Archives for January 19, 2017

DAY 36 – From industrialization to differentiation

DAY 36 – From industrialization to differentiation

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Quinoa industrialised processing in the remote town of Slainas.

So now what?   It is interesting to talk of markets, cycles, prices, yields – but what about the people behind the markets, the ones whose livelihoods depend on the quinoa harvest?  Following the cycles of development, mature markets can become industrialized with new product but they can also differentiate though the product itself.  This is how Fair Trade operates in other export commodity markets such as coffee and chocolate – putting a social and environmental value on production which consumers support through their purchases.

There are advantages to Bolivia’s quinoa production which can enable it to compete in new areas of Fair Trae, quality and variety – creating a premium quinoa with a higher price.  A small study conducted by my UMass students last semester, showed consumers willing to pay 30% more for organic quinoa that has a high nutritional and cultural value. The challenge now is to organize Bolivia’s diverse quinoa community of associations, cooperatives, private businesses, NGOs and government ministries to educte outside markets and consumers about the benefits of Bolivian quinoa.

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Packaged quinoa for sale in the US – a mix of many varieties listed as just flakes with no mention of location or type of quinoa.

The first step is the development of a Bolivian Seal of Denomination for the Royal Quinoa grown in a 25 mile zone around the salt flats.  This quinoa is distinct in its high nutritional quality and large, creamy seed formation.  It is also mostly organically grown, hand harvested and blessed.  This seal will be presented at the world famous German Natural Foods Trade Show in February – and if accepted, will create the name Royal Quinoa as something solely in reference to the distinct varieties of quinoa from Bolivia’s Salt Flat zone – thus opening a new market solely for Bolivia quinoa.  This is much like the name Champagne only being able to be used for grapes and sparkling wines coming from Champagne, France.  Monitoring and enforcement of the proper Seal use will be tricky here as will the marketing of the Seal to global audiences who are unaware of the distinction.

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The salt flat region where Bolivia’s Royal Quinoa Grows.

Another advantage of the Bolivian quinoa is the distinct varieties of seeds grown and their special properties – for soup, breads, energy, fast cooking…  International micro-markets for specialized gourmet quinoa exist – but they need to be found and developed.  The producers and associations are prepared to separate their quinoa by these distinct varieties (and not just white-red-black) but the market needs to also exist for the to sell this – by the container (20 tons of product at a time).  This is difficult as most market de

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

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

velopment is done through expensive and sophisticated foreign trade show participation where language and communications are huge challenges for the small Bolivian farmer or their cash-strapped association.

It would be interesting to explore the possibility of having a Bolivian quinoa presence at the US regional ExpoEast Natural Food trade show in Baltimore this fall.  But like the Seal of Origin, unique cross sector partnerships and commitments need to be formed to support this.

DAY 34 – What’s next for Bolivia’s farmers?

DAY 34 – What’s next for Bolivia’s farmers?

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This APQUISA quinoa is cleaned, packed and ready to go. But there’s a delay as markets and revenue streams are verified.

Across the countryside, I am finding farmers who are saving hundreds of pounds of carefully planted, harvested and hand processed quinoa in their homes.  Each 25-pound (quintal) bag represents almost $114 (800Bs) of labor and agricultural inputs such organic fertilizer and pest control systems but is currently valued at just $71(500Bs) or much less if it’s not organically certified ($50 or 350Bs).

This spring’s drought may have destroyed 40% of the planted quinoa and though some farmers are replanting, hoping to get in a little more yield before the winter frosts, it is uncertain if they will be successful in this.  Once again, worms are eating the quinoa seed heads though farmers are lax to invest in costly organic pest management systems, which are still experimental and may not always work.  Farmers have also cut costs on the organic llama fertilizer which costs $450 a truckload for about 1.5 acres of land, thus fertilizing less.  They have also reduced their land cultivation by about 80% to minimize outside labor costs which once were as high as $21 a day plus food and lodging.  Now quinoa families are managing 9 to 18 acres plots on their own – instead of the vast 130 -150 acres they previously managed.  They are selling their tractors too, to help with cash

Quinoa fields - only some plants are germinating due to extreme drought conditions.

Quinoa fields – only some plants are germinating due to teh spring’s extreme drought conditions.

flow.  According to Ing. Aroni, is estimated there were 2,000 tractors purchased in the Royal Quinoa region over the past decade. Now it seems at least 30% have been sold or are for sale – most to the richer, more developed Santa Cruz lowlands where vast amounts of rice, wheat and soy are grown.  When necessary, farmers will take a few quinoa sacks to the local Challapata market to sell, below production costs, to at least keep the cash flow moving.

Many of the quinoa tractors were bought from new bank loans made in the past 2 years.  It will be interesting to see what happens when this year’s harvest comes through low and without much market value and there are not enough funds for loan repayments.  Banks are not allowed to take farmers’ lands or houses and the production was the collateral for many of the loans which seem to average about $5,000 with a 12% or more apy.

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Empty fields in Bolivia’s Royal Quinoa zone. Many farmers saw the stagnant, low prices for quinoa on the world market and decided to not even bother planting quinoa. They explain that it would have been a loss for them anyway.

There is vast migration which has affected education systems since fewer children are in local schools.  It is common for quinoa communities to have an average of 25 permanent families and 75 residents, who live in other cities and border countries such as Chile, occasionally returning to tend to their quinoa, village meeting or festivals.  The local economy is also affected as there is now less construction of new houses, purchasing of farm equipment, food, labor and housing.  So people have less to spend, earn less and times are tough.  Some men have left their quinoa fields for work elsewhere – working as long distance truck drivers or as laborers in the city – leaving the women to tend to the quinoa alone with their children.  Others have sent their children to college and are waiting for their children to get more professional jobs as lawyers, agronomists, and business developers – though jobs for college graduates are hard to find here in Bolivia.  Entire families have left for the cities of Oruro, La Paz, Cochabamba and Santa Cruz.

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The desert dust bowl of some of Bolivia’s best quinoa lands.

While Bolivia’s quinoa yields for 2017 look bleak, most agree that market prices will stay steady – partly due to the vast amounts of quinoa still in storage, and not in circulation in Bolivia’s quinoa market, and the continued presence of global quinoa production.

 

DAY 33 – the difficult evolution of Bolivia’s quinoa market

DAY 33 – the difficult evolution of Bolivia’s quinoa market

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A farmer studies a young quinoa seed head, bent by a worm chewing on the stalk. Healthy seed heads can grow to produce up to a half pound of quinoa seed each.

What’s happening with the quinoa in Bolivia?  Well many things.  First there was the boom, brought on by decades of international development work in the quinoa fields – improved (and some not so improved!) methods of soil management, seed planting, pest control, cultivation and harvesting.

cleaning quinoa

In the market quinoa is quinoa – red, white or black. But there are actually lots of varieties and differences in quinoa that is important for consumers and farmers.

Through much trial and error –  and there were plenty of errors – the delicate volcanic soils and the unique properties of the quinoa plant became better understood.  Teams, projects and supplies from the US, Holland, Switzerland, Israel, China and more slowly trickled into the area, finally reaching a high level of production and world recognition of the ancient grain around 2004.  By 2013, the world recognition of Bolivia’s “seed of gold” was growing exponentially, and like all fledgling new markets, the demand outstripped the supply, leading to elevated prices and a period know at the “quinoa boom” with total exports totaling more than $200 million, according to Genaro Aroni, a Bolivian quinoa agronomist with over 30 years working with this ancient grain. The boom lasted from 2009 – 2015 when prices suddenly drastically dropped by more than 75% – due to the entrance of new competitors in the market – largely from Peru, but also Canada and France.  Now the Bolivian quinoa farmers are struggling to cover their costs of production.  Many are saving their quinoa until prices go up again, others have left the quinoa region altogether – in search of better work.

Today the quinoa has entered into a “mature market” cycle – with little differentiation of product, relatively low prices worldwide, more production of quinoa from other places, and a steadily growing consumer demand, which meets the slowly growing availability of the product, as new producers enter into the market.

This is not good news for Bolivia’s farmers.  They pride themselves on their hand grown quinoa, deep ancestral knowledge of the plant, commitment to organic farming methods, and their own cultural connection to the ancient grain.  These qualities are not present in the current market of – white-red-black quinoa.  In the world markets, there is no distinction of how its grown, where, by whom or even what the quinoa itself actually is (it’s a seed not a grain).  There are actually over 70 varieties of quinoa – with many only able to be grown in Bolivia’s mineral rich, high desert salt flat regions.  Within the standard white-red-black spectrum, there exists countless specific quinoa varieties with distinct characteristics that are simply lumped together and sold as a single color type.  Some say that these ancient varieties are becoming lost as the market demands the simplified image of quinoa.  But in my research I found that they are actually only lost to the consumer.  The farmers know what they are planting – and the women know how to cook it.  Each variety of quinoa come with its own uses and recipes.

In the range of white quinoa alone, there exists the Tolerado which cooks the quickest; the high protein (18%) Hachachina; the sticky Caslala which is great for making bread and noodles;  the Q’oto which is toasted and ground into the beloved Bolivian pito; and more.

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Quinoa farmer checking her Caslala variety of break making quinoa – commonly known as white quinoa – but having distinct properties as being soft, sticky and perfect for baking.

One way to compete in a mature market is through product differentiation and market specialization.  In my former research, I focused on industrialization – looking at how quinoa communities can improve their market access, diversify their economy, create new jobs and build value through the transformation of their raw product (bulk quinoa for export) into processed foods.  In the 18 months I have been done, some associations and communities have done just that – with good results.

For example the quinoa growers association, APQUISA, in the town of Salinas now has a quinoa bakery and a contract with the local mayor to provide hundreds of regional breakfasts for schoolchildren daily.  This enabled them to expand their operations into a full bakery producing breads, cookies, and cakes for the local community and regional trade shows. They now have a store located on the central plaza of the town and are looking to expand distribution throughout the region, once they get improved packaging for their product which will extend its shelf life better.  The quinoa producers association of SOPROQUI in Uyuni had a similar contract with their regional mayor which also enabled them to expand their processing to breads, noodles, and quinoa puffs.  They work with their parent association ANAPQUI, one of Bolivia’s oldest quinoa associations, to access the quinoa processing equipment which produces quinoa flakes, flour and puffs.  ANAPQUI now has packaged products of different varieties of quinoa seeds and flakes with export to Spain.  In addition, a growing number of producer associations such as ANAPQUI, QUIMBOLSUR, APQUISA and the community of Otuyo, have their own quinoa processing plants – with the latest technology and laboratories – that can produce export quality quinoa, though reducing their reliance on contracted cleaning and creating a new revenue flow as some also clean others’ quinoa at a cost of 40 – 120Bs per quintal.

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APQUISA’s delicious quinoa bread – fresh made daily in Salinas.

The industrialization of quinoa is looking good – but it’s not the best.  The low market prices, minimal technical knowledge, and lack of capital investment, has made the industrialization costly and difficult.  APQUISA’s president Endulfo Gabriel C. invested $100,000 into their quinoa cleaning plant and bakery – with market prices so low, even with the extra national sales and production, they are behind on their payments to members for quinoa and do not have the funds to further develop their product, packing and seek export sales.  This is the situation for many of the local quinoa industrialists I have met.  The market is not giving them the movement of funds they need to move forward – in equipment, training and market development.

Stay tuned for tomorrow’s post – what could be next…

DAY 32 –  The Quinoa of Atlantis

DAY 32 –  The Quinoa of Atlantis

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Cleaning the quinoa on the “shores” of what might have once been Ancient Atlantis.

Some, like British aerial photographer, Tim Allen, argue that Bolivia’s Pampa Aullagas is the site of the ancient city of Atlantis – according to ancient Greek descriptions.  There is competing evidence that this may indeed be true, including local legends of floods, evidence of ancient trade with the Sumerians, found artifacts, underground rivers, and geographical features such as concentric rings and evidence of ancient canals and water systems. The region of Pampa Aullagas, once known as

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Relaxing amongst the quinoa of Atlantis.

Antisuyo, is closely connected to Lake Poopo and the Uyuni Salt Flats.  It is also the site of some of Quillacas’ most robust quinoa farming.  Here’s photos of the ancient city mountain and the encroaching flood waters of Poopo.  Was there a time when the altiplano was fully flooded and Pampa Aullagas was the place of the ancient civilizations of gods?  There are many stories of floods in the altiplano, legends about the fights of the gods, volcanoes, and the settling of the mysterious salt flat region – home to the Royal Quinoa, which according to legend, was first brought to that region by angels long ago.