Diagnosis of a complicated panorama for agriculture in 2023

It is necessary for the Government to offer sustained plans over time with the participation of people specialized in Peruvian agriculture, in addition to extensive knowledge of the complexity of our agricultural reality.

It is evident that the year 2022 has been disastrous for Peruvian agriculture. After a pandemic with severe measures that caused considerable losses to the men of the field, added to the presence of seven (7) Ministers of Agriculture in a period of 16 months of the Government of former President Pedro Castillo, an 84% decrease in agricultural purchases, as well as a decrease in more than 20 thousand hectares planted in the agricultural campaign from August 2021 to March 2022 (El Comercio, 2022).

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As a consequence, the planted area of the main transitory crops has been reduced by 18.8% (La República, 2023) and planting intentions according to crop in the period 2022-2023 measured in hectares of rice decreased by 12.1%; the potato, in 12.6%; hard yellow corn, at 25.5%; wheat, at 17.7%; and cassava, at 20.5%, to detail some products.

This, coupled with the increase in costs to produce food this year, is worrying. According to the National Water Authority (ANA), the consequences of the drought that occurred between August and November of last year are being translated into the loss of crops, the death of livestock, and the proliferation of pests and diseases.

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The figure reached last year meant that four pre-owned vehicles were sold for every new vehicle sold, said Alberto Morisaki, manager of Economic Studies and Statistics of the Automotive Association of Peru.

In this sense, the former Minister of Agriculture Von Hesse mentioned that, although the rains have begun to regularize since December, sowings have decreased in quinoa (-30.5%), potatoes (-12.1%), corn corn (- 6.6%) and rice (-4.9%). Faced with this palpable water shortage, the eighth Minister of Agriculture, Nelly Paredes, announced in December the offer of a drought bonus, ensuring that the Ministry of Development and Irrigation (Midagri) would prioritize projects for planting and harvesting water, construction of amunas, reservoirs and mini reservoirs.

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Additionally, despite the urgency of purchasing for the start of the agricultural campaign in July, Agro Rural announced the cessation of a fourth purchase award to the company Direcagro for 44 thousand tons of urea. Experts know that not having fertilizer in the field will have an impact on the production of the main products: rice (92%), potatoes (74%) and corn (59%). The Government, as if anticipating this result, launched the Fertiabono economic bond that would benefit some 370,000 farmers with less than 10 hectares so that they can directly buy fertilizer from commercial houses. However, it has been shown that the delivery of bonuses does not necessarily end up attacking the main problem. Additionally, this Fertiabono is based on a new standard under construction.

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The items that drove the growth of retail trade in said period were pharmacies, supermarkets and home improvement. However, department stores contract.

Finally, a point of discussion that ends up ruling the food security of Peruvians for this year are the demonstrations and riots that are taking place in the country as a result of the political convulsions within the executive branch. These generate million-dollar losses of between 60 to 100 million soles per day in protest, which is endorsed by Diego Macera, from the Peruvian Institute of Economy, and Alex Contreras, head of the Ministry of Economy and Finance (MEF) (BBC Mundo, 2022 ; The Peruvian, 2022).

Likewise, other calculations, such as that of the National Society of Industries (SNI), approximate losses valued at S/ 468 million (due to the protests last December), equivalent to 45% affectations in the sector in 7 days of stoppages. All this is not alien to the agricultural sector that experiences deficiencies in the national food logistics chain, generating the possibility of shortages in the main markets nationwide (Agraria.pe, 2022).

Complicated outlook for agriculture this year. It is necessary for the government to offer sustained plans over time with the participation of people specialized in Peruvian agriculture, in addition to extensive knowledge of the complexity of our agricultural reality. It will be key in this 2023 to define national priorities with transparent public interventions, strengthen inter-institutional articulation and seek a sustainable common good to attract public and private investment again.

Angie Higuchi, professor of Administration at the Universidad del Pacífico.