Does Alpaca Farming Support Indigenous People In Andean Countries?

Alpaca woolen products are often presented as sustainable and with a low impact on the environment. But what about the indigenous people? Does alpaca help the indigenous communities in a positive way?

Alpaca farming supports many (very) poor communities in the Andean highlands across Peru, Bolivia and Ecuador. Large-scale producers buy the fleece from local farmers and produce high-quality yarn with it. Farmers might lose out on profits, while limiting their cost and risk at the same time.

While it might seem limiting on the indigenous peoples that they (need to) work with larger corporations to sell their wool, there are many cultural differences that need to be addressed before jumping to conclusions.

Indigenous Alpaqueros in Peru 

The majority of alpaca wool is sourced from South America: Peru has the highest population of alpacas (84% according to CONACS) and is the main exporter of wool and Bolivia is home to the second largest population of alpaca (11.7% according to CONACS). 

In Peru, the majority of alpaca farmers live in Puno, Arequipa and Cusco, where a distinction is made between small, medium and large alpaca farms:

Source: CONACS (Consejo Nacional de Camélidos Sudamericanos)

The Size of the Farm Matters

Medium and large alpaca farms can dedicate more funds, time, and research to vertical production (including yarn production and wholesale) and fiber quality improvement. Small farmers have no funds to do so. This limits their position significantly compared to large scale farmers.

Small farmers often dedicate themselves to producing raw fleece. They do not get involved in spinning wool and making products. However, you might find an individual or so who does, often more for entertainment than anything else, or extreme necessity. A small farm or individual would not be able to meet the production scale of the medium and larger farms.

Small farmers often herd alpacas only as a part of their business and need to do other agricultural activities in order to get by. Participating in the alpaca industry does provide a steady income to them, however small it may be. They benefit from the success of larger, international players, though returns might remain limited.

Large producers (either with their own alpacas or with raw fleece bought from small farmers) produce high quality yarn that meets the demands of a growing international market. With large-scale production, producers can reduce cost and increase the quality of their products.

The downside is that only a small percentage of the real price of alpaca wool stays with local farmers in the Andes. A larger share goes to producers and manufacturers of end-products.

Alpaca Wool Is a (High Quality) Export Product

Alpaca wool and alpaca woolen products have become increasingly popular over the last few decades. No longer limited to souvenirs from Peru or very exclusive brands, alpaca wool is becoming more mainstream due to increasing demand for high-quality goods. And alpaca wool hits the sweet spot of price vs. quality. 

According to Andina.pe 90% of the world’s alpaca comes from Peru and 80% of all alpaca wool in Peru is exported. This means A) that Peru is the leading producer of alpaca wool, and B) that most alpaca wool is exported to other countries. 

Prices of clothes and accessories made with alpaca wool have increased and are often too high for the Andean people themselves. When I lived in Peru, locals admired alpaca products but could rarely afford them. “Oh, yes, alpaca wool... that’s for the foreigners,” they would say.

According to CONACS, many small alpaca farmers live in extreme poverty. 

High poverty levels among alpaca farmers in Peru persist because they don’t have the funds or knowledge to make their alpaca business grow and benefit from an increasingly popular material. They are too small to set up a vertical production system and face significant structural barriers.

Traditions and Traumas: The Way Life for the Indigenous People is Influenced

This relationship has brought a special bond to the indigenous populations of Andean countries. Farmers cherish their animals and don’t necessarily see them as a mere source of income. Alpacas are part of the family. Herding alpacas is a way of life.

Centuries ago, when the Spanish arrived in South America, many alpacas were killed or crossbred with llamas because the conquistadores didn’t see their value. Indigenous people were pushed high into the Andes and shared their homes with the alpacas that already lived out there. During times of conflict and terror, alpacas and their farmers were displaced and marginalized together.

• Read more about the history of alpaca wool in another article I wrote: What Is the History of Alpaca Wool?

Some cultural patterns have emerged from this context:

Economic Rationality 

Some farmers limit shearing to “save” wool for harsher times, though annual shearing generally improves fleece quality. While this may seem counterproductive, it reflects risk-averse strategies under conditions of scarcity.

Humble to a Fault

I know from personal experience—having lived in Peru 5 years—that the people in the Andes are incredibly humble. I’ve met some of the warmest and most caring people in my life in the Peruvian Andes. But, there’s a counterside to their softness: many are reluctant to assert themselves, which can lead to accepting unfavorable deals. With limited opportunities, suboptimal agreements may still be better than no deal at all.

On the other hand, trauma from political violence has left many farmers distrustful of change.

Internal Division in Andean Countries Maintains the Indigenous People at a Distance

Another important factor is the cultural and structural gap between the rural indigenous farming population and the urban and more educated population responsible for the industry.

Ethnic discrimination and educational marginalization contribute to increased inequality. Many farmers lack access to knowledge, awareness of legal rights, and negotiation strategies. Geographical marginalization makes it even more difficult to gain any type of inclusion. 

The treatment of alpaca wool as a longstanding export product has not benefited everyone in the supply chain.

The Rise of International Alpaca Farming Can Jeopardize the Position of the Andean Farmers

Did you know that for a long time, it was actually prohibited to export live alpacas? Only in the 1980s and 1990s did the Peruvian government reduce their export restrictions on alpacas. 

Inevitably, the “head start” that Peruvian alpaca farmers used to benefit from was quickly caught up by increased breeding practices abroad.

With the increase of farmers in countries like the US, Australia, and New Zealand, Andean countries were (and still are) seeing a decrease in their global share and now have to compete with producers that have way more resources available to them. 

This increase might jeopardize the position of (indigenous) farmers in Peru, even though it might benefit the position of the alpaca. People in the Andes will have very limited possibilities to compete on the global market, which could potentially cause the entire alpaca industry in Peru to lose their prominent market position. 

Here’s why: 

• Farmers in developed countries can secure loans, insurance, or even government subsidies for agricultural development. Indigenous producers in Peru or Bolivia are often excluded from these systems due to lack of formal land titles, credit history, or bureaucratic support.

• Wealthier farms can afford advanced genetic selection, improving fleece quality and consistency. Meanwhile, many Andean farmers lack access to even basic veterinary care, let alone breeding programs.

• With slick websites and direct-to-consumer e-commerce platforms, international producers can command premium prices while telling ethical or luxury lifestyle stories. By contrast, smallholders in the Andes remain anonymous in most global supply chains, selling raw fleece at volatile commodity prices.

In other words, Peru’s historic export ban gave it a head start, but that lead is no longer secure. In fact, indigenous farmers now face international competition in a global market they helped create… But one they’re structurally excluded from.
 

The Current Struggles of Small Alpaca Farms 

On the other hand, it provides an opportunity for governments, Peruvian producers, and even brands to invest in Peruvian wool and improve the supply chain from the core. Something that is incredibly necessary to make sure local traditions, customs, and livelihoods get the appropriate support.

After the era of terrorism by the Shining Path, many indigenous people in the Andes were left with limited access to education, healthcare, and infrastructure. Despite interventions, improvements have been limited. High migration rates and lack of government investment seem to make the situation even worse.

Some communities struggle to meet basic needs, let alone invest in better nutrition for their animals. Fortunately, alpacas are hardy and can thrive on the natural vegetation of the highlands. (They’re actually very energy-efficient little animals!)

Migration to cities also reduces the number of people available to maintain traditional farming practices. In Puno, for instance, most farmers are between 44 and 65 years old (Source: CONACS).

Traditional systems like ayni (the idea of reciprocation: “today for you, tomorrow for me”---a foundation of Andean community life) are weakening. With fewer people in rural areas, support networks are collapsing. Causing more isolation and marginalization consequently. 

How Can Alpaca Farming Support the Indigenous People of the Andes?

Some alpaca wool producers already make a genuine effort to support indigenous farmers in Peru, but this is not uniform across the industry. You will have to do your homework and look for the following ethical practices to make sure alpaca farming actually supports the indigenous people in the Andes. 

1. Direct Sourcing from Indigenous Communities

Look for a wool producer who sources their wool directly from smallholder farmers in the high Andes, because it means cutting out exploitative middlemen. This allows farmers to earn more stable and transparent prices for their fleece.

2. Investment in Quality and Training

Look for a producer who provides technical support and training to help improve the quality of the fleece (finer fiber diameter, better shearing techniques, animal health). This raises the value of the wool and helps communities move up the value chain.

3. Sustainable Pricing Models

Rather than relying purely on volatile global market prices, some companies offer minimum guaranteed prices or premiums for higher-quality fleece. This creates a more stable income for indigenous herders and doesn't require them to barter---which goes against their cultural principles. 

4. Environmental and Cultural Sensitivity

High-quality producers emphasize environmental stewardship and cultural respect, supporting traditional practices while discouraging overbreeding or environmentally harmful grazing.

5. Local Value Addition

Instead of exporting raw wool, it is more beneficial for the local economy to process fibers locally (including spinning, dyeing, and finishing it) and then selling the wool with added value to foreign markets (or even as finished garments). Look for producers who not only source, but also process their fibers locally. 

• And, if you’re looking for finished products, look for locally (hand)crafted garments, too. (Like mine at Yanantin!)

This retains more value in-country and supports Peruvian industrial jobs, not just raw material extraction.

What Does this Mean for You? 

Some producers do support indigenous alpaca farmers through fair sourcing, quality training, and local processing, but the extent, consistency, and inclusiveness of these benefits vary and it’s always important to remain critical. 

• Look for Transparency

• Choose brands that clearly name their wool producers and explain how their alpaca is sourced.

• Avoid vague labels like “ethical” or “sustainable” unless they’re backed by specifics. Impact reports and interviews with employees are some of the things I would look for.
  
  

• Be Wary of Cheap Prices

• If it’s unusually cheap, it’s probably not ethical.

• Fair sourcing costs more (and that’s a good thing if it means farmers are paid fairly and ecosystems are protected!)
  
  

• Support Certified or Traceable Products

• Prioritize brands with third-party certifications (e.g. Fair Trade, RAS/RWS) or detailed supply chain info (“traceability”)

• Ask questions: Who made this? Where was the wool processed? Who profits?