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Perishable Pundit
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Produce Business

Deli Business

American Food & Ag Exporter

Cheese Connoisseur



Tesco’s Price-Hike Strategy

In late June we ran a piece, Tesco Launches Price War In The U.K., but now there are reports coming out of the U.K. that Tesco has a new strategy:

GOING UP: THE NEW TESCO PRICE STRATEGY

Retail giant signals an end to the cost-cutting war as concern grows over the quality of cheap food.

It was the £2 chicken that finally ended the war. When ASDA slashed the price of its birds by almost a quarter last month and began selling poultry for less than a tin of cat food, the supermarket dared its most bitter rival to match the price. But instead of accepting the challenge, Tesco has surprised the industry by claiming the moral high ground. In what has been hailed as an end to loss-leading cheap food, Tesco is going to put up its prices.

‘For decades, food has been a falling proportion of total consumer spending and as a business we have contributed to this by cutting prices to help people spend less,’ Sir Terry Leahy, Tesco’s chief executive, said in previously unreported comments at a company meeting. ‘That won’t change, but the long-term trend of declining spend on food has stopped.’

When ASDA slashed the price of its 1.55kg chickens by 22 per cent, the market was both appalled and attracted, with customers clearing shelves of the birds while farmers warned that they could not produce safe, healthy chickens at such low prices.

Tesco will now sell the same size bird for £3.39, a rise of 4 per cent. It is, hopes Leahy, a price increase that will draw the shoppers through the doors by reassuring them of the quality of produce and humane farming methods, combined with a fair deal for producers.

‘I believe we’re seeing a fundamental shift in the priority that consumers place on food,’ said Leahy. ‘The link between diet and health, interest in cooking, provenance — including local and fair trade — is also not only about affluent customers. The growth in the proportion of our customers buying organics is fastest among less affluent customers. This could be a big long-term positive for the industry.’

His comments represent a volte-face in the long-running and increasingly vicious price war between Britain’s two largest supermarkets. In June, Tesco and ASDA announced they were going to step up the battle to protect and preserve their market share. They were, they said, going to go head-to-head on price.

ASDA, recently named Britain’s cheapest supermarket for the 10th year running by the trade magazine The Grocer, immediately instituted price cuts worth £250 million on 10,000 items. It launched a complete school uniform for less than £10 and sparked a Harry Potter price war by selling JK Rowling’s final adventure for £5 — almost £13 less than the publisher Bloomsbury’s recommended retail price.

Tesco hit back, claiming that an independent price-checker proved it was winning on low prices. A week after ASDA’s price cuts, it followed suit, with £270 million worth of reductions on more than 3,000 products.

Tesco’s decision to pull back from this skirmish and concentrate on making a virtue of higher prices may also be the result of an announcement earlier this month by the Competition Commission that it is investigating Tesco and ASDA for threatening suppliers into granting discounts that the supermarkets could use to undercut rivals. Preliminary findings are expected this month.

But the rise in prices is, say experts, not entirely the result of altruism in Tesco’s boardroom. Soaring wheat prices will soon force all supermarkets to raise prices to cover the rise of nearly 100 per cent in livestock feed.

‘The cost of wheat has hit an all-time high owing to poor harvests and rising global demand,’ said Richard Crane of the accountants Deloitte. ‘The price of wheat is likely to prompt hikes in the cost of bread and meat. These price hikes are a global issue and cannot be absorbed by the food producers.’ Foot and mouth has also added to pressure on British meat producers, he added.

The farming industry, however, has been taken by surprise by Tesco’s announcement. It praises the supermarket for alleviating some of the pressure on farmers. ‘This price hike is the first sign that we’re finally coming to an end of cheap food. Tesco has been the first to move and that needs singing from the rooftop,’ said Charles Bourns, chairman of the National Farmers’ Union poultry board. ‘It has resisted the move towards the £2 chicken and is now going the other way. Other retailers will have to follow suit. There are people out there who will always buy £2 chickens, but we can’t go on selling chicken for less than the cost of cat and dog food,’ he added.

Tesco is refusing to say whether it will increase prices on other produce, but industry experts say that it is significant it has chosen poultry as its first shot across the bows.

Between them, the big four supermarkets sell more than 235 chicken products, from chicken chargrills and thighs to chicken pies and curries, chicken soups and breaded birds. Until now, the wide-spread popularity of the meat has encouraged supermarkets to use it as a loss leader — selling it at heavily discounted prices to lure customers into their stores.

Alex Waugh, director of the National Association of British and Irish Millers, says that it remains to be seen whether Tesco’s gamble will pay off, but he said he shares Leahy’s belief that the public is beginning to mistrust ever-decreasing food prices.

‘This is a sign that supermarkets are finally beginning to understand that persistent below-cost selling is not a sustainable practice,’ he said. ‘It is not even what customers want any more: the market for the cheapest lines has declined for bread by about half in recent years. There is a growing market for quality and fairness where price is not predominant.’

Other supermarkets are already giving hints that they are considering following Tesco’s lead. ‘We believe that consumers do need to understand that true value is always going to be a balance between quality, price, and fair prices to farmers,’ said a spokeswoman for Waitrose.

ASDA, however, is standing firm: ‘At the moment we have no plans to react,’ said a spokeswoman. ‘We’ll try to keep prices as low as possible for as long as we can, working with our suppliers to ensure that customers get the best possible deal. While the rising cost of commodities does provide both suppliers and retailers with an ongoing challenge, we owe it to our customers to try to give them the best possible price for their shop.’

It is a fascinating subject. Although some of it is surely PR, Tesco also has its finger on an insight into consumer perceptions: Price is part of what influences consumers as to the value of things.

Although some people who value organic are thoughtful people who have studied the issues and have come to a personal conclusion, many people who intentionally buy organic are in search of the “best.” And what makes something the “best”? Many attributes, of course, but price is high among them. Whole Foods is both a natural/organic store and an upscale shopping experience. If organics were always cheaper than conventional, it would reduce the allure considerably.

It is interesting to note that although reference is made to “…a price increase that will draw the shoppers through the doors by reassuring them of the quality of produce and humane farming methods, combined with a fair deal for producers…” at no point does Sir Terry Leahy, Tesco’s Chief Executive, say that Tesco’s chicken or other specific foods are superior to ASDA’s in any of these specific aspects.

It will be a fascinating thing to watch whether simply raising prices, while asserting these values, will be sufficient to make the public believe that Tesco’s perishables are worth paying more for.

It is also interesting to note farmers applauding retailers increasing the price level on their products. As far as we can see, this is because the producers have allowed retailers to brainwash them that, somehow, retailers have to make money on everything they sell.

The truth is that the very definition of a “loss leader” is a product the retailer loses money on in order to woo customers into the store and sell them more profitable things.

Perishable products happen to be the ideal loss leaders because they are the products that consumers need most frequently.

In fact, people forget, but the great fear of supermarket executives when Wal-Mart launched its supercenter concept was that Wal-Mart would run the entire food business as a loss-leader in order to draw consumers, who would then buy highly profitable general merchandise.

There are really three separate points to come out of this:

  1. Farmers need to not get caught up in retail price points. Retailers price individual items differently depending on their pricing philosophy and merchandising emphasis. Retailers have to make a profit — overall — not on every item. Retailers also have an opportunity to make up losses on one item over another; few growers have that opportunity. If a retailer wants to sell your item below cost, that is the retailer’s merchandising and marketing decision. A farmer can cooperate because he will get higher volume, but no farmer should take it as an imperative to drop his price or lose money just because a retailer wants to focus its promotion on one item.
  2. ASDA and other low price leaders need to realize that in an era when sustainability and related green and social responsibility is all the rage, low prices are sometimes viewed with suspicion. Low price promotions thus should always be partnered with copious information going to the quality, safety and sustainability of the product. In this case, ASDA better make clear that these chickens aren’t “cheaper;” they are the same or better chickens that Tesco sells, sold less expensively.
  3. The real complaint Tesco could typically make against another operator that promotes low prices on individual items is that unless a customer only buys that item, the customer will likely overpay for some other item as the retailer tries to “average up” its margins. In this particular case, that is a more difficult case to make as ASDA — as the article mentions — was just named as the cheapest grocer for the 10th year running.

Our hunch is that Tesco is making a virtue out of a necessity. It is counting on its U.K. division to perform while it proceeds to invest heavily in the U.S., and it sounds better to position a price increase as part of a commitment to sustainability than it does to whine about the need for margins.

It is, however, a technique that all discounters should expect to encounter, a vague whisper that, because the price is good, ipso facto, shortcuts must have been taken.




More Americans Farming In Mexico

Interesting piece in The New York Times entitled, Short on Labor, Farmers in U.S. Shift to Mexico. Although it doesn’t cite any statistics showing growth, it points to a WGA telephone survey that 12 of its members have 11,000 workers in Mexico. It also mentions a speech on the senate floor by Senator Dianne Feinstein, during which she displayed a map that highlighted 46,000 acres farmed by American companies in just two Mexican states.

The gist of the article is that whereas in the past, American companies farmed outside the US to avoid high land prices and to provide counter-seasonal product, now the efforts are designed to take advantage of an available labor force. The piece focuses on one particular American grower:

Tramping through one of his first lettuce crops near Celaya, an agribusiness hub in Guanajuato, Mr. Scaroni (Pundit Note: Steve Scaroni, Valley Harvesting & Packing) is more candid than many farmers about his move here. He had made six trips to Washington, he said, to plead with Congress to provide more legal immigrants for agriculture.

“I have a customer base that demands we produce and deliver product every day,” he said. “They don’t want to hear the excuses.” He acknowledges that wages are much lower in Mexico; he pays $11 a day here as opposed to about $9 an hour in California. But without legal workers in California, he said, “I have no choice but to offshore my operation.”

Steve Scaroni always winds up involved with the issue of the day. In 2004, when the focus in California was Worker’s Compensation reform, he had this to say:

Steve Scaroni, who owns Valley Harvesting & Packing Inc. in Heber, said he donated $10,000 to the initiative campaign because he feels strongly that reforms are badly needed. Scaroni has a supply of initiative petitions that he is delivering everywhere his company does business.

“We’ve basically driven all the profit out of operating a business in California,” said Scaroni, who has 1,500 employees in 100 different job classifications. “The system is in dire need of reform. Our workers’ comp rates have tripled during the past five years and we’re now paying more than $4 million a year in premiums.

“What’s happening is that many businesses that were once profitable are now only marginally so because of workers’ comp premiums,” Scaroni said. “That means less tax dollars for the state, less money to invest in new equipment and technology, no new employee benefits. The way the system is now, it’s very unpalatable to do business in California.”

And over two years ago, Steve was writing letters to the editor on immigration issues:

Just like Mr. Gibson, I also feel betrayed. I have worked 20 years to build an Agricultural Company from scratch. Now I am faced with having to close my business and lay off hundreds of legal USA workers because I simply can not find enough willing legal USA workers to do the low skill entry level harvest crews that Agriculture depends on.

Every one wants to get on the “send all the illegals back from where they came from” bus — but few understand the service and labor these folks have provided for the last several years when there were no legal USA workers to do these entry level jobs.

If all you “ship out the Illegal Aliens” folks get your way, please don’t complain if in a couple of years most all of your fresh fruits and vegetables have a Product of Mexico or China on the label!

Steve seems an innovator, with a big logistics operation and even owning an Authorized Nextel Representative. Along with his sons, Matt and David, he is involved in off-road racing.

It seems as if what Steve is doing is completely sensible. The biggest concern most Americans would have is food safety but, on that point, Steve is reassuring:

…transferring to Mexico has been costly, he said. Since the greens he cuts here go to bagged salads in supermarkets in the United States, he follows the same food-safety practices as he does in California. Renting fallow Mexican land, he enclosed his fields in fences and installed drip-irrigation systems for the filtered water he uses.

He trained his Mexican field crews to wear hair nets, arm sheaths and sanitized gloves, and held drills on the correct use of portable toilets. In the clean-scrubbed cooling house, women in white caps scrutinize produce for every stray hair and dirt spot.

Yet the point of the article is that this is a problem. Steve feels he was forced into the decision:

Frustrated with experts who say that farmers with labor problems should mechanize, he plunges his hands into side-by-side lettuce plants, pulling out one crisp green head and one that is soggy and brown. After his company invested $1 million in research, he said, “We haven’t come up with a way to tell a machine what’s a good head and what’s a bad head.”

He also dismisses arguments that he could attract workers by raising wages, saying Americans do not take the sweaty, seasonal field jobs. “I know beyond a shadow of a doubt that if I did that I would raise my costs and I would not have a legal work force,” Mr. Scaroni said.

Yet it is not clear that those who are concerned about immigration will see the article as detailing a problem. After all, labor intensive work such as textiles has already mostly relocated outside the US. From this perspective the article is just recounting how a long term trend of low skill labor moving overseas is continuing in the produce industry.

The article mentions food security, but it seems unlikely the U.S. population will get too agitated over the possibility of a war with Mexico where the country will withhold food from the U.S. Some middle class jobs that support agriculture will be at risk, but it is unclear how many and, of course, presumably resources that had gone into growing will have other uses that will provide other returns. If farming in other countries is more competitive, U.S. owners might make additional money selling to other countries in Europe, Asia, the Middle East and elsewhere.

On food safety, American growers moving into countries seems encouraging, raising standards and, in a sense, creating islands of U.S. technology and techniques that US processors can access.

Still there is something a little unsettling about it, as there is with all Schumpeterian change.

Joseph Schumpeter was perhaps the most incisive thinker on entrepreneurs and capitalism to ever write. He is most famous for coining the term, “creative destruction,” to define how capitalism works by constantly destroying old ways of doing things to free up resources to do new things.

As he put it, all businesses must, at all times struggle “…to keep on their feet, on ground that is slipping away from under them.”

That is a tough analogy for a farmer but availability of labor, just like availability of land, capital and technology, are all ever-changing variables. One can certainly try to change laws to institute policies more favorable to farming, but smart growers such as Steve Scaroni know enough to hedge that bet.




Food Safety And Sustainability Go Hand-in-Hand At Ocean Mist Farms

Ocean Mist sent over some news:

OCEAN MIST FARMS EXTENDS GREEN INITIATIVE TO STAFFING

Ocean Mist Farms, the leading grower of artichokes and other fresh vegetables, in its ongoing commitment to sustainable agriculture, is creating a new position dedicated to environmental stewardship.

Afreen Malik, currently the manager of food safety, will take on the added responsibility of managing the company’s environmental activities said Joe Pezzini, vice-president of operations.

“Afreen understands the importance of these two functions and is in a unique position to direct our environmental initiatives across the company,” Pezzini said. “As farmers, we understand the importance of caring for the land and the footprint we leave behind.”

Ocean Mist is a leader when it comes to green initiatives.

For example, 90 percent (moving toward 100 percent) of the company’s farmed acreage utilizes drip irrigation to reduce water consumption and fertilizer usage.

The company uses energy efficient lighting in its offices and implements conservation measures in its cooling facilities through lighting, variable speed evaporator fans, electronic forklifts and a cardboard recycling program.

The company has long been a proponent of integrated pest management practices to reduce pesticide use and farms artichokes organically.

“We see a need for this new position because it is important to us and to our customers,” Pezzini said. “We fully realize this will only grow in importance with time.”

Malik has been with Ocean Mist since 2004. As manager of food safety, she has been integrally involved in directing the company’s food safety program from “Farm to Fork” as well as enhancing product traceability and recall protocols.

Prior to joining Ocean Mist, she worked with Frozsun Foods/Sunrise Growers. Malik is a graduate of the University of California, Santa Barbara.

We suspect this won’t be the last we hear about companies creating positions that combine food safety with sustainability. After all, food safety is, in a sense, a subset of sustainability. How can it be sustainable if your product is dangerous and causes illness or death?

Yet the trend poses some challenges. After all, environmental stewardship often conflicts with food safety. If you have a river running through your farm, the “green” side of things may call for the maintenance of a riparian area encouraging the growth of native species of vegetation and animals.

The food safety perspective is to rip all that out and mow it flat so no nasty animal that might bring a problem onto the field is anywhere near. In fact laying asphalt over the area might be even better.

The key is for the company to define its priorities so that individuals in these types of positions have firm guideposts on how to balance these choices.

It is a big job. Food safety does not seem to be getting easier, and pressures from the perspective of sustainability and social responsibility are increasing. We wish both Malik and Ocean Mist Farms well.




‘Great Mates’: USA Pears And New Zealand

It was only in 1999 that USA Pears gained access to the New Zealand market. Now it is the 9th largest export market for American pears. To celebrate and thank the local trade, a dinner themed “Great mates” was held and even the United States Ambassador attended:

NEW ZEALAND’S IMPORTERS OF PACIFIC NORTHWEST PEARS ACKNOWLEDGED BY AMBASSADOR BILL MCCORMICK

Importers of Northwest-Grown Pears are Key to Continued Growth of USA Pears in New Zealand Market

Laura Scandaurra (FAS), Ambassador McCormick,
Simon Hoist (Food Writer), Lisa Cork (Pear Bureau Northwest)

As harvest for the fresh USA Pears grown in Oregon and Washington is underway, U.S. Ambassador to New Zealand Bill McCormick joined in a dinner that recognized the country of New Zealand’s importers of pears. Ambassador McCormick, a longtime resident of the Pacific Northwest and co-founder of the upscale McCormick and Schmick’s national restaurant chain founded in Portland, Oregon, has a connection to U.S. grown pears as 84% of the American fresh pear crop is grown in Oregon and Washington.

(From left) Peter Lange (Imports Manager, MG Marketing),
Ambassador McCormick, Stephen Ogden (Solutionz),
Pip Duncan (Food Writer), Peter Turner (Fresh Direct, Importer)

The theme of the dinner was “Great Mates,” and New Zealand’s importers were recognized for the critical role they play in making fruit imported from the U.S. a success. California Summer Fruit and California Grapes were also included in the special reception. The event was held the eve of the opening day of the Foodstuffs industry trade show at the Caccia Birch House, an historic residence in Palmerston North, New Zealand.

Much recognition is indeed due to New Zealand’s traders, as they have helped the Oregon, Washington, and California fruit industries achieve record success in the New Zealand market. Imports of pears in particular have increased from 2,200 standard box equivalents imported in the 2001/2002 pear season to over 60,000 boxes in the 2006/2007 pear season, which equates to an increase of over 2,500% of USA Pears imports to New Zealand.

“New Zealand is an exciting growth market for Northwest Pears and with Ambassador McCormick’s ties the Pacific Northwest, he was a perfect spokesman to kick off the new season,” said Kevin Moffitt, president and CEO of Pear Bureau Northwest.

Lisa Cork, the marketing representative for USA Pears in New Zealand, quoted Will Rogers as she summed up the importance of the dinner. “Will Rogers said, ‘go out on a limb; that is where the fruit is.’ As a result of this special dinner, we hope New Zealand’s importers realize their contribution to the American fruit industry. Their willingness to ‘go out on a limb’ to send fruit to a market at the bottom of the world is appreciated by growers, the industry, and the U.S. Ambassador.”

The New Zealand kick off event was the first of many such events and promotions that are underway as the new crop of USA Pears enter the international markets. Campaigns such as billboard advertising in Mexico and Russia as well as importer incentive contests and consumer samplings will be conducted in over 35 markets worldwide. With a crop that is expected to be slightly larger than last year, the industry is looking forward to an excellent export season. “There are many issues in our favor this year from a weak dollar in many markets which helps exports to smaller pear and apple crops in Europe and a U.S. pear crop that will meet the needs of all export markets,” stated Moffitt.

Northwest grown pears are actively promoted under the USA Pears logo in over 35 markets worldwide. International marketing representatives develop and maintain promotions for USA Pears with activities targeted for each country’s market. Approximately one-third of the fresh Northwest pear crop is sold outside of the United States, with Mexico, Canada, Brazil, and Russia topping the list of export markets. New Zealand is currently the ninth largest export market for USA Pears.

A lot of credit to go around. Lisa Cork represents USA Pears in New Zealand and is widely praised for running an effective program. Jeff Corea is the international Marketing Director and, along with Leyla Kabasakal, the International Marketing Assistant, they run one of the most aggressive export programs of any U.S. produce trade group.

One reason may be because Kevin Moffitt, president and CEO of Pear Bureau Northwest, had Jeff’s job before he was promoted, so he has particular awareness and sensitivity to the development of international markets.

We’ve known Kevin for many years, but the image that will always stick in the mind of the Pundit is when we were both in Cuba and Kevin was manning the USA Pear booth, trying to give out samples. The line was endless and most of those in line had never seen a pear. Kevin used that pear slicer like a machine gun as he pounded out the slices and spread the gospel of USA Pears.

Now, apparently, they are spreading the message to the opposite end of the globe. Congratulations to the team at USA Pears and many thanks to the trade in New Zealand for being open to the fruit. And kudos to Ambassador Bill McCormick for standing up for USA Pears and the American produce trade.




Silbermann Shares Journalism Prize With The Pundit

In the Pundit home state of Florida, there is an annual award ceremony for print magazines. This year, Pundit sister publications, PRODUCE BUSINESS and DELI BUSINESS, won several awards. The Pundit’s column “Organics Redux,” which ran in PRODUCE BUSINESS, won the prestigious “Charlie” award as the best single piece of Opinion, Editorial and Commentary. You can read the piece here.

The “Charlie” award is named after a University of Florida journalism professor who helped found the Florida Magazine Association, which gives the award.

Lee Smith, Publisher of DELI BUSINESS magazine, also won a Charlie for her Annual Specialty Cheese Guide. If you enjoy cheese, you have to have one of these. You can find it here.

We won an assortment of Silver and Bronze finishes, including categories such as Best Overall Magazine and Best Written Magazine, as well as for individual articles.

Of special note is that the exchange the Pundit co-writes each month with Bryan Silbermann, President of the Produce Marketing Association, was awarded a Bronze. In his contribution, called “Research Perspectives,” Bryan presents the results of a piece of PMA consumer research and, in “Comments and Analysis,” the Pundit responds with analysis and, sometimes, some constructive criticism.

Each month is a different topic. We recently had an exchange on the role of floral in mass market retailing; you can see that exchange here.

The Pundit wishes to thank PMA for its bravery in cooperating in such a project. Many trade associations would hesitate to expose their work to such criticism. It takes a certain degree of self-confidence to realize that subjecting research findings to scrutiny is the real way for the industry to learn the most from the findings.

Special congratulations to Bryan on his award. If this association thing ever doesn’t work out for him, he has a bright future in journalism.




Pundit’s Mailbag — Further Support Efforts For Peru’s Earthquake Victims

As part of our coverage of the earthquake in Peru and industry efforts to help the Peruvians — particularly the farm workers — we ran a piece entitled, Sun World Launches Peru Earthquake Relief Program, that detailed a Sun World effort to get money to help relief efforts in Peru.

The gist of Sun World’s program is that a portion of the proceeds of Sun World’s sales of Peruvian Minneolas will be presented to the Peruvian Minister of Agriculture, to be spent on efforts to assist farm workers and otherwise to assist in the rebuilding of Peruvian agriculture.

Now we have received some additional information from Sun World:

I appreciate your continued reporting and sharing of information within our industry. Recently, your campaign and communication regarding the need for a coordinated effort to aid those in Peru — and regrettably others in the future — is right on target. I thought you would enjoy the personal perspective of someone on the ground there and what his suggestions are.

— Mike Aiton
Senior Vice President
SunWorld International

We appreciate Mike’s letter and, especially, his passing on of two things. First, you can see a presentation with photos of the damage caused by the earthquake here.

Second, as Mike references, he has sent along a letter from a contact in Peru:

This is a small brief just to let you know that we are ok after the earthquake. We have only suffered minor issues. The big house at the farm has only a few cracks, one of the guest houses has completely fallen and the worker quarters in the farm are ok as well. However, most of the worker’s houses have suffered a lot. You can see half of the population of Chincha still sleeping in the streets.

The earthquake struck in the Nasca fault, about 30 miles west of Pisco, which is about 50 miles from Chincha. We live in Chincha. Pisco was torn to ruins. I would say about 80% of the houses are uninhabitable. Chincha is in better shape with an average of 48% uninhabitable. We are all trying to relieve the basic needs of our workers and population in the best way possible. We have established a plan where the first thing done was aiding the health issues. This has now been done and the dead have been buried.

Secondly, we are supplying food and water. This is a gigantic task as no volume will be sufficient for the needs of the community. The third step will be to supply shelters, and lastly we need the government to rebuild the homes. We are waiting for the Peruvian government to help (promises have been made and new laws are showing good predisposition; but at a bureaucratic rhythm). The problem is the lack of leadership from the authorities and haziness in the view of the objectives. Most of the companies in this area are helping their own workers.

We are helping our own workers (about 1,500) but also our community (defined by the district in which we live). It is amajor task and so far we are covering the health, food and water supplies on a daily basis. Beatriz, my mother, has opened a distribution center at La Calera for these purposes. Besides donating Food and Water, La Calera has established a system for distributing basic non-perishable foodstuff items, such as rice, sugar, beans, powdered milk, etc to distribution centres around Chincha, to be sold at low prices; trying to fight the speculation going on (300 — 500%).

The process of giving the shelters is a bit slower, but is in place already. We had to conduct a survey among the people who had really damaged homes and with a shelter design that will work in our conditions. We have designed a shelter model that will last for 8-10 months (hopefully time to rebuild the houses), at a cost of US$ 100 per shelter; it is not much in size, about 25 m2 (250 feet2) but it will give shelter to at least one family.

We are asking all our friends from abroad to participate by donating any money possible to cover the expenses of the shelters. We already have a Non Governmental Organization ONG Pro-Laran; Laran is the District in which La Calera resides; it is a non-profit organization which was originally funded to aid Laran in Social issues. We can see no better use for Pro-Laran now than to channel the money and organize the aid to our community after the Earthquake.

Besides the sheltering aid, Pro-Laran ONG has been operating (started by mother Beatriz) for 3 years now, creating school programs, mothers’ associations, ANNIA (Children’s Organization), Wawa-wasi (Nursery), building community centers along with many other projects.

Any proceeds donated will be for the supply of shelters (US$ 100 per family) to the workers of La Calera and to the people of Laran. Our goal is to provide 1,000 shelters. We will not give money to the people directly; we supply them with the shelters themselves.

If you wish to donate, please send funds to:

Beneficiary — ONG Pro Laran
Account — 315-1614644-1-62
Bank — Banco de Credito del Peru
Swift — BCPLPEPL
Address Bank — Av. Centenario # 156 La Molina, Lima 12

If you are able to donate and you contact me through our website, we will gladly send you back the names of the families that you have helped to shelter.

— Estuardo Masias
www.lacalera.com.pe

La Calera Group is a family-owned farm that is the largest producer of fresh eggs in Peru and also grows and exports citrus, avocados and grapes.

Mr. Masias has also provided the contact and donation information for ONG Pro-Laran, a non-governmental organization being used to funnel aid to Peru and, especially, to provide shelter for farm workers in this region.

For $100, they can provide a simple shelter that, hopefully, will buy enough time to allow homes to be rebuilt.

It is sometimes hard for Americans to understand the impact of an event like this earthquake to people like Peruvian farm workers. It is not just the damage caused by the earthquake; it is the lack of back-up and support systems. No money to go stay at a hotel — even for a little while. Families are not spread out, so they can’t just stay with a sibling in another part of the country. There is no insurance company to call.

The need is great but, fortunately, the impact of even a small donation is great as well. It is an opportunity to do a lot of good.

Many thanks to Mike Aiton of Sun World for passing this along and to Estuardo Masias of La Calera Group for allowing us to publish his letter.

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