Peru Seeks Investment in Agriculture
On 2 May 2012, Bloomberg reported that Peru was going to look for investors for a $530 million irrigation project located on the country’s northern coast.The country is currently seeking to boost its agricultural sector and exports and the project is expected to contribute to fulfilling that purpose.
The Chinecas project, which will be located in the Ancash region in northern Peru, is also intended to increase Peru’s hydroelectric output. The project will create some 90,000 jobs and will contribute to the economic development of the region. The news agency Peru This Week reports that according to the Prime Minister Oscar Valdes, the project had met all the technical requirements needed for operation and he congratulated the technical team, which was in charge of examining the various economic and technical details, in coordination with the Ministry of Finance;the President Humala had previously ordered the project to be reviewed in a 60-day period.
As noted at the outset, the irrigation project would require investment amounting to $530 million, or 1.4 billion soles, as in an e-mail statement the Prime Minister pointed out that the investments would be both public and private. The governor of Ancash, Cesar Alvarez, on the other hand, expects that the project will bring foreign investments in the country.!m(/uploads/story/24/thumbs/green_crops_inline.png)
According to the Peruvian news agency Andina, the implementation of the Chinecas project has been a goal 26 years in the making, since first put forward. Yet, it is not the first large-scale irrigation project in Peru, with the other examples being the Alto Piura and the Olmos projects in the Piura and Lambayeque regions, respectively. The Ancash governor, however, notes that unlike the two other irrigation projects, the Chinecas irrigation project had to wait 26 years to get a green light.
Ancash’s governor also pointed out that in addition to creating employment opportunities, the Chinecas project will also promote agricultural exports. Currently, Peru is trying to further develop its agricultural sector and according to the Peruvian Prime Minister, the project shows that the country is not only in the mining industry, since Peru “will give value to exports”.
Bloomberg reports that in 2011, agricultural produce accounted for $2.83 billion of Peru’s $46 billion of exports. Currently, Peru is the world’s largest exporter of several agricultural commodities, namely asparagus, organic bananas and organic coffee. In addition, according to the Peruvian government’s private investment promotion agency Proinversion, Peru ranks among the world’s highest crop yield countries for sugar cane, asparagus, olives, artichoke and grapes. And, yet, there is plenty of additional potential for the development of the agricultural sector, since, as pointed out on the website of Proinversion, Peru has 7.6 million hectares with immediate agricultural potential, and yet, less than 3.6 million are used.
Among the factors expected to facilitate the growth of the agricultural sector in Peru will be competitive prices of water for agricultural use. Consequently, irrigation activities such as the Chinecas project can potentially boost agricultural production and establish a more favourable investment environment.
In addition to boosting the agricultural sector, the irrigation project will have a positive impact on Peru’s hydroelectric output, with hydroelectricity being the main renewable energy resource exploited in Peru.