The newly rediscovered, nutritious “miracle grain” quinoa, eaten increasingly by health-conscious consumers in the developed countries, is making the rich richer and the poor poorer. At least if we are to believe the recent article in The Guardian newspaper of the U.K. (click here to read the article). The unusually high protein content (14-18%) and other nutrients of quinoa attract health-conscious vegetarians and others who want to avoid animal proteins. As a consequence, the demand—and the crop price—of quinoa has tripled since 2006. The Guardian, consistent with its left-wing ideology, laments this as a bad thing. Why? The primary producers of quinoa are poor South-American countries: Peru, Bolivia and Ecuador. (Quinoa is successfully grown also in other cool-climate regions, such as the Canadian Prairies). The Guardian article claims that increasing demand and price of quinoa in the developed countries is driving poverty in the poor regions of the world: “…[Quinoa trade] is yet another troubling example of a damaging north-south exchange, with well-intentioned health and ethics-led consumers here unwittingly driving poverty there.”
How do increasing demand and crop prices for quinoa drive poverty in South America? The Guardian claims that “the fat-cat exporters and foreign super markets cream off profits” while the poor in Bolivia, Ecuador and Peru cannot afford to eat quinoa (the staple of their diet for milennia) any more. However, this Marxist argument is a myth. The increased demand for and prices of quinoa—or anything else—do not make the rich richer and the poor poorer. Quite the contrary: the increasing demand for and prices of things mean that more value is being created overall, which benefits everyone involved, including the laborers.
It is true that the quinoa farmers and exporters (“the rich”) benefit from the increased crop prices, but they do not hoard the extra money they earn in a vault while keeping the laborers’ wages at subsistence level. It is in the interest of the producers (farmers, producers, distributors, exporters, supermarkets) to invest the excess returns, or a large portion, into further production. This means increased job opportunities for workers. And as the demand for labor grows, wages increase, allowing workers to pay higher prices for quinoa and other consumer goods. Even if the producers choose to spend a portion of their excess returns from higher quinoa prices on consumption instead of investing them, workers will benefit because more demand (consumption) requires more production, and more wealth is created overall.
Another Marxist myth is that producers will try to jack up their prices and simultaneously “exploit” their workers by paying a pittance for their labor. With this method, only the very wealthy could afford to buy anything. However, workers are also consumers, and they constitute a large market. It is in the producers’ interest to achieve the largest possible share in the market segment they choose—and most of them will not be able to choose “the wealthy only”-segment. This means they must attempt to lower their costs and prices in order to reach a large market share and maximize their profits.
Finally, the price increase of quinoa will slow down as the supply will increase to meet the demand, making quinoa affordable again for the South American laborers when their wages and job opportunities have adjusted to the higher price of quinoa.
Capitalist “exploitation” and “the rich getting richer and the poor poorer” are myths, so if you enjoy eating quinoa, please continue to do so without guilt. It is not exploiting the poor in South America but making them better off (which of course is not the reason to eat quinoa—just a beneficial side effect).