The Peruvian Amazon region has seen significant growth and agricultural development in recent years, and coffee is a major cash crop in the area. Weak law enforcement, insufficient environmental sensitivity among the rural extension systems that train and educate farmers and the lack of environmental criteria for credit applications have led to inefficient land use and high rates of deforestation.
This NSP proposes an approach to move the sector towards zero-deforestation, increase yields sustainably and reduce the local environmental impact and methane emissions through wastewater treatment. This will be undertaken in line with the Peruvian Nationally Determined Contribution (NDC) and the National Coffee Action Plan (NCAP). To promote a sector-wide low-carbon development, the NSP will insert a group of improved practices, coupled with an innovative financial mechanism.
On the technical side, the NSP will invest in capacity building for the rural extension services, administrations at the municipal level and financial institutions that provide credits to farmers. It will also promote and support sustainable agricultural methods, such as the planting of shed trees, composting waste water treatment and innovative information technologies.
On the financial side, the NSP will blend different financial resources to implement a "green box" credit window for technologies that contribute to both increased farm productivity and reduced GHG emissions. These financial resources will work in parallel with the traditional loans for rehabilitation and rejuvenation to improve coffee plantations and apply fertilizers. The traditional adoption resistance to green technology will be overcome by enabling lending at lower transaction costs and with more agile and complete risk assessments.
The NSP is expected to directly impact 10,000 Peruvian farmers with an average farm size of two hectares, leading to substantial emission savings, as a result of from wastewater treatment, and absorptions from agroforestry and avoided deforestation.