Archives for January 9, 2017

DAY 25 – Cash flow in the quinoa lands

DAY 25 – Cash flow in the quinoa lands

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Florinda’s house in Otuyo – neither a estande nor a residente – Quinoa farmer and leader, Florinda Consales, likes to call herself a doble domicilio (2-homes) person because of her constant presence in the quinoa community.

The quinoa villages are quiet, children away on school vacations – visiting family in the cities, or city children coming in for a weekend in the town with their family.  Most quinoa communities are now made up of 25% estantes (full timers) and 75% residentes (residents).  Residentes are weekenders (or less) who grow quinoa on their family lands, participate in community projects, celebrations and decisions but live in neighboring cities hours away.  Often these are professionals, such as professors, lawyers or developers, who bring important projects and resources to the community.

The community of Otuyo is a 30 minute ride by truck over a narrow dirt track that winds through volcanic mountain passes, past condor nesting caves, and into a long, smooth swath of salty lowlands extending far to the shores of the Uyuni salt flats miles away, is a typical quinoa community.  Their one-room school houses 12 students and one teacher.  The Otuyo community center is large enough to accommodate all 61 families though only 15 reside there full time.  The ones that live there farm the vast quinoa lands, tend sheep and llamas, and grow onions, beans, potatoes and herbs in their personal gardens.  The school has a large greenhouse that produces tomatoes and vegetables for school lunches.  Moms accompany the youngest children to school to help with the teaching of the younger grades.

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Llama dung waiting for to be spread across a fallow quinoa field in preparation for October 2017 planting.

The residents are welcome into the community and participate in celebrations bringing important knowledge and resources from the cities.  Their children are in college.  Most own their 4-wheel drive trucks and SUVs, live in newly built build brick homes and enjoy shining new tiled bathrooms – compliments of a development project.

According to world standards these communities are impoverished.  The 2015 crash of the quinoa market, caused by massive production in Peru which flooded markets and drove down prices,  has produced positive and negative effects – though coupled with the recent drought, the negative is getting much larger and bigger.  The positive is a slowing down of Bolivian production.  People are now back to their regular bi-annual rotation schedules, families are farming much more manageable 5-8 hectacre plot instead of the 20+ hectacers they were racing to produce previously.  Many people from the quinoa region who had migrated the other countries in search of work and returned to grow quinoa, have returned back their foreign communities in Spain and Argentina.  People are feeling less pressure to produce and grow and feel that once again they can settle back down into their familiar family settings and work together in long term, meaningful production that benefits the community and protects the earth.

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A robust quinoa plant in a private garden.

The damage caused by the massive quinoa production of 2011 – 2015 seen in vast areas of desertified lands.  Places cleared of native vegetation and plowed dry, becoming fodder for towering dust devils that rage through the quinoa lands in dry times.  In some places, wild animals such as emus and vicunas are entering into quinoa fields and eating the delicate plants.  Some producer associations such as APQUISA, certain Fair Trade programs, and the Oruro Technical University (OTU) are working on re-establishing these damaged lands and promoting more erosion-friendly farming methods, such as ringing 2 hectare fields with hedges of tola plants – whose 2- 3 foot height act as windbreakers and protects plants from frost.

With the fall of prices also comes the migration of the males in the family – in search of better work.  The women are left on the farms, it not being culturally appropriate for them to leave for work, in addition many of them are mothers and have children to still care for.  So woman are alone in the quinoa lands, often as they were before the boom that brought the families back and together again.  I will be studying this more as my work progresses.

As far as cash flow, every home I have visited has a storeroom filled with socks of quinoa.  Farmers say they are waiting for better market prices and orders before from their cooperatives before selling their quinoa.  Every once in a while when cash is needed, a sack of quinoa may be sold, or a sheep or llama killed and its meat sold.  The animals and grains become savings accounts and security for the farmers.

DAY 24 – Rural Credit and the Quinoa fields

DAY 24 – Rural Credit and the Quinoa fields

Young quinoa seed head forming in its first 6 weeks of growth.

Young quinoa seed head forming in its first 6 weeks of growth.

PRODEM, a privately financed bank in Bolivia founded in 1988 to provide financing to medium and small, rural businesses, has the solution.  With over 2,600 employees and a network of 54 urban and 69 rural agencies, PRODEM is the finance source that many farmers turn to.  Savings accounts in Bolivianos are offered at a 2% annual interest rate.  Credit to farmers is offered to producers over the age of 18 who own land and have been commercially farming it for at least one year.  PRODEM offers everything from 9 month loans to agriculture wholesale buyers and distributors to a one year loan for farmland development and a 4 year option for farmers to buy equipment with.  Though their rates are not published online, farmers tell me they are at 12% – 21% depending on the type of loan, guarantee and term.prodem

We’re in Otuyo, the heart of the Royal Quinoa growing lands and despite nearly two weeks of steady, daily rain, many fields lie empty.  Some are fallow – the Bolivians follow a strict two-year rotation cycle for farming their delicate altiplano soils.  The fallow lands are bare, flat, dirt – the deep furrows that once housed robust quinoa plants are now leveled by the wind, a few dried quinoa stalks lay testament that indeed, there was once production there, not long ago.  Large, dark piles of llama manure dot these fields.  This will be spread by tractor in the fall (March-April) to organically feed the soil for the spring planting of quinoa in October 2017.

quinoa-growingMeanwhile other fields with deep furrows also lie vacant – these were prepared with manure and carefully planted in October and November – but drought and winds caused the delicate germinated seeds to wither and die or covered the emerging plants with dirt and also killing them.  The mayor of Oruro predicted a month ago that 50% of the quinoa harvest would be lost to drought this year.  And while the rains came just in time for some – as quinoa seed heads were just starting to droop – it was not soon enough for many.

Some families were out replanting their quinoa, now that the rains were present, hoping to squeeze in a second chance at a decent harvest.  Though many others opted not to.  It was late in the season they explained, the weather future is so unknown it is hard to make an educated decision for a late planting.  Hail and frost can come and kill off the plants too – especially later in the growing season.  And who knows how long the rains will last for, they add.

So back to the loans.  In my recent research, I noticed a recent trend for quinoa farmers to have loans – often pretty large ones of 11,000BS to 30,000Bs and upwards of $10,000 – some through banks others through cooperatives.  Considering the average rural family’s per capital income is $2,800 a year, according to the FSD, this can represent an entire year of income – taken out in loans.  Previously the families in the quinoa fields had risen to a much higher level, increasing by 39% according to the Borgen Project

This brings family earning levels to almost $4,000.  I observed families earning much more than this but these were the ones associated with powerful producer associations and high quality export certified organic and Fair Trade production.  Never-the-less, with relatively high debt load and a bleak agriculture and economic outcome for 2017, I was concerned about what would happen with the loans.

I asked the farmers if they had loans, many did. I asked if they were concerned, they were not.  I asked why.  They explained that the loans were backed by their farmland.  The banks had sent out agronomists who assessed and valuated the lands.  Legally, the banks cannot take these lands, only use them as guarantees for loans.  The farmers are producing on the lands as they had promised, so they see they part of the deal being covered.  Loans get paid at harvest time.  If they do not have the money to pay the loan at harvest, they explained, then they simply renegotiate terms with the bank.  At this rate, it seems that most will be defaulting on their loans to some degree.  These are also relatively new loans most just 1 or 2 years old. Most were given just as quinoa prices began to fall and farmers still had vast wealth accumulated from the previous 5-7 years of the quinoa boom and high production/earnings levels.  It will be interested to see if the banks are as relaxed with the potential defaults coming in June as the farmers are.