D) in the agricultural sector. Its activities include conducting research activities, transferring technology, conserving and utilising genetic resources, and producing high genetic value seeds, seedlings and reproducers. It regulates and co‑ordinates research, development, and innovation (RDI) with the National Agricultural (see Chapter 4) (MIDAGRI, 2025[19]).
SENASA (Decree 1059 of 2008) is responsible for matters related to plant and animal health and has technical, administrative, economic, and financial autonomy. It promotes and participates in the international harmonisation and equivalence of sanitary and phytosanitary standards and measures. It conducts national-level control, registration, and supervision of chemical pesticides for agricultural use. This includes pesticide manufacturers, formulators, importers, exporters, packagers, distributors, quality control laboratories, business establishments, and warehouses. SENASA is tasked with safeguarding the country against pests and diseases to maintain the integrity of the agricultural and livestock industries. This aims to reduce agro-sanitary problems and associated risks, providing greater security for the production and export of agricultural products (MIDAGRI, 2025[19]).
AGROMERCADO, formerly Sierra y Selva Exportadora, is an institution affiliated with MIDAGRI that implements programmes, strategies, and actions across all three regions of the country (Sierra, Selva, and Costa) in co‑ordination with regional and local governments. It seeks to increase access to markets for small and medium-scale farmers who are under any type of farmer organisation (created by Law 31872 of 2023). AGROMERCADO provides various services, such as management and market research. (Agromercado, 2025[20]). The functions of AGROMERCADO include
Co-ordinate and align public policies to ensure the inclusion of small and medium-sized farmers in economic activity, particularly in export markets, but also in national markets.
Encourage the integration of small and medium-sized farmers into national and international markets through plans, projects, and initiatives that add value to agricultural products, and by supporting their participation in trade promotion activities.
Promote training, technical assistance, adoption of new technologies, and entrepreneurial skills, as well as leadership and co‑operative efforts, to help small and medium-sized family farms gain stronger market access and commercial opportunities.
Develop and implement investment projects in productive infrastructure for agriculture and irrigation that support commercialisation and post-harvest processes, to improve competitiveness and facilitate access to both domestic and export markets.
Prioritisation, among the government entities, of financial tools and mechanisms for different agricultural value chains, tailored to their characteristics, to support small and medium-sized family farms.
Collect, organise, and share information to establish production and marketing chains that connect farmers more effectively to national and international markets, in co‑ordination with the relevant sectors.
Strengthen capacities in quality management, certification, and value-added processes to support the effective integration of small and medium-sized family farms into competitive markets. Carry out any other responsibilities assigned by law (Agromercado, 2025[20]; MIDAGRI, 2025[21]).
SERFOR is the governing body of the National Forestry and Wildlife Management System (SINAFOR). Its primary role is to encourage sustainable wildlife management in the country. The organisation is responsible for defining policies and issuing standards and procedures to promote the development of the forestry and wildlife sectors (see Chapter 3) (MIDAGRI, 2025[19]).
ANA’s role is to manage, conserve, protect, and sustainably utilise the water resources of different basins while promoting a culture of water conservation. This includes authorising volumes of water used and distributed by water service providers (the entities providing sanitation services and irrigation boards), evaluating environmental instruments, granting water use rights, discharge authorisations, and the reuse of treated wastewater (see Chapter 3) (MIDAGRI, 2025[19]).
Although the government has introduced various policy instruments and frameworks to support agricultural development, the programmes and interventions led by MIDAGRI and its partners have shown limited capacity to transform the sector or improve the livelihoods of family farmers. Most initiatives reach only a small fraction of farmers, typically no more than 15% of those eligible to benefit. Most programmes rely on distributing limited resources and are restricted in scope. They often target predefined groups of producers, which tend to be the same every year (MIDAGRI, 2025[19]).
The agricultural sector has several co-ordination mechanisms to help better policy alignment within MIDAGRI and other national government agencies. These co‑ordination spaces work well to generate diagnostics and prioritise interventions, but have not succeeded to date in generating incentives to change the behaviour of the different actors. These co‑ordination spaces do not have additional budgets and do not create new mandates or new policy (multisectoral) instruments. This has contributed to the limited results to date. Furthermore, there are also efforts to co‑ordinate between national and subnational government levels to improve policy implementation efficiency.
Multisectoral Commission for Food Security and Nutrition (COMSAN)
Created by Supreme Decree 102-2012-PCM, the Multisectoral Commission for Food and Nutrition Security (COMSAN) has the following functions (COMSAN, 2013[22]):
Evaluate and recommend policies related to nutritional food security.
Evaluate and update the 2004-2015 National Food Security Strategy and propose a new one for 2012-2021.
Propose the National Food and Nutrition Security Plan from 2012 to 2021, which must include the responsibilities, deadlines, and forecast of the corresponding financing for its implementation.
Propose mechanisms of articulation and complementarity between the members of COMSAN and other levels of government and civil society.
Conduct policy monitoring and evaluation activities.
Promote the support of international organisations.
Inter-ministerial Commission for Social Affairs (CIAS)
The Interministerial Commission for Social Affairs (CIAS) is responsible for directing, articulating, co‑ordinating, and establishing social policy guidelines and spending and supervising compliance. Its primary function is to reduce poverty and extreme poverty. The CIAS may meet jointly and simultaneously, when necessary, as established by Law 29158, Organic Law of the Executive Branch, of 19 December 2007.
Multisectoral Commission on Family Farming Development
The Multisector Commission has various functions. Firstly, it issues reports that evaluate and recommend policies related to family farming. These reports should be based on technical approaches or reports provided by the relevant sectors. Secondly, it oversees the execution of the National Family Farming Strategy. Thirdly, it prepares a technical report containing the National Family Farming Plan corresponding to the current National Family Farming Strategy. This report should include responsibilities, deadlines, and forecasts for implementing the corresponding financing. Lastly, it prepares annual reports. These functions are established by Supreme Decree 015-2016-MIDAGRI, which approves the Regulation of Law 30355, Law for the Promotion and Development of Family Agriculture, and creates the Multisector Commission for the Promotion and Development of Family Agriculture (July 2016).
Strategic Multiannual Sectoral Plan (PESEM)
The Multiannual Sectoral Strategic Plan (PESEM) is a management tool that outlines the objectives and strategic actions of the agricultural and irrigation sector. It aims to improve the sector’s intervention, focusing on achieving results and impacts that benefit agricultural producers. The PESEM guides public interventions in the industry, and its implementation involves all three levels of government according to their functions and powers. This document was created following the strategic planning cycle for continuous improvement, as outlined in the Methodological Guide for Sectoral Strategic Planning of CEPLAN. It was established by Ministerial Resolution 0015-2023-MIDAGRI on 13 January 2023. The PESEM 2015-2021 has been extended to 2027, and the PESEM 2024-2030 was approved.
Co‑ordination between national, regional and local levels
Other efforts to improve co‑ordination across local, regional, and national levels are underway. These include MIDAGRI’s institutionalisation of 24 Regional Agricultural Management Committees (CGRAs) through Resolution No. 0206-2021-MIDAGRI, which aim to promote sustainability, secure funding, and create incentives for effective implementation. In addition, Resolution No. 0257-2024-MIDAGRI established the Regional Management and Articulation Offices (OGAR), which are being rolled out as MIDAGRI’s territorial link and as integrated service hubs for farmers, regional and local governments. Together, these mechanisms support the strengthening of Regional Agricultural Agendas (ARAs), with CGRAs serving as collective roadmaps for local productive development (El Peruano, 2021[23]; El Peruano, 2024[24]).
Furthermore, MIDAGRI is advancing a forward-looking strategy aligned with the National Agricultural Policy’s priority objectives to 2030. This includes ongoing dissemination of the Policy across all levels of government and producer organisations, updating the Policy to address emerging issues such as agroclimatic intelligence and sustainable market demands, and assessing a transition toward a service-based management approach (MIDAGRI, 2026[25]).
The government has expanded subnational government interventions in agriculture by providing goods and services to small-scale producers, in line with Law No. 32513, which authorises the use of Canon resources, derived from income tax revenues in regions where natural resources are extracted, for agricultural land formalisation and natural disaster prevention (El Peruano, 2026[26]) (MIDAGRI, 2026[25]).
Source: MIDAGRI (2025[19]), Informacion Institucional, https://www.gob.pe/institucion/midagri/institucional.
This section begins by examining the policies through which transfers are directly received by producers, i.e. included in the measurement of the Producer Support Estimate (PSE), such as price support measures and input subsidies. Trade policies are discussed in Section 2.3. Policies providing support via general services to the agricultural sector are discussed as well, such as rural development, innovation and technical assistance, and infrastructure investments, among others, which are included in the General Services Support Estimate (GSSE); lastly, the final subsection discusses the Consumer Support Estimate (CSE).
2.2.1. Price support measures
Peru does not rely on price controls or measures to support prices, nor have public stockholdings for any agricultural product. The country uses the Peruvian Price Band System, which is a mechanism adopted by Decree 371 with the aim of stabilising prices of four groups of agricultural products (milk powder, sugar, yellow maize, and rice). Stabilisation is achieved by raising the ad-valorem tariff when the global price is below the floor level and lowering it to zero when the international price is above the ceiling (more details in Section 2.3).
In 2020, the Law on State Purchases of Food of Family Farming Origin, Law 31071, was enacted. This law aims to establish rules for public food purchases from family farming, while promoting consumption, improving the economy of family farming producers, and contributing to healthy eating. The objective of the law is to reach 30% of government food purchases in food assistance programs from Family Farming. However, the programme has very low levels of implementation and in some regions has not been implemented at all (El Peruano, 2020[27]).
2.2.2. Income support measures
Peru does not have permanent support measures for farmers’ income. Income support mechanisms in the agricultural sector in Peru are limited and primarily address emergencies. After the COVID‑19 pandemic, two emergency Decrees 108-2021 and 119-2022 were approved, creating the Wanuchay bonus. The bonus was an economic support of USD 90 to family farming producers with less than two hectares. The aim was to ensure food production for the 2021-22 harvest and to strengthen food security in the country. A total budget of around USD 6 million was given to 65 000 small-scale farmers nationwide. These were one-off measures for only 2021-22 (Gobierno Nacional del Perú, 2021[28]).
2.2.3. Reduction of input costs
Subsidies for variable and fixed inputs and services
Peru has limited subsidies for inputs, which are targeted and tailored to small-scale farmers and farmers living in vulnerable conditions, such as Indigenous Communities located particularly in the Sierra and Selva regions. This includes support for seeds, fertilisers, pesticides, feed, machinery and equipment, and technical assistance, among others. Input subsidies are the main policy instruments used and are implemented via different mechanisms; sometimes, the same policy instrument, programme or project is implemented by several institutions (e.g. MIDAGRI, SENASA, INIA, local governments, etc.), which complicates its evaluation.
AGRORURAL (Programa de Desarrollo Productivo Agrario Rural), is one of the main programmes that provides subsidies to farmers. Its main objective is to promote rural development, improve agricultural and livestock productivity, and reduce poverty in rural areas, especially among small-scale farmers and in regions with low economic development, such as the Sierra and Selva regions, through the provision of agricultural inputs, on-farm irrigation infrastructure, technical assistance, capacity building and trade articulation mechanisms. AGRORURAL also designs, promotes, and manages agricultural development models that facilitate the co‑ordination of public-private investments that contribute to poverty reduction and the inclusion of rural families in both crop and livestock activities (Agrorural, 2025[29]). It has five areas of action:
Sustainable management of natural resources in watersheds, by building and maintaining rural irrigation systems, reservoirs, and water harvesting structures to improve water availability, such as qochas. Soil conservation through reforestation, promotion of terracing techniques, provision of seeds for the establishment of cultivated pastures for livestock, etc.
Investments in rural infrastructure, through the implementation of on-farm irrigation and productive infrastructure investments aimed at rural agricultural development.
Management of the agricultural and livestock value chain.
Promotion of the sustainable use of the organic fertiliser guano.1
Protection and reduction of the vulnerability of family farmers and their livelihoods to the risk of natural disasters (Agrorural, 2025[29]).
AGRORURAL operates by providing either the inputs directly or via monetary resources for the purchasing of the inputs and services requested. AGRORURAL has a national presence in all 24 departments with 94 local offices at the provincial level (Agrorural, 2025[29]). To receive the benefits of AGRORURAL, farmers need to be in the prioritised areas of the country and need to be registered in the national farmer registration. Under this scheme, farmers apply to obtain the inputs they need via a plan that is submitted to the local offices; this plan could request a bundle of different types of inputs (variable, fixed, and services such as technical assistance). The plan is then evaluated, and once approved, farmers receive the subsidy. This applies to both individual farmers and farmer organisations. For some AGRORURAL’s actions, farmers do not need to submit the plan, only to request the subsidy (Agrorural, 2025[29]). AGRORURAL also promotes access to credit for small agricultural producers through seed capital, revolving funds, and community banks, with funds co-financed by the UN International Fund for Agricultural Development (IFAD) (Agrorural, 2026[30]; IFAD, 2026[31]).
AGRORURAL reaches around 120 000 farmers annually, but in 2024 reached 230 000, yet its target population is 1.7 million small-scale farmers living in vulnerable conditions located mostly in the Selva and Sierra regions, but also, to a lesser extent, in the Costa region. Some of its challenges are the limited resources needed to expand the service coverage, considering that the programme is present nationwide, which requires greater financial, logistical, and personnel resources. Another key problem is the limited co‑ordination of public interventions in the territory, aimed at strengthening intra- and intergovernmental relations, to consolidate efforts and reduce duplication, seeking greater effectiveness and efficiency in the use of public resources (Agrorural, 2025[29]).
AGROIDEAS (Programa de Compensaciones para la Competitividad) is another key institution that implements policy instruments. It promotes business management and the adoption of environmentally sustainable agricultural technologies for organised small and medium-sized agricultural producers (Agroideas, 2025[32]). It aims to increase the competitiveness of small and medium-sized farmers through financial incentives for innovation, business management, and productive diversification. AGROIDEAS’s objectives are:
to improve agricultural and livestock productivity by adopting modern technologies
to strengthen the business and organisational management of farmer associations
to promote productive reconversion, shifting to more profitable and sustainable crops
to support associativity to promote farmers working together in organisations
to contribute to food security and rural economic development (Agroideas, 2025[33]).
AGROIDEAS provides non-reimbursable co-financing (grants) for three main components: 1) technology adoption by funding for modern equipment, irrigation systems, post-harvest infrastructure, transportation, packaging, etc., and by co-financing for high-tech or reconversion projects; 2) business management by providing support for hiring professional managers or administrators for farmer organisations, where AGROIDEAS pays part of their salaries; 3) productive reconversion by providing financial and technical assistance to switch from low-profit crops to high-value products. AGROIDEAS has one part of its budget dedicated to only women farmers. In this context, the Rural and Indigenous Women’s Entrepreneurship Strategy was approved in 2023. The strategy aims to promote productive ventures in the agricultural, livestock and forestry sectors, as well as in handicrafts derived from these activities. It targets agricultural organisations composed of rural and Indigenous women farmers to strengthen their economic autonomy. For all types of subsidies provided by AGROIDEAS, farmers need to submit a business plan to obtain support. The total reach of farmers for 2024 was 24 000 (Agroideas, 2025[33]).
AGROMERCADO also provides support to farmers to improve market access for small and medium-scale farmers through management support and market research. Its key functions include co‑ordinating public policies for farmer inclusion in domestic and export markets, promoting value-added initiatives and trade participation, providing training and technical assistance, developing agricultural infrastructure projects, prioritising financial tools for different value chains, sharing market and production information, and strengthening quality management, certification, and value-added processes to enhance farmers’ competitiveness and integration into national and international markets (Agromercado, 2025[20]; MIDAGRI, 2025[21]).
PSI (Programa Subsectorial de Irrigaciones), under the auspices of MIDAGRI, is the governing body for irrigation at the national level in Peru. It promotes the efficient and sustainable use of water for irrigation, aiming to improve agricultural productivity and farmers’ livelihoods. Its main objectives are to foster the sustainable development of irrigation systems in all three regions of the country (Sierra, Selva and Costa); strengthen water user organisations; build management capacity; and spread the adoption of modern irrigation technologies. PSI began operations in 1998 as a project focused on improving existing irrigation infrastructure, promoting parcel-level irrigation, and training water user organisations along the Peruvian coast. In 2006, it was formally established as a program through Law No. 28675 and was designated as the governing authority for irrigation.
PSI’s provide support for on-farm irrigation systems. Its main activities include improving and rehabilitating irrigation systems, strengthening water users’ boards for better water management, supporting regional and local governments in the implementation of the irrigation law, and executing projects that promote large-scale adoption of modern irrigation systems. Its operational model emphasises shared financial participation between farmers, water user organisations, and the state, with the gradual reduction of state investment. This approach fosters self-management, empowerment, and a culture of responsibility within farmer organisations.
To achieve its objectives, PSI develops strategies, policies, and operational plans; manages studies, works, and consultancies related to irrigation and drainage infrastructure; and supports institutional strengthening through training and technical assistance. Its main lines of intervention include the rehabilitation and improvement of irrigation infrastructure (such as intakes, main and secondary canals, and measurement works), the promotion of irrigation systems (pressurised and gravity-based) to boost land use and crop yields, and support for water resource management. Through these efforts, PSI seeks to ensure efficient, equitable, and sustainable water use in Peruvian agriculture.
Other programmes that reduce input costs for farmers have been created to offset the effects of the COVID pandemic. In 2022, the government implemented FertiAbono, which provides monetary support to agricultural producers with a total cultivated area of up to ten hectares who use nitrogen, phosphorus, and potassium (NPK) fertilisers with the idea of maintaining the agricultural activities running and to contribute to the economy’s recovery, and ensure food security in the country The government allocated more than USD 129 million to this programme, which benefited 313 820 farmers. Then, an extension was implemented. the FertiAbono 2, for which financial subsidies were available for farmers with up to five hectares who use fertilisers. The subsidy is determined based on the total hectares cultivated, the type of crop, and the fertiliser used. The government allocated USD 39.4 million, which benefited 168 002 small-scale farmers. The measure ended in 2023 (BC, 2023[34]; Gobierno Nacional del Perú, 2023[35]).
Preferential rates for water pricing were introduced and approved in 2023 by Decree 013-2023-MIDAGRI. This decree, under the auspices of ANA, provides a water rights scheme for irrigation water and sets the economic remuneration for water use and discharge. Table 2.2 shows the rates for 2024 applied to agriculture and to other economic activities. The values paid in soles per cubic meter differ depending on whether the water is used for agriculture. In Peru, there are no regulations that favour agricultural producers for electricity or energy (El Peruano, 2024[36]).
Soles per cubic meter
Note: Reproduced from Supreme Decree 025-2021-MIDAGRI, Supreme Decree that approves values of economic compensation to be paid for the use of water and the discharge of wastewater, dated December 23, 2021
Source: El Peruano (2024[36]), Decreto Supremo 013-2023 MIDAGRI, https://cdn.www.gob.pe/uploads/document/file/5591307/4965284-d-s-013-2023-midagri_valores-2024.pdf?v=1703284048.
Agricultural credit policies
Peru has developed specific mechanisms to support financing for farmers through Banco Agropecuario (AGROBANCO), the public bank for the sector, which is under the auspices of the Ministry of Economic and Finance (MEF) and MIDAGRI. It was established by Law No. 27603 in 2001, as a private-law state-owned financial institution. With a specific mandate to support the agricultural sector, AGROBANCO has especially focused on small and medium-sized producers.
Over the years, the bank has undergone various legislative reforms that have shaped its organisational structure and expanded its operational capacity, while always maintaining its primary objective of facilitating access to credit and other financial services essential for agricultural development. In 2018, Law 30893 reformed the previous guidelines due to a bankruptcy crisis that had almost ended the functions of the bank (Figure 2.1). This restructuring and new regulation focused on strengthening its institutional capacity, comprehensively addressing aspects such as risk management, regulatory oversight, and strengthening the bank’s assets (Agrobanco, 2025[37]). The bank is supervised by the Superintendencia de Banca y Seguros, and it is part of the public enterprises holding, FONAFE.
AGROBANCO funds itself from the Ministry of Economy and Finance, from the Agroperu fund, which was established in 2009, by Decree 027, to provide additional funds to agricultural credit and from its own service profits. AGROBANCO also provides credit at preferential rates via FIFPPA, a fund that is used to pay the market and preferential rates differences. The total value of loans allocated by AGROBANCO has varied across time, reaching USD 308 million in 2024 (Figure 2.1). AGROBANCO has also implemented write-offs where the farmer’s debt is forgiven, starting in 2018 up to 2024. For 2024, the total amount pardoned was USD 27 million (Agrobanco, 2024[38]).
AGROBANCO provides financing for agricultural and livestock products at preferential rates. Loans could be for working capital, marketing, and investments (i.e. machinery and equipment). This credit is designed to enhance the productivity of agricultural producers and facilitate their entry into the financial system. It can be granted as an individual or associative credit, such as irrigation boards, producer associations, communities, or co‑operatives. The bank has a credit line exclusively for female farmers (Agromujer) created in 2022; in 2024, 16 000 women received loans totalling USD 55 million in credit allocations. In 2024, AGROBANCO reached more than 100 000 agricultural producers nationwide.
Source: Agrobanco (2024[38]), “Report to the OECD”, unpublished.
2.2.4. Agricultural infrastructure projects
On-farm and off-farm Irrigation projects
In terms of agricultural infrastructure, two areas dominate the government interventions: irrigation projects and land titling. Peru has two types of mechanisms to address irrigation support. One is on-farm support that farmers receive to invest in their land, carried out by different institutions like MIDAGRI, PSI, AGRORURAL, etc., and the second is off-farm support related to large investments in irrigation, usually carried out by ANA, which builds dams, regional irrigation channels, etc.
For the on-farm support, MIDAGRI and PSI implement subsidies allocated to the on-farm irrigation projects. These subsidies are used for irrigation systems inside the farm. Farmers can apply for these subsidies with a proposal for the investments needed. The proposal is revised and approved, and then the subsidy is provided. Another programme is the Sierra Azul Fund that provides subsidies to farmers with lower income levels, including those in poverty and extreme poverty, by financing complementary activities related to water management, planting, and harvesting at the national level.
The Fund has designed technology specific to each intervention area and aims to enhance agricultural water security through the collection and utilisation of water from agricultural and Andean regions (Sierra region) across the country. This is particularly important given the emergence of climate change, which has disrupted the hydrological cycle and led to uneven rainfall distribution across time and space. This situation indicates that the heaviest rainfall occurs briefly in a few months, resulting in longer dry periods. The Fund tries to develop strategies to retain water within a hydrographic basin to ensure a consistent supply and prevent the loss of significant volumes into the sea (Sierrazul, 2025[39]).
The Sierra Azul Fund has designed a strategy for agricultural water security that includes planting and harvesting water at the national level (Sierrazul, 2025[39]). This activity is necessarily linked to significant irrigation infrastructure, pressurised irrigation systems, and capacity development to achieve an integrated and efficient system for managing water resources. The goal is to reduce gaps in providing services and infrastructure for agricultural water use.
This PIPMIRS (Small and Medium Irrigation Infrastructure Programme in Peruvian Sierra) programme aims to enhance agricultural production for rural families in Amazonas, Áncash, Ayacucho, Cajamarca, Huancavelica, Huánuco, Junín, La Libertad, and Piura by improving irrigation systems and strengthening institutional capacity for water management in micro-basins. This programme results from a loan agreement between the Japan International Cooperation Agency (JICA) and Peru. The programme’s total cost is USD 60 million, with 60% of the investment from JICA.
For off-farm investments, in terms of large irrigation infrastructure, ANA is the most important institution that has implemented, over the years, different large investment projects for irrigation across the country, such as building and restoring dams, reservoirs and qochas, infiltration ditches, verification of groundwater wells, etc. ANA invested around USD 71 million in the maintenance of old infrastructure as well as new large irrigation projects.
The Resolution No. 0137-2025-MIDAGRI of 2025 approved a project of large irrigation works to be implemented in 15 departments across the country. These projects are initiatives that encompass the construction of irrigation infrastructure, the implementation of technologically advanced irrigation systems, and farmer training. They aim to expand the agricultural frontier, with a significant impact on agricultural productivity, and a productive diversification toward more profitable crops. These projects represent a major investment estimated at USD 24 billion. Their implementation will allow for the improvement of 681 912 ha of agricultural land and the irrigation of 531 669 ha, reaching a total of 1 213 581 irrigated hectares.
Another major off-farm irrigation investment was Con Punche Perú Agro plan, which was established in 2023, following the approval of resources to the plan by Supreme Decree 024-2023-EF. The plan aimed to improve farmers’ productivity and counteract clogging and damage to irrigation infrastructure. The measures include The measures include (i) intervention in irrigation infrastructure maintenance activities, (ii) optimisation of investments for marginal expansion of rehabilitation and replacement, planting, and water harvesting, and (iii) financing of business plans and productive transformation. With a budget of USD 207 million, the majority (75%) is invested in the maintenance of irrigation infrastructure and the rehabilitation of canals (CEPES, 2023[40]). These interventions aim to benefit 2 million agricultural producers by improving their irrigation systems and water security, resulting in the potential increase of crop production (MIDAGRI, 2025[41]). The plan included ANA, PSI, AGRORURAL, and the Sierra Azul programmes, for irrigation infrastructure maintenance activities and investments in optimisation, marginal expansion of rehabilitation, and replacement.
Land reforms, land tenure and titling
Peru has an unequal land distribution, with a land inequality Gini coefficient of 0.93 by 2012, one of the highest in the Latin American region. Inequalities linked to agricultural development continue to exist as a result of the past exclusion of indigenous people from land ownership, leaving them with either no land at all or the least productive lands (see Chapter 1 for more details). Some progress has been made over the years, with land reforms and changes in legal frameworks; however, implementation of the land titling remains slow, uneven and fragmented and indigenous land rights continue to be vulnerable due to institutional gaps (Barrón, 2008[42]; Zuniga, 2022[43]).
At the end of the 1960s, Peru initiated its land reform, and between 1970 and 1975, the process accelerated, totalling more than 9 million ha, which were redistributed. In the 1980s, special projects were launched that included the settlement schemes in the Selva region, irrigation works in the Costa region, and mechanisation in the Sierra region. The land reform and subsequent special projects profoundly reshaped Peru’s regional dynamics. In the Selva region, road-building projects near Pucallpa facilitated massive migration, triggering deforestation rates exceeding 250 000 ha annually in the 1980s. Sierra, meanwhile, saw fragmented land holdings as peasants divided co‑operative farms into smaller plots, which led to reduced economies of scale but reinforced traditional communal practices. Costa region irrigation projects created new agricultural export zones but also deepened regional disparities in infrastructure and market access, reinforcing the uneven development pattern across Peru’s three natural regions (Sierra, Selva and Costa) (Barrón, 2008[42]; Zuniga, 2022[43]; Mongabay, 2024[44]).
In the 1990s, the programme Proyecto Especial de Titulación de Tierras (PETT) was created to regularise land tenure across Peru. This programme underwent administrative shifts, decentralisation to regional governments and ultimately led to the establishment of SICAR (the Rural Land Cadaster System) under MIDAGRI in 2018. Then the PTRT projects, including the PTRT3, were created, which have helped build an institutional and technical system for registering, titling, and integrating rural land into a national cadastre; however, validation waiting time and land conflicts remain significant (Barrón, 2008[42]; CEPES, 2023[40]; Zuniga, 2022[43]; Mongabay, 2024[44]).
Currently, PTRT3 (Catastro, Titulación y Registro de Tierras Rurales del Perú-3) is a cornerstone of MIDAGRI’s efforts to provide land rights to agricultural farmers. The implementation of this programme is in co‑ordination with regional governments and focuses on formalising land tenure through cadastral mapping, titling, and registration. By 2024, it registered 43 657 land titles, benefiting over 242 000 farmers, including individual farmers and communal territories (MIDAGRI, 2025[45]). Another effort has been the titling of the indigenous territories of the Selva region by MIDAGRI, which by 2023, formalised 29 757 ha of native community lands across Loreto, San Martín, Junín, and Ucayali; benefiting around 3 465 indigenous residents (MIDAGRI, 2025[45]). Changes of 2024-25 in the Forest Law (see more details in Chapter 3) imply several new programmes to be created, designed and implemented by MIDAGRI with the main purpose of accelerating the titling process, particularly for Indigenous Communities, while protecting the environment, particularly by curbing the deforestation rates across the country. For example, in 2025, MIDAGRI and SERFOR launched a collaboration to accelerate the titling of Indigenous lands that overlap Permanent Production Forests (BPP). This work is projected to impact 21 native communities in Ucayali, Loreto, and San Martín (MIDAGRI, 2025[45]).
2.2.5. Rural development programmes
Small-scale farms largely dominate the agricultural sector, and these farms face numerous challenges, such as low productivity and poverty. Rural poverty reached 39.3% in 2024, with extremely rural poverty at 15.5% (see more details in Chapter 1) (INEI, 2024[46]). This is primarily due to gaps in access to infrastructure and services, along with limited employment opportunities.
The agricultural sector remains crucial to Peru’s development, despite contributing only 6.8% of national GDP in 2024 (MIDAGRI 2025). It plays an essential role in generating employment and livelihoods for rural residents, with 81.7% of individuals living in rural areas depending on agricultural income for their livelihoods (MIDIS, 2024[47]). The government has developed a policy framework for rural development, which includes a comprehensive approach to tackle crucial challenges faced by the rural population, including smallholders. Table 2.3 shows major programmes and their objectives.
Source: IFAD (2020[48]), Impact Assessment: Strengthening Local Development in the Highlands and High Rainforest Areas Project (PSSA), https://www.ifad.org/en/w/publications/impact-assessment-strengthening-local-development-in-the-highlands-and-high-rainforest-areas-project-pssa-; Adaptation Fund (2024[49]), Building a Program for Adaptation and Resilience to Climate Change of Andean Local Communities and Ecosystems in Peru, https://www.adaptation-fund.org/project/building-a-program-for-adaptation-and-resilience-to-climate-change-of-andean-local-communities-and-ecosystems-in-peru/; IFAD (2018[50]), Republic of Peru - Country Strategy and Programme Evaluation, https://webapps.ifad.org/members/eb/125/docs/EB-2018-125-R-19.pdf; Agro Rural (2024[51]), Programas y proyectos de Agro Rural, https://www.gob.pe/cn/12260-programa-de-desarrollo-productivo-agrario-rural-programas-y-proyectos-de-agro-rural; Fondo de Cooperación de Desarrollo Social (2022[52]), Haku Wiñay/Noa Jayatai, https://www.foncodes.gob.pe/portal/index.php/haku-winay; Calderon et al. (2023[53]), Assessing essential service provision for prevention and management of violence against women in a remote indigenous community in Amantaní, Peru, http://dx.doi.org/10.1186/s12939-023-02012-3; IFAD (2017[54]), Fortalecimiento de mercados, diversificación de los ingresos y mejoramiento de las condiciones de vida en la Sierra Sur, https://ioe.ifad.org/documents/38714182/39710630/PDSS_Peru.pdf/cf018369-b808-4fd8-855b-cf8654557d19.
2.2.6. Marketing
Peru has implemented programs aiming to improve access to market information, enhancing commercial opportunities for smallholder farmers and promoting the competitiveness and internationalisation of agricultural products. A comprehensive set of digital tools, marketing initiatives, training and technical assistance, as well as marketing certifications, is employed to integrate producers into markets and modernise the sector.
Market information
The Integrated Agricultural Statistics System (SIEA) platform collects and consolidates agricultural statistical information from various sector agencies. It co‑ordinates strategic activities with other public entities and establishes alliances with the private sector to optimise joint intervention in generating, accessing, disseminating, and using agricultural information. This resource targets agricultural producers seeking to develop their knowledge, strengthen their technical capabilities, improve decision-making, adopt good practices, solve problems, generate changes, and take advantage of market opportunities (SIEA, 2025[55]).
SIEA’s objectives are: a) provide producers with information using ICT through private sector participation; b) enhance the productive and commercial capacities of agricultural producers; c) unify and consolidate information from internal and external sources into a centralised database; d) ensure access to information for monitoring the sector’s strategic actions and contributing to better-informed decision-making; e) facilitate efficient institutional co‑ordination to enhance the articulation between MIDAGRI and external entities related to the agriculture sector, and to promote interoperability between them (SIEA, 2025[55]).
MIDAGRI has also created the Padrón de Productores Agrarios-PPA (Register of Agricultural Producers), which is an official database to identify and organise farmers and agricultural producers across the country. It records key information such as the producer’s name, location, size of cultivated land, type of crops or livestock, and production methods. The PPA aims to provide an accurate picture of the agricultural sector, which is essential for designing policies, delivering subsidies, offering technical assistance, and improving market access for small and medium farmers who often operate informally. Beyond data collection, the register plays a critical role in connecting farmers to government programs, financial services, and food security initiatives. By enrolling, farmers can gain access to benefits such as state-backed credit, crop insurance, training programs, and emergency support during climate or market crises. It also helps the Peruvian government better allocate resources and ensure that aid reaches the right producers, especially in rural and vulnerable regions (MIDAGRI, 2025[56])
The Datero Agrario is a free text message service that provides wholesale prices of the leading agricultural products registered in the Supply and Price System (SISAP) to primary cell phone users. Additionally, it includes information on the national climate (SENAMHI) and water availability in rivers and reservoirs (ANA).
The Virtual Catalogue of Agricultural Products platform aims to provide family farming with improved business opportunities through innovative technological tools. Its objective is to enhance the marketing conditions of agricultural, livestock, and forestry goods. MIDAGRI promotes the platform to establish a short channel in the agri-food chain and showcase the national agricultural offer. This brings the producer closer to the consumer to achieve growth and development of family farming in Peru.
The Mi Caserita application provides access to real-time reference prices for essential foods in the major markets of Metropolitan Lima. It can be accessed from any smartphone. MIDAGRI staff collect the information through internet surveys in thirty wholesale and retail markets in Metropolitan Lima. With Mi users can search for food and view prices displayed on a map. The cheapest prices are in green, intermediate prices in orange, and the most expensive in red. Users can easily select their preferred option and view details or directions to reach the market from their current location.
Marketing and promotion
MIDAGRI Mercados de la Chacra a la Olla are food fairs for the direct purchase and sale initiatives, as an alternative to local markets for purchasing food from the primary family basket at actual market prices and with the participation of small local producers. The organisation operates under the guarantee of regional, provincial, and local governments to ensure the safety of attendees, producers, and organisers. This initiative aims to promote the entrepreneurship of small-scale farmers who continue to supply food to wholesale markets and supply centres, guaranteeing an excellent supply to end-users, fair prices, and avoiding speculation. Due to a lack of budget, the initiative ended on 31 December 2021 (Gobierno Nacional del Perú, 2024[57]). MIDAGRI also organises the Peruvian Cheese Salon, to promote cheeses and other dairy products, as well as fostering direct contact between producers, wholesalers and consumers (MIDAGRI, 2025[58]).
The Productive Export Route (RPE) is a multisector strategy that provides training and technical assistance for productive and export development. Its objective is to increase the competitiveness and internationalisation of exporting MSMEs and those with export potential in the prioritised regions and chains that grow coffee, cocoa, chocolate, bananas, mango, quinoa, avocado, asparagus, grapes, pomegranate, passion fruit, oregano, ginger, curcuma and maca.
The Family Agriculture Certification Mark of Peru is a distinctive sign created by MIDAGRI to enhance the positioning of products of origin in family farming and services derived from them in local, regional, national, and international markets. The aim is to recognise, value, and safeguard the traditional techniques of rural men and women who belong to family farming, ensuring food security and conserving our country’s biological diversity. Family farming producers and their organisations registered in the Registry of Producers and Organisations of Food Producers of Family Farming of the Regional Directorates of Agriculture, or those registered in the National Registry of Agricultural Cooperatives or the Directory of Native and Peasant Communities, may request a license to use the certification mark free of charge. Likewise, if the entities are organisations, they must have a single record of existing and active taxpayers. The certification mark license enables family farming producers and their organisations, among others, to participate in state food purchasing procedures in compliance with Law 31071 and its regulations (MIDAGRI, 2022[59]).
The PromPeru commercial offices are responsible for promoting worldwide all types of Peruvian products, not only agricultural. PromPeru is also responsible for studying, planning, training, and executing activities outlined in the operational plans for export promotion. They promote Peru’s tourism, the country’s image, and business investment in their respective markets. All actions are based on policies issued by the Ministry of Foreign Trade and Tourism and relevant sectors. (Promperu, 2025[60]).
2.2.7. Agri-food safety measures
Peru has implemented a series of regulatory and institutional measures aimed at improving quality control, sanitary standards in the agricultural sector.
The National Agricultural Health Service (SENASA) is the institution that oversees animal and plant health programmes as well as the monitoring of chemical residues, including residues of pesticides and veterinary drugs, as well as other contaminants, such as heavy metals and microbiological contaminants and their toxins, in primary agricultural products of plant and animal origin intended for human consumption and feed (SENASA, 2025[61]; Gobierno Nacional del Perú, 2024[62]).
SENASA ensures the health of the plants and protects them from pests and diseases that could harm farmers, consumers, or trade. Some of its main functions are 1) surveillance and pest control, where monitors crops for plant pests (e.g. fruit fly, coffee rust, locusts) and declares and maintains pest-free areas (critical for trade but also for local food safety); 2) quarantine and prevention, controls the import of seeds, plants, and fresh produce to prevent the entry of exotic pests and diseases, and operates border inspections with quarantine stations; 3) integrated pest management (IPM) by promoting biological control agents (e.g. natural predators, sterile insect techniques) to reduce pesticide use; 4) certifies crops for domestic and export markets by certifying production areas, nurseries, and packing plants and monitoring pesticide residues for compliance with safety standards (SENASA, 2025[61]; Gobierno Nacional del Perú, 2024[62]).
SENASA’s role for animal health is carried out by protecting livestock and consumers from animal diseases that can reduce productivity or pose public health risks (zoonoses). Some main functions are: 1) disease surveillance and eradication, where it runs national programmes for the control/eradication of foot-and-mouth disease (FMD), brucellosis, rabies, avian influenza, newcastle disease, etc. and maintains disease-free zones, recognised by the World Organisation for Animal Health (WOAH). 2) Vaccination and control campaigns, where SENASA implements vaccination programmes (e.g. against FMD and Newcastle disease) and co‑ordinates with farmers to ensure herd/flock immunity. 3) Animal movement control, where SENASA monitors the transport of live animals to prevent the spread of diseases and issues zoosanitary certificates for internal trade. 4) SENASA also takes care of veterinary and drug and residue control on animals destined for human consumption (SENASA, 2025[61]) (Gobierno Nacional del Perú, 2024[62]). SENASA also conduct other activities at the border, from certification to control and certification:
Phytosanitary and zoosanitary certification. SENASA issues phytosanitary certificates for plant products (fruits, vegetables, grains, etc.) and zoosanitary certificates for animal products (meat, dairy, live animals).
Pre-export inspections and Controls. SENASA, inspects products at farms, processing plants, and export terminals to ensure they are free of pests, diseases, or chemical residues above permissible limits. Oversees compliance with Good Agricultural Practices (GAP) and Good Manufacturing Practices (GMP) for export-bound goods.
Residue monitoring and laboratory testing, SENASA runs surveillance programs for pesticide residues, heavy metals, and veterinary drugs in food products. Accredited SENASA laboratories conduct microbiological and chemical analyses, which are often required by international markets.
Border control and certification for exports, at ports and airports, SENASA controls shipments to verify documents and physical conditions. Also, provides certification for re-exported agricultural goods transiting through Peru (SENASA, 2025[61]).
Regardless of the key importance of SENASA in maintaining good sanitary and phytosanitary health of the country, its budget has not been stable, from one year to another. By 2024 the total budget was around USD 80 million (Figure 2.2).
Source: SENASA (2025[61]), https://www.gob.pe/institucion/senasa/institucional.
Another institution that oversees food safety in the country is the National Institute for Quality (INACAL) is a specialised technical body under the Ministry of Production, that develops and promotes national quality standards, including those related to food safety. It also accredits laboratories and aligns national practices with international norms (e.g. ISO, Codex) (see more details in Chapter 5.
2.2.8. Preferential tax policies for farmers
Peru’s tax framework includes targeted incentives to promote export-oriented agriculture under the Agricultural Promotion Law (27360), which provides tax benefits, such as a reduction in income tax rates and a special labour regime tailored to the unique demands of agricultural work, such as seasonality and daily work hours. This Law has been modified over the years, but continues to be the basis for the promotion of export-oriented agriculture and has been extended until 2031 (LP, 2025[63]; Congreso de la Republica, 2002[64]).
Another Law No. 31110 establishes a special regime to promote agricultural, agro-export, and agro-industrial activities through targeted tax incentives and labour rules. For exporters, the law provides significant tax benefits, including a reduced corporate income tax rate of 15% (instead of 29.5% of the general regime) for companies with annual net income up to 1 700 Tax Units (UIT) until 2030, and a phased rate increase for higher-income companies. It also allows accelerated depreciation at 20% for irrigation and hydraulic infrastructure projects, advance value-added tax (VAT) recovery on capital goods and construction during the pre-production phase, and a 10% tax credit on reinvested profits (up to 70%) for smaller taxpayers, with reinvestment focused on irrigation systems. Additionally, businesses can deduct up to 10% of expenses supported by the regime NRUS receipts within a limit of 200 UIT annually (El Peruano, 2020[65]). The law also mandates Customs (SUNAT) to publish annual reports on companies benefiting from these incentives, ensuring transparency. These measures aim to improve competitiveness, encourage reinvestment, and formalise employment in the agricultural sector while boosting infrastructure and productivity in export-oriented activities (El Peruano, 2020[65]).
To incentivise investments and economic activity in the Selva (Amazon) region, particularly in agriculture and related sectors, Law 27037 was established, which includes reduced income tax rates, exemptions and special tax credits for eligible producers and businesses. This law sets a preferential tax framework to encourage economic development in the region. The law established a 10% income tax for taxpayers located in the Amazon and mainly engaged in agricultural activities, aquaculture, fishing, tourism, manufacturing activities linked to the processing, transformation, and marketing of primary products from the mentioned activities, and forestry transformation (provided they are produced in the area), as well as forest extraction activities (MINAM, 1998[66]). The income tax rate is lowered to 5% for taxpayers in Loreto and Madre de Dios regions, and in the Iparia and Masisea districts of the Coronel Portillo province, as well as in the Atalaya and Purús provinces in the Ucayali region, who are engaged in specific activities as indicated in the standard (MINAM, 1998[66]).
Moreover, taxpayers in the Amazon who engage in agricultural activities or process native and alternative crops in the area may be fully exempt from income tax. Depending on their location, companies that process these products will be subject to an income tax rate of either 10% or 5%. However, Amazon-based taxpayers are eligible for a tax credit equal to 25% of their monthly gross tax on taxable sales made outside of this region. Taxpayers in the regions of Loreto, Madre de Dios, and the districts of Iparia and Masisea of the province of Coronel Portillo, as well as the provinces of Atalaya and Purús of the region of Ucayali, will receive a special tax credit equivalent to 50% of their monthly gross tax (MINAM, 1998[66]; El Peruano, 2020[65]). Lastly, all livestock species sold live are exempt from paying the General Sales Tax (IGV) according to Decree No. 043-2005-EF Appendix I (MEF, 2005[67]).
2.3.1. Main objectives of agro-food trade policy
Peru maintains an open economy and is committed to commercial integration, particularly in the agricultural sector. This has resulted in a consistent rise in agricultural exports and their diversification, making the agro-export sector an important part of Peru’s free trade agreements (see Chapter 1 for more details). This export-oriented agriculture has been, over the past 20 years, increasingly significant in exporting non-traditional products, which has created employment opportunities, generated foreign currency flows, and promoted regional development (MIDAGRI, 2022[68])
Agri-food products generally face low tariffs
Agri-food trade overall is subject to relatively low applied tariffs. This is slightly higher than other sectors: in 2023, the simple average MFN tariff applied by Peru on agri-food products (as defined in Annex I of the WTO Agreement on Agriculture) was 2.8%, compared with 2.3% for non-agricultural goods (Figure 2.3). In contrast, the trade-weighted average tariff for agri-food products (1.4%) is lower than non-agri-food products (1.8%), suggesting that there is a higher volume of trade of agri-food products subject to lower tariffs compared to non-agri-food products. The highest tariffs are found in the beverages and tobacco (5.1%) and the animal products sectors (4.8%), whilst the sector with the lowest tariffs is cotton with 0.5% tariffs (WTO, 2025[69]; WTO, 2006[70])’.
Note: The figure shows simple average rates. The calculation of the average includes an estimation of ad valorem equivalents for tariffs expressed in NAV form. Agriculture is defined according to Annex I of the WTO Agreement on Agriculture.
Source: WTO (2025[69]), World Tariff Profiles 2025, https://www.wto.org/english/res_e/booksp_e/world_tariff_profiles25_e.pdf; WTO (2006[70]), World Tariff Profiles 2006, https://www.wto.org/english/tratop_e/tariffs_e/tariff_profiles_2006_e/tariff_profiles_2006_e.pdf.
Peru’s average agro-food tariff has decreased significantly from 13.6% in 2006 to 2.8% in 2023. This is lower than the country’s Latin American peers as well as OECD Members, except Australia and New Zealand (Table 2.4).
Note: The table shows simple averages. The calculation of the average includes an estimation of ad valorem equivalents for tariffs expressed in NAV form. Agriculture is defined according to Annex I of the WTO Agreement on Agriculture. Peru data is from the year 2023, all other countries 2024.
Source: (2025[69]), World Tariff Profiles 2025, https://www.wto.org/english/res_e/booksp_e/world_tariff_profiles25_e.pdf.
All agricultural tariff lines are bound in the WTO by an upper limit, with 97.8% of final bound tariffs ranging between 25-50%. Like most WTO members, Peru applies tariffs on its agricultural products at levels below their bound levels. More than half (55.4%) of agricultural MFN tariff lines were duty-free in 2023, with the rest falling within the range of 5-10%. As a result, 77.8% of the value of agricultural imports entered Peru duty-free, whilst 21.4% were subject to duties within the range of 5-10% (Figure 2.4).
Frequency by level of tariff rates
Source: (2025[69]), World Tariff Profiles 2025, https://www.wto.org/english/res_e/booksp_e/world_tariff_profiles25_e.pdf.
Import licenses and quantitative restrictions on imports
Peru does not have quantitative import restrictions, and the country follows the WTO Agreement on Import Licensing Procedures, ensuring that any licensing system is transparent, predictable, and non-discriminatory. Agricultural and food-related licensing is mainly justified under sanitary and phytosanitary (SPS) measures for protecting human, animal, or plant health. A Phytosanitary Import Permit (PFI) granted by SENASA is required to import plant products into Peru. It is important to note that not all plants or plant products are authorised to enter Peru. If the product to be imported does not have established requirements, a pest risk analysis must be requested. A list of agricultural commodities containing phytosanitary risk categories has been established based on the level of processing to which the product has been exposed, its proposed use, and its potential to transport pests (Gobierno Nacional del Perú, 2021[71]). Peru, over the past 20 years, has barely used any quantitative trade restrictions such as safeguard measures, countervailing or antidumping duties (Gobierno Nacional del Perú, 2024[72]).
The Peruvian Price Band System (PPBS)
The Peruvian Price Band System (PPBS) is a mechanism introduced by Decree No. 115-2001-EF in 2001, to stabilise the import prices of four groups of agricultural products: rice, yellow maize, sugar, and milk, with a total of 47 related subheadings (products), to limit the negative impact of international price volatility. For each of the four products, there is a customs table that includes a list of reference prices and the corresponding specific duty or tariff rebate. It also includes a ceiling price and floor price, calculated based on 60 monthly average prices from reference markets in the case of rice and sugar, and 120 average prices in the case of maize and milk. International reference prices are taken to prepare the customs tables (semi-annual) and the reference prices (monthly) (MEF, 2025[73]; MIDAGRI, 2025[74]).
The Central Bank of Peru (BCRP) updates the customs tables every six months and the reference prices every 30 days (average of the previous month), then the Ministry of Economy and Finance (MEF) publishes with the endorsement of the MIDAGRI. Any economic agent can compare the monthly reference prices with the customs tables to verify whether imports of products under the band are subject to payment of a specific duty, valid until the next month’s reference price is published. The PPBS is activated when the reference prices from the reference markets fall below the floor price; in this case, a specific duty equivalent (as a % of CIF) to the difference between the floor price and the monthly reference price is applied. Similarly, a tariff rebate is applied when the reference price exceeds the ceiling price, equivalent to the difference between the ceiling price and the reference price (MEF, 2025[73]; MIDAGRI, 2025[74]).
The principles of this mechanism are 1) Transparency: the regulations are established and published; the information source is public, stable, and accessible. 2) Predictability: economic agents can estimate floor, ceiling, reference prices, and the corresponding specific duties. The import cost is set in advance, based on internationally recognised averages. 3) Non-discrimination: applied at the border to imports from third countries. 4) Non-discretionary: being transparent, administrative manipulation is very difficult. 5) Tariff-based: compatible with WTO commitments and subject to WTO bound levels. 6) Historical consistency: with minimal modifications, it maintains long-term trends, and the effects of protection (reductions and/or specific duties) are neutral (MEF, 2025[73]) (MIDAGRI, 2025[74]).
All regulations governing the PPBS are published in the official gazette El Peruano. Updates to customs tables and modifications to the PPBS mechanism are made by Supreme Decree endorsed by MEF and approved by MIDAGRI. Monthly reference prices are issued by the MEF Vice-Ministerial Resolution. The application of specific duties to PBS imports must not exceed the WTO consolidated bound level of 68% for most products. To limit its impact, a maximum of 40% of the CIF import value was established. To date, no product has reached 25% of the CIF import value. In practice, the application of duties is rare, activated only when there is a sharp drop in international prices. For rice, since mid-2023, no duty was applied until March 2025; in April, May, and June 2025, duties of USD 72 per metric tonne, USD 82 per metric tonne, and USD 100 per metric tonne were applied, respectively. Maize imports have not paid duties since mid-2019. For sugar, no duties were applied between November 2020 and April 2025; in May, June, and July 2025, duties of USD 4, USD 32, and USD 50 per metric tonne were applied, respectively. For milk, duties are applied occasionally; currently, none are applied. Figure 2.5 shows the rice example used from 2021 until July 2025 (MIDAGRI, 2025[74]). Box 2.2 shows the modifications that the PPBS has had over the years since its creation.
Source: MIDAGRI (2025[74]), Boletin de la Franja de Precios, https://cdn.www.gob.pe/uploads/document/file/7828224/6603889-boletin-franja-de-precios-ene-feb-2025.pdf?v=1742936065; MEF (2025[73]), Franja de Precios, https://www.mef.gob.pe/es/?option=com_content&language=es-ES&Itemid=100854&lang=es-ES&view=article&id=289.
Export policy measures
Peru does not have any export subsidies or export taxes; it only has certification requirements that exporters need to fulfil to protect animal and plant health. For instance, to export or re-export fresh or primary processed plant products, or plants, a phytosanitary certificate must be obtained from SENASA. This certificate is based on the standards established by each country’s National Plant Protection Organisation (NPPO). The purpose of this certificate is to protect agriculture and the environment from the spread of pests. The phytosanitary requirements are higher for products at a higher risk of being affected by pests. SENASA certification is also required for the treatment and packaging of plants and plant products intended for export. This certification verifies that the plant is selected, cleaned, washed, packaged, and treated appropriately for plant products destined for export. Furthermore, to export plant products, SENASA must certify the field or production site.
Supreme Decree No. 115-2001-EF (21 June 2001): established the Price Band System, where the BCR reviews and updates the customs tables every six months and also provides the average CIF reference prices of the previous fortnight/month to MEF and MIDAGRI. MEF and MIDAGRI endorse the decrees, and MEF publishes them. MEF publishes average CIF reference prices fortnightly/monthly.
Supreme Decree No. 103-2015-EF (1 May 2015): limits the application of the corresponding specific duty to 20% of the declared CIF value. This adjustment was notified to the WTO Dispute Settlement Body (DSB) in the context of Guatemala’s 2013 review of the PPBS.
Supreme Decree No. 055-2016-EF (28 March 2016): modifies the methodology for calculating floor and ceiling prices, and for calculating variable additional duties and tariff rebates under D.S. 115-2001-EF. Includes a maximum tariff cap of 20% for imports under the price band. Adjustment notified to the WTO DSB in the framework of Guatemala’s 2013 review.
Supreme Decree No. 371-2017-EF (21 December 2017): replaces the reference market for rice (FOB-Thailand) with FOB-Uruguay (“Uruguayan white rice, max. 5% broken, weekly quotations, source: Creed Rice”). Reduces the maximum ad valorem tariff to 15% for imports under the PBS.
Supreme Decree No. 152-2018-EF (5 July 2018): temporarily modifies the lower confidence interval for rice imports. Raises the maximum tariff cap to 20% for PBS products.
Supreme Decree No. 382-2021-EF (29 December 2021): updates the customs tables. Raises the maximum tariff cap to 40% for PBS imports. Modifies the confidence interval calculation for updating tables: 120 monthly averages for maize and milk. Temporarily modifies the lower confidence interval for dairy imports.
Supreme Decree N° 317-2023-EF, and Supreme Decree N.° 286-2024-EF which extended the former to 31/12/2025.
Source: MIDAGRI (2025[74]), Boletin de la Franja de Precios, https://cdn.www.gob.pe/uploads/document/file/7828224/6603889-boletin-franja-de-precios-ene-feb-2025.pdf?v=1742936065; MEF (2025[73]), Franja de Precios, https://www.mef.gob.pe/es/?option=com_content&language=es-ES&Itemid=100854&lang=es-ES&view=article&id=289
Trade relations: Bilateral, regional, and multilateral agreements (WTO commitments)
Peru has been a WTO member since 1995 and a member of GATT since 1951 and has established a wide network of free trade agreements (FTAs), economic partnerships, and integration pacts across continents. Peru has bilateral and regional FTAs with the United States, Canada, China, Chile, Japan, South Korea, Singapore, Thailand, Australia, Mexico, Costa Rica, Honduras, Panama, the United Kingdom, the European Union, and the European Free Trade Association (EFTA). Peru also has regional integration and multilateral agreements with the Pacific Alliance, Andean Community (CAN), MERCOSUR (economic complementation agreement), the CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership), which includes Australia, Canada, Japan, Mexico, New Zealand, Singapore, Viet Nam, among others (see more details in Chapter 1’).
This global openness has been a key factor contributing to the country’s transition into a major global trader of certain high-value agro-food products, including fresh grapes, blueberries, green asparagus and mangoes. This is a shift away from traditional products such as coffee and cane sugar. For instance, 90.8% of the USD 64.3 billion in export value that Peru reached was exported to countries with which Peru has current trade agreements. The United States was the leading destination for Peru’s agricultural exports, receiving 28.8% of shipments worldwide in 2022 and reaching an export value of USD 3.3 million, followed by China (14.9%) and the Netherlands (12.2%) (UN Comtrade, 2025[75]) (see more details in Chapter 1’).
2.4.1. Main resilience policies
Peru’s agricultural sector is highly vulnerable to climate change and faces many risks. The Niño phenomenon, rising sea levels, extreme weather and water scarcity and soil degradation threaten the country’s diverse landscape and economy. Despite these challenges, Peru has opportunities to adapt and mitigate the impacts through strategic planning, scientific research and community engagement. Effective water resources management, agricultural diversification and investment in sustainable practices are essential for building resilience. Collaboration across sectors and levels of government, combined with international support, will be crucial for Peru to navigate the complexities of climate change and safeguard the well-being of its populations and ecosystems (see more details in Chapter 3).
The National Adaptation Plan to Climate Change (NAP) approved by MINAM in 2021, aims to reduce the country’s exposure and vulnerability to climate change, as well as its adaptation capacity by 2030 and 2050 in key sectors, including agriculture, water and forestry. The NAP offers strategic guidance for climate change adaptation planning, implementation and monitoring, complementing the more specific objectives, measures and targets outlined in the NDCs. Furthermore, the National Agricultural Policy 2021-2030 includes a key focus on reducing vulnerability to climate change and enhancing resource management (see more details in Chapter 3).
Peru created the System for Monitoring Adaptation and Mitigation Measures (SIMOM), a set of actions, regulations and tools (MINAM, 2019[76]). MINAM, as Peru’s lead authority on climate change, is responsible for overseeing SIMOM’s design and operation, ensuring it aligns with national laws. SIMOM comprises tools for three components: 1) evaluating climate adaptation measures; 2) tracking and verifying GHG emissions and removals; and 3) overseeing climate change financial support (see more details in Chapter 3).
The 2025 National Public Investment Policy Guidelines incorporate sustainability as a core principle. These guidelines promote the development of resilient assets capable of withstanding the long-term impacts of climate change, while preventing operational, financial, environmental, and social risks, and encouraging investment projects that generate positive environmental externalities. This programmatic framework includes the Agricultural and Irrigation Sector Environmental Management Regulations (RGASAR) and the implementation of Agroclimatic Management Platforms (PGA), in co‑ordination with the National Meteorology and Hydrology Service of Peru (SENAMHI). These platforms provide farmers with accessible, science-based climate information to support lower-risk planting and harvesting decisions (El Peruano, 2026[26]) (MIDAGRI, 2025[77]).
2.4.2. Risk management tools in agriculture
Risk management and resilience agricultural policies in Peru are highly related to adaptation to climate change, specifically to water management, such as off and on-farm irrigation projects. However, one of the policy instruments most used in Peru for risk management is insurance. The insurance market in Peru is limited or non-existent for subsistence agriculture, except for the services provided by the government through institutions like MIDAGRI or AGROBANCO. This is not the case for export-oriented agriculture, which is well integrated into the financial market (national or international) for both credit and insurance services (MIDAGRI, 2024[78]). MIDAGRI has the Catastrophic Agricultural Insurance (SAC), an insurance that provides support to smallholders in the country’s poorest and most vulnerable areas. It covers 24 out of 25 regions and provides a fixed amount of around USD 215 per hectare to producers who lost their crops due to pests, frost, drought, cold, fires, and other hazards (MIDAGRI, 2025[79]). In 2024, SAC compensated around 100 000 small-scale farmers whose crops were affected by natural hazards, distributing more than USD 15.5 million, covering 1.6 million ha (MIDAGRI, 2024[78]). Since its creation in 2009, SAC has steadily increased its budget with a sharp decrease for 2024 (Figure 2.6).
Source: MIDAGRI (2025[79]), Seguro Agrícola Catastrófico (SAC), https://www.gob.pe/institucion/midagri/campa%C3%B1as/19256-seguro-agricola-catastrofico-sac.
SAGRO, under the administration of MIDAGRI, is an agricultural insurance programme. This is a subsidy aimed at small farmers or ranchers who wish to protect their crops or animals against various climatic risks that affect agricultural activity for commercial purposes. The subsidy covers 80% of the insurance premium, with the remaining 20% to be paid by the farmer or rancher. This subsidy aims to co-finance insurance premiums for small producers who seek to protect their invested capital, production costs, or the value of their agricultural credit. Producers who manage up to 10 ha each are eligible for this insurance. In 2024, SAGRO invested the equivalent of USD 12 million (MIDAGRI, 2023[80]).
Recuperate YA is a one-time emergency financial assistance programme launched in 2022. It was created in response to a severe drought that affected agricultural and alpaca-breeding producers nationwide. The initiative aimed to help producers reintegrate into productive activity. The programme provides individual payments to mitigate the damage caused by severe drought. It is intended for agricultural producers who manage up to four hectares of land affected by severe drought by more than 50% or raise 1 to 12 alpacas. In 2023, the government allocated USD 72 million, benefiting more than 199 532 farmers (MIDAGRI, 2025[81]).
This section provides a quantitative evaluation of support allocated to Peruvian agriculture between 2000 and 2024. It utilises the OECD’s method for measuring the level of policy effort governments provide to support their agricultural sector, employing a set of indicators designed to assess the level and composition of support and monitor how this support evolves over time and across countries.
The OECD classifies agricultural support policy measures into three main categories: support to individual farmers (through the Producer Support Estimate, or PSE, indicator), support to agricultural producers collectively (through the General Services Support Estimate, or GSSE, indicator) and support to consumers (through the Consumer Support Estimate, or CSE, indicator). Put together, these indicators provide a comprehensive picture of agricultural support through the Total Support Estimate (TSE). A comprehensive database for OECD and selected non-OECD countries is available at Agricultural Policy Monitoring and Evaluation 2025. Data for the comparative analysis of this section comes also from the Agricultural Policy Monitoring and Evaluation 2025 report.
2.5.1. Support for agricultural producers
The Producer Support Estimate (PSE) measures the monetary value of transfers from consumers and taxpayers to agricultural producers arising from government policies that support agriculture. Transfers generated by agricultural policies are measured in gross terms (as no adjustment is made for costs incurred by producers) and at the farm gate level (to measure support provided only to individual primary producers of agricultural commodities).
The PSE is often shown using the %PSE indicator, which is calculated by dividing producer support by the value of gross farm receipts (i.e. the value of production plus budgetary and other transfers to producers). The level of support offers insights into the effort that agricultural support policies have on producers (support when the PSE is positive or a burden when the PSE is negative), on consumers (a burden when the MPS is positive), and on taxpayers (with the use of budgetary allocations, which are not only used for PSE but also to GSSE and CSE). The agricultural products chosen for the PSE calculations account for 70% of the total production value, while the remaining 30% is estimated through extrapolation. For the case of Peru, 18 agricultural products met the criteria: rice, maize, potatoes, avocado, grapes, asparagus, mandarines-clementines, blueberries, bananas, coffee, cocoa, palm oil, sugar, milk, beef, pig meat, poultry, and eggs (see Annex 2.C for more details).
The average level of producer support in Peru, was 6.2% of gross farm receipts (%PSE) for 2022‑24, suggesting that only that percentage of agricultural producers’ gross receipts was generated by public policies (Tables 2.5 and 2.6). This producer support is comprised of two major components: market price support, accounting for 82% of the PSE, through the Peruvian price band system for rice, yellow maize, sugar, and milk; and budgetary allocations accounting for the remaining 18%; where payments based on input use, such as subsidies for variable and fixed inputs, as well as on-farm services, contributed with most of it (16%), the rest were payments provided for emergencies (1%) and for environmental services (1%).
National currency (million PEN)
Source: OECD (2026), “Producer and Consumer Support Estimates”, OECD Agricultural policy monitoring (database), https://data-explorer.oecd.org/.
Million USD
Source: OECD (2026), “Producer and Consumer Support Estimates”, OECD Agricultural Policy Monitoring (database), https://data-explorer.oecd.org/.
The %PSE is a good indicator to compare the level of support across countries and over time, in spite of differences in sector sizes and inflation. In comparison with countries covered in the 2025 OECD Agricultural Policy Monitoring and Evaluation report, Peru’s average level of PSE has declined from 23% in 2000-02 to 6.2% in 2022-24, which is much lower than the OECD average of 13.2% and the average of 12.2% (positive PSE only) for emerging economies. Peru’s level of support is similar to that of Brazil (5.4%) and the United States (7.1%) (Figure 2.7).
Note: The OECD total does not include the non-OECD EU Member States. The PSE of the 11 Emerging Economies only includes positive support. These 11 countries are Argentina, Brazil, China, India, Indonesia, Kazakhstan, the Philippines, the Russian Federation, South Africa, Ukraine and Viet Nam.
Source: Data of countries different from Peru are from OECD (2026), “Producer and Consumer Support Estimates”, OECD Agricultural policy monitoring (database), https://data-explorer.oecd.org/.
Two other indicators provide specific information that can be used to evaluate changes in policy measures over time: 1) the producer Nominal Protection Coefficient (NPC), which shows the effective price received by producers relative to the price that would prevail without the country’s support policies, thereby measuring the degree to which domestic markets are insulated from the world market; 2) the producer NAC, which shows the producers’ gross farm receipts (including producer support) relative to the value of production at border prices, thereby measuring the degree to which the signals guiding production, consumption and trade come from the market (relative to those from policy intervention).
For Peru, the producer NPC decreased from 1.32 in 2000-02 (meaning that domestic prices received by producers were 32% above world prices) to 1.06 in 2022-24 (Table 2.6). This indicates that over the past two decades, the level of price distortion has fallen and that market signals are becoming more important for producers’ decisions. The producer NAC also fell from 1.30 (meaning that gross farm receipts are 30% higher than if production was valued at border prices and in the absence of other support policies) in 2000‑02 to 1.07 in 2022-24. This indicates a higher share of farm receipts generated in the market at unsupported prices, and therefore lower government intervention and higher influence of market signals on the orientation of agricultural production.
Peru’s PSE composition: Market price support
The way in which support is provided is as important for its effects as the support level. The composition of support shows how positive producer support is provided and negative producer support is imposed, with different impacts on the agricultural sector and on the distribution of benefits across society. Governments have a broad range of measures at their disposal to support agricultural producers: for example, they can support domestic prices through tariffs in combination with domestic market interventions or direct price interventions. They can provide subsidies to reduce the cost of variable inputs such as fuel and fertilisers. They can also provide payments on a per animal or per hectare basis, or as a top-up to farmers’ income. Each type of measure has different implications for producers and markets, including across different commodities.
Market price support (MPS) is directly linked to commodity output and can have a significant effect on production and trade. This type of support, which can be positive or negative, qualifies as one of the potentially most trade-distorting forms of support. Moreover, MPS is less effective in increasing producer income than other types of support, such as direct payments to farmers or taxes on assets that are less attached to commodity output. Market price support, which applies on a commodity-by-commodity basis, also distorts relative production incentives across individual commodities. Moreover, past OECD work has associated positive MPS with a strong potential for negative impacts on the environment.
Market price support is calculated where there is domestic or trade policies that create a Market Price Differential (MPD) between the domestic and reference price of agricultural commodities. The reference price represents the opportunity cost for domestic market participants at the given world market conditions (or the price that would have prevailed without domestic and trade policies present in the country). Market price support can generate transfers from consumers to producers when farm gate prices are above reference prices (positive price gap) or from producers to consumers when farm gate prices are lower (negative price gap). Price gaps may also exist without any such policy measures, caused by poorly functioning markets, weak institutional infrastructure or poor physical infrastructure. As the PSE and its parts measure policy efforts rather than these types of market failures, in such cases, market price differentials are assumed to be zero.
In the case of Peru, the decrease in %PSE is mainly due to the trade openness approach the country undertook in the 1990s and early 2000s, where several FTAs were signed, and border protection and price controls were dismantled (Figure 2.8). Currently, although PSE% is much lower, MPS has been its main component, contributing with 82% of the PSE for 2022-24. 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 PPBS implemented for rice, maize, sugar and milk.
Source: OECD (2026), “Producer and Consumer Support Estimates”, OECD Agricultural Policy Monitoring (database), https://data-explorer.oecd.org/.
Peru’s PSE composition: Budgetary transfers
The other important component of the PSE for Peru is the budgetary support provided through different types of payments for variable inputs such as fertilisers, seeds, for fixed capital formation, such as on-farm equipment and machinery investments, and subsidies for on-farm services. All these types of input support subsidies combined account for around 18% of PSE. Within those, payments for fixed capital formation represent the most important category for the entire period since 2000. Most of this support is provided to farmers for on-farm investments, particularly for irrigation.
Over the years, the country has experienced serious droughts, which have prompted the government to provide support to better manage water resources. Several programmes were created to finance on-farm irrigation systems, reservoirs, and water harvesting structures, among others, to increase water availability. Other programmes were created to finance soil conservation practices, such as the creation of watershed management to reduce erosion and terracing (Figure 2.9).
Payments for variable input use are another important category for Peru. These relate mostly to fertilisers, seed, and concessional credit with preferential interest rates. A relatively small part of budgetary transfers goes to on-farm services, which are mostly allocated for training, capacity building, and technical assistance. Occasionally, Peru provides producer support payments based on current factors of production such as land area, animal numbers, income or revenue, particularly in the context of catastrophic losses due to climate hazards or the Niño phenomenon. These payments may be based on land, animal number or farmers’ income situation.
Source: OECD (2026), “Producer and Consumer Support Estimates”, OECD Agricultural Policy Monitoring (database), https://data-explorer.oecd.org/.
Another category of Peruvian budgetary support to producers is payments based on non-commodity criteria, which are mostly for environmental protection payments to implement different practices that aim to preserve biodiversity, or soil conservation and for agroforestry. In addition, farmers in Peru benefit from implicit forms of support that are not accounted for in the support estimates, due to constraints in data availability, like preferential water use rates, due to the difficulties in measuring the volume of water consumed on-farm. Some tax cuts (drawbacks) for the export-oriented agriculture are also granted, but they are also used in other sectors of the economy.
Peru’s PSE composition: Single commodity transfers
In order to examine the level of support by commodity and to understand to what extent agricultural policies are commodity-specific, the OECD uses the Producer Single Commodity Transfers (SCT) indicator. A %SCT of 25%, for example, indicates that the value of transfers that are specific to the commodity is equivalent to one-fourth of the commodity’s gross farm receipts. SCT sums up commodity-specific transfers, such as MPS and payments linked to the production of a given commodity, and expresses it as a percentage of commodity gross receipts (i.e. value of production and budgetary payments specific to the commodity). Variations in levels of support between products translate into incentives or disincentives for producing them.
Hence, differing support levels across commodities in a country generate additional market distortions affecting farmers’ production choices. Alternatively, payments may be provided to producers of any commodity in a designated group (e.g. any crop or any livestock producer), or simply to producers of any commodity without distinction. The latter payments give more flexibility to those who receive support to define their production mix, therefore allowing producers to be more responsive to market signals.
MPS in Peru is mostly created by the PPBS, a tariff mechanism designed to stabilise the cost of key agricultural imports rice, yellow corn, sugar, and milk against international price volatility. It works by setting a floor and ceiling price based on international reference markets. When prices fall below the floor, a specific duty is applied; when prices rise above the ceiling, a tariff rebate is granted (see Section 2.3.1 for more details). However, Peru implements MFN tariffs as well to some products like beef (11%) and poultry, pig meat with (6%), which from time to time also contribute to the MPS (Figure 2.10). For the period 2022‑24 the products that received more support were maize, sugar rice, beef, pigmeat, poultry and milk. While eggs shows a negative support (Figure 2.11).
Source: OECD (2026), “Producer and Consumer Support Estimates”, OECD Agricultural Policy Monitoring (database), https://data-explorer.oecd.org/.
Source: OECD (2026), “Producer and Consumer Support Estimates”, OECD Agricultural Policy Monitoring (database), https://data-explorer.oecd.org/.
2.5.2. Support to general services for agriculture
The General Services Support Estimate (GSSE) captures all types of public financing of measures that create enabling conditions for the primary agricultural sector. As opposed to support provided to individual producers measured by the PSE, the GSSE measures support that benefits the agricultural sector collectively. Support for general services includes agricultural research and development, agricultural training and education, inspection and control, infrastructure, marketing and promotion, and public stockholding. Unlike the PSE and CSE transfers, GSSE transfers are not received by producers or consumers individually, and do not directly affect farm receipts or consumption expenditures.
In Peru, the GSSE expressed relative to the value of agricultural production has declined from 3.2% in 2000-02 to 2.1% in 2022-24. This shows that public expenditures for general services have not kept pace with the increase in the value of production. Even though the government has considerably increased the budgetary allocations to general services over the years, this has been outpaced by the sector’s growth, particularly since the mid-2010s, when highly valued non-traditional crops started to dominate the agricultural portfolio. This is similar to developments across the OECD, where GSSE relative to the value of production declined from 4.8% to 3.2% between 2000-02 and 2022-24. The growth in general services expenditures in Peru reflects the government’s ambition to invest in public goods and services to improve the sector productivity; however, these allocations have been limited (Figure 2.12). However, due to the reduction in producer support, the share of GSSE in total agricultural support (TSE) has increased significantly over time, reflecting a growing relative importance of these transfers within the overall policy mix. In Peru, general services accounted for approximately 11.1% of total support to agriculture in 2000-02 and 17.4% in 2022‑24.
As part of the OECD’s analysis of agricultural support, a comprehensive review of public expenditure is conducted at both the national and sub-national levels. Based on information submitted by national authorities, the level and composition of budget support are analysed through the budget expenditures provided by governments to producers individually (as farmers), collectively (as a sector) and to consumers. Each policy measure supporting agriculture is then classified by the OECD according to specific implementation criteria, identifying the economic feature and eligibility conditions for farmers. The review includes:
Producer support measures (classified under the PSE component), covering seven categories: support based on commodity output, payments based on inputs used, three categories of direct payments (linked to current or non-current area, animal numbers, receipts or income, with or without production requirements), payments based on non-commodity criteria and miscellaneous payments.
General service support measures (classified under the GSSE component), benefiting the sector as a whole. These include six categories: agricultural knowledge and innovation systems, food inspection and control, rural infrastructure development and maintenance, marketing and promotion, public stockholding costs and miscellaneous payments.
Consumer support expenditures (included in the CSE), which include budgetary transfers to first-stage consumers, as well as cash or in-kind consumption subsidies to address food insecurity in vulnerable populations.
Source: OECD (2016[82]), OECD's Producer Support Estimate and Related Indicators of Agricultural Support, https://www.oecd.org/content/dam/oecd/en/topics/policy-issues/agricultural-policy-monitoring/producer-support-estimates-manual.pdf.
For 2022-24, within the GSSE the category of development and maintenance of infrastructure accounted for 41% dominated by irrigation investment from ANA, MIDAGRI and other institutions dealing with water infrastructure (Figure 2.12). Agricultural research, extension and knowledge transfer, with 34% provided mostly by INIA. Budgetary allocations on inspection and control systems (animal and plant health), including those related to pests and diseases, corresponded to around 18% mostly allocated to SENASA.
Source: OECD (2026), “Producer and Consumer Support Estimates”, OECD Agricultural Policy Monitoring (database), https://data-explorer.oecd.org/.
2.5.3. Support to consumers of agricultural products
The Consumer Support Estimate (CSE) measures the cost (or benefit) to consumers arising from market price support policies and public expenditures for support to consumers. Similar to the PSE, the CSE is measured at the farm gate level. A positive CSE suggests that consumers benefit from public policies, either because of domestic prices being below international price levels or due to budget support directed to them. A negative CSE indicates an implicit tax on consumers as they pay domestic prices that are higher than international prices. In the OECD methodology, consumers include both first-stage buyers of agricultural commodities (e.g. a food processor who purchases grains) or as final consumers (e.g. low-income households targeted by food aid programmes). In the absence of consumer support policies, the CSE generally mirrors the MPS calculated within the PSE.
Similar to the PSE, the CSE can be expressed in relative terms as a percentage of consumption expenditures (%CSE). In most countries monitored by the OECD, consumers are implicitly taxed due to domestic prices above world market prices. This is also the case in Peru; food consumers and other first-stage buyers of agricultural products (e.g. processors) pay the higher prices that agricultural producers benefit from (see above), which are then usually transmitted to the final consumer.
In some countries, this burden is partly or fully compensated through direct budgetary support for consumers through various forms of food assistance. This too is the case in Peru, where various food programmes such as Qali Warma, Cuna Mas, and Glass of Milk, have seen their budgets increase over time. Nonetheless, the overall CSE in Peru has been negative in all years for which data are available. The average percentage of CSE for Peru was estimated at -24.6% during 2000-02, suggesting that consumers were, overall, taxed through agricultural and food policies that increased consumption expenditures by about one-quarter (Figure 2.13). By 2022-24, this value decreased to -5.1%, indicating that the burden for consumers has become lighter.
Source: OECD (2026), “Producer and Consumer Support Estimates”, OECD Agricultural Policy Monitoring (database), https://data-explorer.oecd.org/.
2.5.4. Total support to agriculture
The Total Support Estimate (TSE) is the broadest indicator of support, representing the sum of transfers to agricultural producers both individually (PSE) and collectively (GSSE), as well as transfers from taxpayers to consumers. Expressed as a percentage of GDP, the percentage TSE (%TSE) indicates the burden that the support to agriculture generates for the country’s economy. Its value depends on the degree to which the agricultural sector is supported or taxed in a country, and the importance of this sector relative to the overall economy.
Total support in Peru has decreased from 2.2% of GDP in 2000-02 to 1.1% in 2022-24, double the OECD average of 0.54% and higher than that for Chile (0.26%), Mexico (0.69%), or Brazil (0.7%), but lower than levels observed for Colombia (1.13%), Korea (1.26%) or China (1.65%) (Figure 2.14). Moreover, this level of TSE has been relatively flat over the past 20 years.
Peru’s TSE averaged around USD 3 billion per year in 2022-24 (Figure 2.14). Peru’s main TSE component is market price support. Budgetary support for consumers represents the next largest component. Other budgetary allocations are roughly equally split between budgetary PSE expenditures and GSSE expenditures (Figure 2.15).
Source: Data of countries different from Peru are from OECD (2026), “Producer and Consumer Support Estimates”, OECD Agricultural Policy Monitoring (database), https://data-explorer.oecd.org/.
Source: OECD (2026), “Producer and Consumer Support Estimates”, OECD Agricultural Policy Monitoring (database), https://data-explorer.oecd.org/.
Peru’s agricultural policies are currently oriented around two main areas of action: promoting the development of small-scale farmers, while continuing to strengthen and expand the agricultural export-oriented sector. For the export-oriented sector, the public sector continues acting as an enabler and promoter of an environment conducive to agricultural export development: investments in infrastructure to expand the agricultural frontier, improvements in logistics chain infrastructure, maintenance of an appropriate institutional framework for phytosanitary matters, trade promotion abroad, among others.
To address the challenges faced by small-scale farmers, the National Agricultural Policy 2021-2030, aims to increase incomes and improve livelihoods by boosting farm competitiveness and integrating small-scale farmers into markets. This includes increasing vertical integration into commercial agricultural value chains among smallholders, reducing subsistence farming, and promoting natural resource management for sustainable agricultural growth. Policy tools designed to meet these objectives are well-targeted and tailored specifically for smallholders.
Current interventions include limited payments to farmers, mainly for on-farm investments such as irrigation and technical assistance, which remain scarce, with limited coverage and insufficient resources. Continued implementation challenges include fragmented co‑ordination across national, regional, and municipal levels of government. Programmes are fragmented, spread geographically and thematically, and often deliver services of limited quality. The lack of institutional coherence reduces the effectiveness of payments, services, and investments, which tend to reach only a small proportion of agricultural producers.
Agricultural policy faces further limits due to budget constraints and fragmented institutional structures. A significant portion of the resources available is absorbed by administrative costs, leaving little for effective services or direct support to farmers. Despite a clear policy framework, poor co‑ordination, challenges in institutional capacity, and limited funding prevent interventions from driving structural change.
Producer support, as measured by the %PSE, has been relatively flat since the late 2000s. In 2022‑24, agriculture support policies generated around 6.2% of gross receipts of agricultural producers. Producer support is dominated by market price support (MPS) for different crops and livestock products. Border protection, such as the Peruvian Price Band System, has been a major determinant. MPS accounted for 82% of the PSE for the period 2022-24. Particularly high levels of MPS are observed for rice, maize, sugar, milk, beef, and poultry. Budgetary transfers contributing to PSE come mostly in the form of payments subsidising fixed capital formation, particularly for on-farm irrigation projects; other payments are destined to on-farm services such as technical assistance and for variable input use like seeds and fertilisers.
Total budgetary allocation to general services for Peru’s agricultural sector has been largely neglected. Key areas such as agricultural knowledge and extension services, rural infrastructure, land tenure, and marketing infrastructure have received little to no support over the years. Of the limited funding available, the majority has gone to infrastructure development, mostly irrigation (41%), followed by agricultural knowledge and innovation systems at 34% and inspection and control services at 18%. Another budgetary transfer is related to CSE, as Peru also provides consumer support that includes food aid programmes provided to the poorest populations of the country.
Total support to agriculture in Peru averaged around USD 3 billion per year in 2022-24, equivalent to 1.1% of its GDP. This share is double the OECD average but similar to that of the emerging economies covered by the OECD Agricultural Policy Monitoring and Evaluation report.
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Producer Support Estimate (PSE): The annual monetary value of gross transfers from consumers and taxpayers to agricultural producers, measured at the farm gate level, arising from policy measures that support agriculture, regardless of their nature, objectives or impacts on farm production or income.
Percentage PSE (%PSE): PSE transfers as a share of gross farm receipts (GFR, i.e. the value of production plus budgetary and other transfers to producers).
Producer Nominal Assistance Coefficient (producer NAC): The ratio between the value of gross farm receipts (including support) and gross farm receipts valued at border prices (measured at farm gate).
Producer Nominal Protection Coefficient (producer NPC): The ratio between the average price received by producers at farm gate (including payments per tonne of current output), and the border price (measured at farm gate). The producer NPC is also available by commodity.
Producer Single Commodity Transfers (producer SCT): The annual monetary value of gross transfers from consumers and taxpayers to agricultural producers, measured at the farm gate level, arising from policy measures directly linked to the production of a single commodity such that the producer must produce the designated commodity in order to receive the transfer.
Producer Percentage Single Commodity Transfers (producer %SCT): The commodity SCT expressed as a share of gross farm receipts for the specific commodity (including support).
Consumer Support Estimate (CSE): The annual monetary value of gross transfers to (from) consumers of agricultural commodities, measured at the farm gate level, arising from policy measures that support agriculture, regardless of their nature, objectives or impacts on consumption of farm products. If negative, the CSE measures the burden (implicit tax) on consumers through market price support (higher prices), that more than offsets consumer subsidies that lower prices to consumers.
Percentage CSE (%CSE): CSE transfers as a share of consumption expenditure on agricultural commodities (measured at farm gate), net of taxpayer transfers to consumers.
Consumer Nominal Assistance Coefficient (consumer NAC): The ratio between the value of consumption expenditure on agricultural commodities (at farm gate) and that valued at border prices (measured at farm gate).
Consumer Nominal Protection Coefficient (consumer NPC): The ratio between the average price paid by consumers (at farm gate) and the border price (measured at farm gate).
Consumer Single Commodity Transfers (consumer SCT): The annual monetary value of gross transfers to (from) consumers of agricultural commodities, measured at the farm gate level, arising from policy measures directly linked to the production of a single commodity.
Indicators of support to general services for agriculture
General Services Support Estimate (GSSE): The annual monetary value of gross transfers to general services provided to agricultural producers collectively (such as research and development, training, inspection, infrastructure, marketing and promotion, and public stockholding), arising from policy measures that support agriculture regardless of their nature, objectives and impacts on farm production, income, or consumption. The GSSE does not include any transfers to individual producers.
Percentage GSSE (%GSSE): GSSE transfers as a share of Total Support Estimate (TSE).
Total Support Estimate (TSE): The annual monetary value of all gross transfers from taxpayers and consumers arising from policy measures that support agriculture, net of associated budgetary receipts, regardless of their objectives and impacts on farm production and income, or consumption of farm products.
Percentage TSE (%TSE): TSE transfers as a percentage of GDP.
This Annex reviews the market price transfers (to producers) element for major commodities or groups of commodities included in the PSE database for Peru. It analyses the market price differential by looking at the difference between domestic prices at the farm gate level and reference prices at the border level. It provides, in parallel, an overview of the main domestic and trade policies targeting specific products according to their trade status. Whether positive or negative, market price differentials (MPD) are supposed to reflect domestic and trade policies in place (a positive MPD meaning an implicit support to producers and a negative MPD an implicit tax). When this is not the case (for reasons mentioned earlier), the market price differential is set to zero. This analysis is at the centre of the OECD methodology for the measurement of agricultural support and is key to understanding transfers between producers, consumers (understood here as first-stage buyers of agricultural commodities) and taxpayers.
← 1. Guano is the accumulated excrement of seabirds located on Peruvian islands in the Pacific. Once the fertiliser is processed and packed, it is then distributed to farmers.