Day 33 – Following the Fair Trade value chain

Day 33 – Following the Fair Trade value chain

As I follow value chains: the organic Bolivian quinoa from the Brattleboro Food Co-op to the US UNFI distributor, to the Quinoa Foods Company exporter in La Paz, to the farmer, the Beliz family in the community of Ciqulacca, outside of Salinas (which I hope to visit on Monday), I start to see values in the relationships, points of view, cost structures, and challenges that the people on each link of the chain face.

Fair Trade brings a new dynamic to the chain where more complex relationships are formed. The standard organic value chain is one of pre-set prices, filled orders and compliance. However the Fair Trade, organic value chain also brings an important relationship exchange. No longer are producers simply responding to the demands of the exporters; they are collaborative partners with them. The exporters bring producers to their export countries in Europe and the US, introduce them to international markets, and work with them to determine fair prices and export strategies. The result is a more robust relationship, loyalty, a greater understanding of the markets and customer demands, and more autonomy and empowerment for producers.

Fair Trade organic quinoa producer association AIPQUISA-C in SauSau, Bolivia

Fair Trade organic quinoa producer association AIPQUISA-C in SauSau, Bolivia

I find the Fair Trade producers to be more open to new market approaches, diversification, and branding. They are empowered and are more apt to take the initiative on new ventures and act as leaders both within their organization and their community. I took you to the APQUISA Fair Trade organic quinoa growers association of Salinas a week or so ago, and we will visit them again this Sunday when they hold their annual meeting to determine what their export quinoa price will be with FLO (the European Fair Trade certifier). Now I am in the small town of Quillacas, at the entrance of the Quinoa Real growing region close to the quinoa Black Market of Challapata. Here members of APROQAY (Association of Producers of Quinoa, Cayne) are preparing 5,000 pounds of quinoa for export through Andean Family Farmers, the Oruro-based producer branch of the US Fair Trade, organic quinoa company, Andean Naturals (Featured in the Day 16 posting on the blog). A truck is coming later today to take the grains to Andean Natural’s Jacha Inti processing plant in El Alto, 7 hours away.

Loading Fair Trade  quinoa into the sorter and cleaning machine. APROCAY, Quillacas, Bolivia.  This quinoa will then be professionally cleaned and processed at the Jacha Inti plant in El Alto, 9 hours away.

Loading Fair Trade quinoa into the sorter and cleaning machine. APROCAY, Quillacas, Bolivia. This quinoa will then be professionally cleaned and processed at the Jacha Inti plant in El Alto, 9 hours away.

Eufraén Huaylla Mamani is the president of APROCAY, a small Fair Trade, organic producer group made up of 52 families form the Cayne community outside of Quillacas. A heavy-set man with a broad, happy face, he gladly spent the afternoon with me, his technical assistant Milton, from the non-profit organization FAUTAPO and Ester Chambi Marca, a political leader and leadership instructor in the community. He spoke of the history of APROCAY, how he met Sergio and became a Fair Trade producer, and a recent trip to the US sponsored by Andean Naturals, where he attended an international quinoa growers conference. Here’s the highlights of this conversation…

Originally Eufraén and 300+ other organic quinoa growers in Quillacas were members of PRODESQUI (Inter-salar Producers of Quinoa) in early 2010 or so. This large group was producing organic quinoa but did not know about certification processes, organizational leadership or how to manage large projects, such as a quinoa processing plant the Bolivian president had recently built in their community. Never-the-less with the growing demand for quinoa and raising prices, there were determined to learn what they needed to in order to produce the best quality qinuoa for the best markets. Their big break came when representative of ENRI, a US quinoa buyer was introduced to the community by Wilson’s QUINBOLSUR.

Eufraén, seeing this as a big opportunity, made sure the visitor was well received. There was dancing, music, food, farm tours and presentations. Though the buyer, who was of Indian origin, did not speak Spanish and Eufraén did not speak English, a QUINBOLSUR translator, Raul Beliz (the same Beliz famil

QUinoa being sorted into seed sizes and dirt content...

QUinoa being sorted into seed sizes and dirt content…

y who’s quinoa was in the Brattleboro Food Co-op), was present to help with the communications. All seemed to have gone very well and Eufraén and PRODESQUI were proud of the presentation they made feeling certain it would lead to new quinoa sales through QUIMBOLSUR. A few weeks later a PRODESQUI member looked up the ENRI website and found a posting of the visit to Bolivia, with photos of Quillacas and the celebrations there. However, there was no mention of Quillacas nor PRODESQUI, all was presented as if it was QUIMBOLSUR. The members of PRODESQUI were dismayed and felt cheated and taken advantage of. They lost their confidence in QUIMBOLSUR and did not want to work with them.

Meanwhile another opportunity came. This time it was ZTA and APAE. They wanted to purchase a container of quinoa (5,000 pounds) direct from PRODESQUI. They gave PRODESQUI a month to clean the quinoa and three months to get the container through customs to the port of entry. However PRODESQUI felt the risk was too great. They would be putting thousands of dollars of their own product in the hands of others they did not know, plus they would need thousands of dollars more for the cleaning, shipping, and documentation. They would need to take out a loan, hope the shipment was received, of god quality, that payment made and they were able to pay back the loan in time as well as themselves. It was too much. “What if the boat sank or their container was lost?” they asked. They declined the offer.

Three grades of quinoa: 1. Small sandy quinosa that gets sold at half price where it will be cleaned and ground into quinoa flour sold in the local market. 2. SMall quinos seeds ready for final processing.  3. Larger quinoa seeds ready for final processing. 4.  Quinoa seeds that still need to be removed from the seedhead plus plant debris.

Three grades of quinoa: 1. Small sandy quinosa that gets sold at half price where it will be cleaned and ground into quinoa flour sold in the local market. 2. SMall quinos seeds ready for final processing. 3. Larger quinoa seeds ready for final processing. 4. Quinoa seeds that still need to be removed from the seedhead plus plant debris.

A third opportunity came with the offer of a $2,000 organic certification. At this time, the price for certified and non-certified organic quinoa was essentially equal so many producers dismissed the certification as unnecessary. However something about this caught Eufraén’s attention. He looked into this more and soon met Sergio from Andean Foods, who was in the country looking for certified organic growers to partner with in his Fair Trade company. They immediately struck up a friendship and Eufraén and 24 other producers left PRODESQUI to form APROCAY, collectively paid for their organic certification, and started producing for Andean Family Farmers (the Bolivian production branch of Andean Naturals). Eufraén in particular liked the terms that Andean Family Farmers provided, Andean Family Farmers was obligated to buy the APROCAY organic quinoa no matter what, though APROCAY could decide how much of their product they wanted to sell. Prices were set together, with APROCAY suggesting the price they wanted and a final price being agreed upon at Andean Natural’s Jacha Inti processing plant once the quinoa was reviewed for quality, moisture content and cleanliness, which affects the product’s final weight. Quinoa is purchased in 5,000 pound lotes (lots) or 500, one quintal bags weighing 100 pounds each, so weight is an important variant in final purchase prices.

Loading 100 pound sacks of cleaned and weighed quinoa for final processing.

Loading 100 pound sacks of cleaned and weighed quinoa for final processing.

Last year APROCAY was earning about $6,000 a ton for their quinoa though this year Eufraen expects he might get only $3,000 with the current price drop. However to get to this point of trust and level of sales was not easy. Andean Family Farmers purchased their Fair Trade quinoa in 5,000 pound lotes with a promise of payment once the quinoa was received at the Jacha Inti plant in La Paz. At the time, quinoa was selling fin the black market of Challapata for 1500Bs per quintal (100 pounds). Jatun Acha was paying a pre-negotiated 1700Bs per quintal for the quinoa or $243 a bag. With 500 bags making an order, this was $121,500 that the producers were trusting someone else they hardly knew would pay them. When Eufraen first announced the sale, producers promised 500 bags of quinoa, but only delivered 150. Eufraen had to hustle to get enough certified organic quinoa from elsewhere to fill the order. He did it and payment was received within one week, almost 1 million Bolivianos. “How do you manage something like this?” asked Eufraen laughing, “the money was in boxes, it was crazy!”

For the next shipment, Andean Family Farmers suggested APROCAY open a bank account at the Central Bolivian Bank (BCB) in the nearby city of Oruro. They would send payment to this bank account and Eufraen could write checks to the member producers which they could come to the city of Oruro to cash. He was dubious. He did not think the farmers would believe in this system. Besides the market price in Challapata had just risen to 1750Bs a quintal, higher than the Jacha Inti price, but less stable too. Never-the-less, he gave it a try. Working with Jacha Inti and using a bank account seemed better than carrying around boxes of Bolivian money and relaying on the whims of the Challapata market. This time he received 380 bags of quinoa (from the 500 that were pledged). The producers immediately received their checks, brought the pieces of paper to the bank, and sure enough received cash for them. They were sold! Next time an order came, all 500 bags of quinoa were present. The long term result of this was that farmers learned how to open bank accounts, save their money and plan their finances. A down side of this is that with such easy access to banking, many (about 70% to 80% of all members) also took out mortgages for a house in the city of Oruro, construction or car/tractor loans (amounting to a maximum of $10,000 per loan). With this year’s lower quinoa prices, these loans are more difficult to manage. Before the loan was easily paid with the money earned from the sale of just 20 bags (quintals) of quinoa, now it is more difficult. The average family is produces about 76 bags of quinoa a year, so loan payments today can take up almost half of their earnings.

Today APROCAY has doubled in size to include 52 families with over 300 acres in rotation. This means that at any given year about hectactres of quinoa will be planted. With an average yield of 10-14 quintals per hectacre, this represents about four lotes of quinoa a year that can be sold to Andean Family Farmers.

In 2014, Eufraen took his first trip abroad, to the quinoa grower’s conference in California, at the invitation of Andean Family Farmers. Here he saw many new innovations in the quinoa market, met producers, researchers, agronomists and visited businesses such as Eden Foods and college campuses in Washington state. He had cultural exchanges with the US as well, visiting migrant communities and learning of the hardships that many Americans faced with housing and food insecurity. As impressed as he was with the US zeal and energy in support of the growing quinoa market, he was glad to return to the US when the visit was over. He likes the quiet pace of Quillacas, the friendly villagers who he all knows by name, and the celebrations and festivals which the Bolivians are so good at hosting. He continues to refer fondly to his friendship with Sergio and is proud of the relationship that has formed with Andean Family Farmers. I wished him a good trip as he and Milton boarded the large truck loaded with 5,000 pounds of APROCAY quinoa en route to the Jacha Inti processing plant. He expected to get about 700Bs ($100) per quintal for his quinoa this time, 60% less than last year’s price. Often APROCAY pays 8,000 to 9,000Bs for the trucking of the quinoa, as well as a 3Bs for every sack carried by the workers and 2Bs for maintenance, amounting to about 15Bs per sack, paid for by the producers. Eufraen and his technical staff always accompany the quinoa to the plant where it is then analyzed. This is how they learn of improvements or variations in the product which they can then address back in Quillacas. It is also a good time to touch base with the Andean Natural counterparts and celebrate in the work well done.

Another benefit APROCAY receives through their relationship with Andean Foods is a social premium paid back to the community. Two years ago, the Fair Trade certification from FLO cost APROCAPY $4,000. They received half of that back from their social premium fund valued at $250 per ton of product sold, explained Eufraen. APROCAPY expects to receive as much as $15,000 in social premium funds for last year’s sale plus another $5,000 from the year before which were not paid yet. According to Fair Trade rules, 30% of these funds need to go towards natural environment projects. The rest, about $14,000, APROCAY decides themselves what to with in an assembly. Eufraen thinks the funds should go towards an interest bearing “social security” fund to cover medical costs for illness or injury amongst APROCAPY members and their families. Once the funds come in, the association will take a vote and a decision will be made as to how to best use them.

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