Rural perspectives: Sharing experiences from Latin America and the Caribbean

Our window into the world - Taking a market-driven approach to sustainability

By Josefina Stubbs

Over the past year, IFAD’s Latin America and the Caribbean Division has co-hosted three workshops on enhancing project implementation strategies in the region. Sure, it’s not the sexiest topic in the world, but the shared experiences we took with us – especially the idea that only through market-driven approaches can we attain true sustainability – will last a lifetime.

Through these conferences – November in Nicaragua for the Central American countries, December in Argentina for the Southern Cone, and in May in Ecuador for the Andean countries (plus Guyana) – we managed to come even closer to the program teams implementing IFAD’s co-financed projects on the ground.

And while sound program implementation strategies are essential to sustainable development – as is project supervision – it was the synergy and knowledge sharing between these diverse groups that really added the most value. This two-way dialogue is providing a unique ‘rural perspective’ – something I like to call a ventana rural – into the way we operate in Latin America.

This ventana rural is offering up new lessons everyday. But one of the most important lessons I’ve taken with me is that we must allow for a market-driven approach in order to achieve lasting results for our projects.

In this issue of Ventana Rural, we explore the ins-and-outs of market-driven development. In our article on organic cacao production in Ecuador, we explore how enterprising farmers saw an expanding niche market and ran with it. In our piece on Paraguay, we examine how demand-driven strategies can still work within a marketplace context.

It’s a delicate balancing act. As an organization we cannot take a top-down approach, telling farmers in Paraguay they should plant certain crops simply because the market demands it. Nor can we simply turn our heads when local producers demand more and better access to markets and new sources of income. After all, it is these new revenue streams that will help ensure food security and allow families to send their children to school, key first steps in breaking the cycle of poverty. Rather, we need to seek a common ground between the two, bringing in new market-minded ideas during our project supervisions, while still allowing for grassroots demand-driven approaches at the local level.

Of course, there are no easy solutions. But I hope you enjoy our little window into the Latin American and Caribbean countryside. Over the past few months I’ve visited Peru, Brazil, Ecuador (and a few more places in between). While the jetlag can certainly take its toll, in the end, only by looking directly at our projects on the ground – and at the people, organizations, policies and governments that implement them – will we truly understand how to bring about lasting results in our collective effort to end rural poverty worldwide.

Saludos,
Josefina

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Building a competitive advantage in Peru


		Olga Osjo Palomino received training from IFAD through the Management of Natural Resources in the Southern Highlands (MARENASS) initiative. With her new knowledge, Osjo Palomino was able to build terraces, cultivate corn and potatoes in rows, and sell her surplus products in the local market.

A little bit of competition can go a long way. After all, in the world of business – whether you’re building a multi-billion-dollar paper tiger on Wall Street or you are starting a home-spun yogurt business in the south of Peru – only the fittest of the fittest will survive.

Taking these Darwinian mandates to heart, the IFAD-funded Sierra Sur Project in Peru is looking toward competition as a mechanism for development. But the project teams at Sierra Sur are not simply asking smallholder farmers and rural micro-entrepreneurs to be more competitive with each other, rather they are actually holding public contests where emerging businessmen (and women) in the region can present business plans and compete for funds.

“The project hopes to help the poor rural farmers of the Southern Andean Region leave poverty behind. With this in mind, the project has a strategic approach that is focused on demand,” said José Sialer Pasco, Director of the Sierra Sur Project. “This strategy is essentially based in these competitions.”

The competitions are held throughout the massive 77,693-kilometer project area, one of the poorest regions in Peru, where scarce water and difficult growing conditions make it even more difficult to run a successful agro-business. Around US$16 million of the project’s $22 million funding came from IFAD.

Under the system, local entrepreneurs present their business plans or natural resource management approaches to a panel of judges – community members, local government officials and representatives from Sierra Sur – who reward funds to the best enterprises. The project provides 80 per cent of the funding in the form of a grant, with the entrepreneurs putting up 20 per cent of their own money. The seed money is then invested into the new enterprise. Some people opt to use the funds to build resource management systems like cisterns while others hire technical advisors to help build their businesses.

Putting theory to practice

Griseldo Puma Callahui Pacheco is a member of the Agricultural Producers Association of Tuntuma. After competing for funding in a regional contest, he was able to hire a technical advisor to help with his cheese and yogurt business.

“My vision for my family is to have my own proper cheese plant by next year,” said Don Griseldo. “Each one of my children knows this business, and this will help them in the university. They won’t just be experts like me, rather, they’ll be chemical or agro-industrial engineers. That’s my vision for the future.”

For natural resource management, the project is helping smallholder farmers create water-catching systems, reforest areas and build small dams.

“Before there was no water; it was dry land. So we are working with our natural resources with communal and family water reservoirs,” said Pedro Usca Laucata, a farmer from the Pichigua District. Pedro worked along with 70 other members of the community to build an earthen dam. “We are collecting the water for our animals, not for irrigation. And with the trees we are planting we are trying to counteract pollution in the area.”

Engineering sustainability


		Faustina Navarro takes a well-deserved break on her farm in Manchaybamba, Andahuaylas, Peru. One of IFAD's regional priorities is to promote rural empowerment, especially for women.

“We are about two years from closing the project… In May of last year we had a mid-term evaluation, and we can say with much satisfaction that the program has helped around 5000 families to rise up from poverty,” said Sialer. “And we have the hope that we are going to make it to our goal of 15,000 families, probably even surpassing the 15,000 families that will overcome poverty.”

One of the challenges the project is facing is one of sustainability, according to Sialer. But he remains optimistic, saying that by working directly with locals and local governments – which are now taking on the reigns of the project – they’ve built sustainability into the project from the very beginning.

“The most important thing is that campesino families are taking this on as something of their own,” said Sialer. “At this point they don’t talk about ‘the Sierra Sur Project,’ they talk about ‘their Sierra Sur Project.’”

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Supporting family farming in Paraguay


			Around 19,000 rural poor families, representing approximately 120,000 individuals, are expected to benefit from the program.

There are many ways to support family farming – and demand-driven development mechanisms – in a place like Paraguay. But no matter how you approach it, you can’t create lasting results without money and capacity-building. IFAD is providing both to this land-locked South American nation.

The money came in the form of a loan to support the Rural Paraguay program, which is helping more than 140 farmer’s organizations in the eastern part of the country. IFAD’s contribution to the US$18 million package is estimated at $15.1 million for the next three years. The project is slated to benefit some 120,000 individuals, especially small-scale producers whose productivity has been affected by declining returns on traditional cotton production models and those with limited production values.

Key to the project’s goals are the demand-driven elements of harmonizing ongoing poverty-reduction investments financed by other organizations, using an approach based on direct participation and selection of the initiatives by the beneficiary organizations.

“The project’s main outcome would be to ‘graduate’ poor smallholders’ organizations through the accumulation of social and technical capital so that they can participate in project activities and access the services of other public investment projects,” said Paolo Silveri, Program Manager for IFAD’s Latin America and the Caribbean Division.

But it’s important to look before you leap, and Silveri is still in negotiation with the Paraguayan government to ensure the funds are properly administered.

“We don’t want the government to throw away money without a framework, plan and the ability to execute their plans within the organizations, because this is public money, and you need to use it wisely,” said Silveri. “With this in mind, our slow-and-steady approach is working toward a positive end result, allowing the organizations and development mechanisms to strengthen themselves.”

Family farming seminar

On the capacity building front, IFAD is continuing to invest in the people and organizations of Paraguay. The MERCOSUR Family Farming Seminar held in Asunción, Paraguay, in December 2009, brought together representatives from governments, small-scale farmers’ associations and international development agencies.

“The seminar offered government officials, rural development specialists and international agencies from all MERCOSUR countries an opportunity to share and discuss experiences on how to promote small-scale farming as a key engine for rural growth and food security in the sub-region,” said Silveri. “The presence of President Lugo witnesses the high importance that the government of Paraguay attributes to the development of small-scale agriculture, and IFAD’s presence in the podium reflects its appreciation and recognition of our lead role in this development area in Paraguay.”

The Paraguay Rural Program has extensive operations in the central region of the nation.

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Cacao is king

Grassroots organizations in northern Ecuador leverage the sweetest of treats to step out of poverty

There’s nothing on earth quite like chocolate, a lovely indulgence so delicious, so decadent that we’ve created a veritable cult of adoration surrounding it. But chocolate is much more than a favourite sweet in northern Ecuador. Chocolate – and the cacao bean used to make it – is fast becoming a way out of poverty, with several programs helping smallholder farmers and micro-entrepreneurs make a bit of green (yes, Ecuador is on the US Dollar), out of a simple bean.

With the help of the IFAD-funded organization ACUA, a regional program helping Afro-Ecuadorians overcome poverty, local producers and entrepreneurs got together to form the Atecames Cacao Producers Association (APROCA). While the region was traditionally known for its banana production, local organizations like APROCA saw great potential in the cacao market – especially in the “certified green” side of the market – and decided to go for it, working with the Rainforest Alliance and BCS to certify some 580 hectares of cacao plantations.


			On a recent mission to Ecuador, IFAD staff and project leaders took an afternoon off from the heavy work of building project implementation strategies to tour a nearby organic cacao farm.

“This green certification has allowed us to find really interesting markets, because it pays better for the product,” said APROCA’s Deisy Rodríguez.

Organic cocoa – the bean is referred to as cacao, while the refined ingredient is referred to as cocoa – is big business these days. And Latin America is leading the way, accounting for more than 70 per cent of worldwide organic production. The region accounts for just 13 per cent of the conventional market, which is dominated by Africa. Worldwide, the Dominican Republic is the leading organic supplier, producing around 5000 tonnes per year, according to industry reports.

Industry reports also predict the premium chocolate market will grow from US$7 billion in 2007 to $12.9 billion in 2011, making this a worthwhile growth industry for small-scale producers like Rodríguez. Figures for global certified organic cocoa production are hard to come by, but most indicate that certified production comprises an extremely small 0.5 per cent of total cocoa production. And while organic cocoa prices fluctuate dramatically – after all, paying a premium for a simple chocolate bar truly is a luxury – most sources estimate it to fetch a premium of 10 to 40 per cent over non-organic ($100–300 per tonne in 2005).


			APROCA isn't the only organic operation in the region. This leader from the FONMSOEAM cacao growers organization showed the IFAD team how they work the fields and keep up with organic practices

But APROCA isn’t just about green farming. Over the past five years, the organization has worked directly with 600 families, and established 100 hectares of new cacao plantations.

“For the producers, this entire process has been a great help, because it has allowed us to consolidate the process of production and commercialization,” said Rodríguez. “We support every aspect in the value chain of cacao, starting with production, which involves the administration of plantations, improvement of existing ones, and planting of crops.”

Talk about vertical integration, the association also processes the cacao at their refining and storage facility, and markets it for both national and international consumption.

“We’ve seen that one of the especially important aspects of our project is the strengthening of the organizations we work with,” said Rodríguez. “This helps facilitate a dialogue for the producers, allowing them to build a cooperative commercialization strategy that will really work and be sustainable over the long haul.”

But sustainability starts from the individual, and for Rodríguez, the process of becoming a small businesswoman has created a lasting impact.

“In my own life this has given me more experience. I’ve been able to go to many fairs where I learned a lot about the whole world of cacao,” said Rodríguez. “This experience has allowed me to put more value on what’s ours.”


			Deisy Rodríguez visited the IFAD delegation in their Atecames hotel to share the organic chocolate (the chocolate with coconut was especially yummy) produced by APROCA.

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Interviews in Spanish with APROCA's Deisy Rodríguez and Nelisa Panesu

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Giving Afro-Ecuadorians a voice

Northern Ecuador is an area marked with poor social infrastructure and high-levels of violence resulting from the conflict in neighbouring Colombia. The large concentration of Afro-Ecuadorians living in the region has been especially marginalized. But thanks in part to the hard work of IFAD-funded organizations like ACUA, the Afro-Ecuadorian community – there are an estimated 150 million Afro-Latinos across the Americas – are increasingly finding a voice and making their way into mainstream society.

On the national level, the Constitution now recognizes Afro-Ecuadorians as a unique ethnic group, allowing for increased social, political and territorial rights. On the local level, with groups like ACUA providing technical training and access to resources, Afro-Ecuadorians are playing an increasingly important role in the agriculture sector, a critical first-step in integrating this long-forgotten group into the regional economy.

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