Farmers and producers of raw commodities often receive little of their products’ final value. Small-scale producers can add value to their products in many ways: adopting new inputs and technologies to increase quality, accessing premium markets, expanding the range of products offered, and processing are just a few of the methods that TechnoServe has trained producers to employ.
In fact, our first project helped to establish a mill that allowed farmers to add value to their long grain rice by generating animal feed, a finished product that kept more of the rice’s value within the community. In the following 50 years, TechnoServe has helped many communities to add value to their products, implementing new processes that farmers could sustain for a more prosperous future long after the project’s end.
In the high altitudes of the Andes – where the terrain becomes too extreme for horticulture – the only feasible agricultural activity is alpaca rearing. Alpacas are adapted for the highland landscape – from their famously soft and warm wooly coats, to their perfectly padded feet for the wet, spongy ground – and Andean families have depended on alpaca meat and fiber for survival for thousands of years. Today, these communities also depend on the sale of those goods for the income they need to feed, house, and educate their children.
When of high quality, alpaca fiber is much more valuable than other wools, providing a unique economic opportunity for often resource-bare highland communities. However, traditional practices and ineffective markets often keep alpaca-rearing families trapped in cycles of subsistence rather than prosperity.
In 1997, TechnoServe partnered with Wiñay, a local organization, to work with nearly 2,000 alpaca herders in Puno, Peru, to add value to their wool. At the time, Puno’s alpaca herds were not providing high-quality wool, primarily because of poor grazing habits, parasites, and infections. Adding to the poor quality were rudimentary shearing practices. Not only did Puno herders not shear frequently enough, but lack of resources and proper tools often limited them to using broken pieces of glass for the job.
As a first step, TechnoServe trained herders in improved animal nutrition and health care practices, and also encouraged them to shear their herds every year rather than the traditional two-year period. More frequent shearing helped to increase herders’ sales volume and boost their incomes, enabling them to invest in the better nutrition and parasite control practices they had learned. These measures, in turn, helped their alpacas to produce a higher quality fiber and accelerate the cycle of increased income.
Another important value-adding activity that TechnoServe taught herders was to sort the fiber before selling it. Different parts of the fleece yield different fiber quality. By sorting the fiber into commercially recognized quality grades, herders could negotiate higher prices and get premium prices for the best fibers.
TechnoServe assisted the herders to connect their premium product with premium markets by finding processing mills to buy the improved fiber, training producers properly to price their product, and helping them to negotiate marketing contracts.
After optimizing the value of their primary product, TechnoServe also encouraged herders to negotiate partial payment in yarn, allowing them to add further value to their wool by creating woven alpaca products that they could sell at retail prices in the local marketplace.
By the end of TechnoServe’s assistance over five years, farmers added more than $230,000 of value to their annual alpaca fiber production, helping participating herders to increase their annual alpaca incomes by 122 percent, from $85 to $180. By using best practices to capture maximum value from their alpaca herds, Andean alpaca communities are transforming their traditional livelihoods into prosperous futures.