Agricultural Product Marketing Platform
Agricultural Product Marketing Platform
Business Model Description
Brings agricultural producers (wholesale and retail) closer to offer their products on a Marketplace to end consumers, using real-time information on competitive price fluctuations, and explores new sales channels.
Expected Impact
Connecting agricultural producers directly to the end customer through digital channels
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- Region Lima y Callao
Sector Classification
Food and Beverage
Development need
- In 2022, the weight of the agricultural sector in the GDP is 6.1% (3)
- In December 2022, the year-on-year variation of the Agricultural Production Index was -0.96%, due to a decrease in agricultural activity of -2.43% (1)
- By the end of the year, the agricultural sector grew by 4.3% compared to the same period in 2021, driven by increased production in the Agricultural subsector (+5.5%) (2)
Policy priority
- Institutional Strategic Plan 2019-2024 (Modified) - MIDAGRI (Implement initiatives to improve agricultural services) (5)
- Agricultural Policy Guidelines: A guiding framework for decision-making by public and private sector actors (6)
- Food and Nutritional Security Law No. 31315: Development of public policies on food security (4)
Gender inequalities and marginalization issues
The difference in income between men and women can affect consumption patterns in the food and beverage sector, such as:
- The average income of women is 69.6% of the income of men - INEI (Sep-2022) (10).
- In 2021, men's labor income increased by 10.7%, while it decreased by 1.1% for women (11).
Investment opportunities introduction
- 2021: The country achieved a 13.6% GDP growth (12)
-The National Agricultural Policy (PNA) guides public investment towards providing services that strengthen the sector (14)
-Strategic National Development Plan 2050: proposes to improve rural infrastructure, enhance the productive and commercial capacity of farmers (7).
Key bottlenecks introduction
- Inflation was 6.43% in 2021 and 8.56% in 2022. This reduces the purchasing power of the population (15)(16)
- Agriculture in Peru has low productive efficiency, with 85% of farmers having plots smaller than 10 hectares (17)
- 17% of companies in the extractive sector reported difficulties in finding qualified personnel (18)
Food and Agriculture
Development need
- The poverty of small agricultural producers is partly due to the inappropriate use and degradation of the natural resource-based production foundation (17).
- In 2021, agricultural production is the second most significant employment-generating activity in Peru (26).
- Approximately 97% of agricultural workers in Peru work in the informal sector (35).
Policy priority
- National Agrarian Policy: Seeks to effectively address issues related to quality specifications, certification, innovation, and sustainability faced by agricultural producers (14).
- Law 31110: Law on the agrarian labor regime and incentives for the agrarian sector, irrigation, agro-export, and agro-industry (20).
- Law No. 1062 - Law on Food Safety and its Regulations (30).
Gender inequalities and marginalization issues
- In 2017, 46.9% of rural women received lower incomes, compared to 12.7% of men (22).
- In 2012, 30.8% of the people involved in agricultural activity were women, but they only managed 28.8% of the plots intended for this activity (23).-
- Only 6.4% of female agricultural producers managed to manage credit, while for men it was 10.4% (23).
Investment opportunities introduction
- Perú is an ideal country for agricultural investment due to its soil conditions and climate diversity (12).
- The National Plan for Product Diversification (PNDP) places significant importance on activities such as agriculture (27).
- The Agricultural Fund for Risk Sharing (FAE Agro) was created to guarantee working capital loans for agricultural producers (13)
Key bottlenecks introduction
- Informality represents more than 70% of total employment (equivalent to 1/3 of the GDP). This translates to inadequate development and increased poverty (31).
- There is a decline in the production of key agricultural products due to a shortage of fertilizers (24).
- The absence of a wholesale market system contributes to high marketing costs that affect producers (17).
Agricultural Products
Pipeline Opportunity
Agricultural Product Marketing Platform
Brings agricultural producers (wholesale and retail) closer to offer their products on a Marketplace to end consumers, using real-time information on competitive price fluctuations, and explores new sales channels.
Business Case
Market Size and Environment
USD 100 million - USD 1 billion
< 5%
Between January and September 2022, agricultural production in Peru amounted to USD 512 million, marking a 4.1% increase compared to the same period in 2021 when it was USD 496 million (25).
Indicative Return
> 25%
Feasibility studies for the implementation of marketplaces for food commerce yield a return on investment ranging from 30% to 40%. (34)
Investment Timeframe
Short Term (0–5 years)
The estimated payback period for a project implementing a marketplace is 3 to 4 years. (34)
Ticket Size
< USD 500,000
Market Risks & Scale Obstacles
Market - Politcal Instability
Market - Highly Regulated
Market - Volatile
Impact Case
Sustainable Development Need
A characteristic of the internal agricultural marketing is the multiplicity of intermediaries and the absence of a wholesale market system. This is directly reflected in high marketing costs.
To consolidate agricultural growth, it is necessary to demand the development of productive factors to address the urgent needs of producers in areas such as technological innovation and business management.
Agriculture employs 26% of the National Economically Active Population (PEA) and 65.5% of the PEA in rural areas. In contrast to its ability to generate employment, it is one of the sectors with lower labor productivity due to the low educational level of the workforce in rural areas.
Gender & Marginalisation
Women make up 43% of the agricultural workforce. However, they are often affected by restrictive sociocultural norms and gender stereotypes in our society, which can limit their ability to make decisions. (28)
Expected Development Outcome
It provides the experience as if you were in the wholesale market, where you can see how the prices of various products change second by second. Each of the wholesalers has a digital space where they offer their products and gather real-time information on price fluctuations.
Gender & Marginalisation
The model provides direct contact between a food product provider and an end customer, reducing the involvement of intermediaries and allowing direct price management. This has an impact on their income and the management of information for the production of their products.
Primary SDGs addressed
9.3.1 Proportion of small-scale industries in total industry value added
The agricultural sector employs 26% of the Active Economic Population at the national level and 65.5% of the Active Economic Population in rural areas (17). Initially, the wholesalers who didn't understand how the platform would work because some people resist digital options and prefer going to physical markets to make their purchases. However, at the same time, these wholesalers are aware that it's necessary to explore new channels that enable them to sell their products.
By 2030, the goal is to improve agricultural sector competitiveness by 36% through vertical integration into the value chain of agricultural producers, reducing the proportion of family agricultural producers at the subsistence level, and enhancing the management of natural resources for sustainable agricultural production.
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Corporates
Public sector
Indirectly impacted stakeholders
People
Gender inequality and/or marginalization
Public sector
Corporates
Outcome Risks
The producers depend on the technological platform, the availability of the platform, or the logistics service.
Resistance from buyers to use electronic payment methods.
Rural women have less access to equipment or internet connectivity, which hinders their participation in digital commerce.
Impact Risks
Dependency on an internet connection for the merchants who are on the platform.
The elderly are the ones most involved in production and marketing, but they also face the greatest challenges in learning to use digital tools.
Impact Classification
What
Optimization of the purchasing, selling, and dispatch processes for wholesale businesses by HORECA industry players.
Who
Reduction of logistics and input supply costs for HORECA industry players.
Risk
Dependence on internet connection services (mobile and fixed) by sellers and buyers.
Impact Thesis
Connecting agricultural producers directly to the end customer through digital channels
Enabling Environment
Policy Environment
The National Development Strategic Plan 2050 makes reference to agricultural production and fertilizers within the context of a broader vision for the sustainable development of the country (7).
The "Reactiva Perú" program aims to provide a quick and effective response to the liquidity needs that companies are facing due to the impact of COVID-19 (8).
Financial Environment
Financial incentives: The volume of spending on managed IT services in Peru in 2021 amounted to US$523.97 million. This investment is concentrated in the commerce and manufacturing sector.
Fiscal incentives: The Law Promoting Scientific Research, Technological Development, and Technological Innovation (Law No. 30309) makes the tax incentive for companies, especially SMEs, more attractive, allowing them to allocate more resources to investments in new technologies.
Regulatory Environment
Law No. 31110. Law on the agrarian labor regime and incentives for the agricultural, irrigation, agro-export, and agro-industrial sector (20).
National Decent Employment Policy (PED) Supreme Decree No. 013-2021-TR ensures conditions for the fulfillment of labor rights and fair income (21).
Marketplace Participants
Private Sector
Whipay, Perú Pasíón
Government
Ministerio de Desarrollo Agrario y Ruego (MIDAGRI), Ministerio de Producción(PRODUCE), Ministerio de Comercio Exterior y Turismo (MINCETUR), Dirección General de Salud Ambiental (DIGESA)
Public-Private Partnership
Intercorp Group
Target Locations
Region Lima y Callao
References
- (1) INEI (2023). Informe técnico de producción nacional diciembre 2022.
- (2) MIDAGRI (2022). Informe del Valor Bruto de la Producción Agropecuaria.
- (3) BCRP (2023). Notas de estudios diciembre 2022
- (4) Congreso de la República (2021), Ley N° 31315 - Ley de seguridad alimentaria y nutriciona
- (5) MIDAGRI (2022), Plan Estratégico Institucional 2019-2024 (Modificado)
- (6) MIDAGRI (2015), Lineamiento de política agraria
- (7) PCM (2022), Plan Estratégido de Desarrollo Nacional al 2050
- (8) MEF (2023). Programa Reactiva Perú (Modificado)
- (9) INEI (2022). Perú Brechas de Género 2022
- (10) INEI (2022). Estadísticas con Enfoque de Género
- (11) GOB.PE (2022). Brecha de ocupación laboral - Nota de Prensa
- (12) EY (2022). Guía de Negocios e Inversión en Agricultura y Agribusiness en el Perú 2022/2023
- (13) GOB.PE (2020). Gobierno crea el FAE-AGRO para inyectar S/ 2,000 millones en créditos a pequeños productores - Nota de prensa
- (14) MIDAGRI (2021), D. S. N° 017-2021-MIDAGRI, Política Nacional Agraria 2021-2030
- (15) BCRP (2022). Reporte de Inflación . Diciembre 2022
- (16) INEI (2023). Variación de los Indicadores de precios de la Economía. Diciembre 2022
- (17) MIDAGRI (2022). Problemas tipo de la agricultura peruana
- (18) MTPE(2022). Encuesta de Demanda Ocupacional (EDO)
- (19) Fundación Friedrich Ebert (2021). La Agricultura Peruana Situación Post COVID-19
- (20) Congreso de la República (2020), Ley N° 31110. Ley del régimen laboral agrario
- (21) BANCO MUNDIAL (2021). The long shadow of informality
- (22) Observatorio Nacional de la Violencia Contra las Mujeres y los Integrantes del Grupo Familiar (2019). Mujeres rurales en el Perú: población vulnerable a la violencia
- (23) INEI (2012). Inequidad de género en la actividad agropecuaria
- (24) Conveagro (2022). Perú afronta una preocupante escasez de fertilizantes a las puertas de la próxima campaña agrícola
- (25) MIDAGRI (2022). El Agro en cifras. Mes: Abril 2022
- (26) BCRP (2021). Actividad Productiva y Empleo. Memoria 2021
- (27) PRODUCE (2022) Programa Nacional de Diversificación Productiva
- (28) FAO (2022). The state of food security and nutrition in the world
- (29) Banco mundial (2023). Alimentos y agricultura. Panorama general
- (30) Presidencia de la República (2008), D. L. N° 1062. Ley de inocuidad de los alimentos
- (31) INEI (2022). Comportamiento de los indicadores de mercado laboral a Nivel Nacional
- (32) WHIPAY
- (33) PERÚ PASIÓN
- (34) ESAN (2018). Plan de negocio de marketplace online de fruta fresca para los mercados mayoristas
- (35) Gestión (2021): El 97% de los trabajadores agro en Perú laboran en la informalidad