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Results Briefs November 4, 2021

Fueling an Engine of Sustainable Growth: Agricultural Innovation in Peru


Coffee nursery in Cajamarca, Seed Company Subproject. Photo: World Bank.


Peru strengthened its national agriculture innovation system through a combination of institutional reforms, capacity strengthening activities, and supporting investments. A demand-driven competitive grants mechanism supported 541 subprojects, generating innovations that have been adopted by nearly 32,000 farmers, boosting their incomes by an average of 34 %. In addition, more than 75,000 training days were provided to researchers and extension professionals, and 57 agriculture-related master’s degrees, including 25 for women, were granted.


For a long period after its creation in 1978 with a mandate to support innovation in the agriculture sector, Peru’s National Institute for Agricultural Innovation (INIA) made limited progress. Constraints included stagnant budgets, inadequate infrastructure, constant reorganization, and a high rate of staff turnover. Operating in an uncertain and constantly shifting policy environment, INIA faced difficulties establishing coherent priorities and implementing effective programs. INIA’s chronically weak performance led to waning political support that was soon reflected in a lack of financial backing: between 2000 and 2010, Peru’s public spending on agricultural research and development averaged less than 1 % of agricultural GDP, extremely low by global standards. The resulting lack of innovation contributed to a productivity slowdown and kept the agriculture sector from achieving the high rate of sustained growth needed to improve food security and reduce poverty in rural areas.



The agricultural innovation model traditionally used in Peru was linear and dominated by public agencies: Public research institutes were expected to generate improved technologies that could be passed to public extension agencies for transfer to end users. The World Bank, drawing on global experience and in partnership with the Inter-American Development Bank, set out to replace the linear model with a multi-actor innovation network in which public agencies, private firms, civil society organizations, and end users could interact through iterative feedback loops, allowing innovations originating in different places to flow throughout the system in response to supply and demand forces. To facilitate the emergence of the new multi-modal innovation network, the National Agricultural Innovation Project (known as PNIA from its name in Spanish) supported activities on several fronts. One set of activities focused on strengthening INIA as the leader of the national agricultural innovation system by renovating aging infrastructure, modernizing equipment, training staff, and reforming institutional policies and operating procedures. A second set of activities focused on building the national agricultural innovation system by establishing regional bodies and supporting the design of localized innovation agendas. A third set of activities focused on promoting innovation on the ground, most notably through a demand-driven competitive grants program that directed funding to innovation activities via 541 subprojects implemented throughout the country.


PNIA, implemented between 2015 and 2021, achieved the following key results.    

  • Strengthening INIA’s capacity. PNIA supported necessary legislative changes in INIA’s legal status from a public agency to a Specialized Technical Organization, paving the way for reforms in governance arrangements and management systems. In addition, infrastructure at INIA’s 13 research stations was upgraded, and laboratory facilities and equipment were modernized and upgraded.  
  • Consolidating the national agriculture innovation system. PNIA helped establish 20 agricultural innovation technical commissions and dozens of regional meetings with local partners and stakeholders during which local innovation agendas were developed. Decentralized events coordinated by PNIA promoted collaboration between key actors to generate, transfer, and adapt knowledge and technology at the regional level.
  • Financing demand-driven innovation. PNIA supported a competitive grants program that funded subprojects in several categories, including strategic research, adaptive research, extension, seed enterprise support, and capacity building. According to the project’s external Impact Evaluation, strategic research subprojects resulted in the publication of 136 articles in indexed scientific journals. Meanwhile, the adaptive research, extension, and seed enterprise support subprojects boosted agricultural incomes for nearly 32,000 subproject beneficiaries by 34 % on average, compared to a control group.
  • Training the next generation of innovators. PNIA established a Scholarship Fund that awarded scholarships for postgraduate study, internships, and technical training. The Fund financed 82 master’s students, and while some students had to cut their programs short due to the COVID-19 pandemic, 57 received their degrees (including 25 women). The Fund also supported 255 internships (66 national and 189 international).
  • Raising awareness of the innovation agenda. PNIA supported activities designed to raise awareness of the innovation agenda and build political support for further public financing. These included annual agriculture innovation fairs, known as AGRONOVAs, that provided venues for hundreds of exhibitors (many of them beneficiaries of PNIA financing) to showcase their innovations before thousands of participants. The CARAL National Innovation Prizes competition attracted enormous interest and highlighted innovation efforts in the fields of agrobiodiversity, value-chain development, climate change resilience, and sustainable development. The CARAL competition attracted 169 nominations, from which 20 initiatives were selected for recognition as outstanding examples of innovation promotion.

Molecular processing of mushroom specimen in San Martin, Adaptive Research Subproject. Photo: World Bank

Bank Group Contribution

The World Bank, through the International Bank for Reconstruction and Development (IBRD), approved a loan in the amount of US$40 million to finance this project. By project closing, more than 97 % of the IBRD loan proceeds had been disbursed.

Other support for project preparation activities came through a grant in the amount of US$350,000 financed by the Spanish Fund for Latin America (SFLAC), a trust fund established by the Spanish Ministry of Economy and Competitiveness and administered by the World Bank. SFLAC is the only region-specific trust fund program and a critical instrument of the Bank’s work in the Latin America and Caribbean region.


The government of Peru provided approximately US$37.4 million in counterpart funding to finance project costs.

In addition, many partners and stakeholders contributed to PNIA’s success.   

  • The Ministry of Economics and Finance supported the innovation agenda at the national level.
  • The Ministry of Agriculture and Irrigation supported innovation at the sectoral level.
  • The National Institute for Agricultural Innovation hosted the PNIA and embraced institutional reforms, including a change in legal status.
  • The UN Food and Agriculture Organization provided technical assistance. 
  • National Agriculture Innovation System members participated actively in the national agriculture innovation system.

Project beneficiaries (individual producers, producer organizations, agribusiness firms) also participated actively in designing and implementing subprojects, including contributing approximately US$24.1 million in cash or in kind to access subproject financing through the competitive grant windows.

It is important to note as well that PNIA was part of the Peruvian government’s larger National Innovation Program, which received parallel financing from the Inter-American Development Bank in the amount of US$40 million. Teams from the two banks collaborated closely throughout the preparation and implementation phases, coordinating efforts in pursuit of a common development objective.


Carmen Chavez, a veterinary student from the Amazonas Region in Peru, is one of 189 students who benefited from PNIA’s international internship program. The program sent her to Sassari University in Sardinia, Italy, where she spent six months studying improved management practices for sheep milk production. She chose the topic because she is interested in identifying intensive livestock production strategies that could help slow deforestation in the Peruvian Amazon. In the first three months, Carmen carried out field work in the Caseificio Deidda processing plant, where she learned how to make dairy products. For the final six months, she worked on the Cuscusa farm, handling, feeding, and caring for goats and sheep. Carmen says, “Thanks to this internship, I have realized my responsibility as a professional to contribute to the development of our country and particularly my region: Amazonas.”

Moving Forward

The impressive results achieved by PNIA provide compelling evidence that supporting innovation at the sectoral level can be highly effective. Sustaining the results achieved under PNIA and building on the foundation it has laid will depend on strong ownership of the project by the government of Peru and sustained political and financial support. An active debate is currently under way in Peru concerning the relative advantages and disadvantages of supporting innovation at the sectoral level versus consolidating efforts within a single, more centralized agency or program. The outcome of this debate will likely influence whether the results achieved under PNIA can be maintained. 


Strawberries in Cusco, Adaptive Research Subproject. Photo: World Bank


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