Farmers in Piura, Peru’s northernmost region, dumped 20 tonnes of limes outside the factories of Limones Piuranos and Agromar Industrial on January 29, in protest at their treatment at the hands of buyers and the lack of government support for farmers.
Limones Piuranos and Agromar Industrial are part of an oligopoly of three companies in the Piura region that collude to set the prices at which they buy limes from producers — just last month alone, the companies lowered the price of limes four times. Farmers used to get paid 800 soles (A$342.69) per tonne, but now only get paid 300 soles (A$158.50).
José Marchena, president of the Lime Technical Board, said that prices do not even cover the cost of the harvest: “The prices they pay are unfair.”
The companies wield considerable purchasing power to buy limes in large quantities and process them into products — oil, peel and juice — that can be stored for considerably longer than fresh limes. This way, the companies can manipulate supply, manufacture shortages and stockpile products in case of actual shortages, which guarantees their profits.
Farmers, who do not have the economic means to distribute or elaborate their produce to compete with the large companies and agro-exporters, face little choice but to sell their limes at unfair prices.
Water crisis
Moreover, farmers in Piura are still reeling from the region’s worst water crisis last year, which caused huge crop losses due to insufficient water for irrigation. Some farmers reported losing more than 70% of their crops, such as rice, beans, corn and banana.
The crop failures left many farmers in crippling debt from the loans taken out to invest in agricultural production.
Many parts of Piura city did not have running water for nearly two months last year, and are still experiencing chronic shortages, which puts at least 630,000 people at risk.
Large agribusiness and industrial companies played a significant role in causing and exacerbating the crisis through their control of the region’s water.
Although 93% (20,382 licences) of all water licences granted are for agricultural use and just 0.3% (65) for industrial use, the total authorised water consumption for both uses is the same. In other words, the Peruvian government — through the National Water Authority — has granted just a few companies permission for highly water-intensive activities.
Miski Mayo Mining Company, a subsidiary of the US-based The Mosaic Company, has a licence to use about 45.4 billion litres per year for extracting and processing phosphate from its open-cut mine in the Sechura Desert. Apart from the repercussions of obscene water use, pollution from the mine and transportation of phosphate has contaminated nearby communities and impacted the local fishing and agricultural industry.
Agribusiness
In the agricultural sector, a handful of agribusiness companies have almost free reign over much of the region’s water.
Piura city’s annual water demand is about 69.4 billion litres per year. Yet, AgroAurora, a subsidiary of Grupo Gloria, holds 61 licences to use 168 billion litres per year, predominantly to produce and process sugarcane. AgroAurora is a subsidiary of Grupo Gloria, a Peruvian conglomerate that has monopolised the market for lactose products, such as milk and cheese.
At the height of Piura’s water crisis, farmers resorted to destroying AgroAurora’s dyke on the Chira River — which diverts huge quantities of water to its own plantations — in November, due to it causing water shortages downstream.
The same month, about 500 farmers blockaded the Pan-American Highway in the Piura region to protest the government’s mismanagement of water and failure to respond to the crisis.
For years, local and federal governments have known about the worsening drought and water scarcity in the region, but refuse to take action to ameliorate the risk or support local communities.
The National Meteorology and Hydrology Service’s Piura department warned the government months before the water crisis, raising the alarm over water deficits in the Poechos and San Lorenzo reservoirs.
The Poechos reservoir, along the Chira River, is a crucial water source for farmers — 31% of crops in the Piura region use water from the reservoir.
Despite this, the government entity responsible for managing the Poechos failed to upgrade necessary infrastructure and clear sediment build-up that has greatly reduced the storage capacity of the reservoir.
More concerningly, the government has granted mining concessions covering 60% of the reservoir to companies seeking to exploit the mineral-rich sediment.
Disregard
The Peruvian government has continually shown a disregard for the farmers whose livelihoods are at the mercy of predatory companies and fluctuating prices for agricultural products.
In the Lambayeque region, several factors — such as low export prices and climatic changes affecting fruiting patterns — resulted in an oversupply of mangoes from the most recent harvest.
Without the means to transport large quantities of produce, farmers were left with no choice but to bury tonnes of mangoes to avoid attracting fruit flies and other pests. Farmers in the Lambayeque region lost an estimated 4500 tonnes of mangoes, with some losing up to 80% of their harvest.
Instead of supporting farmers to find markets for the mangoes, or at the very least transport them to communities to be consumed, agricultural minister Ángel Manero’s solution was to simply tell growers to not plant any more mango trees for the next three years.
Farmers condemned Manero’s comments, and said that the government should be acting against the predatory corporations and helping farmers distribute their products.
This is just one example of the absurdity of food production and supply chains under capitalism, where an abundance of food is produced but wasted, while billions live in situations of extreme food insecurity.
In Peru, the highly concentrated food industry and lack of infrastructure for farmers to distribute or process their own produce means they are left with no choice but to sell their harvest at the unfair prices set by food companies and exporters.
Peru has one of the most concentrated markets in Latin America — a handful of corporations control the food, beverage, pharmaceutical and banking industries. Just seven companies control 55% of the food market, with extraordinary power to fix prices, manipulate supply and further consolidate control over certain industries.
Grupo Gloria paid small-scale dairy farmers an average of 1.35 soles (A$0.58) per litre of fresh milk in 2023, but production costs for the farmers were about 1.76 soles (A$0.75). Due to Gloria’s monopoly of the market — it buys 72% of the country’s fresh milk — many farmers have no choice but to sell their milk at unsustainable prices, attempt to re-negotiate a small price increase or simply leave the industry.
Gloria processes the milk, adulterating it with ingredients to form a product of much lower quality and nutritional value than regular milk, and sells it for a significant profit margin. For example, Gloria sold a 395g can of reconstituted milk — made by adding water to powdered milk — for 4.20 soles (A$1.79) in 2023, which is more than triple what it paid farmers for a litre of milk.
Additionally, Grupo Gloria was recently fined in Colombia for using banned lactose serum in its milk, and is currently fighting in Peru’s constitutional court against a law that mandates higher quality whole milk production.