Peru’s arid coastline is not the obvious place for an agricultural renaissance. Officially one of the driest places on earth, with as little as 1.5mm of rain a year, the narrow southern strip of desert between the foothills of the Andes and the Pacific Ocean is a study in brown.

But along the northern fringes of the Atacama Desert, farmers such as Estuardo Masías have helped bring Peru out of the agricultural dark ages, triggered by the 1969 land reforms of leftist dictator Juan Velasco.

“It turns out to be one of the best places [for agriculture] because there’s no rain but we have water – it rains in the Andes and it pours down into the ocean,” says Mr Masías, part-owner of La Calera group, which supplies avocados, grapes and citrus fruit to big supermarkets in the UK, the US, continental Europe and Asia.

“Rain is a blessing but it can also be a problem. If you have your grape production hanging on the vines almost ready to harvest, and you have a slight rain, you’re done. You lose lose 30-50 per cent of the crop because of mould.”

Thanks to Israeli drip-feed irrigation systems, the Masías family has made the most of water supplies and transformed more than 1,800ha in seven coastal valleys into plantations of citrus, table grapes and Hass avocados.

South of La Calera in Ica, however, tensions grow amid predictions the aquifer could dry up within a decade.

“It’s very urgent in the case of Ica because most of the water they use is undergound water and the water table is dropping quite dramatically,” says Ismael Benavides, president of the committee for water and irrigation at Proinversion, the state investment promotion agency, who was last week appointed finance minister.

Two irrigation projects are slated for the region: a $50m investment that would siphon water from Amazon-fed lakes into Ica’s canals and conduction channels, and a $170m dam and irrigation development in Pisco.

Even with last week’s granting of the controversial Majes project – one man died in protests against the plan – to irrigate 40,000ha in Arequipa, Peru’s south coast lags the north in irrigation investments, however. “The great limiting factor in Peru is water; so you have to start with infrastructure and dams to hold the water in store for the dry season,” says Mr Benavides, a former agriculture minister, who has an asparagus, citrus and grape farm in the region.

“The second thing is to introduce systems like drip irrigation, but that’s expensive and small farmers can’t afford it unless the government somehow helps them.” Despite a surge in agricultural exports in the past decade, from $300m to $2.5bn last year, the sector is still relatively small. Agriculture accounts for only 8.3 per cent of gross domestic product, although it employs almost a third of the workforce.

Strong sales in the first half of 2010, up 19 per cent on the same period in 2009 to $1.37bn, highlight the potential for Peru to keep growing, buoyed by a raft of bilateral trade deals with markets such as the US, the European Union, China, and most recently South Korea.

José Chlimper, chief executive of Agrokasa, which exports asparagus and table grapes to Tesco, Walmart, Costco and others, says 80 per cent of exports now go to countries with which Peru shares a trade deal.

As US farmers will unhappily attest, it was a 1991 trade deal – in part aimed at luring farmers from coca, the base ingredient for cocaine – that helped Peru become the world’s top exporter of asparagus.

The country is now also the world’s leading producer of speciality coffees, paprika and organic bananas. Other important crops include cocoa, avocado, artichoke, sugar and mango.

Lucrative markets for native products such as powdered Maca root, the “Andean viagra”, sacha inchi, or “Inca peanut”, and quinoa and kiwicha, high-protein “supergrains”, are also opening up, says William Arteaga, head of agroindustry at PromPeru, the state promotion agency.

Exports of quinoa – a healthfood shop favourite finding its way on to restaurant menus as “quinotto”, showed an increase of 368 per cent over the past four years, from $1.6m in 2006 to $7.3m in 2009. In January to June 2010, exports of quinoa reached $4.8m, a 105 per cent increase on the same period last year.

Back at La Calera, the Masías family farm in Chincha, the air is loaded with the scent of orange blossom as the harvest readies. Thirty years ago, Mr Masías’s father had all but 50ha of his land expropriated by the government in return for a dusty bundle of “agribonds” that are still in the family’s possession.

Today it has bought much of its original land back, hectare by hectare, and Mr Masías and his team are preparing for a visit to Hong Kong to further expand their market share. “Citrus originated in China and China is by far, far, far the biggest producer in the world. But they eat it all!” says Mr Masías. “So it’s a very good potential market.”

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