The Quinoa Quandary of Rising Prices

Macro-economics is often ironical. Many experts have historically shown that as the global need for any agri-produce typical to a certain geographic area rises, the provision and affordability of the same for the local populace declines. It is because local farmers prefer to sell the produce to international food companies that pay higher prices than selling it in local markets which offer comparatively lower prices.

I saw this happening first hand in India. I lived in the country for some time a few years back when my hubby was posted there for a project. India is prized for some varieties of mangoes and a few varieties of apples grown in the lower Himalayan regions. Surprisingly, most of these prized varieties are inaccessible to the locals. Most of the produce of these varieties is shipped straight to supermarkets abroad with very little finding its way to local markets.

In fact, in many cases, the only produce that stays in the country is the one saved by the farmer for his family and friends. The trickle of produce that really makes it to the local markets ends up lining supermarket shelves and is priced at comparable prices as they would command in a market in the US, not counting the fact that India has one-fourth the purchasing power.

The result of the export demand is that apples and mangoes, at least some varieties, have the highest food inflation across all classes of food in India.

Thankfully, apples and mangoes come in a number of varieties. Also, they aren’t staples and hence Indians don’t starve.

The issue becomes much more sensitive when we start talking of Quinoa and Bolivians. The farmers in the country have long grown the grain and nearly the whole country is a consumer of the same. Large chunks of the population uses it as a staple and relies on it for sustenance.

However, with the entire globe now adulating quinoa, a section of the media believes that ordinary Bolivians cannot afford the food anymore. In fact they have started moving away from quinoa and started adapting unhealthy fast food resulting in malnutrition.

This is alarming and definitely not something which the FAO (UN) had in mind while declaring 2013 as the International Year of Quinoa. One of the objectives behind the FAO making 2013 the International year of Quinoa was to popularise the wonderful grain and spread it across the world.

Quinoa – UN’s big hope

UN has recently declared 2013 as the International Year of Quinoa. The Food and Agricultural Organization (FAO) has the aim of reducing malnutrition across the globe by half by 2015 and quinoa will play an important role in this.

The flexibility of quinoa to grow in adverse conditions gives UN its rays of hope. Since the grain can grow at very high altitudes and in adverse climate, it becomes suitable to grow in regions which are not currently under farming.

Another reason is that quinoa is rich in nutrition. The grain can singlehandedly maintain your protein, fibre and essential protein requirements of the population.

And that has led to a huge spike in popularity of quinoa. In a world increasingly aware of health, quinoa has come to be recognized as a supergrain and is gaining acceptance, sweeping across the Americas and Europe, and now increasingly Asia.

Quinoa Prices

This surge in popularity while good for meeting the FAO’s objectives, has led to a sharp rise in quinoa prices. In the last decade, prices have spurted from less than $70 per tonne to $2000 per tonne at present. This is an average annual growth of nearly 40%, many times higher than the global average food inflation.

In the last five years itself, quinoa prices have more than tripled.

Not quite something that bodes well for global food security if half our planet’s population cannot afford the grain.

The Sustainability Debate

Whilst the rise in prices has bought cheer to the farmers in Bolivia who are seeing a massive improvement in their prosperity levels, this is definitely not sustainable. If prices keep on rising the way they have been around in the past, quinoa would soon become unaffordable for many.

Basic macro-economics will then dictate a fall in quinoa consumption. Rising prices will turn quinoa from a supergrian to a super-exclusive grain.

This is a challenge for the FAO to counter as its first prerogative is to keep quinoa affordable for the masses across the world.

But are the Bolivians Worried?

Coming back to our original debate, is quinoa really causing malnutrition problems in the Andean communities of Bolivia and Peru?

Rising agri-produce prices mostly bring a cheer to the farmer growing the produce. Traditionally, the Andean plateau farmers in Bolivia and Peru have been the poorest society in the South American continent. Quinoa’s popularity has changed some of that, raising the economic levels of the farmers.

Speaking to United Nations, Elias Vargas, a local farmer growing quinoa said that “People everywhere are buying quinoa. In La Paz, you can purchase it in the markets. It’s everywhere. For that reason we are also able to sell small quantities. With that money we sustain our families.”

Vargas and his neighbors are small farmers and don’t have accessibility to global markets. They sell their crops to a local Bolivian coffee chain, which uses quinoa in its salads, sandwiches and desserts.

There are more than 130,000 farmers like Vargas growing quinoa over a land tract of 250,000 acres.

What is surprising is that quinoa was even regarded in Bolivia as ‘poor man’s food’ with Bolivians preferring to eat wheat and rice. The increase in global fascination with quinoa has even benefitted domestic consumption and it allows small farmers with little exposure to global markets to get healthy prices. Clearly, the economic condition of the community has improved significantly and quinoa crop now allows them to spend more on housing and education.

There is a significant difference in prices of quinoa in the local markets of Bolivia/Peru and at supermarkets in North America. Processed, rinsed and packaged quinoa being marketed by food companies like Bob’s, Eden or truroots retails at a huge premium in North America over the locally sold quinoa in Bolivia.

This alleviates the concerns of the critics of quinoa’s growing popularity.

The Delicate Ecology – Maintaining Prices as well as Sustainability

However, the UN and FAO remain watchful on the situation. Rapid increase of any farming in an ecological system often starts destroying the system, mostly due to human ignorance or greed. Precisely the same can happen to the Andean plateau and the Bolivian / Peruvian population.

The UN points out that if prices keep on rising, local farmers are required to reduce their utilization of quinoa and choose to supply to the international food companies. Worse, the prices of quinoa may actually spike in the local markets as well as more farmers gain access to the large food companies, shunning the underpaying local markets.

The World Health Organisation (WHO) is already worried that about one-third of children under the age of five in the Andean countries are already chronically malnourished. A move away from consuming nutritious quinoa towards processed foods will only worsen the scenario

Higher incomes may also eventually lead to locals moving away from comparatively coarser (but healthier) grains like quinoa to less healthy processed foods by choice, inadvertently and ignorantly worsening the nutrition balance. This is something that is already happening in Bolivia as farmer families with higher income shift to other staples like noodles and rice which come much cheaper.

Source by Rachel M Harper