Day 30 – The story of the quinoa pyramid scheme

Day 30 – The story of the quinoa pyramid scheme

Enzo, a local tour guide, Salinas quinoa grower and lawyer told me this tale of the quinoa pyramid scheme of 2012-2014 which could explain the hostile, non cooperative response I received to my research in Puqi and shy the books are so off.  They most likely were affected by this.

“It sounds like a TV soap opera – except it’s true,” he said.

The scheme worked like this.  At the height of the quinoa boom people were desperately trying to amass large shipments (lottes) of quinoa which were 100 one-quintal bags of quinoa weighing a total of half a ton for export markets.  The export buyers themselves were prowling the streets of Challapata cash in hand, ready to make a deal.  Lourdes Mamani Cruz, a local Challapata resident, had a better plan.  She traveled straight out to the quinoa communities themselves – sometimes dressed as an agronomist in a heavy pantsuit, other times as a savvy foreigner in a suit with suitcase in hand, or in some instances as a cholita, a local rural woman with a heavy skirt and long braids, or as a city person in jeans and a jacket.  For whatever best fit the situation she would change her presentation.  Using different names and cash in hand she would buy a lotte up front at a 1,200 a Bs per kilo price, often higher than the current prices.  Gladly the farmers gave her their quinoa, taking the $8,500 in cash in exchange.  She promised to return for more.  They were happy to serve her.

Lourdes would return after a month or so and ask for another lotte.  She explained she would pay the farmers once the lotte was brought to her client because that is when she would be paid.  She noted down their sales in a book and all signed and witnessed it.  Excellent!  The farmers were thrilled.  How lucky they were to have such a wonderful buyer!  She came right to them, paid a good price, and had good sales contacts.  Lourdes promised to return soon for more.  In anticipation, some farmers secured loans from local banks with the guarantee of their sales to Lourdes or city homes, others invested in machinery and construction, happy to have access to such a successful future.  Lourdes returned again, again with her book, but no money.  Some farmers got suspicious, some did not want to sell to her without payment, others trusted her and felt she was working hard and with patience all would work out.  Many sold her their quinoa again, on credit.  And then Lourdes was never heard from again.

When the farmers when to find her, see what was going on, and demand payment they learned she was not who they thought she was.  Cell phone numbers were false, names false and even the book was false.  There was no such a person as the one they thought they were working with and no such businesses.  They had been duped, cheated, had, robbed.  It was a total scam!  Dozens and rural quinoa communities and 150 farmers and their families affected.  People defaulted on their loans losing property and goods, the elderly lost their life savings, couples fought, broke up, got divorced.  It destroyed families and communities.

The farmers were furious.  The went to the police, the local authorities.  It was soon learned that this mysterious woman was Lourdes and that she did not work alone. She had two other women, Paricia de Churanga and Elena Torrilo working with her.  In addition there was a man at the head of the pyramid, Lourdes’ initial contact, a businessman from Santa Cruz, the rich tropical city hundreds of miles away, so the story goes, explained Enzo.

It was found the quinoa had been sold to solid Bolivian organizations such as Irupano, Seiti and Jatari.  The bought the quinoa in good faith, not knowing the role they were playing in the scam.  Lourdes, Patricia and Elena immediately disappeared – if they didn’t they would have been killed by the angry farmers.   No one knew where they were, not even family members.  A country-wide alert was put out to find them.  Within two years from 2012 to 2014, they had stolen at least over $150,000 from local quinoa farmers according my very conservative calculations.

Enzo explained how miraculously Lourdes had been found at a police check point a few months later.  The police immediately brought her into custody for her own protection but then soon after she was discharged but in an unknown way.  It was obvious, Enzo explained, that the police had been paid off and that is why she was let go.  The farmers demanded the story get reported to the national press but the local authorities assured them that would cause the women to flee even quicker – they needed to be quiet and careful about finding them.  And then the women were never seen again.   It is rumored that Elena is in Peru Patricia may be somewhere in La Paz and Lourdes could be in Argentina or Chile – she had family in both places.  In addition, explained Enzo, it might have been that at one time Patricia was found in La Paz, but she and Elena had also been cheated by Lourdes and had nothing to show for their work in the scheme.  It had been all Lourdes’ work and she had left with all of the money.

Other rumors say that when money is begotten bad, bad things come of it too.  There are stories of Lourdes’ investment in cars, crashing and her investment of restaurants failing.  But these are rumors and imaginings of what might be happening with Lourdes now no one knows for sure.  Lourdes’ father still lives in Challapata, said Enzo.  There he works as a reclusive tailor, rarely leaving his workshop ashamed to show his face to those in the community.  Lourdes is most likely in Argentina, he thinks -the big con artist of the quinoa fields.  The curious thing, noted Enzo, is that the women were evangelist christens, Pentecostals.  He reflected how that could be and wondered why their faith in God did not prevent them from undertaking such a horrific scam that ruined so many lives.

Enzo did note that some quinoa farmers banded together to hire a private investigator to find out what happened to Lourdes and the money – though no real results have come up.  It was clear the police were accomplices in Lourdes’ escape but to what degree it is not clear.  Farmers want the story to go public – four years later.  But so far it hasn’t and the mystery continues.

DAY 7 – Heading out to the Quinoa heartland

DAY 7 – Heading out to the Quinoa heartland

challapata

Challapata – Quinoa Capital.

Summer vacation has begun! The cold sharp mountain air is now soft, the winds gentle.  People dot the streets, some in costume getting ready for celebrations, bands assemble on street corners to play – trumpets shining in the highland sun, drums thumping.  Children’s laughter streams though it all.  The winter has ended, school is out and vacation is here!   There are graduation parties and weddings.  Children are everywhere – freed of their school smocks, backpacks and books – out with parents, out with friends, cousins, wandering the streets, populating the parks,  A liveliness and cheer pervades it all.  In the city families line up for ice-cream in the warm 70 degree sun, working parents on vacation as well.  In the countryside, thoughts of drought and winds are dropped – at least for the moment.

Holyhocks at the DIAL Hotel.

Holyhocks at the DIAL Hotel.

Tonight we are sleeping in Challapata for $10 a night.  I remember this place as a dusty outpost with rickety dirt road and a plaza that consisted of single flagpole 18 years ago.  Today it is a teaming town with banks, paved roads, chandelier decked restaurants, a tree filled plaza strung with Christmas lights, and lots of new houses – built with the quinoa money of the recent boom.  Tomorrow I’ll report on the visit to Belle Vista…

DAY 7.5: Profile of a Quinoa Farmer

DAY 7.5: Profile of a Quinoa Farmer

The tiny quinoa outpost of Bella Vista

The tiny quinoa outpost of Bella Vista

Hermano* Esteban is close to 70 years old, he grew up in poverty as an only child.  He remembers not having enough to eat and days when a handful of pito – ground, toasted grains, served as his only meal.  He values work and took jobs wherever he could: harvesting crops, sewing pants– for 1 BS per pair, he completing 5 pairs in a day and with his weekly earnings of 25BS, had more than enough to eat.  Today, he laments, that would not even feed him for a day.  Esteban was also a musician, playing the sousaphone in bands in Oruro and Pa Laz, earning enough money to buy a truck and becoming a truck driver for years.  Eventually he settled down to farm and now has 30 hectares (74 acres) of land – half of which is in production and the other half is grazing land for his llamas.  He is s head of the llama and quinoa association, APROGUILGAC, and is seeking Fair Trade certification for his group.

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

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

Esteban is an example of the new quinoa rich, he owns 2 SUVs and takes us out to a BarBQ dinner of coal roasted llama and sausage with a side of rice with cheese, salad and boiled potatoes. He has five sons.  His youngest just graduated high school and is college bound, his second oldest on is already in college studying economics.  During the quinoa boom the entire family was working together to grow quinoa, now their participation is more sporadic.  Esteban says it costs him 750Bs ($107) to plant, grow, harvest and process a quintal of certified organic quinoa which quinoa exporters are paying 400Bs ($57) for.  (Note: The Bolivian currency is Bolivianos (Bs) the exchange rate is 7Bs = $1). I’m not sure if the Fair Trade price is much higher.  When I left the country in 2015, 800Bs ($114) was a dignified price for a quintal of quinoa, leaving the farmer with a 6% profit margin.  Now it’s a 53% loss!

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

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

Costs of quinoa production includes paid labor for harvesting, purchased fertilizers and pest control.  Fertilizer in the form of llama dung is still sold for 550Bs ($79) a truckload with 1.5 truckloads being needed per hectare, plus natural pest control methods which cost 120Bs ($17) per hectare just for moth control of one variety which eats plant leaves.  The other pest variety which eats the seeds comes in March and also needs paid organic controls.

We are traveling with Tito Mendoza the Bolivian head of the Fair Trade NGO, CLAC, which works with small farmers across Latin America..  He was contacted by Hermano Esteban to introduce Fair Trade to his group and see how they can benefit from the certification.   We have a 5am meeting to travel 2 hours in Esteban’s fully equipped Jeep (electric windows, GPS, leather seats) to the remote community of Belle Vista in Corona in Uyuni, on the Potosi border – to meet with a group of farmers who may or may not be there since the meeting was actually supposed to be yesterday and most are now in the campo celebrating graduations and other traditional celebrations.

The women were there and we had a good meeting!

The women were there and we had a good meeting!

We fear that especially the women will not be there since they are cooking and preparing for the parties.  Never-the-less, I pack up my raisins and crushed brazil nuts anyway.  I’m planning on teaching women to make quinoa salad using “pisara” (cooked quinoa) vinegar, oil and raw chopped vegetables – with the raisins and nuts mixed in –  a nice combination.   Raisins and crushed brazil nuts are not regularly available in the rural countryside and are a bit expensive, they will add an extra special touch to the recipe.

 

* Note:  it is customary to addresses each other as “hermano” “hermana” in the quinoa region – bother and sister.  This is not religious, rather it is inclusive and shows that each other is equal and of a single family.