FMO has signed a US$ 15 million loan with Agricola Pampa Baja S.A.C. (Pampa Baja), a producer of fruits, vegetables and milk in Peru. Pampa Baja recently acquired 1,370 hectares (in Olmos, Northern Peru) in addition to their existing 1,200 hectares (in Majes, Southern Peru) and the loan will be used for land preparation, state-of-the-art irrigation systems, plant and equipment (including cooling & packaging facilities).
For more than 50 years, the Paredes Rosales family have been active entrepreneurs in Peru and through their company, Pampa Baja, they produce fresh produce for export markets. The company also operates one of the largest dairy farms in the country, which greatly compliments its agricultural activities. Pampa Baja has grown steadily over the years to meet the ever increasing requirements for high quality products which are produced in an economical and environmentally safe manner. Their agricultural lands are professionally managed using top of the line technology at all stages and equipped with state-of-the-art irrigation infrastructure. A portion of the project is committed to supporting local smallholder farmers by building beneficial bridges between the company and the farmers. This is being done via skill and knowhow transfer, increased farmer income and production as well as the widening of rural development opportunities.
Suzanne Gaboury, Director Agribusiness at FMO said “FMO is proud to play a part in supporting Pampa Baja’s geographical expansion activities which will allow them to broaden their off-season production window as well as increase food production and economic development in a remote and under-developed region of Peru.”
Pampa Baja’s existing operations generate some 1400 jobs in the region which can reach up to 2000 in peak season. It also provides indirect work for around 550 people. The Olmos operations will generate additional substantial employment opportunities for the local community with 500 permanent and 1200 seasonal jobs. Agriculture is the main source of income for about 2.4 million families, representing just over 30% of Peruvian households, and generates some 7.6% of GDP.
As part of the FMO financing, Pampa Baja must implement and remain compliant with an enhanced Environmental and Social Action Plan which includes an Integrated Water Resource Management system. The company has been GLOBALGAP certified for their export products since 2005 whose 3 pillars are: social responsibility, product safety and environmental sustainability. They are the first and only paprika producer in Peru certified with such standards. Pampa Baja have additional certifications in place covering land, environmental, food & safety, processing, security and monitoring aspects of its business activities.
Pampa Baja’s land in northern Peru is part of the Peruvian government’s Olmos Irrigation Project, which is transforming desert land into agricultural land for certain crops through irrigation works, and has been the subject of intensive due diligence, engineering efforts and must adhere to best practice. Impact will be realized through additional food production, increased economic development and opportunities created as well as improvements in the standard of living in the Lambayeque region of Northern Peru.
FMO has long been a strong advocate of ecological endeavors, having environmental and social measurements embedded in the core of its investment processes. Climactic conditions in Northern Peru are challenging and environmental and social risks for Pampa Baja will continue to be assessed and evaluated. In this way, FMO and Pampa Baja aim to make a difference to the commercial and environmental future of Peru.
