US$40 Million to Create National Agricultural Innovation System
WASHINGTON, December 17, 2013 – More than one million farmers from the poorest areas in Peru will benefit from innovative agricultural technologies developed through the National Agricultural Innovation System (SNIA, in Spanish), a project financed with a US$40 million loan approved today by the World Bank Board of Directors.
Peruvian agriculture still faces multiple challenges, including low yields, cropland fragmentation —which entails high transaction costs—, salinity and erosion issues, limited water availability, effects of climate change, as well as low levels of technology use which contribute to the productivity gap.
“Specialized assistance, both from the World Bank as well as the Inter-American Development Bank, guarantees the future dynamism of the agricultural innovation system and the evolution of the National Agricultural Research Institute (INIA) from a research organization into one of the leaders of the national agricultural innovation system,” explained Milton von Hesse, Minister of Agriculture.
The Ministry of Agriculture, using a double-pronged strategy, has established the National Agricultural Innovation Program (PNIA), composed of two main projects: one to generate the conditions necessary for the national agricultural innovation system financed by the World Bank and another to improve the INIA’s strategic research services, financed by the Inter-American Development Bank (IDB).
“By strengthening investment in agricultural research and expansion, agricultural producers will have access to more and better technologies, enabling them to improve the profitability of their efforts and increase household income, often the poorest in Peru,” said Susan Goldmark, World Bank Regional Director for Bolivia, Chile, Ecuador, Peru and Venezuela.
In Peru, agriculture represents around 9 percent of the GDP and employs seven million people with varying income levels: the annual net income of an agricultural family living on the coast is US$2,800; in the rainforest it reaches US$1,900, while on the highlands it’s barely US$1,000.
Between 2002 and 2010, the World Bank supported the Ministry of Agriculture’s Innovation and Competitiveness in Peruvian Agriculture Project (INCAGRO) with a series of competitive funds to strengthen strategic research, adapt new technologies and provide training. During this period, INCAGRO managed a 24 percent return rate, according to independent experts. In fact, INCAGRO mobilized research centers, universities, non-governmental and agricultural organizations, setting into motion a decentralized innovation system with strong private sector participation.
Now, following this successful experience, the Bank will support the SNIA with the creation of a Technical Secretariat within the National Agricultural Innovation Institute (INIA). The Technical Secretariat will be equipped with a monitoring and evaluation system, a knowledge management unit, a policy analysis one, as well as a unit to manage competitive funds and a liaison unit, focused especially on regional governments. The Technical Secretariat will provide a series of competitive funds, supporting the empowerment of producers’ organizations, strengthening strategic skills and the development of agricultural innovation skills with national and international scholarships. The project will consolidate a decentralized agricultural innovation system and institutionalize the leadership of the Technical Secretariat.
The overall budget for the project is US$125.2 million, US$40 million of which will be financed by the World Bank while a further US$30.7 million will come from participating farmers’ organizations.
