Organic grain processing in Peru The predecessor of the local partner Grupo Organico Nacional S.A. was established approximately thirty years ago and started to work with poor farmers to cultivate organic quinoa (and some other seeds and grains) to give them additional income. Since four years, the production and demand for quinoa is booming and several multinationals have been established in Peru to profit from this product which has its origin in Peru. These large players, who have their own cultivation, outcompete small growers which have difficulties to target the international market which asks 100% clean grains and consistency in color and size. To give small farmers access to the international market, the local partner wants to upgrade its facilities to produce improved quality grains, introduce improved quinoa varieties for farmers and to train farmer to produce better quality grains. The applicant Jarwo B.V., who supports factories with the design and installation of tailor made processing line solutions, sees high potential in the growing international market for seeds and grains as quinoa and will provide its expertise to upgrade the processing plant.The new processing plant will be established in Lima and will source grains from Puno, Arequipa and the Apurimac River Valley. A joint venture will be established in which the local partner will be integrated. With the PSI investment, the production volumes will double. More outgrowers will be involved and existing smallholders will be stimulated to expand their production.Corporate Social Responsibility (CSR)Organic, HACCP, Control Union Fair Choice, IFS, FairTrade and GMP certificates will be obtained. Recycled water will be used. Safety, health, insurance, emergency support will be taken care of for employees.Impact•	Employment and working conditionsAt least 96% above the minimum wage is paid. Hygiene standards are respected, a doctor is contracted, people get 30 days off, two extra salaries are paid per year, social insurance is covered, women with children get financial support for day care, disabled people are contracted, sports activities are organised and educational and health programmes are done with farmer communities.•	Innovation/Transfer of knowledgeAn innovative production processing plant will be established which complies with strict quality control that is required for the international market. In the longer run, the local partner cannot be competitive with its old technologies which are very inefficient and cannot sort on colour. The innovations include technology standards in sorting methods (for consistency in colour and size. Currently, colour is sorted by hand at outgrowers level) and cleaning methods (100% absence of stones and quarts and 99.997% cleanness of straws) with use of lasers. Currently, other players in the local market use old technologies which are not that consistent and not automised. Another difference with local processors is that they work with conventional seeds and grains, whereas the PSI project works with organic products.New quinoa varieties will be introduced for small farmers to generate more yields. For the introduction of these varieties, training will be given to make sure that farmers will yield seeds according to international standards in terms of size and colour. Competitors do not have outgrower programmes. They buy on the local trade market and have their own large cultivation areas.Small consumer packages are used, whereas normally the grains and seeds are sold in bulk.•	Chain effectsSeeds are bought from family farmers (approximately 2,600 of which 600 additionally created by the PSI project). The farmers live in communities in Puno, Arequipa and the valley of the Apurímac River (valley where the Shining Path is active and in which very little companies have interest). Farmers are provided with free (new variety with higher yield) seeds (without the obligation to sell to the joint venture), they are trained, have access to harvest processing technologies and are paid market prices. Through the Fair Choice label, the farmer families are supported with education and health. The children of the families go to school until 3 o'clock. Therefore, no child labour takes place. Sometimes they help their parents, but this is within ILO norms. In farmer trainings child labour is discussed.By means of this project, the outgrowers' programme will be more than doubled (in terms of planted hectares and by introducing a new group of approximately 600 farmers).Local services as machinery maintenance, transport of grains to factory, (international) logistics, communication, water, electricity, fuel and office utilities are bought locally.A low percentages of 10% will be sold on the local market. The joint venture will aim for sales in supermarkets under the brand name Inca.•	Impact on the sectorThe project partners will work with the University of the Altiplano in Puno and with the Agrarian University of Lima to exchange information. Also an agreement is signed with the National Agricultural Research Institute to develop new grain varieties for small growers (on the expense of the joint venture).The joint venture strives to be a good example for other producers and companies to expand the Peruvian market for organic grains. It is its intention to boost this sector in Peru.•	EnvironmentThis is a project for organic production of seeds. Moreover, it promotes efficiency of use of raw materials, as water. It also implements proper waste management.•	Position of womenFifteen women will be hired of whom four at medium-/high-level. Women with children will get financial support for child care.•	Impact on food safety10% of the seeds is sold on the local market.•	Impact on waterWater for cleaning is recycled. The establishment of a new grain processing plant to annually process 3,000 Mtons organic grains and seeds as quinoa, amaranth, chia and sesame seed of higher quality in terms of consistency.