Is Quinoa trade good or bad for local communities?

Farming communities in the Andean Altiplano have traditionally produced the grain quinoa for local consumption. This year is the UN’s International Year of Quinoa. The declaration recognizes the grain’s high nutritional value and the Andean indigenous people who “through their traditional knowledge …maintain… protect and preserve quinoa in its natural state as a food for present and future generations.”Quinoa is exported from Peru – demand for the grain soared once consumers in rich countries learnt of its unique properties (high levels of protein).

This month, Guardian food journalist Joanna Blythmann wrote that the increased demand for this “miracle grain of the Andes” meant bad news for local communities as they could no longer afford to buy this traditional staple substituting it instead for imported low grade food stuffs. The riposte to this argument from another journalist was that high prices meant increased incomes for the communities as they were mainly farmers. –

: Biodiversity International\ D. Astudillo, Flickr

Blogger and agricultural economist Marc Bellemare points out that these are both hubristic arguments and that three questions need to be answered in order to assess whether trade is beneficial for safeguarding food security for rural communities.

The answers to each question posed by Bellemare are credibly provided by one of his readers, Sergio Nunez De Arco:

  1. Are the majority of households in the Altiplano net buyers or net sellers of quinoa, or are they autarkic relative to it? Knowing the answer to that question would be a good first step towards assessing the welfare impacts of a quinoa price increase.Answer: Farmers who plant quinoa are net sellers. Herders are net buyers. Assessing the financial welfare impact in the quinoa production areas is easy as it simply involves tracking the average income per family farm. It went up from $35 to $220 per family per month in the past 5 years.
  2. Do net seller households produce under contract, as part of a quinoa value chain, or do they sell to processors on the spot market? Knowing the answer to that question would allow assessing whether producers are insured against price risk.Answer: Many producers are illiterate and do no sign contracts. Most quinoa producers are organized in associations or coops in Bolivia. In Peru and Ecuador they have private land ownership. Producers self-insure against price risk by selling only 2/3 of their crop until they are certain of the next year’s crop outcome. There is no formal insurance or long-term contracting in the quinoa business.
  3. Is it possible to store quinoa for a relatively long period? Knowing the answer to this question would allow us to tell whether people can avoid the “sell low, buy high” cycle by which many smallholders in developing countries are rendered poorer than they need to be.Answer: Quinoa can be kept as long as 3 years with no adverse effects. We have 5 year old stock that does not show signs of aging. Small holders can wait out short periods of low prices- which are very, very rare. Quinoa has mainly gone up in price in the last 5 years.

One can also argue that the local economy would benefit from higher prices as the farmer will use his or her higher income to spend more money in the local non-farm economy (health and education services, consumer goods, housing improvements etc). So, in summary, higher prices can contribute to meeting food security objectives but there are other value chain characteristics (e.g. farmers well organized to mitigate risk and store grain) and policies that need to be in place as well.

Footnotes

According to Biodiversity International, Quinoa (Chenopodium quinoa) has been cultivated for 7,000 years. Called the “mother grain” by the ancient Incas, it sustained their population until the Spanish conquerors arrived in 1532 and replaced their cultivations with wheat and barley. Today, the scientific recognition that quinoa has a protein level equal, if not superior, to powdered milk, plus a high calcium content, means it is returning to “mother grain” status in some parts of the Andes.

ITC’s Trade and Environment Programme is supporting one company linked to several hundred farmers in the Peruvian altiplano to organize organic certification of the communities’ quinoa for export.

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