Andean Naturals/Jacha Inti Producers’ Tour

Today was incredible!  I’ve only been traveling with Andean Naturals/Jacha Inti for less than two days, but I already feel like I’ve learned more about the commercialization and export side of royal quinoa than I have during these entire seven weeks in Bolivia so far.  It’s just so wonderfully generous of Sergio and Fabricio to let me tag along on their producers’ tour. 

“Andean Naturals is a leading US importer of quinoa and a 2013 B-Corp Best for the World company.” And Jacha Inti Industrial S.A. is their Bolivian branch/on the ground partner.  Currently, our group is about nine people: Sergio, Fabricio, another shareholder in the company who is a plant manager and developer of their processing technology, three agricultural technicians/agronomists, an Australia quinoa farmer and businessman, two American importers/clients, and myself.  Last night, we received a really informative and well-done presentation by Ashley, the farmer from Australia, which outline his own farm activities.  He owns thousands of hectares near Perth in Western Australia, mainly under oats but also a sizeable amount of quinoa.  He is founder of the company “Australian Quinoa” and practices high-tech, no till precision agriculture using the most modern technology (e.g. tractors driven by satellites).  He received seed from America and has been experimenting with growing and developing his own variety of quinoa for more than five years now.  Quinoa presents a solid opportunity for Australia as well since it is a robust crop and the country is experiencing increased drought and irregularities of precipitation.

With the founding brothers Fabricio and Sergio

After a nice breakfast at the hotel, we set out early from Oruro a few hours south to Challapata.  I’ve been planning on coming to Challapata for more than a year, as it was on my original itinerary for Bolivia when I was putting together my Watson Fellowship application for its importance to the international quinoa industry.  Challapata has been referred to as the quinoa “hub” or “heart” of the quinoa industry in Bolivia.  A small city on the road from Oruro to Uyuni, Challapata has a weekly Saturday market where quinoa prices have historically been set by farmers, traders/middlemen, and other buyers.  We are spending the night here before setting off to Potosi and Uyuni in the morning.  But today, we were able to meet with three different producers’ associations outside Oruro/Challapata.  Seeing quinua real (“royal quinoa” in English) was so exciting for me since I have mainly been working with the NGO PROINPA on quinua dulce (sweet quinoa) in marginal expansion areas outside La Paz and also around Lake Titicaca.  These sweet quinoa varieties are mainly for home consumption and farmers are just beginning to explore domestic markets.  Coming here, however, is like a dream come true, since I’ve been wanting to get involved and learn more about the export sector for a very long time, and up until now, I felt that it just wasn’t happening.  But what a dream it’s been so far!  Royal quinoa in the farmer fields from today was just absolutely breathtaking.  It seems that lots of rain this year, so far, has really benefitted the plants, which are tall, healthy, and robust with huge panicles (flower heads) showing promise for lots of grain and green leaves (lots of chlorophyll, really healthy).  In fact, one farmer we met today is able to get yields of 5x the national average (the average is about 500 kilograms per HA and he was achieving 2,500 kg/HA) – just incredible!  These communities are very hard working and dedicated; they are diligent about weeding, spraying organic biopesticides several times, preparing llama and sheep dung as fertilizer, and even creating their own mixture/foliar spray as biopesticide and growth stimulant.

Truck full of farmers

Celebrating the arrival of Andean Naturals

Soil fertility management with llama dung

Quinoa in love

Giving an offering to Pachamama

Lunch: quinoa, llama, and potatoes

Some of the best looking quinoa

Cholitas and baby lambs!

My serious note-taking/listening face

Photo courtesy of Sergio

Jacha Inti agronomists :) (Sergio's photo)

The group :D

Confetti from the farmers :) 

Photo courtesy of Sergio

Greetings (*awkward claw hand hug*)

Group photo

February 21, 2014

I think my brain is about to explode, literally.  It is so full of useful information that I am having serious trouble synthesizing everything I’ve learned over the last five days.  I also laugh as I look back on a word document I made almost a year ago, titled “Watson Logistical Plan” – I will dedicate an entire post to this in the future, but for now, I will reflect on the fact that I thought I was going to stay in Oruro and Challapata for three weeks.  Jokes.  Now that I am finally here in Challapata, I see that it is not the “quinoa promised land” I had imagined.  In fact, it is a tiny and sketchy town where quinoa happens once a week at the market where prices are set.  In fact, maybe “shady” is a better word to describe Challapata.  We had to park our two SUVs in a garage somewhere because we thought they might get stolen in the night because Challapata is also the center for a lot of illicit activity (e.g. smuggling of toys, cars, and even illegal quinoa export to Peru).  Someone told me that Challapata is probably the second sketchiest town in Bolivia, only after another town in the Yungas, which serves as the center of coca and drug trade.  Cool.  Anyways, I am spending a second night here because I’ve decided to stay to try to see the Saturday market tomorrow.  Fortunately, another agronomist from Jacha Inti is also going to stay with me and we are both going to return to Oruro tomorrow (fingers crossed) and me to La Paz.

Getting breakfast off the street in Challapata: api and postre (purple maize sweet drink and fried pastry with powdered sugar)

While I’m thinking about it, I also want to compose a list of why I believe quinoa is everything I have been looking for this year.  I know I said the same thing about organic agriculture in Bhutan, but this ancient Andean pseudo-grain may fit the bill even more.  Keeping in mind the extensive list of key concepts I composed after the World Agricultural Forum 2013 Congress in Hyderabad, India, it is remarkable how much quinoa addresses each of the points.  A quick reflective brainstorm:

·         Quinoa is highly nutritious with all of the essential amino acids and high in protein (a great meat substitute for vegetarians), gluten-free (perfect for increased cases of Celiac disease and food allergies), high in fiber, low in cholesterol (as we struggle with heart disease), and rich in vitamins and minerals.

·         Quinoa has the potential to alleviate food insecurity on a large-scale because it is so nutritious and filling compared to other staples such as pasta and rice.  However, we need to be aware that local food security and sovereignty should be prioritized; yet when the price of quinoa is 4-5x higher than rice in local markets due to international demand and exports, this becomes problematic.

·         Yet we cannot ignore the fact that Bolivian city dwellers do not have a culture of eating quinoa to begin with because of the negative connotations from the Spanish conquest (i.e. quinoa is the poor man’s food or the stuff of Indians).  This may change in the future, however, as the government promotes domestic consumption through school breakfast and nursing mother programs, as well as the efforts of some private businesses.

·         To eat or not to eat?  We have to acknowledge that the quinoa boom in the West has led to reverse migration from the cities back to the countryside as farmers return to their lands to farm this lucrative crop, as well as assisted in lifting thousands of farming families out of poverty with its high prices, affording them a higher quality of life.  I saw this first hand, as farmers can now afford really nice cars to drive back and forth from cities to tend to their plots.

·         Quinoa hasn’t yet become a commodity like wheat, rice, soy etc. but may be headed in that direction as more and more countries join the production side.  Already, prices are determined by international demand and fluctuate often.  Thus, Bolivia will maintain its price premium and stay competitive only if it can maintain its organic status, possibly fair trade, and also brand “Royal Quinoa” to promote a story of origin

·         As a robust crop, quinoa is going to be an extremely important crop for adapting to climate change since it thrives in harsh environments (e.g. dry sandy soils).  I have also seen the importance of hybridizing seed through traditional breeding methods to create short cycle varieties to adapt to climate change and later rains.  However, another complication related to climate change is that quinoa requires extremely intensive post-harvest processing to clean the grain, remove the saponin, etc. and this has historically been very resource intensive.  If companies and products cannot figure out a more efficient way to clean the grain with less water usage, as well as proper disposal of waste water, consumers may backlash and boycott quinoa because of the environmentally unfriendly post-harvest processing in the context of drought and global water scarcity.

·         Quinoa is a hugely environmental issue.  Farmers need to maintain the soil fertility through the application of organic manure and natural fertilizers, as well as rotations with legumes, while being cognizant of minimizing tilling and using cover crops to minimize erosion on this fragile soil.

·         My brainstorm from WAF 2013 (in italics):

o   We must work collectively to close the gap in productivity between potential and actual yield and close gap between farm and non-farm incomes.  To achieve these objectives, small farmers need access to finance/credit, technologies, knowledge, and the market.

§  This is certainly true for quinoa in Bolivia, as it raises the question of intensive versus extensive agriculture, as up to now, many farmers have just been expanding their land without paying adequate attention to improving yields on existing parcels (i.e. intensifying their farming).  This issue will become more relevant as expansion continues to encroach on traditional llama grazing areas and into marginal soils.

§  In terms of access to finance and credit, it is also extremely important for quinoa farmers as they need to be able to purchase inputs and implements.  For this reason, there are many local development banks offering micro-loans to farmers and even efforts of private businesses such as Andean Naturals/Jacha Inti to develop credit schemes for farmers and their associations.

§  Access to markets for quinoa producers is EVERYTHING.  Most of the individuals in the Southern Altiplano cannot grow anything else on their marginal soils and historically, llama raising and other animal husbandry have propped up their livelihoods.  Finally, they have a crop that fetches high prices on the world market, but they will only benefit if they have access to markets.

o   Contract farming can help provided assured markets but only if small farmers interests are preserved and not exploited

§  According to the United Nation’s Food and Agriculture Organization (FAO), “Contract farming can be defined as agricultural production carried out according to an agreement between a buyer and farmers, which establishes conditions for the production and marketing of a farm product or products. Typically, the farmer agrees to provide agreed quantities of a specific agricultural product. These should meet the quality standards of the purchaser and be supplied at the time determined by the purchaser. In turn, the buyer commits to purchase the product and, in some cases, to support production through, for example, the supply of farm inputs, land preparation and the provision of technical advice.”

§  Who benefits from contract farming?  The FAO says, “Both partners engaged in contract farming can benefit. Farmers have a guaranteed market outlet, reduce their uncertainty regarding prices and often are supplied with loans in kind (payment through goods and services rather than money), through the provision of farming inputs such as seeds and fertilizers. Purchasing firms benefit from having a guaranteed supply of agricultural products that meet their specifications regarding quality, quantity and timing of delivery.”

§  Is contracting farming recommended for all type of agriculture products?  “In principle, there is no restriction to the types of agriculture products that can be the object of a contract. There are numerous examples of successful contract farming arrangements for most types of crops and livestock. Examples also exist for forestry, aquaculture and fibre products, as well as for flowers and tobacco, to name a few. While the applicability is fairly general, there is evidence that the most successful schemes are associated with agricultural products that are high-valued or produced for processing and /or exports. Products for which there is high local demand may be more susceptible to side selling and thus may be less suitable for contract farming.”

§  It seems to me that contract farming is happening in quinoa in a less formalized way.  For instance, some companies like Jacha Inti are committing to purchasing 100% of farmers’ organic quinoa but I don’t believe they have any kind of written contract.  However, the model of contract farming is definitely present and helps address the concerns of stable supply and prices and farmers may receive technical assistance and financing options. 

o   Labor shortages present a major challenge, which can only be partially addressed by appropriate mechanization

§  This is certainly the case with quinoa, as the price of labor has skyrocketed in recent years.

o   Moreover, smaller land holdings create bigger challenges and fewer and larger farmers are easier to mechanize with economies of scale

o   Regardless of the source, handouts are not sustainable – just a short-term fix; knowledge transfer and sustained practice exchange are preferable (education is key, both formal and informal).  This training could be implemented through innovative communication that is accessible to farmers.

§  This is certainly true and I saw this on the producers’ tour.  One could see the difference between farmers who were dedicated and not dependent on hands outs from NGOs or the government compared to those who were practically just asking for gifts.  A culture of dependence in agriculture never seems to be a positive thing, and fortunately, there are companies such as Jacha Inti and NGOs like PROINPA that are promoting capacity building, education, and empowerment instead.

o   Thus, the potential for the ICT sector (namely web-based, mobile, and television technology) to assist with agriculture and knowledge transfer – connecting farmers with each other, consumers, government, universities etc. – should have an emphasis on local language exchange, database creation, precision agriculture to make application of inputs more efficient, weather prediction, marketing support etc. (though ICT can only facilitate and not solve)

§  The quinoa industry has already seen the far-reaching effects of ICT technology just in the presence of cell phones.  Now farmers don’t have to travel all the way to Challapata to know the prices.  Once one farmer gets an offer, the price spreads like wildfire through the use of mobile phone technology.  NGOs like PROINPA and FAUTAPO are also working on developing weather stations to disseminate information about climate to farmers via cell phones.

o   Public private partnerships are crucial (e.g. producer companies, private extension officers, venture capitalists and other private companies investing in infrastructure), but the private sector needs to ensure fair share to farmer

§  After visiting around 10 producer associations around Oruro, Challapata, and Uyuni, as well as seeing the activities of Andean Naturals and Jacha Inti, it is clear that partnerships are key, especially those that involve private business but are also concerned with farmer welfare.

o   Risk management (e.g. insurance support) and price management should be prioritized

§  Quinoa is risky business, that’s for sure, as the prices are constantly fluctuating, which is one of the main concerns of the farmers who would like to see a stabilization of prices (preferably higher, obviously).

o   Technology is definitely available but requires capacity building, and it should first and foremost be appropriate for small farmers

§  Quinoa farmers require increased appropriate technology to improve their productivity (e.g. mechanized seeders, harvesters, threshers, washers etc.) and reduce some of the drudgery associated with manually cultivating large parcels, as well as address the issue of increased labor costs.  With the idea of appropriate technology in mind, the harvesters etc. need to be small enough to adapt to the farmers’ plots and also not interfere with local customs.  For example, mechanizing but keeping separate the harvesting and threshing processes respects farmers’ traditions while increasing efficiency.

o   We cannot overlook the role of cooperatives and producer companies in uplifting marginal farmers and providing them with collective bargaining power

§  Quinoa is an incredible example of the success of cooperatives and producer associations.  There are more in the country than I can keep track of and they really have revolutionized the industry, allowing farmers to come together to sell their products, obtain credit, inputs, implements etc.  Together, producers’ associations have been able to regenerate rights and political power as farmers are the owners.  They also can function as private businesses purchasing members’ quinoa and selling directly to international buyers, which can eliminate intermediaries.  Associations/cooperatives have allowed farmers to gain collective knowledge of international markets, as well as promote sustainable production on a broad scale through internal control systems and technical support.

o   Policy alone is not the solution as it just provides a favorable environment for change

§  In fact, it seems like policy related to sustainable agriculture and quinoa in particular has been rather stagnant.  For example, a 2011 paper I read titled, “The Challenges of Developing a Sustainable AgroIndustry in Bolivia: the Quinoa Market” by native Bolivian and Duke University Master’s student, Katherine Macarena Antonio, offered several policy alternatives including:

·          Food Safety and Nutrition Policies would promote quinoa as a nutritious food through educational initiatives, subsidies to impoverished communities through school breakfast and pregnant mother programs, and integration into regional development and safety policies.

·         Environmental/Organic Agriculture Policies would improve yields on existing land rather than expansion by promoting organic fertilizer application (requiring adequate R+D), mandating field rotation for nutrient recovery, investing in improved land preparation and management (e.g. providing extension services and training in field rotation), and supporting national branding for value addition and quality maintenance.

·          Trade Policies to improve the business environment would involve facilitating exporting, reducing transaction costs, bureaucracy and corruption, and renegotiating existing agreements with primary buyers.  E.g. “smart trade policies with the US and EU” as well as organic/high quality certification, patents, and certificate of origin to reduce contraband and promote Bolivian exports (rather than increasing trade barriers), branding royal quinoa as unique to Bolivia as value addition (rather than treating it like any other commodity crop), and improved infrastructure to reduce transaction costs and facilitate easier flow across borders

·         Ideally, the ultimate policy plan would integrate all three while prioritizing the environmental components.  In my interview with Katherine, she said, “After 2011, the President went to the United Nations and said let’s promote quinoa all over the world.  But as for policy suggestions like a specific tax or quota to promote domestic consumption, no, nothing has been done.”

o   We should concentrate on multi-use crops for food, fodder, and fuel, which addresses the food versus fuel debate, the loss of fodder from mechanized harvesting, and the fact that breeding is overly focused on grain so crop residues are suffering.

§  This is an interesting question.  Up until now, I have no knowledge of farmers using crop residues as fuel, but I know they can be given to animals as fodder, it just isn’t part of the local culture.  I learned that some farmers burn the stalks and use the ashes when they chew coca (it helps catalyze the leaf apparently) and that some middlemen will buy the stalks and all of the quinoa byproducts.  However, it seems that if farmers can be sensitized to use the residues as fodder or even consume the leaves at home (which are more nutritious than the grain), then quinoa really could become a multi-use crop not just coveted for its golden grain.

o   We need data and science (not ideology) driven policy frameworks, especially through utilizing existing knowledge, technology and science – we don’t have to reinvent the wheel, but this info needs to be practically available to farmers

§  Yep, also true for quinoa!

o   Modern methods such as genomics, markered selection, tissue culture, GMOs, precision agriculture (more efficient use of natural resources), conservation agriculture (low carbon and sequestration) etc. have the ability to help

§  GMOs have yet to enter the world of quinoa, but who knows, in a few years, it might very well be the reality.  Interestingly enough, Bolivia is very protective over their germplasm and the only way to get seed out of the country is illegally.  However, conventional breeding practices have proved important for developing thousands of varieties that are tolerant to different environmental conditions such as drought or salinity.  Moreover, precision agriculture and no-till farming may also be the future of quinoa production, as precious soils and natural resources in this harsh environment require conservation and forethought.  Both of these advanced practices are already being seen in countries like Australia with quinoa.

o   We must consider “sense of place” and place-based solutions (e.g. crop selection based on suitable crops; irrigated versus dryland farming and cereals, millets etc.)

§  This is definitely true with quinoa on Bolivia’s Altiplano.  Right now, it is impossible to take a massive combined harvester from the lowlands used for soy or wheat and stick it in a quinoa field.  First of all, the size is inappropriate and secondly, the mixed seeds/lack of homogeneity in the fields make mechanized harvesting difficult.  Some plants are mature while others are still green, so it leads to huge losses in product.  This is where appropriate technology (e.g. a separate mechanized, small harvester and portable thresher) come in, which are place-based.

o   There is a possibility for an innovative extension service with farmer facilitators (could be option for entrepreneurship or private sector where government has failed)

§  It seems to me that this would be super, especially because the Bolivian government lacks an extension service all together.  Instead NGOs and private businesses are offering technical support to farmers, yet if farmers could enter the extension service industry, they could potentially help themselves.

o   Sustainable agriculture can be a form of value addition in and of itself

§  YES!  Farmers are producing certified organic and in some cases, fair trade, are can achieve a much higher price premium, just from farming sustainably.  And if the price difference between organic and conventional is not huge now, the margin will only increase in the future as the global market becomes flooded with conventional quinoa from other countries.

o   Farmers should partake in the first levels of post-harvest processing and value addition at the farm or village level.  If farmers can do step one of value addition/processing, this can lead to a 10-50x livelihood improvement (could be as simple as grading, sorting, or processing, but this requires capacity building).  Moreover, currently, policy has an over-emphasis on production, whereas there needs to be an equal focus on processing and value addition at farm/small level (i.e. the farmer can increase share if he adds value, since the person adding the value makes the money)

§  Quinoa farmers also want to take some value addition into their own hands.  I met producers who are interesting in making soups, flour, baking bread and cakes etc. to sell in the local market, as well as those who want to have their own processing plant entirely.  Private companies such as Jacha Inti definitely emphasize that farmers sell them a high quality grain that is well cleaned, which improves the entire process thereafter, but in fact are discouraging farmers from taking on an entire processing plant because of lack of knowledge and support.  Thus, it may be better in a comparative advantage sense for farmers to focus on improving field-level production activities and let export companies specialize in post-harvest processing.

o   There is a strong need to eliminate middle men, a system that victimizes farmers and removes capital and power from their hands; farmers should be given a choice and only then will they be able to increase their profits

§  Don’t even get me started on the issue of middlemen in the quinoa industry.  It is a whole new ball game or can of worms, if you will, filled with nuances, complexity, and contraband.  There is even one scholar who argues that middlemen are ultimately beneficial for the industry since they give farmers a choice of who they sell to and also minimize prices for consumers.  Interestingly enough, however, middlemen are like private businesses in and of themselves, incentivizing farmers through perks such as free transportation, immediate cash payment and even cash advancements, and the fact that they will purchase everything (e.g. small grain, crop residues).  Often operating with illegal drug money, middle men have many advantages over private business and are unfortunately, disincentivizing organic production because they won’t offer a premium for organic grain.  Hopefully this will change in the future, however, as farmers realize that the organic premium is going to increase and as supply also increases, it will be more beneficial for them to partner with a private company than be at the whim of intermediaries.

o   In terms of subsidies, we must remember “politics without principle” is one of Gandhi’s sins – subsidies can help and also their removal can eliminate uneconomical practices

§  Strangely, agricultural subsidies are not really extant in Bolivia.  Farmers are not receiving government support in this area and if anything, perhaps in the future, quinoa could be subsidized for urban consumption.

o   In sum, the main issues involved in the topic of promoting sustainability and enhancing agriculture for smallholder farmers include: capacity building, mechanization, research and development, changing undergraduate curriculum, entrepreneurship, science-based and data-driven policy, gender equity, climate change, cooperatives, post-harvest processing and cold chain development, ICT, biotechnology and bio-based farming, industry, labor shortages and unemployment, political impartiality, credit and finance, insurance, risk management, subsidies, trade collaboration/exchange, and alliances.  The challenges of the world food and farming system require a holistic approach.  There is no silver bullet magic solution.

§  Although I wrote this list following a conference in India, almost every single one of these aspects is also relevant to quinoa farmers in the Bolivian Altiplano.  In addition, there is also no silver bullet magic solution to making quinoa sustainable environmentally, economically, and socially in the future, but rather, the industry demands cross-collaboration of stakeholders and commitment to strategic planning for the long-term.

Driving through the Altiplano

Potosi

La casa de moneda (national mint and museum in Potosi)

Cerro Rico Pachamama painting: a famous representation of the silver-mined mountain in Potosi that combines indigenous beliefs with the Virgin Mary. 

Mummified children in the museum

Playing with pigeons in Potosi

Sun dial

Lol, I thought "Speaking English guides" was funny

The mountain where they extracted all of the minerals in Potosi

Casual llama crossing

A farmer showing the quinoa packages he saw when he traveled to the U.S.

Some examples of quinoa technology in Chacala outside Uyni

A certified organic and fair trade community

Chacala, the community where I went back and stayed for a couple of days to do farmer interviews outside Uyuni

Dancing :)

Then we visited the Salar, the world's largest salt flats

The salar was still flooded because of the rainy season

Awesome moment of Sergio carrying a Cholita

Our amazing team!

Ash, the Australian quinoa farmer, taking my classic "jumping picture"

With Fabricio and Javier, Jacha Inti agronomist at some cool geologic sites

Lots of driving across flooded surfaces, like trying to cross this bridge

Arcoiris (rainbow) over La Paz on my way back - nice welcome home!

Photo courtesy of Sergio, quinoa products in the US

Photos of the tour team from Sergio

Wish I hadn't missed the factory tour...in English ;)

With Ash, the Australian quinoa farmer :)

With Sergio Nunez de Arco, founder of Andean Naturals (the largest importer of organic quinoa in the US). Named by Time Magazine as "The King of Quinoa" and one of the "13 Gods of Food" along with Michael Pollan and Vandana Shiva. A real food/ag celebrity moment!!