STRATEGIES TO DEVELOP MARKET ACCESS THAT CONTRIBUTE TO RESILIENCE IN THE BOLIVIAN STRATEGIES TO DEVELOP MARKET ACCESS THAT CONTRIBUTE TO RESILIENCE IN THE BOLIVIAN HIGHLANDSHIGHLANDS

CASE STUDY: PMCA AND BAP FOR CHUÑO AND TUNTACASE STUDY: PMCA AND BAP FOR CHUÑO AND TUNTAFigueroa, M.Figueroa, M.11 and C. Valdivia and C. Valdivia11

11Department of Agricultural Economics, College of Agriculture, Food and Natural Resources, University of Missouri, Columbia, MO 65211 USADepartment of Agricultural Economics, College of Agriculture, Food and Natural Resources, University of Missouri, Columbia, MO 65211 USA

Flow chart 1. BAP’s structure, participants and outcomes

AbstractAbstract The study evaluates how the Bolivian Andean Platform (BAP), under the philosophy of the Participatory Market Chain Approach (PMCA) reduces transaction costs for native products elaborated by small-scale farmers in three communities in Umala-Bolivia. At a first stage, the study identifies how local native potato varieties’ programs (NPVP) developed by the CIP-Altagro project empower farmers to be able to participate in the BAP. It also identifies the barriers foreseen by those who do not participate in NPVP. At a second stage, it analyzes which transaction costs are reduced for farmers who participate in the BAP. It also identifies incentives within the platform that motivate market chain actors’ participation. To accomplish the objectives, the authors use qualitative methods to develop a multiple embedded case study, and an empirical study under the Pattern-matching logic (Yin, 1994). For the case study, personal interviews are conducted with all stakeholders of the BAP. For the empirical study, the qualitative analysis consist on the selection of families that produce chuño and tunta for commercial purposes from the SANREM and Altagro baseline surveys. From this point forward, the subsequent qualitative analyses consist on the selection of families who participate in NPVP from those who do not, for further separated interviews. The results indicate, on the one hand, that NPVP benefit producers’ participation in the BAP by promoting collective action, sustainable livelihoods and capacity of agency. The barriers to participate in NPVP are mainly due to emigration and consequent less labor available at the household. On the other hand, the BAP reduces transaction costs in the market chain, and promotes capacity of agency and market involvement for small-scale producers. However, the BAP lacks incentives to motivate farmer’s participation, and offers a price that does not pay off producers’ efforts for higher quality of chuño and tunta.

KeywordsPMCA, BAP, native potatoes, Umala, Bolivia, resilience, chuño, tunta.

ObjectivesObjectives1. To identify how local native potato varieties’

programs (NPVP) developed by CIP-Altagro empower farmers to be able to participate in the BAP.

2. To identify the barriers foreseen by those who do not participate in the NPVP.

3. To identify and analyze which transaction costs are reduced for farmers who participate in the BAP.

4. To identify incentives within the platform that motivate market chain actors’ participation.

ConclusionsConclusions

MethodsMethods

Research FrameworkResearch Framework

The authors applied qualitative methods to develop a multiple embedded case study, and an empirical study under the Pattern-matching logic (Yin, 1994). For the case study, individual interviews were conducted to all current stakeholders of the BAP. The question addressed to each interviewee was open-ended, and intended to know how the institution/program benefited from its participation in the BAP, in terms of transaction costs, access to information, market access, and development of networks for native products. For the empirical study, the qualitative analysis consisted, on the one hand, of identification and selection of families that produce chuño and tunta for commercial purposes in the communities of Umala: Kellhuiri, Vinto Coopani, and Sirujiri. The SANREM’s baseline survey consisted of 54 observations from Kellhuiri and Vinto Coopani, whereas Altagro’s baseline survey consisted of six observations from Sirujiri. On the other hand, once the families were identified, further selection of families who participated in NPVP, and those who did not, was conducted to separate two groups of interviewees: participants and non-participants. In total, thirty eight families from the three communities were selected for personal interviews, identified as marketers of native potatoes. From the 38 families, 23 were participants of NPVP, and 15 were non-participants. NPVP participants identified were: nine in Kellhuiri, eight in Vinto Coopani, and six in Sirujiri (see table 1). Fewer non-participants families were reached because of the lack of disposition to be interviewed.The purpose if dividing the interviewees into participants and non participants, the authors identified household characteristics (gender, income, current economic activities, consumption, land owned and crops diversification), assets (livestock, sheep, native and commercial crops) and capitals (human –i.e. age and number of members in the household-, social –i.e. organizations they belong to-, and natural -i.e. native and commercial potato varieties for chuño and tunta).At the end of this process, there were two groups of farmers: NPVP participants and non-NPVP participants, and their characteristics. The questions addressed during the interviews to producers were open-ended, as follows:1.Why do you participate in the NPVP (identify incentives, benefits, availability of time, capitals)? 2.Why did you decide not to participate in the native potato varieties’ programs (enforcements, shrinking behavior, lack of incentives)? 3.What can you list as benefits, costs, barriers and incentives for your participation in NPVP (capitals, transaction costs, information, networking)?

The research consists of two parts. First, a case study on the BAP, an institution created under the PMCA’s philosophy. Second, an empirical study that consists of qualitative analyses on the SANREM and Altagro baseline surveys on observations from three communities in Umala-Bolivia: Sirujiri, Kellhuiri, and Vinto Coopani.

Case study: The Bolivian Andean Platform (BAP)As a platform for negotiations, the BAP intends to reduce transaction costs for all participants, with especial emphasis on small-scale farmers. As a result of reduced transaction costs, the BAP increases bargaining and negotiation power for farmers to provide them with higher access to markets. These outcomes are achieved by creating links between all actors of the market chain: producers, intermediaries, processors, sellers, being the ultimate goal to reduce the transaction costs of their negotiations. Ultimately, Innovandes is the agent of change created by Papa Andina to make the BAP’s outcomes possible at all levels of the market chain. As shown on flowchart 1, participants of the BAP are entities of promotion and research, transportation, financial support, producers, processors and sellers, and the government, as it is the institution that licenses the existence of the BAP. Proinpa Foundation, Prosuko, Kurmi, Fomem, DEZE Ltda., and Ministerio de Agricultura participate in the platform as strategic support for the negotiations that are carried on.Producers’ problematicOn the one hand, producers lack entrepreneurial and business skills. Their perspective of the market develops within the community, henceforth their marketing and commercialization decisions are made at the community level. When extrapolating their experiences at the market level, producers lack organization and collective action. Producers are not formally organized in associations or cooperatives that would allow them to offer permanent supply. Their organization consists of informal groups that commit themselves to offer produce without explicitly knowing their supply limitations. On the other hand, intermediaries require from communities the existence of collection centers to reduce the transaction costs related to collection per household. Due to the lack of producers’ organization, collection centers are not formally recognized by other community members. Furthermore, products like chuño and tunta are mostly commercialized when producers are in need of money.

CommunityObservations* from SANREM baseline

survey

Observations from ALTAGRO baseline

survey

NPVP Participants

NPVP non participants

Sirujiri N/A 6 6 0

Kellhuiri 25 N/A 9 6

Vinto Coopani 29 N/A 8 9

Observations available for selection

54 6

Total observations/interviews23 15

38

* = number of families

Table 1. Qualitative selection of observations for interviews

NPVP benefit small-scale producers in three ways. First, it promotes farmers’ collective action because communalorganization is needed to carry on the NPVP long-term activities. Such activities require labor and knowledge for the identification and selection of native varieties’ seeds, planting, fertilization, and harvesting of the communal plots. NPVP has established a minimum requirement for communities to run the programs: at least 12 people have to commit themselves to the successful development of activities. If participants are less than 12 people, they have to show themselves very committed to the program for the NPVP to run. The latter is the case of Sirujiri, where only six are the committed participants. They have brought their spouses to participate in order to increase the number to 11. Second, it promotes sustainable livelihoods because NPVP disseminate ancient knowledge regarding native varieties among all participants. Also, the varieties that are planted are those that are most adapted to the conditions of the area, and can resist climate variability in events such as flood, drought, hail, and frost. Third, because farmers plant native varieties resistant to climate variability, yields are less likely to be lost in the face of events. As a result, farmers are less vulnerable to climate risks. Likewise, because farmers participate collectively in communal activities, it is more likely that they will produce a larger yield of native potatoes for niche markets. In consequence, resilience among those farmers who participate is enhanced. Farmers who participate in NPVP see an increase in their possibilities of access to the BAP or other niche markets that require organization and differentiated products. On the one hand, farmers who participate in NPVP share common characteristics; they believe that: 1) participating in NPVP will increase their technical knowledge about agricultural practices, harvesting and post-harvesting care, 2) native potatoes are a valuable alternative to face climate events because they are more resistant to climate variability, 3) NPVP will improve their likelihood of reaching higher income markets that will eventually enhance their livelihoods, 4) participating in NPVP is an investment of time for the benefit of their families, and also 5) 70% of participants are less than 70 years old, and have a spouse and/or children that help them with household and additional activities.On the other hand, farmers who do not participate in NPVP say that: 1) they do not have time to go to the meetings and participate in the activities because they are old and cannot handle additional activities besides those at the household, 2) there is not enough labor at the household to distribute the work, 3) they do not believe the NPVP will enhance their livelihoods because the results are not immediate, and also 4) 60% of non-participants are older than 50 years old. In general, the most common barrier seen by non-participants to participate in NPVP is the less labor available at the household to distribute the work, due mostly to the emigration of household members (usually husband, older sons and daughters). The BAP’s main strength rests on its promotion of collaborative interaction between market chain actors and formal organizations of support. It reduces TC’s for small farmers, in terms of market chain networking, access to market information, marketability, and commercialization of their native products. The interaction in the BAP promotes collaboration, and enhances agency and access to information and markets for Andean producers. Nonetheless, the BAP presents weaknesses mostly related to motivation for participants. First, there is no formal commitment from participants, but only their will to participate in the meetings and activities. Second, the organizational strategies of the platform about negotiation processes, entry and exit rules for participants are not formally established. Third, the platform does not count with a full financial service entity as a participant, which limits the capacity of the platform to provide financial support to ensure permanent supply to the platform, and good quality of produce. Deze Ltda., one of BAP’s stakeholders, offers partial financial assistance, only where Innovandes also invests. Fourth, the BAP offers a price that does not pay off producer’s efforts for higher quality (hygiene and size) of chuño and tunta, thus, there is no economic motivation for farmers’ additional quality efforts. The BAP price is established once a year as an average of last year’s monthly prices in the market. Sometimes, the market price is higher than the BAP price due to market demand and supply, however, the price at the BAP does not change. Fifth, participation is limited to those communities where Innovandes is providing technical assistance, which is limited to their budget. To synthesize, the two farmers’ organizations that participate in the BAP are allowed to participate because both have active leaders who organize the communities to participate in BAP’s activities and meetings. One of them, UNAPA, does not receive technical support from Innovandes, whereas, APEPA does. The cause of the latter is the focus of the NGO that supports each farmers’ organization. In the absence of rules, the incentives to participate in the BAP are the access to market information for UNAPA, and the access to markets for APEPA. In the case of the former, it reduces marketing and access to information’s TC’s. In the case of the latter, it reduces TC’s regarding finding a buyer for the native potatoes. At the time when this research was conducted, according to the BAP representatives, both farmers’ organizations lacked on-time supply, and quality of produce in terms of cleanliness and size. This initiative has been able to benefit farmers with greater access to resources and market involvement. In order for the most vulnerable to benefit, there is need to focus on actions and options that reduce TC’s in production, marketability, and commercialization of their native products.

Processors and sellers’ problematicProcessors and sellers make decisions based mostly on personal skills, rather than on systematic information of the market. Furthermore, both are economically limited to provide immediate payments to producers and intermediaries, and to add market value to new Andean products. Moreover, given strict market’s requirements, having to deal with informal suppliers and bad quality of produce limits their motivation to negotiate with non-organized producers and/or intermediaries.

Empirical studyThe qualitative analysis consisted of identification and selection of families that produce potato, chuño, and tunta for commercial purposes in the communities of Kellhuiri, Sirujiri and Vinto Coopani, and how many of those participate in NPVP. These analyses were done on previously developed baseline surveys from SANREM and CIP-Altagro projects in the same area. Thirty eight families from the three communities were selected for personal interviews, identified as marketers of native potatoes. The origin’s distribution of the families is shown in table 1. From the 38 families, 23 were participants of NPVP, and 15 were non-participants. Fewer non-participants families were reached because of the lack of disposition to be interviewed.