The Quinoa Boom and the Welfare of Smallholder Producers in the Andes

The recent attention for quinoa as a highly nutritious “superfood” and the consequent increase in international quinoa trade is changing the production and consumption of quinoa among smallholder farmers in Andean regions, where the crop originates from. Quinoa is converting from a common staple and subsistence crop into a high-value cash crop. The rapid rise in international quinoa prices creates a concern about quinoa consumption – and consequent implications for nutrition – among Andean farm-households. In this paper, we estimate the own price elasticity of consumption of quinoa for quinoa-producing farm-households in the Peruvian Andes. We rely on the seminal Barnum-Squire farm-household model to explain the effects of food price changes that simultaneously affect farm-households’ consumption and production decisions. We apply the theoretical model to original farm-household survey data from Junín, a traditional quinoa producing region in Peru. The estimates show that a 1% increase in the quinoa price results in a 0.429% increase in quinoa production and a 0.238% increase in its consumption. Our finding of a positive own price elasticity of consumption of quinoa suggests that the global quinoa boom did not adversely affect the nutritional intake of smallholder quinoa producers.