United States 

Department 

of Agriculture 

www.ers.usda.gov 

 A Report from the Economic Research Service

Abstract

Over the past two decades, Peru has emerged as a significant fruit and vegetable 

exporter. The United States is one of its most important markets. This rise in exports 

was driven by advantages in climate, low production costs, and preferential trading 

arrangements with major countries. But because many of the same products exported 

by Peru are grown in the United States, increased Peruvian exports will continue to 

affect U.S. growers as well as consumers. In this report, we highlight the success 

stories of three commodities—asparagus, processed artichokes, and table grapes—that 

represent different impacts on U.S. growers. Despite Peru’s success in developing 

a fruit and vegetable export industry, challenges remain. In order to continue on its 

current export trajectory, the country must confront a number of constraints, including 

water access, land rights, and underdeveloped export infrastructure.

Keywords: Peru, fruit and vegetable exports, asparagus, artichokes, table grapes, California, Michigan, Washington, water management, land rights, infrastructure

Acknowledgments

Appreciation is extended to Mary Anne Normile, Chief, International Demand and 

Trade Branch, and Donna Roberts, Chief, Food and Specialty Crops Branch, both 

of the Market and Trade Economics Division (MTED), USDA Economic Research 

Service (ERS), for their support of this report. We would also like to thank the 

reviewers for their valuable comments, especially Gene Philhower, Agricultural 

Counselor, and Gaspar Nolte, Agricultural Specialist, both of the USDA Foreign 

Agricultural Service, Lima, Peru; Roberta Cook, University of California Cooperative 

Extension Specialist and Lecturer; Shari Kosco, vegetable and deciduous fruit expert, 

USDA, FAS; and John Dyck and Gary Lucier, both of USDA, ERS. Special thanks are 

extended to Linda Hatcher and Cynthia Ray for editorial and design assistance.

Birgit Meade, bmeade@ers.usda.gov 

Katherine Baldwin, kbaldwin@ers.usda.gov

Linda Calvin, lcalvin@ers.usda.gov

Peru: An Emerging Exporter 

FTS-345-01 of Fruits and Vegetables December 2010

Contents

Approved by USDA’s 

World Agricultural 

Outlook Board

Introduction. . . . . . . . . . . . . . . . 2

Peru: An Increasingly 

Important Exporter of Fruits 

and Vegetables. . . . . . . . . . . . . . . 4

What Factors Explain Peru’s 

Success in Exports of Fruits 

and Vegetables?. . . . . . . . . . . . . . 6

Peruvian Export Success 

Stories. . . . . . . . . . . . . . . . . . . . 10

Challenges for Peru’s Fruit 

and Vegetable Export 

Industry. . . . . . . . . . . . . . . . . . . 25

Conclusions. . . . . . . . . . . . . . . . 29

References. . . . . . . . . . . . . . . . . 30
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Since the mid-1980s, Peru has emerged as an important fruit and vegetable 

exporter, and the United States is one of the country’s top export destinations. The question is whether or not Peru will be able to sustain and expand 

its role as an important player in the international fruit and vegetable trade. 

Traditionally, Peru has been known mostly for its exports of metals and 

ores, but since the early 1990s, Peru’s horticultural exports have grown at an 

annual rate of 16 percent, outpacing any other commodity group (Food and 

Agriculture Organization of the United Nations (FAO), various years). The 

early 1990s were a time when a new constitution and new laws encouraged 

Peruvian engagement in international trade and investment in Peru. These 

developments, along with Peru’s natural advantages, such as a climate ideally 

suited for production of many horticultural crops, provided the groundwork 

for ongoing strong economic and export growth in traditional, as well as new, 

fruit and vegetable products.

The United States also produces many of the fruits and vegetables that it 

imports from Peru. A second question, therefore, is what impact Peru’s 

increasing importance as a U.S. supplier and competitor will have on U.S. 

production, trade, and consumption. Although Peru’s export boom began 

with asparagus, the country’s export portfolio has since expanded to include 

such diverse products as processed artichokes, avocados, bananas, various 

types of citrus fruit, grapes, mangoes, onions, and paprika.

This report presents Peru as an agricultural producer and trading partner, 

with a special focus on the fruit and vegetable export industry. We highlight 

the factors that make Peru a successful fruit and vegetable exporter. Peru’s 

main advantages are its (1) investor-friendly business environment and policy 

framework, (2) free or preferential trade agreements with major importers, 

such as the United States, the European Union (EU), and China, (3) relatively 

cheap labor, and (4) good climate.

We then focus on three in-depth commodity analyses of Peruvian fruit 

and vegetable industries that can be described as success stories, but with 

differing levels of impact on U.S. growers. Asparagus is an example of a 

commodity in which Peru competes directly with U.S. producers. Artichokes 

are another successful export commodity; Peruvian exports to the United 

States are almost exclusively processed artichokes. U.S. artichoke growers 

have not produced for the processed market since 2000, so Peru does not 

compete with U.S. production. This type of trade relationship is also true for 

a number of other Peruvian export products, such as mangoes (the United 

States produces very few mangoes) and piquillo peppers. Our third case 

study concentrates on table grapes. Because of the timing of the Peruvian 

growing season, exports to the United States compete with U.S.-produced 

grapes in the U.S. market for only a very short time and Peruvian shipments 

are very small compared with the U.S. supply. However, grape exports from 

both countries do compete in third-country markets, which is a concern to 

U.S. growers. 

Introduction
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We point out some challenges to Peru, such as its reliance on a small number 

of export products and markets, the large distance to its export markets, 

shortcomings in its export infrastructure, water scarcity in the coastal areas, 

and unresolved land right issues. We conclude with an assessment of Peru’s 

potential to continue expanding production and trade in the medium term and 

likely impacts on U.S. production, trade, and consumption.
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Peru is a country of 29 million people situated on the Pacific coast of South 

America. It is classified as a lower middle-income country by the World 

Bank and had a per capita gross national income (GNI) of $3,990 in 2008. 

Gross domestic product (GDP) grew at 9.8 percent in 2008 (World Bank, 

2010), continuing the recent trend of strong economic growth.1 Exports were 

an important driver of this growth, with merchandise exports of $31.5 billion 

in 2008. Exports of goods and services accounted for 27.1 percent of GDP in 

2008, up from 25.6 percent in 2007 and only 12.6 percent in 1991. A major 

part of these exports consists of mineral commodities, which benefited significantly from rising international prices through 2007.2 Agricultural exports 

accounted for 7.2 percent of all merchandise trade in 2007 (FAO, various 

years). Peru has also been successful at attracting foreign direct investment 

(FDI)—U.S. $5.3 billion in 2007, up from $3.5 billion in 2006—an important 

source of capital, which, so far, has been mostly going into the petroleum/

mining sector. FDI contributes to expanding the export sector and investments in major infrastructure projects (World Bank, 2010).

While coffee remains Peru's most important agricultural export crop, more 

than 60 percent of all agricultural exports are now fruits and vegetables. 

Asparagus is the largest fruit and vegetable export item (fig. 1). Peru’s fruit 

and vegetable exports were close to U.S. $1.2 billion in 2009 (Global Trade 

Information Services, Inc. (GTIS), 2010), up from $60 million in 1990 (FAO, 

2009). Since 1990, exports have increased at an average annual rate of 16 

percent—a faster growth rate than Peruvian merchandise exports as a whole 

(FAO, 2009). By comparison, the U.S. share of fruit and vegetable exports 

was close to half a billion dollars in 2009.

1Peru began to feel the effects of 

the worldwide economic downturn in 

2009, with growth projected at only 1.8 

percent, recovering to 5 percent in 2010 

(Reuters, 2009a).

2Many mineral commodity prices 

sharply declined after 2007 until 2009 

when they began to recover.

Peru: An Increasingly Important Exporter 

of Fruits and Vegetables

Figure 1

Growth in the value of selected Peruvian fruit and vegetable exports, 1998-2009

Source: Global Trade Information Services, Inc. (2010).

U.S. $ million

1998 99 2000 01 02 03 04 05 06 07 08 09

0

100

200

300

400

500

600

Asparagus

Grapes

Paprika

Mangoes

Artichokes

Avocados

Bananas

Citrus

Onions
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In general, the United States and Europe are Peru’s largest export markets 

(table 1). In 2009, the United States accounted for 40 percent of Peru’s fruit 

and vegetable exports and Europe accounted for 44 percent (GTIS, 2010). 

In 2009, over half of all Peruvian exports of fresh asparagus, canned artichokes, and fresh onions were shipped to the United States. Recently, China 

has emerged as an important export market for Peruvian grapes. For fresh 

products, it will become increasingly important for Peru to find market 

niches where it can be the low-cost supplier in a particular seasonal window, 

as competition from lower cost producers is increasing. For the processed 

market, seasons are not as important, but keeping costs low is critical.

Table 1

Selected Peruvian fruit and vegetable exports, 2009

Share shipped to selected destinations

Product Value United 

States EU Northeast Asia Rest of world

U.S. $ million Percent

Asparagus 373.9 50.2 44.1 1.3 4.4

Grapes 126.6 27.8 31.6 18.9 21.7

Paprika 101.3 37.8 39.1 0.1 23.0

Mango 81.2 29.9 62.1 1.4 6.6

Artichoke 72.3 59.7 36.8 0.0 3.5

Avocado 64.1 0.2 95.2 0.0 4.6

Bananas 51.6 24.3 63.4 11.7 0.5

Citrus 43.4 26.7 52.5 0.0 20.7

Onion 28.1 77.4 4.0 0.0 18.5

EU = European Union.

Source: Global Trade Information Services, Inc. (2010).
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Peru’s fruit and vegetable export industry benefits from a combination 

of factors that have supported its rapid growth. In the early 1990s, a new 

constitution and new laws encouraged international investment in Peru, as 

well as Peruvian engagement in international trade. Peru’s export industry 

benefits from a business climate that welcomes foreign investors and encourages trade. Free trade agreements with all major trading partners, such as 

the United States, the EU, and China, provide an invaluable stimulus to the 

export industry. The agricultural sector continues to be very labor intensive, 

and Peru’s fruit and vegetable industry has been fortunate to have had access 

to abundant and relatively cheap farm labor. Lastly, Peru’s climate is very 

well suited for the production of a range of fruits and vegetables.

Business Environment

Peru’s economy stabilized after the Latin American debt crisis in the 1980s. 

During the 1990s, inflation was kept below 5 percent thanks to structural 

reforms, deregulation, fiscal restraint, and international loans (The Economist 

Intelligence Unit, 1997 and 2008). Also, the Government of Peru created a 

business and investment-friendly environment with its 1991 Foreign Investment Promotion Law, which legalized unrestricted private foreign land 

ownership and investment and outlawed discrimination between foreign and 

domestic investors. This law and the Government’s campaign of privatization 

in the fishing, mining, telecommunication, energy, and finance sectors were 

successful in attracting foreign investors. In 2007, Peru’s net FDI was close 

to U.S. $5.3 billion (World Bank, 2009b).

This favorable business environment and relaxed land ownership rights 

have supported capable producers and agricultural entrepreneurs who have 

adopted state-of-the-art technology and organizational standards. Largescale exporters are fully aware of international market expectations. Many of 

them have founded or joined associations that can effectively promote their 

commodity, as the associations have a keen understanding of their respective 

industries, as well as world market conditions.3

Trade Agreements

This investor-friendly business climate has contributed to the signing of 

several trade agreements. The United States and Peru have a long-established 

preferential trading relationship, going back to the 1991 Andean Trade Preference Act (ATPA). The ATPA was a multilateral agreement between the 

United States and Bolivia, Colombia, Ecuador, and Peru that offered these 

Andean nations trade concessions in order to establish legitimate industries 

and to reduce dependence on drug production and trafficking. These concessions included preferential access to the U.S. market for a large share of their 

exports, including duty-free access for most fruit and vegetable products. 4

However, the ATPA was scheduled to expire in 2006, along with it its preferential access provisions. After annual renewals, the U.S.-Peru Trade Promo3Examples for such associations are 

the Instituto Peruano del Esparrago 

y Hortalizas, which promotes export 

interests for asparagus and artichoke 

producers, as well as ProHass, the association of Hass avocado producers, and 

ProCitrus, the association for Peruvian 

citrus producers.

4In 2005, 44 percent of all U.S. 

imports from Peru, mostly copper and 

certain apparel, received preferential 

duty treatment (Villarreal, 2006).

What Factors Explain Peru’s Success in 

Exports of Fruits and Vegetables?
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tion Agreement (PTPA) replaced the earlier, less far-reaching trade agreement 

in February 2009. The PTPA is a comprehensive free trade agreement that 

makes Peru’s preferential access to the U.S. market permanent. The agreement also immediately eliminated most of Peru’s tariffs on U.S. exports, with 

all remaining tariffs phased out over defined periods (within less than 5 or 

10 years, but no more than 17 years) (U.S. Trade Representative, 2009). The 

agreement furthermore addressed several nontariff issues, such as individual 

property rights and dispute settlement, and thus eliminated a range of tradeinhibiting obstacles (Villarreal, 2006). Having preferential access to the U.S. 

market is of great value to the Peruvian export sector, even if some barriers 

arising from sanitary and phytosanitary problems remain.

Peru is working toward broadening its trade base and has signed free trade 

agreements (FTAs) with most major trading partners, most notably with 

China and the EU (Andina, 2010). FTAs with Japan and South Korea are 

being negotiated in 2010, and further FTAs are planned with Russia, India, 

Morocco, and South Africa.

Labor

Relatively low labor costs have helped Peru to compete successfully in the 

world market. As a lower middle-income country with a very skewed income 

distribution, average wages are far below those of many of its competitors. 

Low labor costs are partly a consequence of high underemployment (less 

working hours than desired), estimated at 64.5 percent in 2005 (Bolle and 

Villareal, 2007) even though the official unemployment rate has been around 

8 percent in recent years. In 2008, the average nominal wage was only 

about $388 per month (The Economist Intelligence Unit, 2010), or roughly 

$2.15 per hour.5 Agricultural labor costs are much lower than this average. 

Low agricultural wages are a result of an abundant supply of unskilled rural 

workers. However, workers employed by agricultural exporting companies 

earn about 30 percent more than those working for agricultural companies that serve the local market. Growers in Ica reported that labor costs 

were about $8 per worker per day in 2008, higher than in other parts of the 

country. Ica has reached the point where labor for the exporting agricultural companies is getting scarce, driving wages higher. Fruit and vegetable 

production continues to be labor intensive, as many tasks, such as the harvest 

of asparagus, are not mechanized.6

Although labor costs remain low compared with those in competitor countries, jobs in the sector are coveted as they often come with benefits, especially in areas where suitable labor is becoming scarce, such as in Ica. Here, 

some growers invest in family services, such as health care units, nurseries, 

and other community services, to retain their workers and thus reduce costly 

turnover and to keep their employees personally invested in the success of 

the company. Peru’s low labor costs help compensate for high transportation 

costs to major export markets and thus keep Peru competitive in the world 

market. Impoverished families living in the highlands (Sierra) often have no 

other choice than to move to the coastal area for employment even though 

some programs are underway to provide farmers with support to develop 

highland-based export industries such as avocado production.

5Assuming 180 hours of work per 

month.

6For more information on asparagus 

harvesting, see Asparagus Growing 

(2010), http://www.asparagusgrowing.

et/asparagus-growing/harvest-asparagus.
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Climate

Peru’s natural advantage in fruit and vegetable production is its climate. The 

Peruvian fruit and vegetable export industry is located along the long, narrow 

coastal plain, which has a maximum width of 75 miles. Peru consists of 

three very distinct topographic regions that run from north to south (fig. 2): 

a narrow coastal desert plain along the Pacific Ocean in the west, the Andes 

in the center (known as the Sierra), and the jungle in the east. The Sierra and 

the jungle cover about three-fifths of the Peruvian land area, but these regions 

are sparsely populated. With such variation in climate, Peruvian growers 

have experimented in alternative growing regions (further north or south on 

the long coastal plain or up in altitude in the Sierra) in order to increase the 

export seasons for some commodities.

The coastal plain is a tropical desert. The temperature is relatively constant 

and mild due to the Humboldt Current, which brings cold water from the 

Antarctic to most of Peru’s coast and thus moderates otherwise hot temperaFigure 2

Map of Peru

Source: USDA, Economic Research Service. 

♦

♦

♦

♦

•

Piura

Lambayeque 

Ica

Trujillo

Lima

Brazil

Bolivia

Ecuador Colombia

Chile

♦ Cities

• Capital

Jungle

Coast

Sierra
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tures. The closeness of Peru to the equator gives the country a relatively 

even length of daylight throughout the year and guarantees the absence of 

frost. In this spring-like climate, asparagus, for example, can be harvested 12 

months out of the year if proper water-management techniques are used. As 

a Southern Hemisphere fruit and vegetable exporter, Peru has the advantage 

of being able to supply the high-income and populous Northern Hemisphere 

markets in their off-season. 

The Peruvian coastal region has virtually no rainfall (except during the 

El Niño phenomenon), and export agriculture depends on irrigation from 

wells or rivers, which can be problematic.7 Peruvian exporters claim that, 

while others (for example, China) may have cheaper production costs for 

some crops, Peru has the most consistent supply and quality of fruits and 

vegetables due to its predictable weather conditions. The desert conditions 

are excellent for growing fruits and vegetables as long as irrigation water 

is adequate. Recently, however, Peruvian growers have become concerned 

about the possible effects of climate change, which might threaten the 

predictability of weather patterns since more extreme weather conditions, 

such as unusually high and low temperatures and flash floods, have been 

observed. Peruvian scientists have also expressed concern about the retreat of 

Andean glaciers, the source of much of the water used in coastal agriculture 

(Flores, 2007).

7These issues are discussed at length 

in the “Water Management” section.
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Peru’s combination of business climate, trade preferences, low labor costs, 

and climatic conditions helped lay the foundation for developing a competitive and successful agricultural export industry. Many of the fruit and vegetable industries grew out of seasonal demand from Northern Hemisphere 

trading partners. The conditions and developments described in this report 

determine, to a large extent, the current success and future uncertainty of 

Peru’s export commodities.

Although each of these commodities has a different story, they also share 

common characteristics and trends. In examining the successful export 

product stories of Peru and their effect on the U.S. market, we identified three 

different groups of products based on their effect on their U.S. counterpart 

industries. The first group negatively affects the U.S. counterpart industry 

by directly replacing the U.S.-produced commodity within the U.S. market. 

Asparagus is the most prominent example, but Peruvian-produced paprika 

has also negatively affected U.S. production. The second group benefits U.S. 

consumers while having little or no impact on U.S. producers, primarily 

due to negligible production of those particular commodities in the United 

States. Although tropical fruit products, such as mangoes and bananas, also 

fit this category, we explore in some detail the high-value processed artichoke 

market.

The last group represents products that are produced both in the United States 

and Peru but do not compete head to head throughout their seasons, although 

there is some overlap of seasons, which is the case for table grapes and sweet 

onions. We examine table grapes in detail. Many U.S. grape growers are 

concerned about competition between the United States and Peru in important third-country markets. These case studies of asparagus, processed artichokes, and table grapes, therefore, serve as examples for a number of other 

successful export commodities and for the potential repercussions of the 

ongoing fast expansion of Peruvian fruit and vegetable exports, not only for 

Peru, but for U.S. producers and consumers. 

Success Story #1: Asparagus

Asparagus was the first, and remains the most prominent, example of Peru’s 

success as a major exporter of fruit and vegetable products. While the emergence of Peru as a year-round global asparagus supplier was good news for 

U.S. consumers, it had a considerable negative effect on the U.S. asparagus 

industry. The huge success of this export product is partly due to the variety 

of forms in which it can be produced and processed.

Production

Peru is the world’s second largest asparagus producer after China. The Peruvian asparagus industry started in the early 1950s in La Libertad, the region 

around Trujillo, as a canned white asparagus export industry. In the mid1980s, the U.S. Agency for International Development began working with 

growers in Ica to find nontraditional agricultural exports that could reduce the 

Peruvian Export Success Stories
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country’s reliance on coca production. Asparagus looked promising because 

of the area’s deep sandy soil and advantageous climatic conditions. The first 

commercial exports of fresh green asparagus began in the mid-1980s. Today, 

most production is concentrated in the departments of Ica and La Libertad, 

with 39 percent and 44 percent of the total asparagus production area, respectively; Lima (9 percent) and Ancash (8 percent) account for most of the 

remaining land in asparagus production (Ministerio de Agricultura del Perú 

(MINAG), 2010). While white asparagus8 once dominated Peruvian production, in 2008 green asparagus production made up 87 percent of the total 

(Benson, 2010).

Total planted acreage has nearly quadrupled since 1988, with production 

area over 29,800 hectares in 2008 (MINAG, 2010) (fig. 3). Peru is the only 

country in the world that harvests asparagus year round, with two or sometimes three harvests per year per field. The large-scale growers tend to run 

farms with state-of-the-art technology, such as drip irrigation. They can 

manipulate the harvest seasons by withholding water to the plants, which 

enables Peru to target the most profitable market periods. Peru has the 

world’s highest asparagus yields, increasing steadily and almost doubling 

since 1990 (MINAG, 2010).9

Exports

After coffee, asparagus is Peru’s largest agricultural export product at $374 

million in 2009. Exports of fresh asparagus in that year were valued at 

$240.6 million; exports of processed asparagus (such as asparagus in cans 

or jars but not frozen) added another $109.7 million in value, and frozen 

asparagus exports totaled $23.5 million. Domestic demand is very low for 

asparagus, which is not a native vegetable and has not made inroads into the 

Peruvian cuisine; thus, nearly all of the country’s production is exported. A 

major share of these exports—50.2 percent, or $187.8 million, in 2009—was 

destined for the United States.

8White asparagus is a more laborintensive crop because the emerging 

spears must be covered with a mound 

of soil to keep the sun from turning 

them green.

9Yields vary by region. In La 

Libertad, average yield in 2007 was 

13.4 tons/hectare (ha) (Ministerio 

de Agricultura del Perú, 2010). 

Under the right conditions and with 

the most efficient, sophisticated 

technologies, yields as high as 20 

tons/ha have been reached (Nolte, 

2007).

Figure 3

Peruvian asparagus production and area, 1980-2008

Source: Ministerio de Agricultura de Perú (2010).

Production (1,000 metric tons)

1980 82 84 86 88 90 92 94 96 98 2000 02 04 06 08

0

50

100

150

200

250

300

350

0

5

10

15

20

25

30

35

Production Area

Area (1,000 hectares)
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The share of asparagus going to the three different markets—fresh, 

processed, and frozen—has changed over time. These shifts reflect not only 

the changing makeup of Peru’s destination markets but also changes in preferences within those markets. The fresh market tends to be more profitable 

than the processing market, but only in 2002 did fresh export volume finally 

rise above processed volume (fig. 4). In 2009, the fresh market accounted for 

65 percent of export volume and the primary destination was the U.S. market, 

with 72 percent of all fresh asparagus exports. White asparagus is more 

popular in the EU and China, while green asparagus is the preferred choice in 

the United States. 

Processed and frozen asparagus accounted for 29 percent and 5 percent 

of export volume, respectively. Peru also exports processed and frozen 

asparagus throughout the year. In 2009, Peru exported 71 percent of their 

processed exports to the EU versus 23 percent to the United States (GTIS, 

2010). Spain and France were the primary EU destinations. For the much 

smaller frozen asparagus industry, 53 percent of exports went to the United 

States and 40 percent to the EU in 2009. 

Industry Structure

The Peruvian asparagus industry is dominated by large firms, but there are 

enough of them so that most claim only a small portion of total export share. 

In 2005, there were 122 asparagus exporters in Peru, 21⁄2 times as many as 

there were in 1995. The nation’s five largest firms controlled approximately 

42 percent of the market in 2005—the largest 50 firms shared 95 percent of 

the country’s total fresh green asparagus output (Rios, 2007).

The Peruvian Institute for Asparagus and Horticultural Crops (IPEH) is a 

nonprofit association of asparagus producers and exporters founded in 1998 

to promote research, marketing, extension, and international standard compliFigure 4

Peruvian asparagus exports: Fresh, processed, and frozen, 1998-20091

1

In 2002, a separate Harmonized System code was first introduced for frozen asparagus. 

Before that, some frozen asparagus was exported, but it was reported jointly with other frozen 

vegetable exports.

Source: Global Trade Information Services, Inc. (2010).

1,000 metric tons

1998 99 2000 01 02 03 04 05 06 07 08 09

0

20

40

60

80

100

120

140

Fresh

Processed−not frozen

Frozen
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ance. Grower organizations like IPEH have been critical to industry success 

since there is very little public agricultural research on fruit and vegetable 

production issues. These organizations are an example of the entrepreneurship that is evident in the Peruvian agricultural export industry.

Tariffs and SPS Issues

While Peru’s asparagus exports face no tariffs in their main markets, 

including the United States, sanitary and phytosanitary (SPS) barriers affect 

trade. The U.S. Department of Agriculture’s (USDA) Animal and Plant 

Health Inspection Service (APHIS) is trying to prevent entry of the moth 

Copitarsia decolora, which has been found on asparagus in Peru but not on 

asparagus in the United States. APHIS requires every shipment of fresh green 

asparagus to the United States to be fumigated with the pesticide methyl 

bromide.10 Fumigation is expensive and reduces the shelf life of asparagus, 

causing concern among Peruvian producers.

Potential Problems

Peru’s growers recognize the inherent danger of relying on a small number 

of important export items. As the world’s largest asparagus exporter, Peru 

runs the risk of oversupplying the market, which is one reason that most 

growers want to diversify crops. Transportation is a major cost component, 

and bottlenecks and rising transportation costs have become increasingly 

important issues. Most asparagus is exported by air freight. When air freight 

costs increase, some asparagus is shipped by boat, which is cheaper, but the 

lengthy transit reduces shelf life—a problem that becomes more acute with 

the recent addition of methyl bromide fumigation. Transportation costs and 

shelf life considerations will continue to determine whether long-distance 

shipments are economically viable.

Peru’s main rival in the processed asparagus export business is China. Most 

Chinese exports consist of processed white asparagus that is shipped into the 

European market. China’s main advantage comes from labor costs. Average 

production cost per hectare of asparagus in China is half that of Peru. Even 

taking into account Peru’s higher yields, China still undercuts Peru on cost 

per ton—$317 versus $348 (TechnoServe Peru, 2005). While Peruvian 

exports enter the EU duty free and China is assessed a 16-percent duty, 

Chinese asparagus is still cheaper (GTIS, 2010). Dominance in the processed 

industry can change very quickly since no provider has a seasonal advantage 

and only the costs of production matter.

Impact on U.S. Production, Consumption, and Imports

Peru’s success as a low-cost asparagus exporter played a large part in the 

recent decline of the U.S. asparagus industry. U.S. average annual asparagus 

production declined 58 percent between 1990-92 and 2007-09 (USDA, 

Economic Research Service (ERS), 2010a) (fig. 5). Different sectors of the 

asparagus industry are facing different levels of competition. In 1990-92, 

59 percent of total U.S. asparagus production went to the fresh market, 32 

percent to the canning market, and 9 percent to the freezing market. By 2007-

09, U.S. asparagus production had declined dramatically; fresh production 

10White asparagus is not fumigated 

because it develops under the soil and is 

therefore not a host to the pest.
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Peruvian Asparagus Exports: 

Impacts on California, Washington, and Michigan

The Fresh Market and California

California specializes in the fresh market and ships asparagus in the spring (box fig. 1). Although Peru 

is the largest source of U.S. fresh asparagus imports, it is spring imports from Mexico that have lowered 

prices and reduced early-season profitability for California growers. Competition with Mexico has led 

to a severe decline in the California fresh asparagus market; however, many growers confirm that, if 

Mexico were not supplying the market during early spring, Peru could step in with the same result. 

California asparagus production peaked in 2004 and, by 2008, had declined by 53 percent (box fig. 2). 

In 1990, the California season ran from late January to early May. In 2009, the season ran from March 

through early May.

Currently, Peruvian asparagus dominates in the second half of the year. Often, imports in the off season 

can raise domestic consumption as consumers become more familiar with a product and it becomes a 

menu staple, not just a seasonal treat. Between 1990-92 and 2007-09, average annual per capita U.S. 

consumption of fresh asparagus doubled. In the case of fresh asparagus, growers of U.S. imports, not 

U.S. producers, are benefiting from the increased consumption trends.

The Canning Industry and Washington

Competition from Peru has been most apparent in the canned asparagus market, which was largely 

concentrated in Washington. Imports first exceeded U.S. production in 2006 and by 2008 Peru accounted 

for 96 percent of U.S. processed asparagus imports. China was relegated from the most important 

import supplier to a distant second place with just 3 percent (GTIS, 2010).

The Washington asparagus season follows the California season, with shipments from early April 

through June. Traditionally, Washington growers could not rely on the early-season price premiums 

received by the California industry. They instead depended on high yields and concentrated on canned 

spears, which are particularly labor intensive since they require hand trimming. This reliance made their 

industry even more vulnerable to lower priced Peruvian imports. Washington asparagus production 

peaked at 51,200 tons in 1989 and by 2008 production declined 73 percent. 

Between 2003 and 2005, the three biggest canners in the State (all multinational corporations) closed 

their operations and opened new plants in Peru. The now smaller Washington industry has been forced 

into the fresh market. As a fresh-market producer, Washington is facing less pressure. During its season, 

imports from both Mexico and Peru are low but could potentially increase. With lower production in the 

last few years during the Washington season, fresh-market asparagus prices have risen.

Frozen Asparagus and Michigan

Production patterns in Michigan have changed less than those in Washington, but Michigan growers 

have also been challenged by competition from Peru. Michigan traditionally focused on canned and 

frozen asparagus, particularly the product known as cuts and tips, which is less labor intensive than 

whole spears. Michigan asparagus production peaked in 2003 and, by 2008, had decreased by 19 

percent.

Acreage reduction in Michigan is the result of the same factors as in Washington: import pressure with 

prices just above the cost of production. Michigan was able to avoid Washington’s fate due to two 

factors. First, Michigan’s production is more diversified, although canning is emphasized—approxi-
15

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mately 45 percent of their production is canned, 35 percent is frozen, and 20 percent is sold as fresh. U.S. 

frozen asparagus production has been on a downward trend for decades, and imports first exceeded production in 2002. Peru has been the leading source of U.S. frozen asparagus imports since 1995 and supplied 82 

percent of imports in 2008. China was the number two source, with 13 percent of the market in 2008 (GTIS, 

2010). Michigan has the only remaining U.S. frozen asparagus industry. The second factor that helped 

Michigan maintain its processing industry is that many of the processing firms in Michigan are relatively 

small and locally owned, making them less likely to move operations to Peru than the large, multinational 

processors in Washington. Many are primarily private-label canners or freezers uninterested in outsourcing 

their operation because asparagus fills an important seasonal production niche. The Michigan Asparagus 

Advisory Board is encouraging producers to focus their efforts on production of fresh asparagus.

Box figure 2

Total U.S. asparagus production by State, 1990-2009

Source: USDA, National Agricultural Statistics Service (2010).

1990 93 96 99 02 05 08

0

10

20

30

40

50

60 California

Michigan

Washington

1,000 hundredweight

United States

Mexico

Peru

Box figure 1

U.S., Mexican, and Peruvian fresh asparagus shipments, 1990 and 2009

Jan Mar May Jul Sep Nov

0

100

200

300

400

500

600

1,000 hundredweight

1990

Jan Mar May Jul Sep Nov

0

100

200

300

400

500

600

1,000 hundredweight

2009

Source: USDA, Agricultural Marketing Service (2010).
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was down 44 percent, and canned and frozen production had declined 84 and 

57 percent, respectively. Increasing U.S. imports of fresh asparagus from 

Mexico in the spring have hurt the U.S. fresh industry, but Peru could play 

the same role if Mexican asparagus were not available. Peruvian competition 

was behind the decline in the canned and frozen asparagus industry (see box, 

“Peruvian Asparagus Exports: Impacts on California, Washington, and Michigan”). In addition to competition from imports, changes in U.S. consumer 

preferences have affected the U.S. asparagus industry. During the last 20 

years, U.S. average per capita consumption of canned asparagus fell more 

than 40 percent and frozen asparagus consumption remained unchanged. 

Aided by the new phenomenon of year-round supplies of fresh asparagus, 

average per capita consumption of fresh asparagus doubled. 

The U.S. asparagus industry had long been protected from imports by high 

tariffs relative to those of other fruits and vegetables. Since implementation of the North American Free Trade Agreement (NAFTA) in 1994, U.S. 

imports from Mexico have increased as the tariff gradually declined to zero. 

Since 1991, Peruvian asparagus has entered the United States tariff free. As 

U.S. production declined, total U.S. fresh asparagus imports increased over 

500 percent (fig. 5). Fresh imports first exceeded domestic production in 

2000, and Peru has been the dominant supplier since 2002 when it surpassed 

imports from Mexico. Between 1990-92 and 2007-09, average annual 

imports of fresh asparagus from Peru increased from 2,835 metric tons to 

78,644 metric tons. In 2009, Peru provided 56 percent of U.S. fresh imports, 

while Mexico supplied 43 percent. Frozen and canned asparagus imports also 

increased rapidly. 

Federal Relief

U.S. producers will get some relief from the Asparagus Market Loss 

Program, part of the Food, Conservation, and Energy Act of 2008. A total of 

$15 million will be distributed to producers of fresh, processed, and frozen 

asparagus based on losses incurred from 2004 to 2007 due to increased 

Figure 5

U.S. fresh-market asparagus production, imports, 

and exports, 1980-2009

1980 84 88 92 96 2000 04 08

0

50

100

150

200

250

300

350

Production

Imports

Exports

Million pounds

Source: USDA, Economic Research Service, 2010b.
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Peru: An Emerging Exporter of Fruits and Vegetables / FTS-345-01

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imports. Although payments will help compensate growers for recent 

losses, many are concerned about whether domestic asparagus production 

can survive when the larger problem, depressed prices caused by increased 

foreign competition, remains. The Peruvian and Mexican asparagus industries have established themselves as forces on the world asparagus market.

Success Story #2: Processed Artichokes

While the success of the Peruvian asparagus industry had severe consequences for U.S. growers, the emergence of Peru’s processed artichoke 

industry had no effect on U.S. producers. U.S. growers were not hurt because 

the United States produces only fresh artichokes; U.S. growers abandoned 

the processing market because it was not competitive with Spain’s exports. 

When Peru entered the market, its growing exports negatively affected other 

suppliers to the United States, most notably Spain. 

Production

Artichokes were grown in Peru before the boom in fruit and vegetable 

exports but only on a very small scale. Large-scale production for export 

began after disease seriously affected the country’s asparagus crop between 

1998 and 1999, and growers sought to diversify their exports (Vallejos, 

2004). On the coast, growing conditions allow for a 4- to 5-month harvest 

season. Unlike most of Peru’s other exported crops, artichoke production is 

not restricted to the country’s arid coastal desert. Artichokes thrive in some 

areas of the Sierra. Several of the large artichoke producers on the coast tried 

to expand production to the Sierra, but they encountered many problems, 

such as limited grower technical skills, more variable weather, and insufficient transportation infrastructure. Several development organizations are 

currently promoting small-scale production in the Sierra in order to provide 

employment and income opportunities to impoverished communities.

Exports

After a 1999-2001 trial period, processed artichoke exports increased rapidly, 

reaching 35,000 metric tons in 2008 (fig. 6). In 2009, artichokes were Peru’s 

fifth highest value fruit and vegetable export commodity at $72.3 million 

(GTIS, 2010). Almost all of Peru’s artichoke exports are processed products. 

The large export firms of the Peruvian coast concentrate their production on 

varieties that produce the best processed product, primarily artichoke hearts. 

These processing varieties are not the familiar green globe variety grown 

in the United States for the fresh market. Peru does, however, occasionally 

export a very small amount of fresh artichokes to the United States in the fall 

if U.S. prices are sufficiently high (the last shipment was in 2007). 
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The United States, taking 60 percent of Peru’s artichoke export, is Peru’s 

main market, followed by Spain and France, each taking 21 and 8 percent, 

respectively (GTIS, 2010). Processed artichokes are Peru’s second largest 

fruit and vegetable export in value to the United States. Peru’s main competitors are Spain and Chile, although Peru has been gaining part of Spain’s 

market share in the past few years. Artichoke exports to the United States 

benefit from completely liberalized trade and the total lack of SPS issues. 

Fresh globe artichokes are permitted entry into all U.S. ports without any 

special treatment processes, and all processed artichokes are permitted entry.

Impact on U.S. Production and Imports

Almost 99 percent of artichoke acreage planted in the United States today is 

in California. U.S. artichoke production has vacillated around 100 million 

pounds for the past decade after 1985’s production peak of 134 million 

pounds. In the past, California growers sent artichokes to the fresh and 

processing market, but the one processor went out of business in 2000, 

partly because of competition from Spain. Now, all artichokes go to the fresh 

market. U.S. fresh artichoke producers are seeing little competition from 

imports, which account for just 2 percent of fresh consumption, mostly from 

Mexico.

Since the U.S. artichoke-processing industry was gone before Peru became 

a major player, Peru has taken market share away from other foreign processors. Imports of processed artichokes from all sources have increased 242 

percent since 1990. U.S. processed artichoke imports from Peru increased 

rapidly from the first shipments in 2001 (fig. 7). While total processed artichoke imports increased 41 percent since Peru began exporting, much of 

Peru’s supply has substituted for U.S. imports of Spanish processed artichokes, which have declined precipitously. In 2009, Peru accounted for 45 

percent of U.S. processed artichoke imports, followed by Spain with 26 

percent, and Chile with 19 percent (GTIS, 2010).

Figure 6

Peruvian processed artichoke exports by destination, 2000-2009

Source: Global Trade Information Services, Inc. (2010).

1,000 metric tons

2000 01 02 03 04 05 06 07 08 09

0

5

10

15

20

25

30

United States

European Union

Other
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Peru: An Emerging Exporter of Fruits and Vegetables / FTS-345-01

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If artichoke-processing countries, such as Peru and Chile, improve quality 

standards and successfully transition into fresh artichoke production, then 

U.S. producers could be affected by the threat of cheaper imports. For now, 

however, processed Peruvian artichokes have benefited the U.S. market by 

increasing available supplies and decreasing prices for consumers.

Success Story #3: Table Grapes

Whereas asparagus represents products for which the United States and Peru 

compete in the U.S. market and processed artichokes do not, U.S. and Peruvian fruit and vegetable products can compete in another area: third-country 

export markets. Table grapes are a good example of third-country competition between the United States and Peru. Although Peru’s season is mostly 

opposite that of the United States, partly overlapping production seasons 

have caused competition in exports to other countries to rise.

Production

In the late 1990s, Peruvian agribusiness began to investigate the potential of 

table grapes as a profitable export. Until that time, grapes had been grown 

on a smaller scale, destined principally for the domestic table grape market, 

as well as for wine and spirits production. The Peruvian table grape export 

industry is still relatively young, experimenting with different production 

areas and varieties. Land is still available that could be brought into grape 

production but that might not have adequate soils for other crops (MINAG, 

2008). Thus, the full potential of the industry may take some time to develop. 

Grape production in Peru is concentrated in the coastal regions of Ica (42 

percent), Lima (26 percent), and La Libertad (23 percent) (MINAG, 2010). 

New production areas are developing in Piura and Lambayeque, areas in the 

north that have a very early season, thanks to that region’s warmer climate.

Figure 7

U.S. processed artichoke imports by country of origin, 1990-2009

Source: Global Trade Information Services, Inc. (2010).

1,000 metric tons

1990 92 94 96 98 2000 02 04 06 08

0

5

10

15

20

25

30

35

40

45 Peru

Spain

Chile

Other
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Peru: An Emerging Exporter of Fruits and Vegetables / FTS-345-01

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Production is currently concentrated on four varieties—Red Globe (with 75 

percent of production), Flame Seedless (9 percent), Sugraone (8 percent), and 

Crimson Seedless (5 percent) (USDA, Foreign Agricultural Service (FAS), 

2009). Peru began with the seeded Red Globe grape, which grows well there. 

It is a thick-skinned grape that is relatively easy to ship compared with other 

varieties. However, much of the growth in grape demand worldwide is for 

seedless varieties, and Peru is responding to this demand trend. Not all varieties produce equally well in Peru; Thompson seedless, the dominant U.S. 

table grape, has not yet shown much success in Peru (Boriss, 2006).

Exports

Since the first 600 metric tons of table grapes Peru exported in 1998, the 

industry grew to over 60,000 metric tons exported in 2009 (fig. 8). Peru 

exported $127 million in grapes to all countries in 2009, making grapes 

the country’s second most valuable fruit and vegetable export, with $31.6 

million exported to the United States. Although Peru is not a major grape 

producer or exporter, only six of the world’s top 25 exporters—Chile, South 

Africa, Argentina, Brazil, Australia, and Peru—are located in the Southern 

Hemisphere, meaning that Peru is one of only a handful of countries that 

can supply markets during the Northern Hemisphere’s winter. Peru exports 

grapes mainly from October to March, with the greatest volume from 

November to February. This export window falls at the end of the U.S. grape 

season and the beginning of the Chilean season. In addition, the height of 

Peru’s production season coincides with the strong demand associated with 

worldwide December holiday celebrations, as well as the Chinese New Year.

With 32 percent of volume in 2009, Europe is Peru’s biggest export 

market, followed by the United States with 23 percent, and Northeast Asia 

(comprised of Hong Kong, China, Taiwan, Japan, and South Korea) with 19 

percent. Grapes can be stored and are exported by ship.

Figure 8

Peruvian grape exports by destination, 1998-2009

1

No country or aggregation of countries is bigger than the EU, United States, or Northeast Asia.

Source: Global Trade Information Services, Inc. (2010).

1,000 metric tons

1998 99 2000 01 02 03 04 05 06 07 08 09

0

5

10

15

20

25

United States

European Union

Northeast Asia

Other1
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Tariffs and SPS Issues

Peruvian grapes enter the U.S. duty free, as do grapes from the two other 

major U.S. suppliers, Chile and Mexico. On the phytosanitary front, table 

grape imports from Peru are permitted but must be cold treated in order to 

prevent the entry of the Mediterranean and various other fruit flies into the 

United States (USDA, APHIS, 2009). Imports are also restricted to certain 

ports.

Industry Structure

The table grape export industry is highly concentrated and dominated by the 

36 member firms of PROVID, the Peruvian grape producer association. Three 

Peruvian companies account for approximately 50 percent of table grape 

exports (USDA, FAS, 2009). The entire membership of the organization 

now accounts for around 90 percent of Peru’s table grape exports (PROVID, 

2008). Founded in 2001, the organization is working to open new markets for 

its members, especially the lucrative Northeast Asian countries of Japan and 

South Korea. In this pursuit, the association has helped its members adopt 

stricter phytosanitary standards that benefit the country’s industry as a whole 

and better position Peru’s producers for global competition.

Impact on U.S. Production, Imports, and Exports

California is the source of virtually all U.S. table grape production. Annual 

U.S. table grape production has averaged nearly 1 million tons since the late 

1990s (fig. 9). Both imports and exports have grown. Traditionally, the U.S. 

season ran from May through December; new late-season varieties, such as 

Red Globe, Crimson Seedless, and Autumn Royal, now enable shipping into 

January.

Figure 9

U.S. table grape production, imports, and exports, 1970-2008

Source: USDA, Economic Research Service (2010c).

Million pounds

1980 84 88 92 96 2000 04 08

0

500

1,000

1,500

2,000

2,500

Production

Imports

Exports
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Peru: An Emerging Exporter of Fruits and Vegetables / FTS-345-01

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The majority of U.S. off-season grape imports are from Chile and Mexico, 

with small amounts from other suppliers, including Peru, from November 

through March (fig. 10). Peru is currently not positioned to increase market 

share substantially in the United States unless it develops a market niche by 

offering a type or quality of grape that is not available in a particular period 

or by offering grapes at a lower price than that of the existing competition. Peru’s share of the U.S. market totaled just 3 percent in 2009; as U.S. 

growers find ways to extend their season, Peru’s market niche in the United 

States may decline even further.

Peru may have a better chance to take market share in the United States 

from its regional competitors. Brazil benefits from a short market niche 

between September and November. For several years, very few U.S. green 

grapes were available in October and November, and Brazil could demand 

a premium for its exports. If Peru can produce the type of green grape that 

Brazil exports to the United States at a lower cost than Brazil does, Peru may 

be able to compete successfully. U.S. consumers would then benefit from 

lower prices. Peru overtook Brazil in 2009 as the third largest grape exporter 

to the United States after Chile and Mexico. Peru might also pose a challenge 

to Chile’s very early season exports, which have high production costs.

Exports are very important to the health of the U.S. table grape industry. In 

the 2008/09 marketing season, U.S. grape exports represented 38 percent 

of production. In 2009, the largest export markets were Canada, Mexico, 

and China/Hong Kong, which accounted for 45 percent, 8 percent, and 10 

percent, respectively (table 2). The United States exported a relatively small 

amount of grapes to 78 other countries; even a small increase in grapes from 

Peru could affect these markets.

Figure 10

U.S. table grape shipments by source, 2009

Source: Agricultural Marketing Service, 2010.

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Chile

United States

100,000 pounds

Peru

Brazil

Mexico
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Peru has the potential to be a competitor of concern in third countries. For 

example, China/Hong Kong is an important market for the United States and 

Peru, and both countries are trying to capture the lucrative Chinese New Year 

market. U.S. exports have been declining in the last decade, whereas Peru’s 

exports, although small, have been growing (fig. 11). The United States is 

the largest source of imports in China/Hong Kong from August through 

January, but Peruvian imports are now competing, particularly in January 

(fig. 12). Peru is also supplying a large share of the grapes in February. The 

United Kingdom is another important market for both the United States and 

Peru (3 percent and 6 percent of their exports, respectively) (table 2). Peruvian exports to that market have been growing steadily. As Peru continues to 

improve the quality of their grapes, consumer preferences for various grape 

varieties in third-country markets will likely determine relative market dominance between the United States and Peru.

Table 2

U.S. and Peruvian table grape exports to 

selected third-country markets, 20091

Ranking Country or 

region

United States Peru

Quantity Share Quantity Share

Metric tons Percent Metric tons Percent

1 Canada 167,424 45 591 1

2 Hong Kong 30,483 8 7,299 12

3 Mexico 16,392 4 0 0

4 Indonesia 16,129 4 1,575 3

5 Australia 15,397 4 19 0

6 Philippines 14,552 4 187 0

7 Taiwan 14,297 4 856 1

8 United Kingdom 9,775 3 3,610 6

9 Malaysia 7,823 2 333 1

10 Thailand 7,115 2 899 1

11 New Zealand 6,167 2 19 0

12 Singapore 6,092 2 188 0

13 China 6,083 2 3,112 5

14 Guatemala 5,836 2 168 0

15 Vietnam 5,534 1 991 2

16 Colombia 2,937 1 2,063 3

17 Russia 2,322 1 5,244 9

18 Netherlands 494 0 10,902 18

19 Spain 0 0 2,665 4

Others2 40,468 11 19,413 32

1Although this table lists annual market shares, please note that the United States competes 

with Peru mostly during December and January.

2The largest share of Peru’s fresh grape “Others” exports goes to the United States at 23 

percent. 

Source: Global Trade Information Service, Inc. (2010).
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Figure 12

Overlap in monthly China/Hong Kong grape imports from Peru 

and the United States, 2009

Source: Global Trade Information Services, Inc. (2010).

1,000 metric tons

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

0

10

20

30

40

50

60

70

80

90

United States

Peru

Figure 11

China/Hong Kong table grape imports by country of origin, 1998-20091

1

Although this figure lists annual market shares, please note that the United States competes 

with Peru mostly during December and January.

Source: Global Trade Information Services, Inc. (2010).

1,000 metric tons

1998 99 2000 01 02 03 04 05 06 07 08 09

0

20

40

60

80

100

120

United States

Peru

Other

Chile
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Peru’s continued success as a fruit and vegetable exporter faces a number 

of challenges. Reliance on a small number of export products increases the 

sector’s vulnerability to international market shocks. Also, the great distance 

between Peru and its major trading partners makes transportation costs a 

crucial factor in competitiveness, and export infrastructure, such as roads 

and port capacity, is not keeping pace with rapidly growing export volumes. 

Finally, old problems such as water management and land rights also 

continue to burden the fruit and vegetable export industry.

Reliance on a Small Number of Products and Markets

Asparagus still dominates Peru’s horticultural export success. A country 

that depends on a narrow export portfolio, however, is more vulnerable 

to shocks. There is no or very limited domestic market demand for some 

of these products, which puts even greater importance on export markets. 

Growers, therefore, try to diversify into other crops by experimenting with 

new export commodities. Once new promising export products are found, 

however, a lengthy process may be necessary to get them cleared for export 

to the United States or other countries. APHIS, concerned about the introduction of non-native pests, conducts extensive investigations before it opens the 

U.S. market to new foreign products, particularly fresh products. Peru is still 

lagging behind its neighbor Chile, a long-time fruit and vegetable exporter, 

which has APHIS approval for many more horticultural products than Peru.

Besides efforts to diversify its range of export products, Peru is also trying to 

diversify its export markets. This effort is particularly important for crops like 

asparagus for which inadvertent overproduction can lower prices to unprofitable levels. The increasing number of FTAs is a testimony to this effort of 

market diversification.

Distance

Peru is a long way from the United States and other important markets, and 

transportation is therefore a sizable cost factor. As a result, Peru must concentrate on high-value commodities. Asparagus was traditionally sent to the U.S. 

market by air freight. In the early days of the industry, asparagus prices were 

very high. As export volume increased and prices fell, the cost of air freight 

became a challenge to the industry. In recent years, air freight accounted for 

about 45 percent of its total delivered cost. Ocean freight is considerably 

cheaper than air freight, but more time in transit reduces the product’s shelf 

life. Both air freight and ocean freight costs have increased substantially 

since the early 1990s, peaking in 2008, when high energy costs raised air 

freight for U.S.-bound exports by 15 percent over 2007 levels. High transportation costs make Peru vulnerable to competition from suppliers closer to the 

United States, such as Mexico.

Challenges for Peru’s Fruit and Vegetable

Export Industry
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Export Infrastructure

The lack of adequate infrastructure is one of the most serious constraints to 

Peruvian export expansion. Peru requires substantial investments to improve 

its roads and ports, and the Government of Peru is working toward this 

goal. The Pan-American Highway traverses the country from north to south 

along the coast. Although portions of this road around Lima have four lanes, 

the vast majority of the highway in Peru is just two lanes, which results in 

congestion during harvest seasons. Most of the east-west roads to the Sierra 

are even more inadequate—a serious impediment for growers who might 

want to expand production to areas beyond the coast.

When the asparagus export industry emerged, growers struggled with inadequate airport infrastructure to maintain the cold chain, which is critical for 

a perishable product. Growers banded together in 1998 to form Frio Aéreo 

Asociación Civil, a private nonprofit association, to improve the logistics for 

fresh asparagus exports by air. This association has been very effective and 

offers services like cold storage, quality control, and fumigation. As a result, 

the air freight export process for asparagus and other produce is now much 

smoother.

Some commodity exports, including fresh grapes and processed vegetables, 

generally ship by sea. Rapidly growing export volumes of these products 

have placed pressure on Peruvian port facilities. Callao, just south of Lima, 

is by far Peru’s most important port, handling close to 50 percent of Peru’s 

entire trade volume in 2007, but it is also one of the most expensive ports in 

the world. The average cost of exporting one container from Peru is $800, 

compared with an average of $510 in Chile and $660 in Costa Rica. Aside 

from port capacity, insufficient port logistics (such as insurance, holding, or 

security) also put Peru at a disadvantage. In 2004, Peru’s logistics costs were 

32 percent of product value, compared with 9.5 percent in the United States 

and 18 percent in Chile (Gonzalez et al., 2007). The Peruvian Government 

encourages private and foreign investment in infrastructure projects, such 

as the expanding and improving of port facilities, but some workers’ unions 

oppose foreign investment (Reuters, 2009b).

Water Management

Peru has ample supplies of renewable fresh water—more per capita than any 

other country in Latin America—but water distribution is a problem. The 

Sierra and the jungle receive abundant rains, but the Pacific watershed, where 

the primary fruit and vegetable exporters operate (and 50 percent of the 

population live), accounts for only 2 percent of available surface water (Amat 

y León, 2006).

In the coastal region, water is available from about 60 rivers that flow from 

the Sierra to the Pacific, although the flow varies seasonally. Agriculture is 

concentrated in these river valleys. New irrigation projects, using river water, 

have opened some desert areas on the coast to agriculture. In addition, some 

fruit and vegetable exporters based in the coastal desert area depend on 

groundwater.
27

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Since the 1950s, Government investment has brought approximately 1 

million hectares on the coast under irrigation, using mostly surface water, 

80 percent of which is used to irrigate agricultural production. However, 

expanded agricultural area, poor infrastructure, and inefficient irrigation 

methods have led to dwindling water supplies. The more technologically 

advanced exporters have introduced more water-saving irrigation technologies, such as drip irrigation, but at the same time, the amount of irrigated 

land is increasing and multiple cropping cycles per year are becoming more 

common, raising irrigation water demand.

Some of the most important areas for fruit and vegetable export production 

are suffering from overexploitation of groundwater and salinization. The 

extraction of groundwater in some parts of the country, such as the Ica Valley, 

200 kilometers (km) south of Lima, is progressing rapidly (Olson, 2006). 

Water supplies in Ica are projected to be exhausted possibly within 15 years 

unless dramatic action is taken (Rendón Schneir, 2009).

In recent years, the Government of Peru has begun to reform water regulations. At the same time, the Government has also created several new institutions that have a role in water resources management.11

Incomplete water rights, as well as the lack of appropriate pricing for water 

use, are obstacles to investment in irrigation projects. Currently, producers 

pay just a fraction of the true cost of water—$30 per hectare per year for 

a medium-sized farm in a coastal valley, when the true cost can be $200 

(USDA, FAS, 2007). The Government of Peru plans to increase the area 

under drip irrigation to 200,000 hectares on the coast (up from 70,000 in 

2007) and establish 30,000 hectares with drip irrigation in the Sierra. The 

World Bank is funding a project that aims to aid the Government in its design 

of use and discharge fees, and it plans to help the National Water Authority 

(ANA) set up local river basin offices.

Even if existing water resources are managed efficiently, they still may not 

be sufficient to supply growing needs in the coastal area. Peruvians talk 

about tapping the more-than-sufficient water supplies on the eastern side of 

the Andes and bringing them to the Pacific watershed. The Government is 

encouraging public-private partnerships to raise the considerable funds necessary for this kind of investment. One example of a successful public-private 

investment partnership is the Chavimochic irrigation project in La Libertad, 

500 km north of Lima, one of Peru’s major agricultural production areas. 

Water provided by the Chavimochic project is sold at a price to defray the 

cost of the irrigation system, which consists of pipes that run through mountains in order to tap water from a larger river to the south. This redirected 

water is then distributed through a system of channels.

Land Rights Issues in Peru

Land rights are another salient issue affecting Peru’s agriculture export 

sector. Land reform was implemented in Peru between 1969 and 1975 as a 

means to achieve greater social justice and to alleviate rural poverty. Before 

these reforms, the 1961 Peruvian census showed that 75.6 percent of the 

surveyed land was owned by 0.4 percent of the population (Eguren, 2006). 

After the Third Agrarian Reform Law of 1969, expropriation and redistribu11The Government of Peru created 

the National Water Authority (Autoridad Nacional del Agua—ANA) as part 

of the Ministry of Agriculture. This 

agency enjoys financial and administrative autonomy and has a clear mandate 

for integrated and multisectoral water 

resource management. The Government 

also created a new Ministry of Environment, which, among other tasks, is 

responsible for generating hydrological 

information. Furthermore, the Ministry 

of Health is involved in water issues 

as it is responsible for water quality 

management. However, having three 

ministries in charge of water issues has 

led to confusion and conflict over each 

institution’s set of responsibilities. In 

May 2008, the Ministry of Environment 

was put in charge of protecting water 

resources overseeing their recuperation, 

and the Ministry of Agriculture was put 

in charge of distributing water permits. 

Another concern is the potential conflict 

of interest from ANA being part of the 

Ministry of Agriculture while agriculture is one of the major water users 

(World Bank, 2009a).
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tion of land did not bring the intended benefits. The land originally given 

to agricultural production cooperatives was subdivided and sold to their 

previous members. While these subdivisions did give land directly to smallholders, the transfers were problematic as most were not accompanied by 

a legal government-issued title. The lack of well-defined property rights 

was underscored by the 1994 census. Of the country’s 5.7 million farms, 53 

percent were not titled (Herrera, 2005).

With the passing years and administrations, the discourse over land rights in 

Peru has changed from a focus on how “the land belongs to the person who 

works it” toward an emphasis on efficiency and competitiveness, which often 

requires a sufficiently large farm size and experienced and active management. President Alberto Fujimori solidified decrees to this effect with the 

enactment of a new constitution in 1993 that allowed for transfer of land 

titles to third parties and eliminated all acreage restrictions on landholdings. 

The Titling Act from 1997 went even further as it contained a provision that 

uncultivated land holdings would be declared “abandoned” and taken over by 

the State. This new law created some tension with small landholders who left 

some of their coastal lands fallow because of lack of water resources and not 

as the result of land abandonment. Many of the largest farms in Peru acquired 

their land from the Government after just such a takeover (La Revista 

Agraria, 2009).

The result of this new land distribution process has been increased concentration of acreage by just a handful of firms producing crops predominantly 

bound for export. The expansion of arable lands into the desert—made 

possible by large investments in irrigation schemes financed so far with 

mostly public funds—is likewise dominated by export firms. More than 

three-quarters of the 66,000 hectares of land opened up by the Chavimochic 

irrigation project were bought by 11 investors.

Challenges remain despite the recent success of agricultural production 

destined for exports. Many larger farms are limited in their potential to 

expand. A large share of small-scale growers still lack titles for their land and 

are thus prevented from selling it even though progress has been made in the 

area of providing land titles.
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The fruit and vegetable export industry in Peru has expanded rapidly over 

the last 20 years and has made Peru an important player in world markets for 

a number of commodities. Peru is the world’s leading asparagus exporter, 

and other horticultural products may follow suit. Several factors contribute 

to Peru’s success: a favorable business environment, trade agreements, low 

labor costs, and a climate that favors production of many fruit and vegetable 

products. Peru was able to capture significant market share in both the United 

States and Europe (and occasionally Northeast Asia) for a variety of fruit 

and vegetable products. This increased market share has had varied impacts 

on U.S. production and exports. In some instances, it has displaced domestic 

industries, as was the case in the processed asparagus industry. In other cases, 

such as processed artichokes, new Peruvian supplies in the U.S. market do 

not compete with U.S. growers. In still other instances, such as in the table 

grape trade, the United States finds itself competing with Peru in certain 

months for third-country markets, such as Northeast Asia and the United 

Kingdom. Peru’s continued success in the sector will require overcoming 

challenges, such as infrastructure bottlenecks, risk exposure due to narrow 

export portfolios, water management issues, and a complicated land tenure 

situation.

Conclusions
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