For Click Here

Peruvian
Agriculture
Potential
A Global
Opportunity
LUIS FELIPE SANCHEZ ARAUJO
Vice minister of Agriculture
Why Peru?
WORLD GROWTH (% CHANGE)
PRIVATE INVESTMENT GROWTH (%)
EXPORTS 2007
KEY INVESTMENT VARIABLES
Macroeconomic results
NET INTERNATIONAL RESERVES
(MILLIONS OF US $)
FISCAL DEFICIT (% GDP)
Peru: a country with
“Investment Grade”
JP MORGAN EMBI +INDEX
(BASIC POINTS, DIFERENTIAL ABOVE
US TREASURY BONDS)
CREDIT CLASSIFICATION
LATIN AMERICA COMPARISON
Source: Standard & Poor's, Moody's and
Fitch Rating August 2008
Peru Offers
A Favorable Legal Framework
for foreign investment
Non discriminatory treatment
Unrestrictive access to most economic sectors
No performance requirements
Free transfer of capital
Free competition
Guarantee for private property
Freedom to purchase stocks from locals
Freedom to access internal and external credit
Freedom to pay royalties
Network of investment agreements and member of ICSID and
MIGA
A Favourable Legal Framework
for the Agricultural Sector
Law Nº 27360
Tax Incentives:
1.
Income tax shall be determined by applying 15% rate over the net
income.
2.
Corporate bodies may depreciate 20% per year.
3.
During pre-production stage and in a maximum term of 5 years,
individuals or corporate bodies may request the refund of the Value
Added Tax paid for the acquisition of capital goods, inputs, services
and construction contracts.
4.
Tax benefits apply up to December 31, 2021.
Labour and Social Security regime:
- Employers of the agriculture sector are entitled to hire
personnel for indefinite or definite term.
- A special labour and social security regime, with the following
characteristics, has been created: A four-hour working day,
vacations of 15 calendar days, compensation equivalent to 15
daily salary per worked year. Monthly contribution to Health
Insurance system for workers engaged in agriculture activity,
borne by the employer, shall be 4% of each worker’s monthly
wage.
Regiones
productoras
(*) Promedio de consumo durante el periodo 2001-2006. Fuente: MINAG-DGPA
Amazon Region Law

Taxpayers, mainly engaged in the following activities: agro-farming, aquaculture,
fishing, tourism; manufacturing activities related to the processing, transformation
and commercialization of primary products derived from the before mentioned
activities and forestry transformation, provided those products are produced in
that zone; and, activities of forestry extraction, shall apply, for purposes of Third
Category Income Tax, a 10% or 5% rate.

Taxpayers who are mainly engaged in agriculture activities and/or transformation
or processing of products considered as native and/alternate culture in such zone,
shall be exempt from the Income Tax.

In the case of oil palm, coffee and cacao, transformation or processing companies
of those products shall apply a 10% or 5% rate.
Grow means Peru
let me show you why!





1st world exporter of asparagus and 2nd of paprika.
1rst world's productivity of mango, asparagus and sugar cane.
Specialized in growing high-value fruits and vegetables.
5 millions hectare of land, many of them with possibility to
schedule crops periods due to optimum climate conditions.
Announced investments boom for the development of biofuels
(sugar cane and oil palm).
Agro Exports 1994-2007
How we grow
Millions of US $ FOB
•
•
•
Totals
Non traditional
Traditional
Source: Aduanas / Prepared by: MINAG – Does not include woods.
Most Important Markets -2007
Where we go
Main Products -2007
What we take
Peruvian Agro Exporter Companies
Keep growing, keep exporting
EXPORTER COMPANIES
FOB USD
2006
FOB USD
2007
Variation %
CAMPOSOL S.A.
98,167,448
113,236,387
15.35
SOCIEDAD AGRICOLA VIRU S.A.
71,642,778
86,930,228
21.34
DANPER TRUJILLO S.A.C.
41,680,664
57,670,309
38.36
SOCIEDAD AGRICOLA DROKASA S.A.
42,488,580
45,417,821
6.89
AGROINDUSTRIAS AIB S.A
27,556,344
29,664,537
7.65
I Q F DEL PERU SA
24,567,220
27,249,150
10.92
COMPLEJO AGROINDUSTRIAL BETA S.A.
15,791,548
25,199,659
59.58
CORPORACION MISKI S.A.
18,424,327
21,985,092
19.33
CONSORCIO DE PRODUCTORES DE FRUTA S.A.
13,686,046
20,860,610
52.42
GANDULES INC. S.A.C
13,622,414
20,822,992
52.86
CORP. PERUANA DE DES. BANANERO S.A.C.
15,313,382
15,843,358
3.46
PROCESADORA LARAN S.A.C
10,666,393
14,851,231
39.23
AGRICOLA ATHOS S.A.
12,943,702
13,826,644
6.82
8,945,938
13,286,489
48.52
TAL S.A.
Source: Infotrade /Elaborated by: MINAG . OFI-AFA
Comparative Advantages





The Peruvian coast is the only dry tropic in the world, with the
highest solar radiation and warm temperature, because of the
Humboldt Ocean Current and the Andean Range that turns the
coast in a natural greenhouse.
The short productive processes that exist in Peru facilitate the
adoption of technological changes and output improvement.
The agriculture campaign seasons allows our products to access
international markets before our competitors from the south
hemisphere, with a special price.
The diversity of ecological steps gives Peru an advantage among
other countries because we can cultivate year round.
Peru is a mega diverse country, with 84 from the 104 recognized
Holdridge’s living zones in the world.






We have available natural resources like water, land and energy.
Peru has a rich biological diversity and genetic resources.
We have 8 million ha. of fertile land.
With a huge potential to attend the internal and external demand.
The quality of our products is internationally recognized.
There is available and capacitated hand labor.
Our geographic location
An exceptional advantage



Our location in the South hemisphere between the Ecuatorial Line
and the Tropic of Capricorn, allows us to obtain solar radiation with
extra intensity.
Because the solar radiation reflects with more intensity from the
Equatorial Line to the south and we can get to the markets before
the competition.
Because of the intensity of the solar radiation and the quality of
our light we are unique: the photosynthesis takes place between
10ºC to 30ºC. (50°F to 86°F) With more temperature the
photosynthesis is suspended.
Photosynthesis means:
Productivity and Quality
Offseason Opportunities
A great advantage
VENTAJA: The Peruvian crops from the coast enter the North Hemisphere
in opposite season.
More globalized
More open and more opportunities

Up to date, 31 bilateral treaties on the promotion and reciprocal
protection of investments have been signed with countries of the
Pacific Basin, Europe and Latin America, as well as the FTA with
the United States of America .

Free of tariff exports to the North American market (ATPDA) and
to the 27 th. European Union countries (SGP-PLUS) in the frame of
the anti drug battle support.

Commercial Promotion Agreement FTA signed with the United
States of America (implementation process ends in 2008), includes
an Investment Chapter.

Association agreement between the Andean Community (Peru)
and the European Union in the negotiation process.

Peru is a leading nation or "regional hub" in the South American
Pacific area.
More Free Trade Treaties
More Commercial Partners
Concluded
In Negotiation
 USA
 European Union
 Canada
 EFTA
 Singapore
 China
 Andean Community
 México
 Mercosur
Foreseeing (2009)
 Chile
 Thailand




South Korea
Central America
Japan
Australia
More Commercial Partners
Unlimited Markets
EFTA
CANADA
CHINA
USA
JAPAN
SOUTH
KOREA
THAILAND
EUROPEAN
UNION
CENTRAL
AMERICA
MEXICO
ANDEA
COMUNITY
SINGAPORE
AUSTRALIA
CHILE
Concluded
In Negotiation
MERCOSUR
Foreseeing 2009
Agribusiness
A Real Opportunity!
2000 to 2007
Var. % 205
In the increase of the
agricultural exports
Representing in 2007:
US $ 1 967
Million FOB
(Does not include woods)
OPPORTUNITIES
IN THE
COAST
If you want a farm in the only
dry tropic in the world,
this is the place!
Asparagus
Artichoques
Citrus Fruits
Table grapes
Mangoes
Avocado
Paprika
Piquillo Pepper
Organic Banana
Sweet Onions
Pomegranate
Olives
OPPORTUNITIES
IN THE
HIGHLANDS
If you want …
clean sky, bright sun,
pure water, good soils…
Andean Native
Potatoes
Andean Native
Corns
Quinoa
Kiwicha
Processed Maca
Sugar Snaps
Snow Peas
Cherimoya
Passion Fruit
Berries
Potential
The beauty, sweetness, versatility and
healthy characteristics of the berries
make them a high potential product for
export.
•Raspberries: 1 cup of raspberries gives
us 40% of the daily need of vitamin C and
32% of the fiber we need.
•Blueberries: have 3 times
antioxidants than red grapes.
more
•Strawberries: 8 strawberries have more
vitamin C than an orange and gives us
20% of our daily need of folic acid.
Canola
Tara
Alpaca
Finest wool
Huacaya
OPPORTUNITIES
IN THE
AMAZONIA
If you want a
challenge…
a new world is
waiting for you!
Gourmet Coffe
Aromatic Cocoa
Forestry and lumber products
Caoba
Oil Palm
Sugar Cane - Ethanol
Sacha Inchi Oil
Ω 3 ( 48%)
Ω 6 (36%)
Ω 9 (9%)
+
33% Proteins
55% Antioxidants
Camu Camu
Processed
Cat’s claw
Tropical Flowers
and Foliages
New Demands
New Opportunities
Natural and
Healthy Foods
Organic Foods
WORLD
 With 19% annual growl.
 Sales in 2006 US $ 35,000million.
PERU:
Ancestral Agricultural Tradition
based in Natural Selection.

Products:
banana,
amaranto,
cacao,
mangoes, among others.
quinoa,
coffee,

The global market of Functional Foods
surpasses the 100 billion Euros, and
represents more than 5% of the agrifood industry. (Source: FRANTEC -2008)
We have:
Sacha Inchi, Maca, Camu Camu, Olive
Oil, Kiwicha, Quinoa, berries, passion
fruit, Cat´s Claw, among others.
Bio-fuels
Opportunities in:
 Coast: sugar cane, sweet sorghum.
 Sierra: canola, sweet potatoes, colza.
 Jungle: oil palm, cane, soy, jathropha.
Peru has:
 The highest output of sugar cane per hectare FAO (2003).
 One of the highest outputs of Oil Palm per hectare in the world.
Priorities in the Ministry of Agriculture:
 The promotion of industrial energy crops like: castor oil plant,
Barbados nut and sugar cane.
 Identify and guarantee deforested and degraded lands.
Animal Breeding
A High Potential Opportunity
Cow Meat and
Dairy Products
Pork Meat
Poultry
Peru is PRODUCTIVITY
Peru is QUALITY
Peru is BIODIVERSITY
Camu camu
Some native
products
Amaranto
Lucuma
Cactus pear
Soursop
Peruvian Hydraulic
Infrastructure
Potential
A Global
Opportunity
Water Resources
 Pacific Catchment:
3%
- Total Availability:

- Sectoral Uses:

39%
36 613 MMC
55%
16 502 MMC
0% 3%
Urban Use
Industrial Use
Surplus
Agricultural Use
Minin Use
Location of Reservoirs
Main Agriculture, Biofuel and
Forestry Megaprojects

1.
2.
3.
4.
5.

6.
7.
8.
9.
10.

11.
12.
13.
14.
15.
Irrigation Projects:
Olmos Project (27,000 ha).
Majes – Siguas Project, 2nd Stage (38,000 ha).
Cachi River Project (5,000 ha).
Alto Piura Project (15,000 ha).
Lagunillas – Puno Project (10,000 ha).
Land Sale and Private Initiatives:
Majes – Siguas Project, 2nd Stage (1,000 ha).
Lands in Lima Region (8,000 ha).
Lima – Ica Agricultural Development (25,000
ha).
La Libertad Private Initiative (1,000 ha).
Jequetepeque – Zaña (4,000 ha).
Forestry Development and Biofuel Areas:
Piura Agricultural Park.
Cajamarca Agricultural Park.
Tarapoto – Yurimaguas Agricultural Forest
Park.
Ucayali Agricultural Forest Park.
Junín Agricultural Park.
11 4
1
13
12
10
14
9
7
15
8
3
5
6
2
1. Chira- Piura Project
TALARA
RESERVORIO
CANAL NORTE
ECUADOR
POECHOS
RIO CHIRA
PRESA
SULLANA
CANAL SUR
CANAL DE
DERIVACION
OCEANO
PACIFICO
PAITA
IRRIGACION
PROYECTADA
CONGORA
C.H. CURUMUY
PRESA
EJIDOS
PIURA
-SECHURA
REPRESA POECHOS
1,000 MMC
Chira – Piura Agricultural Proyects
2. Alto Piura Project
M
AY
A
EMBALSE
TRONERA
da
Q
L
NE INO
T U ND m
A
K
AS .5
T R 13
645 m
O
F IC
CI
PA
.S
HU
O
IC
NT
LA
T
A
580 m
CH 1
R IO
CH 2
H
RM
UA
AC
A
CENTRAL HIDRO EL ÉCTRICA
CASHAPITE
AL
Q. GRAMAD
CENTRAL HIDRO EL ÉCTRICA
G RAM ADAL
ZONA DE RIEGO
ALTO PIURA
P
RIO
EMBALSE
MAMAYACO
Q. GR AMA
DAL
1era. Etapa 2da. Etapa
A
IUR
TOTAL
Agricultura
CA RR
PA NA M E TERA
E RICA
NA
Area con infraestructura
Cultivada
A incorporar
Has.
Has.
A incorporar
Has.
25,000
6,000
25,000
6,000
11,000
11,000
17,000
42,000
438
396
438
396
834
834
Area Nueva
TOTAL
25,000
Generación eléctrica
CH Cashapite
CH Gramadal
GW.h
GW.h
TOTAL
3. Olmos Project
Phases of Concession
1
DIVERSION
INFRASTRUCTURE
CONCESSION
(in process)
2
3
HIDROELECTRIC
WATER DISTRIBUTION
CONCESSION
CONCESSION
Olmos Project first phase infrastructure location
CAJAMARC
A
PIURA
Embalse
olmos
Embalse Limon
Túnel de
aducción
Túnel de
aducción
CH1
CH2
37000 ha
LAMBAYEQUE
Tunel
Conmutador transandino
4. Jequetepeque-Zaña Project
RESERVORIO
POLLOC
CAJAMARCA
CHICLAYO
ZAÑA
VALLE DE ZAÑA
O
C
E
A
N
O
CAJAMARCA
RESERV GALLITO
CIEGO
DERIV.
NAMORA
CANAL
TALAMBO ZAÑA
P
A
C
I
F
I
C
O
DERIV.
CHEPEN
VALLE
JEQUETEPEQUE
CENTRAL HIDROEL.
“SAN JUAN”
TUNEL
PACASMAYO
CENTRAL HIDROEL.
BOCATOMA
TALAMBO
“GALLITO CIEGO”
TRANSANDINO
CANAL TALAMBO ZAÑA
REPRESA GALLITO CIEGO (570 MMC)
5. Chavimochic Project
5
Canal Madre
4
4
Planta de Agua Potable
5
3
RIO
SANTA
2 1
1
Bocatoma Chavimochic
Chavimochic Project
PLANTA AGUA
POTABLE
CANAL MADRE
RESERVORIO PALO
REDONDO
C.H.VIRU
Chocope
Trujillo
TERCERA
ETAPA
SEGUNDA
ETAPA
PRIMERA
ETAPA
COMPLEJO
AGROINDUSTRIAL
BOCATOMA
Chavimochic Agricultural Projects
6. Tambo -Ccaracocha Project
7. Majes Siguas Project
PRESA
ANGOSTURA
Madrigal
Lari
BOCATOMA
TUTI
Coporaque
Yanque
MacaAchoma
Cabanaconde
Huambo
ADUCCION
COLCA - SIGUAS
ADUCCION
ANGOSTURA –
COLCA
TUNEL
TERMINAL
PRESA EL
PAÑE
PRESA
CONDOROMA
Sibayo
Callalli
CANAL
PAÑE- SUMBAY
AFIANZAMIENTO DE LA
CUENCA DEL RIO
CHILI
DIQUE DE
ESPAÑOLES
CANAL
ZAMACOLA
C.H. LLUTA
PAMPA DE MAJES
C.H. LLUCLLA
BOCATOMA
PITAY
PROY.AGROIND.
PAMPA BAJA
PRESA EL
FRAYLE
C.H. CHARCANI
PRESA
AGUADA BLANCA
DERIVACION
PITAY – SIGUAS
PAMPA SIGUAS
Leyenda
Túnel Proyectado
Túneles y/o Canales Ejecutados
. Proyectado
Central Hidroel.
Bocatoma
Carretera Panamericana
Fecha : 14-01-2003
I Etapa
II Etapa
No es del P.E.
Diseño : PEAE
MINI C.H.
PAMPA BAJA
Contact Information:
Investment Office- Agriculture Frontier Extension
 Ing. Juan Carlos Sevilla Gildemeister [email protected]
 Address: Av. La Universidad Nº 200 La Molina – Lima 12 Perú.
 Phone: (511) 613-5800, Ext. 1144;
 Eco. Carina Vizcarra [email protected]
 Address: Av. La Universidad Nº 200 La Molina – Lima 12 Perú.
 Phone: (511) 613-5800, Ext. 1202;
Agribusiness and Market Access Unit
 Ing. Fausto Robles [email protected]
 Address: Av. Alameda del Corregidor Nº 155 La Molina – Lima 12 Perú.
 Phone: (511) 349-6223
Ministry of Agriculture
 Address: Av. La Universidad Nº 200 La Molina – Lima
 Phone: (511) 613-5800
 Address 2: Jr. Yauyos Nº 258 Lima – Lima
 Phone: (511) 313-5060 / 315-5090
 www.minag.gob.pe
Thank you!
Luis Felipe Sanchez Araujo
[email protected]
December 2008