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Avocado and quinoa in the Andes: small farmers exporting and improving resilience to climate change

Dec 7, 2017

Did you ever wonder where your avocado and quinoa come from? Quite possibly from small-holder farmers in the Peruvian Andes. Although these delicious foods eventually make it to your store’s shelves in the US, Europe, Asia, and elsewhere in the Americas, producing, harvesting and exporting them is getting more complicated all the time due to the effects of climate change.

Andean small farmers are among the most affected by variable and unpredictable weather patterns because of climate change. Increasing temperatures, excess or insufficient rainfall, new crop pests and diseases and variations in productive cycles can wreak havoc on planting and harvest seasons, productivity levels and ability to fulfill commercial contracts on time.  To adapt to these changes and become more resilient to climate change, these farmers need access to loans, technical assistance and market linkages.

This is where MIF and its partners come in. In the first half of 2017, the Fundación Bancaria “la Caixa” partnered with MIF to launch a call for proposals to fund impact investing projects in Peru, that would increase incomes and improve lives of vulnerable populations in rural areas of the country. Of the 34 proposals received, two agricultural projects were selected for funding. These projects were recently approved by the Inter-American Development Bank (IDB) and will begin operations in early 2018. Each will have a loan from the IDB/MIF and a grant funded by the La Caixa Foundation.

The first project will be implemented by two sister organizations in Huancavelica and Ayacucho to boost productivity and the quality of avocado production in an environmentally sustainable way, as well as to improve access to high-value markets. The FONDESURCO credit union will provide over US$1 million in small loans to more than 430 avocado farmers for working capital and productive assets. One of FONDESURCO’s founding organizations – DESCOCENTRO – will provide technical assistance, training and marketing advisory services to the farmers. These services will assist the farmers in implementing climate-smart and environmentally friendly alternative production technologies, improving avocado productivity and quality with an emphasis on critical points in the production process, and developing their business and marketing strategies to eventually sell directly to exporters.  

MIF expects that this will lead to significant improvements for small-scale producers, by incorporating technological innovations and improving market access. Productive innovations include access to small, mechanized irrigation systems to improve productivity and boost resilience to climate change, and the introduction of organic production practices, which may increase the producers’ sale price.  Likewise, evidence shows that activities aimed at boosting market access will: (i) result in more sales at higher prices; (ii) link producers and their cooperative to new buyers, both domestically and abroad, thereby expanding sales opportunities; and (iii) facilitate direct avocado exports rather than selling to local exporters. One of the key expected results of the project is that average productivity of their avocado orchards will increase from 4,680 kg/ha to 6,200 kg/ha after 36 months (approximately 32%).

The second project will be carried out in the Andean regions of Apurimac and Cuzco, and seeks to increase the productivity, financial inclusion and market access of small-holder quinoa farmers.  The “Los Andes” credit union will lend more than US$1 million to over 1,000 quinoa farmers to finance the planting, cultivation, harvest and marketing of their crop, as well as productive equipment and machinery.

Technical assistance, training and marketing support will be provided to the farmers through their cooperative organizations, by the Spanish NGO CESAL which has presence in Abancay, Peru. This support is focused on improving the technical and productive capacity of the quinoa farmers through the introduction of organic production techniques, integrated pest control and improvements in pre- and post-harvest management; strengthening their entrepreneurial prowess and business management skills; and developing broader market linkages through cooperative sales arrangements, and phytosanitary and organic certification processes. CESAL and Los Andes credit union expect that this combination of loans and technical assistance will result in an increase of up to 30% in the productivity of these farmers that form part of the quinoa value chain in the region. Also, financial education will help farmers manage proceeds from quinoa sales, prioritizing savings and financial sustainability. 

Although these two projects will benefit a limited number of smallholder quinoa and avocado farmers, they will provide insights into how technical and productive innovations at the small farmer level, combined with customized loan products adapted to the specific agricultural cycles, can set the stage for improving the competitiveness and climate resilience of Andean producers. Once these tools are tested, refined and improved, they can be scaled in other regions of the country and replicated with other crops. 

So, the next time you enjoy a creamy, green avocado or a quinoa salad, remember that it may have come from one of these farmers, high in the Andes, hoping to improve their livelihood by offering a higher quality and more sustainable product to evermore demanding consumers.

«March 2019»