Gold of the Andes

This past week Marie-Eve and I were in Oro de los Andes, a region to the south and south-east of Huaraz that comprises pampas at 4000 metres, and two deep, disconnected valleys bordering the Huayhuash mountain range.

One focus of CARE in this region, under the Alli Allpa program, is the productive chain for milk and milk products. Its success is tangible.

The dairy productive chain begins with the cultivation of new varieties of pastures - a mix of rye grasses and improved alfalfa. Compared to native species, these improved pastures are more nutritious, more palatable, and grow more quickly. Their introduction is, ideally, accompanied by the use of modern irrigation techniques (e.g.: sprinkler systems) that prevent soil erosion and ensure pasture growth throughout the year. Importantly, the milk production of cows that graze on improved pastures can increase from 4 or 5 litres per day to 6 to 7 litres per day. In Canada, by comparison, the average daily production per cow, while it is lactating, is 31 litres.

In an effort to increase milk production even further, CARE is working with farming families to improve animal genetics through artificial insemination. As of March of this year over 400 cows had been inseminated, resulting in 82 calves. Peruvian cows, or “Criollos”, are crossed with the Brown Swiss breed. The milk production of the first cross-breed, once it has reached maturity at two years, can be 10 litres. After five generations of cross-breeding, about 15 years, milk production can reach 20-25 litres per day.

A typical farming family in Oro de los Andes will grow potatoes, corn, or other staple foods for self-consumption. They may also have three to four cows producing milk. Several weeks ago I was interviewing a number of farmers that are members of an association that I am coaching in San Pedro de Carcas. One of these members, Crisostomo Montes, told me that five to ten years ago his excess milk production was thrown away and he pointed to water draining down the middle of the street. Today he sells all of his milk to Monterreal, a medium-sized cheese-maker in Chiquian, about a 45 minute walk from Carcas.

Monterreal is the leading cheese-maker in Oro de los Andes. It is one of two that has obtained credit to build new production facilities, and one of 25 cheese-makers in the region. The company sells its cheese in Huaraz and to upscale hotels in Lima. Monterreal and two, currently artisanal, cheese makers that Marie-Eve is coaching in Huallanca and Huasta, all suffer from the same problem. There is not enough milk to produce the quantity of cheese needed to satisfy their markets. This is a good problem. The cheese-makers have grown quickly creating employment in the region. They are also creating a stable, competitive market for milk. The present lack of supply can be resolved over time by working with the farmers upstream in the productive chain.

With this in mind, I delivered a presentation on costs, production volumes, and profitability to the Association in Carcas last Tuesday evening. The session was well attended by the men and women in the association, as well as their sons and daughters. The goal was to demonstrate the potential profits the farming families could obtain if they were to increase milk production through the use of better pastures and an increase in the number of their livestock. The presentation wasn’t complicated… but it could have been.

Following the presentation I went through a spreadsheet, developed with the help of several agronomists and a veterinarian, detailing a farm’s typical revenues, costs, and profitability per cow. The association’s members were then divided into three groups by the head of another organization complementing CARE’s work in the village and asked to detail their own costs and revenues. Afterwards they were asked to present these back to the audience. Lead by the younger generation amongst them, I was completely taken aback by the quality and thoroughness of their work.

The farmers in San Pedro de Carcas and other communities that dot Oro de los Andes do not lack the human and natural resources to make their farms successful but they do require some initial guidance in business and new methods of agronomy to set off on the right course. In fact, the successes are already happening. Now to see more of it.

Back to Pomabamba

Last Monday evening, July 6th, we left Huaraz for our second trip to Pomabamba. We had intended to leave Sunday morning but the truck’s scheduled maintenance wasn’t completed until late the following afternoon. Even so, it was just in time as a three day national protest by various groups began Tuesday morning interupting inter-city traffic across the country.

In Pomabamba we are coaching a company named Polaris. Polaris facilitates the productive chain for guinea pigs. The small livestock are typically raised in a casual manner by farming families for self-consumption. They are an important source of nutrition and a popular dish in Peru. In urban centres, especially during holidays, there is a strong demand for guinea pigs and they command a good price in the market.

Under the Alli Allpa program (meaning “Good Earth” in Quechua) funded by Antamina, CARE Peru is focusing on ten agricultural productive chains in the Ancash region that have strong market potential. Farming families that successfully enter a chain have the opportunity to generate additional income and raise their standard of living. In this case it is through the intensive breeding of guinea pigs.

Polaris is lead by Tania Barreto (in photo to left) and consists of four agronomists that are contracted by CARE Peru to provide technical assistance on intensively raising guinea pigs to upwards of 120 families in Conchucos Norte. The technical assistance includes: identifying and treating ailments, consulting on proper nutrition, crossing breeds, ensuring good housing, etc… Polaris cannot depend indefinitely on the contracts from the Alli Allpa program via CARE Peru. As a result, the company has identified several business opportunities and expanded its services to include the sale of medicine for guinea pigs, the production and sale of balanced feed, and the collection and resale of the livestock in local markets. The success of the company will ensure continuity in the productive chain once development assistance is retired.

Following the first introductory meeting with Polaris in Huaraz, Tania identified a number of areas where she believed coaching was required and, in our first session, during the first trip to Pomabamba, we concentrated on the basics of financial statements. On that trip we also spent a day going from farm to farm to meet five producers – as many as were possible traveling through the difficult terrain. This was an eye-opening experience and, despite some success stories, it was apparent that more significant problems faced the company.

Most of the producers were not performing at levels that had been anticipated. This has two implications. The implication for Polaris is that it will have neither sufficient market for its balanced feed, nor sufficient produce to collect for resale to be profitable. The implication for the farmers is that they have not reached levels of production where they can fully benefit from their efforts as well as repay credit borrowed from the local cooperative used to begin their intensive breeding operations.

The subsequent coaching session in Huaraz was a group discussion aimed at identifying specific problems and then solutions to improve producer production. For example, the immune system of a guinea pig is weaker during the rainy season and they become susceptible to salmonella. Many producers will lose guinea pigs en masse and will try to sell most of their livestock before it strikes. Not only does this drive down the price of their product but, as fast as they may breed, it presents a problem when they try to reach critical production levels later in the year. One solution is to create a video testimonial, which can be replayed on a laptop during technical visits, of a farmer – a trusted source - who made a small investment in preventative medicine and saw very low mortality rates for the season.

On this trip to Pomabamba we spent Wednesday creating a detailed action plan with the dates and people responsible for following through with the tasks identified in our previous session.

Unfortunately, the credit problem goes beyond the ability to repay and on Tuesday we met with Marcos Navarre, the manager of the local Cooperative, to learn more about how loans guaranteed by the mining fund were distributed to 50 farming families. In the afternoon we also participated in a meeting with both the Cooperative and Polaris. In an effort to mitigate the potential default rates, the Cooperative agreed to join Polaris in a series of training sessions to be given to farmers in four communities in the region. The Cooperative will provide much needed orientation to the farmers for whom the use of credit is not yet well understood.

Monday, July 6, 2009

It has been about six weeks since Marie-Eve and I arrived in Huaraz, a busy city in the Ancash Sierra with 100,000 inhabitants. Huaraz has experienced rapid growth over the past five years spurred largely by mining activity in the surrounding regions. Construction projects, large and small, are visible everywhere in the city and while Huaraz may never win an award for “City in Bloom” it has a spectacular setting in the valley between the White and Black Mountain ranges.

Running North-South, the main street, Luzuriaga, has shops selling just about everything you would find in a department store. Parallel to Luzuriaga several blocks to the west, and in sharp contrast, is Huascaran, my favourite street in Huaraz and named after the highest peak in the White Mountain range. Along Huascaran men and women in more traditional dress sell local produce neatly displayed in sacks on the sidewalk and shop doors, as well as hats, textiles, economical meals, and all manner of hardware. The narrow sidewalks often force you back onto the busy street where you have to be ever vigilant of determined taxis, collectivos, and moto-taxis that weave amongst people, each other, and stray dogs. Huascaran concludes at the bridge crossing the River Quilcay where adobe houses are perched precariously along its banks. From there it is about a ten minute walk to the CARE office.

Marie-Eve and I do not spend a lot of time in the office. We usually find ourselves traveling to one of four zones in the Ancash Sierra where CARE is intervening and the companies we are coaching are based. Two of these zones, Conchucos Norte and Conchucos Sur, are to the east of the White Mountain range and require crossing at altitudes of 4700 and 4500 metres respectively. Conchucos Sur has a “paved” highway as far as Huari, about four hours away. During the rainy season the unstable slopes shift and the two year old highway has sunk in several sections, since filled in with dirt, and/or been reduced to a single lane because of landslides.

The paved road to Conchucos Norte ends after turning east - from the main North-South route in the Huaylas valley - to ascend the mountain range near Yungay. From Yungay it is seven hours of dirt roads to Pomabamba (which we were told has only had a passable road from the nearest town, Piscobamba, for the last five years). A third zone of intervention, Oro de los Andes, now benefits from a modern highway built by Antamina that extends from the mine to the highway connecting Huaraz and Lima.

In all cases, the difficult terrain has isolated these zones from any sophisticated interchange with urban markets. When we first came to these valleys I kept waiting for a flat lowland to appear between the mountain ranges. No such thing. Where the slopes of one mountain end, the slopes of the next begin, divided only by rivers that eventually feed into the Amazon. Corn, wheat, barley, potatoes and other produce are grown in plots as small as ½ hectare along the slopes, sometimes impossibly steep, of the mountains. The excess produce is then sold to intermediaries where it will find its way to local markets and major centres such as Lima and possibly exported.

Electricity, potable water, and proper sanitation do not extend very far outside of the small towns. I often feel like we are driving several centuries into the past. Donkeys are the pack animal of choice transporting everything from firewood to milk. Along with sheep and cattle, we are more likely to have to maneuver the truck around animals than other vehicles. Fields are often worked with hoes, picks, and, where it is flat enough, a wooden plough driven by two oxen.

Some farmers have improved their situation, especially with the assistance of CARE, by introducing reservoirs, new irrigation techniques, new crops, and improved breeds of livestock through insemination. It will take time, however, for these new techniques to diffuse amongst the many more farming families that live in chronic poverty.

About this blog

It’s been a month now since Marie-Eve Lacasse and Tim Steed began their volunteer posting in Peru as part of Export Development Canada's Global Community Investment Initiative with CARE Canada. Their first report indicates that, by all accounts, they’re getting the job done along with their new colleagues in CARE Peru.

Located primarily in the Huaraz province of Peru, their responsibilities involve coaching six micro-businesses which are variously small business owners, farmers and agricultural cooperatives. The entreprises produce agricultural crops or raise animals. The businesses, farms or co-ops grow corn and corn seeds, strawberries, raise small livestock, guinea pigs and produce dairy products.

The EDC volunteers work closely with a team of agronomists and an economist helping the entrepreneurs with skills such as business management, understanding financial statements, managing accounts receivables and payables, meeting regulatory requirements and assessing the feasibility of entrepreneurial opportunities.

Their experience is not without its challenges, including poor telecommunications and transportation infrastructure; the roads in mountainous Peru often hamper their ability to visit the businesses with which they work.

For example, one of the businesses is about 80 km away ‘as the crow flies’. However, by road, it is three mountain passes away resulting in a 220 km journey often with breakdowns and detours that can add hours to the journey.

Regardless, Tim and Marie-Eve are incredibly busy and taking it all in stride. Read all about their experiences here.

EDC: Experiencing development with CARE

As part of an innovative new partnership, two employees from Export Development Canada are doing a volunteer placement with a CARE Canada project helping small agribusinesses in poor communities in Peru. The volunteers are sharing their expertise with CARE’s beneficiaries.

Read about their experiences as they help CARE fight poverty and defend dignity.