A few years ago, an op-ed in the Guardian argued that high quinoa prices were putting food security in the Andes at risk. The op-ed argued that rising prices driven by ethical foodie demand meant poorer people could no longer afford to buy the protein-rich cereal and instead were turning to “imported junk food”as a substitute. A new ITC study published in May shows the opposite was the case. High prices improved the welfare of poor communities in rural Peru and low prices resulted in a deterioration of nutrition.
Woman quinoa farmer in Puno, Peru
The article and others like it were influential at the time in making “ethical” consumers question buy quinoa. Quinoa became a a symbol for what was wrong with globalization. Its author, Joanna Blythman wrote:
“the quinoa trade is yet another troubling example of a damaging north-south exchange, with well-intentioned health and ethics-led consumers here unwittingly driving poverty there. It’s beginning to look like a cautionary tale of how a focus on exporting premium foods can damage the producer country’s food security”
At the time, I felt that the argument that higher prices were harming consumers, but did not appear logical for smallholder farmers who will always like higher prices just as salaried workers always like higher wages. Given the potentially negative impact of this new zeitgeist on low income smallholder farmer trying to export quinoa, I felt that data were needed to show whether trade strengthened food security or not.
At the time, the International Trade Centre (ITC), the organization with whom I work, was providing training to quinoa and cacao cooperatives in Peru on improving quality in order to enter international markets and thus there was the opportunity to carry out research in the field.
ITC therefore commissioned US agricultural economists Marc Bellemare and Seth Gitter to design a survey to assess the impact of price changes on the welfare of rural quinoa communities.Having identifed 150 household through random sampling in Puno and Cusco, the primary quinoa producing areas in the altiplano, we assembed a team to collect the data. Over 12 months in 2014-15, the survey team led by Efrain Obregon collected data on consumption, assets and income in four rounds of data collection in remote communities in the Peruvian High Plain (altiplano). This was a job that required dediction and the ability to withstand the 4,000 metres altitude – something I found hard to do on my visit to the communities there.
The results of the data collection and analysis were published by ITC in May showing unequivocally that as prices rose between 2004 and 2013, both producers and consumers in the areas surveyed benefited financially from the trade. Quinoa producers, who are amongst the poorest people in Peru, and are mostly women, saw a 46% increase in their consumption over this period. Consumers also benefited due to the stimulus to the local economy from the higher prices – a case of local economies benefiting from international trade.
However, the surge in prices from 2004 onwards led to more intensive farms from the coastal regions entering the market. From 2014 onward prices fell and by late 2015 were back to their 2012 level. Farming households in the altiplano thus saw a reduction in income. As a result, surveyed farmers said they were reducing their quinoa consumption and replacing it with less nutritious food, namely potatoes. So in fact it was lower prices not higher prices that was resulting in nutrition losses. Furthermore, towards the end of the survey, farmers said they had begun to sell off their livestock to pay for basic needs.
Given this precarious situation for smallholders, the report made a number of recommendations. Firstly, that the government should provide incentives to enable cooperatives to buy metal silos. This would enable smallholders to sell stored their quinoa when prices do rise. Currently, farmers store quinoa in hessian sacks that are vulnerable to rodent attack. Secondly, cooperatives would benefit from differentiating their quinoa on international markets as smallholder-friendly, biodiverse and organic. This strategy, which is already being implemented by some co-ops would help avoid further loss of markets to more competitive producers on the coast. A further option is to support diversification of income for example through the government constructing markets to pay farmers to produce more biodiverse quinoa.
The ITC study provides strong evidence that “north-south” exchange i.e. international trade can be highly beneficial to the rural poor, in particular women. However, markets are volatile and competitive and investments are needed to strengthen their comparative advantage in trade.
The scale of the challenges facing farmers on the altiplano is exacebated by climate change which is reducing productivity of agriculture across much of the developing world. Shutting some of the poorest people in the world out of premium price markets is the last thing consumers should think of doing.