DAVID RICHARDSON
With its ability to grow
crops all year round,
Peru has been called
the biggest
greenhouse in the
world. Now a
significant part of its
agricultural output is
heading for the EU
The National Geographical Society has recently discovered evidence of another Inca settlement in Peru to rival that at Machu Picchu 22 miles away. This new site, 11,000ft up in the Andes, is even higher than the ruins for which the country has become so well known over the past few years and which have made Peru one of the top tourist destinations in South America.
The Incas, who were resourceful and sophisticated builders, were also self-sufficient for food, despite the altitude of their settlements. They achieved this by creating flood-irrigated terraces that extend to unlikely heights up mountainsides; a feat only possible because of high rainfall and equatorial latitudes. Their complex constructions defy economic logic and can only have been inspired by some religious imperative. But the Incas were wiped out nearly 500 years ago, not by the conquering armies of Spain, but by European diseases the soldiers carried, to which they had no immunity.
By 21st Century standards Inca cities might seem like gigantic follies. For the substantial coastal strip of Peru is composed almost entirely of sand which, when irrigated with the plentiful water flowing west from the Andes, is capable of growing a wide variety of tropical crops all the year round. It has been described as the biggest greenhouse in the world.
Members of the FW study tour who have just visited Peru were impressed by the magnificence of the mountainous history. But they were also concerned at the potential productivity of this coastal plain. For a significant proportion of its expanding production is heading for the EU. Fortunately most crops grown do not compete directly with our temperate zone production.
Perus total land area is 123m hectares (304m acres), most of which is accounted for by the Andes. Only about 2.6m hectares (6.44m acres) is cultivated and 70% of that is in holdings with fewer than 5ha (12.35 acres). So, subsistence agriculture still dominates the sector, not least because of various agrarian reforms over the past 70 years that split up large estates established by the Spanish and redistributed the land among farmworkers.
About one-third of Peruvians still make their living from the land. And although 50 years ago agriculture accounted for nearly a quarter of the countrys GDP and more than half its export earnings, production has since slipped back. The reforms combined with political instability were largely to blame. But a period of relative stability is now forecast and changes are coming. The present government is encouraging inward investment into agriculture and ensuring irrigation is available.
Indeed there is already evidence that these changes have begun. Surveys have suggested the amount of land cultivated could be trebled. Most of this is on the coastal sand dunes for which the fast flowing rivers provide a more than adequate supply of irrigation water. And there is more potential cropland in the rain forest in the Amazon basin.
We saw some of those new developments and were able to assess their potential as we travelled the country. One 300ha (741-acre) farm along the coastal sand dunes, which was partly funded by outside investors, was, for instance, specialising in year-round asparagus production, mainly for export to USA and European supermarkets. Yields from several cuts were said to total about 25t/ha a year (10t/acre), with experimental trial plots producing up to 45t/ha (18t/acre).
Compare that with the single harvest and 5t to 7t/ha (2t-2.8t/acre) that I understand is achieved by the best British asparagus growers, plus the fact that Peruvian labour costs about £3.52 a day, and it soon becomes clear that even after air freight charges from Lima to Europe the advantage lies in Peru. And both the production and packing standards we saw matched the best in this country. The prices they were getting, FOB Lima, were about £1.23/kg.
We visited other farms producing tangerines, avocados, grapes, passionfruit and other exotic fruit and veg. On one of the biggest, owned by a man who had begun to buy back the land that had been taken from him during agrarian reform, we ran into an inspector from Marks & Spencer. He was checking on production and packing systems, hygiene standards and for any evidence of the use of child labour. If he had found the latter all potential deals would have been off. The next day Tesco was scheduled to look round and Sainsbury two days later.
It would be easy to be complacent about these developments. For most Peruvian products coming our way, with the possible exception of asparagus, appear unlikely to affect our markets. But the potential is huge. The climate allows almost any crop to be grown outside all the year round without heat and with cheap labour.
In an era of increasing globalisation we cannot afford to ignore the fact that unit costs in countries like Peru are a fraction of what they are here. And remember, Peru is the ancestral home of the potato. At the International Potato Centre in Lima we saw hundreds of interesting varieties for which a British demand might be generated. What price Maris Piper if they began coming here?
DAVID RICHARDSON