FAE-Agro benefited only 4% of the planned producers

In his 40 years of experience, and accustomed to overcoming the annual crises of the El Niño phenomenon, Oswaldo Seminario, an agro-industrial producer of legumes in the north of the country, reports that the first six months of the Covid-19 pandemic generated a crisis higher in agriculture.

And in the midst of uncertainty in mid-2020, he saw an opportunity to resurface after the Government’s announcement about the creation of the Business Support Fund for the Agro Sector (FAE-Agro). However, despite having the support, the producer from Piura did not access loans through the program, so he had to resort to self-financing.

“In one way or another, we excluded farmers seek financing from somewhere. As a farmer, I harvest on a piece of land and rent the rest. The savings banks offer us loans, but outside the program, with higher rates, the program generally does not encourage it, ”he said.

And it is that after a year and a half, since the state-guaranteed credit program was created, and less than a month after the end of its validity period, the result is not very encouraging.

According to Cofide data, at the end of December 31, 2021, the program reached only 11,300 agricultural producers, 4% of the total of 270,000 who were expected to benefit. And if a general calculation is made, the scope was barely 0.51% of the total of 2.2 million farmers in the country.

Thus, since its inception, the FAE-Agro has assigned S/ 192.5 million in guarantees, when the total available fund is S/ 2,200 million (see infographic). Which means an advance of 9.6% in monetary terms.

Failure factors

In July 2020, the program was created in order to provide immediate liquidity to producers so that they can save the agricultural campaign. However, in its first version, there were requirements that later had to be modified because they were not in line with the reality of the sector.

The last auction that Cofide called to allocate the funds was in August 2021. In other words, in the last 7 months the program was stagnant. This, despite the fact that in September adjustments were made to improve the scope, such as allowing the participation of Agrobanco.

For Clímaco Cárdenas, president of the National Convention of Peruvian Agro (Conveagro), the problem lies in the fact that it has not been possible to generate the conditions of how to reach the farmer and give him facilities so that he can be a beneficiary.

“Our conclusion is that it ends up being one more failure of government policies. When some type of programs are broadcast, mainly officials from the Ministry of Economy reason outside the reality of national agriculture. That is why they ask for requirements beyond the end to access, the clearest example is the failure of FAE-Agro”, he pointed out, adding that this program was implemented by copying the structure of Reactiva Peru, when nature is totally different.

Gerardo Freiberg, former general manager of Cofide, agrees on this, who stressed that the treatment should have been specialized, since the agricultural sector is a particular item in which sales are not daily or monthly, but are handled by quarterly or semi-annual campaigns. and that there are external factors that can affect harvests (thus profits).

Freiberg commented that in Cofide a year ago a model different from the FAE-Agro was being developed, which contemplated the natural characteristics of financing and transfer of the cost of money.

The data

More information. Jorge Delgado, president of Asomif, stressed that one of the difficulties is the little information available on the agricultural sector. It should be noted that the last agrarian census was in 2012.

reactions

“There are many requirements that they ask for. From property titles, which generally only large producers have. The documentation to access the FAE-Agro is complicated, for a small farmer it does not work”.

Oswaldo Seminario, producer from Piura

“What needs to be done is to design a slightly more complex product that offers the farmer this type of specialized financing, not the traditional banking that other more specific business industries have access to.”

Gerardo Freiberg, former CEO of Cofide