Leveraging Private Partnerships: Smallholders tap new markets in Guatemala

27 September 2011
ITC News

Before the International Fund for Agricultural Development (IFAD) came to the isolated El Quiché region in the highlands of Guatemala more than 20 years ago, the roads were few and far between, irrigation systems and processing centres were virtually unheard of, and the predominantly Maya population had to depend on corn and beans for their diet and livelihoods. Many farmers had to survive on less than two dollars a day to clothe and educate their families. El Quiché was also a hot zone during Guatemala’s 30-year civil war and many residents were forced to move far from the major roads to escape being caught in the crossfire. 

When the war ended in 1996 – leaving more than 100,000 widows and 250,000 orphans – IFAD started working with organizations such as the National Peace Fund (FONAPAZ) to help reintegrate war victims into mainstream society. In an effort to provide farmers in the rough and rugged El Quiché region with the tools and training they need to transform their operations into viable businesses, IFAD-supported projects are leveraging private-sector partnerships and looking across value chains – from production to processing, marketing and ultimately to consumption. This support has allowed farmers to access some of the largest markets in the world and increased incomes by as much as 50%.

In 1998, IFAD partnered with FONAPAZ and the Programme for Rural Development and Reconstruction in the Quiché Department to support food security and rural development projects in El Quiché. IFAD continued funding operations in the region with the National Rural Development Programme, and in 2006 started the Phase 1: Western Region (FIDA Occidente) programme, which focuses on providing farmers with the training and infrastructure needed to produce better products and bring them to market. 

Working with the funds provided by FIDA Occidente, farmers in the area have been able to form producers’ associations, hire technicians and build new productive infrastructure – irrigation systems, storage facilities and packing plants – which have allowed them to produce better quality products such as onions and French beans.
But what good is a quality product if you don’t have a market? By engaging with private-sector partners such as the Guatemalan Exporters Association (AGEXPORT) – which provided assistance in marketing, packaging and branding regional produce – the farmers of El Quiché are now selling their onions and beans to some of the biggest retailers in the world, including Walmart. 

Thanks to the irrigation projects and market-access programmes introduced by PRODERQUI, which are now being managed by FIDA Occidente, smallholder farmers’ associations in El Quiché have seen some US$ 530,000 in gross revenues for French beans, US$ 150,000 for Chinese peas, US$ 72,000 for onions and US$ 62,000 for radicchio. The programmes have also created approximately 250 new jobs for the region. Not only are people working in harvesting, but they are also finding new jobs as truck drivers, in the French bean packing plant, and even as teachers and shopkeepers. 


‘We used to plant corn, but now we are mostly planting onions,’ says Mr. Pedro Tun, President of the IFAD-supported Sacapultecan Ecological Association for Integral Development (ADIES), a producers’ group that has had great success in harvesting and marketing onions. ‘With corn, we were only able to harvest our crops once a year. Now, with onions and our new irrigation system, we are able to harvest three times a year.’ 

ADIES was able to ensure a strong initial product offering by bringing in technicians and new hybrid onion seedlings. But without a storage facility, products still went to waste, so in 2009 the producers’ association built a drying facility, which has allowed them to dry onions in just two to three days. Quicker drying times have ensured a higher quality overall product, allowing the producers of ADIES to access important markets such as Walmart. The three-fold increase in productivity is starting to yield dividends. One hectare of corn can bring in about US$ 624 a year, while a hectare of onions yields US$ 1,900 yearly. ‘For middle-income countries like Guatemala, building viable value chains – from plough to refinery and on down the line to wholesalers and middleman and finally to market – is essential in helping poor rural people step out of subsistence-based agriculture,’ says Mr. Enrique Murguia, coordinator of IFAD operations in Central America, Mexico and the Caribbean. 

All in all, everything seems to be going well for IFAD-supported projects in western Guatemala. But will they be sustainable? One welcome indicator comes from the AGRISEM producers’ association, which has replicated its better-crop/better-market model in five area communities without the direct support of IFAD. And for farmers like Felipe Cotoja, the long-term investment in rural development seems to be working as well. In 2000 IFAD funding brought a new irrigation system to Cotoja’s farm. ‘My farm’s revenues went up by almost 50% [...] by planting all these different types of vegetables,’ says the father of eight.