Farming together

Agricultural producers in Peru unite to improve the sector's ESG credentials.

A group of agricultural producers in Peru recently formed the Association for the Development of Sustainable Agribusiness (“ADAS”) with the stated aim of strengthening the economic, social, cultural impact of cooperative agricultural activities. The project aims to have a positive impact on 125,000 agricultural workers working throughout 25,696 hectares.

An executive at an agricultural services business in Peru commented, “The gap between modern and traditional agriculture is one of the main challenges facing the agribusiness industry. 95% of Peru’s agriculture is in the hands of small farmers who don’t have the tools and technologies needed to lower production costs, increase yields and improve sustainability. This initiative should help to raise the profile of the whole sector.”

“95% of Peru’s agriculture is in the hands of small farmers who don’t have the tools and technologies needed to lower production costs, increase yields and improve sustainability.”

Executive, agricultural services business, Peru

The government is also looking to support the sector. In the last five years, the Peruvian government has implemented the Agrarian National Innovation Project (“PNIA”) which has financed 654 projects owned by small agricultural producers, local agricultural associations and regional research centres. The project was supported by the Inter-American Institute for Cooperation in Agriculture (“IICA”) which offered technical support providing IT, laboratory and machinery to the participating agricultural facilities.

Furthermore, the recently elected President Pedro Castillo has vowed to put agriculture at the centre of his administration’s political agenda. He recently promised to devote a 10% of the country’s budget to agricultural activities which will be structured through an agrarian reform that grants more loans and funds to the sector. 

The managing director explained that the ADAS initiative will be well-received by the government, “Today more than ever, the government wants to improve the living conditions of millions of people dedicated to agriculture and if the private sector provides concrete support, it will be very well received and supported.”

“Corporate governance pressures are growing in Latin American agriculture. The well-being of the company, the workers, the communities and the environment is at the front of this.”

Managing Director, farming group, Peru

Encouragingly, it seems that pressure from international markets and investors is driving this new interest in sustainability. The managing director of a farming group in Peru was enthusiastic, “Corporate governance pressures are growing in Latin American agriculture. The well-being of the company, the workers, the communities and the environment is at the front of this trend that is being driven by markets and investors.”

The CFO of another farming group confirmed, “When selling to supermarkets outside Peru, you are audited based on international standards, we are the subject of 100 audits a year. This has really started to improve the sector because there is a genuine and immediate business need to comply.”

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