7/27/15 – This guest post is written by three students in the Global, Social and Sustainable Enterprise MBA program at Colorado State University, who are co-founders of Chaka Fibers. Chaka is working this summer in Peru, getting to know the entire alpaca fiber supply chain.

Claudia Molina and Emily Fifield, two of the three co-founders of Chaka Fibers, with the alpaca ranchers in the Peruvian highlands.

Far away from the warmth of the Colorado summer, we have been busy working in remote Peruvian alpaca ranching communities at altitudes of 14,000 feet.  We are here to test the feasibility of a business model that connects alpaca ranchers to international markets in order to help alleviate rural poverty in the Andes.  NGOs have a strong presence in Peru and play an important role in working towards this same aim, but we see business-based solutions as key to moving towards more sustainable, long-term progress. This belief has only been reinforced during our time in Peru so far.

The difficulties facing alpaca ranchers, or alpaqueros as they are called here, are complex and multi-faceted and require solutions that address this complexity. DESCO, the Peruvian NGO that has been assisting us in our fieldwork, has been working for decades to do just that in remote Andean communities.  Their projects include alpaca vaccination campaigns, training ranchers in improved breeding practices, and working on strategies to mitigate the effects of climate change on alpaca production.

An alpaquero – alpaca rancher – with his flock in the Peruvian Andes.

This organization does great work to improve the lives of the alpaqueros, but it didn’t take long for us to see that gaps exist in their work that could be best filled by business-based solutions. Over the past week, we’ve been interviewing alpaqueros to learn more about their production systems and the challenges they face as they work to support their families.  All of the alpaqueros we’ve interviewed are participating in DESCO’s alpaca breeding program, which trains them on methods to improve the health of the animals and increase the quality of their fiber in order to capture higher prices in the market. We asked our interviewees if they have seen improvements in quality over the past few years, and all of them responded proudly that they have had more uniform coloring and finer fiber than what they produced before.

However, when we ask how they are now selling this improved fiber, we begin to see the limits of the good work being done by DESCO and other NGOs in these communities.

In the absence of other market channels, the alpaqueros continue to sell their fiber as they always have: through middlemen that pay them a low price based solely on the weight of the fiber, regardless of the quality. Thus, they are receiving no reward for the improvements they’ve made to their product and are in the same economic situation as before. DESCO’s work to improve alpaqueros’ practices is a critical first step, but without access to a market that compensates the alpaqueros for the resources and effort they have invested into improving their product, it does little in the long run to improve their livelihoods.

We believe a business-based solution that builds upon the work of NGOs like DESCO can provide these alpaqueros with options to make a better life for themselves and their families. We at Chaka Fibers intend to fill this gap by connecting them to markets that will pay them a fair price and reward them for their efforts to create a better product.