South America | Climate Smart Agriculture

Impact in the spotlight: La Noria and the business of olives

18 October 2023 13:09

The plains of La Yarada, nestled in the valley of the Rio Caplina at Peru's southernmost point, are famed for their olive groves. Endless rows of silvery trees, their delicate branches sagging with the weight of green and black olives, plump and promising.

For many years, the farmers who work this land produced sevillana olives. Green or black, this variety is Peru's favourite, a staple on tables across the country. Now, visitors to one of the region's many farms are spoiled for choice. Sevillana are still grown, but so are other varieties like manzanilla and kalamata – richer, somewhat smokier olives, popular with palettes in other countries, like Brazil.

One man’s vision

This change is largely thanks to one man, Yury Alfredo Bermejo Sardon, who, in 2010, founded Fundo La Noria and set about transforming the fortunes of the region’s olive farmers. He saw the potential in expanding beyond Peru to foreign markets, where the right varieties can fetch up to $1.80 per kilogram, several times the price paid for the traditional local olives. Today, La Noria is Peru's second largest exporter of table olives. Great growth from humble origins.

Olives grown for La Noria

Yury Alfredo Bermejo Sardon, CEO of La Noria

The plains of La Yarada, Tacna region, southern Peru

“We started this business as a family. 13 years ago we were farmers. And today? Businessmen.”

How that family has grown. Having started with just 4 workers, La Noria now employs 42 permanent staff, rising to 150 during peak harvest. When all the ancillary workers are included, La Noria is supporting the livelihoods of 2500 people across the value chain.

The power of the collective

This is the benefit of businesses like La Noria. Though the processing, packaging and shipping of the olives is run centrally, La Noria is in essence a collective. On average, 25% of La Noria’s olives are grown on its own plantations. The rest are sourced from local farmers, who not only benefit directly from the higher prices La Noria negotiates with exporters, but are helped to grow and improve their own farms in a number of different ways.

The benefit we receive from Fundo La Noria is that they train us," says Marcelino, a farmer who has already been working with La Noria for several years. "They give us talks about diseases, about the pests that they can see in the olive trees. They tell us what we should or shouldn't do in the field.

Planning for a sustainable future

La Noria’s ambition is to help smallholder farmers grow their yields, but to do so sustainably. A lot of emphasis is placed on introducing technology and techniques to reduce environmental impact and ready the farmers for climate change – specialised dripping irrigation systems that optimise water usage; proper systems for managing waste and water usage during the fermentation stage of processing; modern techniques that reduce the need for harmful pesticides.

La Noria, the farmers, the local community, the environment – it’s an arrangement that benefits everyone.

Marcelino grows maize amongst his olive trees – an organic way of preventing pests and diseases

Marcelino, a farmer and one of La Noria’s many independent suppliers

The maize also attracts bees, which help pollinate the farms

“This is why Rabo Rural Fund invested in La Noria in 2021,” says Rabo Rural Fund’s Alessandro Morgagni. “Two years later, and the potential we saw is already being realised. La Noria and its associated farmers harvested 5,800 kg of olives per hectare of land last year, for a total of 5,000 tonnes. With further improvements to farm management, fertilisation and irrigation, that yield could reach 10,000 kg per hectare. Aside from the opportunity to get a better price for their crop, our financial support has allowed La Noria to pay its farmers for their produce even in the fallow period between processing a harvest and finding a buyer for export.”

For farmers like Marcelino, this means stability, now and for the future: “I am a farmer. I was born in these lands. My father was a founder of La Yarada. My dream is to finish my last days here in my little house, with my little animals and my olive trees.”

First though, La Noria and the farmers of La Yarada must ready themselves for the challenges ahead. Yury is wasting no time: “Climate change is hitting the crops more each year. It is affecting us with the increase in temperatures, in terms of the olive trees’ flowering. If there is no cold in the area, the blooms are not adequate. So we are developing the fields, and using the new technologies you find in the world today, carrying out the first tests and bringing this technology to farmers.”

After harvest, the olives are fermented in La Noria’s 6000m2 processing centre before being sold around the world.

Rabo Rural Fund invests in businesses like La Noria because they allow us to scale the advantages of collective and cooperative business models. By bringing together a large group of farmers and workers, La Noria can introduce new sustainable practices to Peru’s olive-farming industry whilst supporting the aspirations of thousands of local people, creating a better future for everyone.

Rabo Rural Fund is a globally active impact lender that covers the need of agricultural business that are too big for microfinance and too small or risky for commercial banks. By offering access to finance we enable them to grow. The Rabo Rural Fund is established by Rabo Foundation in 2012 and manages the fund ever since.