The Agriculture and Economics of Peru

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Peru's gross domestic product in the late 1980s was $19.6 billion, or about $920

per capita. Although the economy remains primarily agricultural, the mining and

fishing industries have become increasingly important. Peru relies primarily on the

export of raw materials--chiefly minerals, farm products, and fish meal--to earn

foreign exchange for importing machinery and manufactured goods. During the

late 1980s, guerrilla violence, rampant inflation, chronic budget deficits, and

drought combined to drive the country to the brink of fiscal insolvency. However,

in 1990 the government imposed an austerity program that removed price controls

and ended subsidies on many basic items and allowed the inti, the national

currency, to float against the United States dollar.

About 35 percent of Peru's working population is engaged in farming. Most

of the coastal area is devoted to the raising of export crops; on the montaña and the

sierra are mainly grown crops for local consumption.

Many farms in Peru are very

small and are used to produce subsistence crops; the country also has large

cooperative farms. The chief agricultural products, together with the approximate

annual yield (in metric tons) in the late 1980s, were sugarcane (6.2 million),

potatoes (2 million), rice (1.1 million), corn (880,000), seed cotton (280,000),

coffee (103,000), and wheat (134,000). Peru is the world's leading grower of coca,

from which the drug cocaine is refined.

The livestock population included about 3.9 million cattle, 13.3 million

sheep, 1.7 million goats, 2.4 million hogs, 875,000 horses and mules, and 52

million poultry. Llamas, sheep, and vicuñas provide wool, hides, and skins.

The forests covering 54 percent of Peru's land area have not been

significantly exploited. Forest products include balsa lumber and balata gum,

rubber, and a variety of medicinal plants. Notable among the latter is the cinchona

plant, from which quinine is derived. The...