Contacts: In Washington: Alejandra Viveros (202) 473-4306 Aviveros@worldbank.org In Lima: Sandra Arzubiaga (511) 615-0660 Sarzubiaga@worldbank.org WASHINGTON, March 31, 2005 – The World Bank’s Board of Directors today approved a $25 million loan for Peru to support the Government’s program to increase the productivity and competitiveness of the agricultural sector in the country. “This program reflects the Government of Peru’s commitment to increasing the profitability and competitiveness of the agricultural sector in order to promote employment, increase incomes, and reduce poverty in rural areas,” said Marcelo Giugale, World Bank director for Bolivia, Ecuador, Peru and Venezuela. “Rural poverty is closely associated with low agricultural productivity, so investing in agricultural innovation will significantly narrow the technological gap and provide small producers better access to markets.” The $25 million loan will support the Second Phase of the Agricultural Research and Extension Program. This program will contribute to the expansion, strengthening, and institutional development of agricultural science and technological innovation in Peru, so it is more inclusive, decentralized, and led by the private sector. The first phase of the project, which was supported by a $9.6 million World Bank loan approved in November 1999, has benefited over 11,000 people -mostly small producers- and has attracted 86 private groups and 200 institutions who participate either as partners or associates in the project. Specifically, the new loan will support the following activities: - Strengthen the market for innovation systems by supporting producer organizations as beneficiaries of quality services, and improving entrepreneurial capacity of private service providers. This component will establish a Competitive Fund to co-finance initiatives that reflect producer demands, including vulnerable groups such as indigenous populations and women’s organizations. It will also co-finance local participant forums and training workshops to improve the administrative and managerial capacity of producers.
- Strengthen agricultural research and technological development for innovation by establishing support mechanisms for “centers of excellence” in emerging areas of science and technology. It will also support regional training programs in high-skill innovation services that are critical to increasing the competitiveness of the agricultural sector.
- Develop the institutional capacity of the public sector to formulate and implement agricultural innovation policy in conjunction with the private sector, and regulate the quality of the National Agricultural Innovation System. This component will establish a Technological Innovation Policy Focal Point in the Ministry of Agriculture, which will be responsible for the policies of incentives and investments in science, technology and innovations in the sector.
“The Bank’s assistance seeks to moderate the overall decline in public sector funding of agricultural research by stimulating private sector funding and strengthening public institutions,” said Matthew A. McMahon, World Bank task manager for the project. “The project shows how the public and private sector can work together in building a modern agricultural innovation system in Peru.”
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