Peru agriculture minister announces agrarian compensation decree in line with U.S. FTA requirements

Peru Agriculture Minister Ismael Benavides said Wednesday he will sign a legislative decree to establish an agrarian compensation program to get in line with U.S.-Peru FTA requirements.

The compensation program, Benavides told state news agency Andina, is to be funded by the Public Treasury and the Inter-American Development Bank. It will administer $700 million over the next five years to improve the productivity of Peruvian agriculture and strengthen its agribusiness industry.

The Agriculture Ministry will promote the production of cacao, coffee and palm oil in the Apurimac and Ene Valley as an alternative to coca leaf, the raw material for cocaine.

“We are developing an agrarian policy, and I believe that these three products are fundamental for the permanent economic development in that area,” said Benavides.

The U.S.-Peru FTA, which was signed into law Dec. 14 by President George W. Bush, was passed only after Republicans agreed to Democratic demands to include environmental standards in the Peru deal as well as in future trade pacts.

In May, Peru President Alan Garcia enacted an Environment Ministry as a deadline loomed to meet these provisions.

“We want to promote reforestation and also have an important forestry industry, it can’t be that Peru comes in last if we have a huge potential to generate more employment,” Benavides said. “The idea is to create regulations to protect our forests and, also, promote reforestation and extraction.”

And to fullfil the remaining US government requirements, he contended, Peru must promulgate a new set of laws for the protection of the environment.

“There are regulations dealing with water and land, agrarian innovation, and we have the agrarian sanitation issue that is also fundamental for the FTA. We are to promulgate a package of 12 laws at the end of the month and these are all associated with the trade agreement,” said Benavides.

The Agriculture Minister hopes these laws will be ready by October, before the 2008 Asia-Pacific Economic Cooperation Forum to be held in Lima in November, and that the U.S.-Peru FTA comes into force Jan 1 2009.

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