Magazine article International Trade Forum

Opening the Door to Exports for Peruvian Smallholders

Magazine article International Trade Forum

Opening the Door to Exports for Peruvian Smallholders

Article excerpt

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On a hillside in the Lamas district, in the upper reaches of Peru's Amazon basin, you will find Jose Ramos, a smallholder from the Pukashpa community. Like many of the other farming communities around San Martin, a northern region of Peru, the Pukashpa community lack access to electricity, and mainly live from subsistence agriculture, growing yucca, plantains and fruits.

For centuries, smallholders such as Jose have been cultivating sacha inchi, a plant native to the Peruvian Amazon. Sacha inchi thrives in the local climate and offers a valuable source of cash to these communities. In recent years, the oil from the sacha inchi plant has gained international recognition for its health properties, including high levels of vitamin E and omega-3 fatty acids. It is used to promote weight loss, fight depression and prevent heart disease.

Interest has risen sharply--particularly in the United States of America--in exploring the world's biodiversity for ingredients that provide high nutritional value and functional health benefits. And in Peru, these natural products are fast becoming a label of the country's uniqueness. According to the Peruvian Ministry of Environment, the total value of exports related to biodiversity based goods in 2011 was US$ 350 million. And around 40% of these goods are destined for the United States market. In Peru, a country where 30% of the population lives in poverty, mostly in rural areas dependent on agriculture, this increase could have significant impact on economic growth.

Despite increased international demand, Peruvian enterprises still find it difficult to break into foreign markets, especially Canada and the United States. Often because of a lack of access to finance and the limited capacity and skills of small and medium-sized enterprises (SMEs). In the United States, for example, one barrier has been the requirement to obtain the approval of the Food and Drug Administration (FDA) as 'Generally Recognised as Safe' (GRAS) for food imports. Any added chemical or substance is considered GRAS only when it can be demonstrated to be safe for consumption by a group of qualified scientific experts.

SMEs in Peru also lacked knowledge on how to make the most out of sacha inchi in the market, including how to position their products alongside other organic and natural products, and how to improve production efficiency. …

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