How a food-sourcing startup is trying to give farmers a fairer deal | CNN

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How a food-sourcing startup is trying to give farmers a fairer deal | CNN
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This ethical food sourcing company is getting a better deal for Peruvian farmers by cutting out middlemen in supply chains.

Today, Sarela Herrada lives in Maryland, but she grew up near Lima, Peru. There, her family owned and raised organic chickens. Their neighbors were smallhold farmers, who grew crops for the community and for export. But as Herrada grew up, she realized that getting farmers’ produce into stores thousands of miles away was a complex process, and one that didn’t always benefit the farmers. “The pricing was really dictated by the middleman,” explains Herrada.

Li works with 3,000 producers across South America and Europe, including in the Andes mountains in southern Peru. There, in an area near the city of Ayacucho, Sarela says 58 people work the fields, rotating between crops such as corn, quinoa and beans.

Li does this through what’s known as a vertical supply chain, taking care of every step, from processing and packaging the food, to handling the paperwork. That level of control brings extra challenges with cashflow. “Usually, from the time that we pay our farmers upfront at country of origin until the product is sold and we get paid, we’re talking about 120 days,” said Herrada. “You’re committed to the farmer, you’re committed to that supply.

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