In El Salvador US aid helps grow a new generation of rural entrepreneurs

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These high school students in Calderitas, El Salvador, are part of the newest generation of rural entrepreneurs: they grow vegetable seedlings, which they then sell to farmers taking part in the USAID program.

When Don Jose Cortez looks out on his land, he sees leafy fields ripe with hundreds of pale green globes: watermelons, flourishing here in larger quantities than ever before.

Thanks to a US Agency for International Development (USAID) agricultural diversification program, the melons have brought unprecedented prosperity to Cortez and other farmers in rural Parras Lempa, El Salvador. USAID's program helps farmers improve their growing techniques, cultivate new crops, and earn higher incomes.

While the present is a time of great success, it's the future that Cortez is thinking of: his two teenage sons, who attend high school during the day and then help him in the fields. "This is the example I try to set for them: to keep learning and to work hard," he says. "That's their heritage."

This hard work is paying off. Cortez leads a group of 64 local farmers who take part in the program; in the past two years, they've collectively invested $90,000 in renting additional fertile land. Cortez's group now manages 40 percent more land—a total of 252 acres—generating an additional $184,000 in annual income and 306 new jobs for the community.

The idea: From short-term relief to long-term economic growth

The origins of this particular USAID program go back to early 2001, when two strong earthquakes struck central El Salvador and smashed a series of rural farming towns. USAID's country office quickly assessed the needs of these communities and began a $200 million multiyear project to rebuild damaged houses, roads, and schools.

Through those assessments, the USAID team saw that it wasn't enough to use the agriculture component of the project just to bring communities back to where they were before the earthquake; people would still be struggling to earn a living from subsistence crops. USAID would need to create new long-term solutions in order to bring about true economic development.

The approach: New crops, new methods

USAID found that new growing techniques could help the farmers of central El Salvador improve their productivity. The agency selected Fintrac, a US-based private contractor specializing in agriculture, to implement a four-year program. Fintrac built on local knowledge by hiring top Salvadoran agronomists to work closely with the farmers on the new methods.

"Other agronomists that have come with previous projects barely spent any time with you," says Cortez. "What's been different about these agronomists [from Fintrac] is that they are here with us every week, and they really get involved in teaching us every single trick of the production techniques."

In communities like Parras Lempa, farmers learned new techniques—different seed varieties, more efficient fertilizing methods, new planting patterns—to improve upon the crops their families had been growing for generations.

In other communities, like nearby Calderitas, farmers learned how to cultivate tomatoes and peppers, which fetch high prices on the domestic market. A drip irrigation system made it possible to grow the vegetables using less water and without the time-consuming labor of hand-watering.

The outcome: Growing rural entrepreneurship

Along the way, Fintrac had to adapt the program to the reality on the ground. Fintrac's agronomists learned that their approach didn't work well with farmers who had less than an acre of land, limited access to credit, or insufficient access to water or roads. But the farmers who met these criteria thrived under Fintrac's assistance.

Fintrac's successes led USAID to rehire the company for an additional four-year program cycle. Today many of these rural entrepreneurs—like the group in Parras Lempa—earn enough to invest their own resources, with the goal of eventually becoming independent from the program.

Fintrac succeeded at promoting economic development by doing the following:

  • Increasing farmers' income. A study of 31 participating farmers showed that after 18 months, the average income had grown by as much as eight times. Farmers increased sales by $26,310 and generated enough resources to invest 75 percent of that income back into their farms.
  • Connecting with the local economy. Fintrac attracted agricultural suppliers by informing them of the potential increased demand from participating farmers. Today, farmers can buy most of their supplies locally and affordably.
  • Linking farmers to markets. "Our role is just to put producers and buyers in touch with each other," says a USAID staffer. "We usually facilitate their exchange of information or even take them to meet each other, and then let them settle it among themselves."

The challenge: Creating solutions that last

As the second four-year cycle nears its end, USAID must now tackle the challenge of making its lessons live beyond the program's end date and boundaries. The agency is currently transferring Fintrac's knowledge to agronomists in the Ministry of Agriculture. USAID is also building partnerships with local nongovernmental organizations that will allow it to reach smaller-scale farmers—including those who originally weren't able to take part in the program.

And in a domestic market increasingly dominated by supermarket chains, USAID will need to invest in new partnerships that enable organized farmers to retain their selling power.

The lesson: Effective aid can transform lives

"In spite of the earmarks and political concerns that often keep aid programs from achieving their full potential, this example shows that USAID can implement meaningful, transformative programs," says Omar Ortez, Oxfam America's senior coordinator for programming and partnership, who visited the program in spring 2008.

"This program came about because of an emergency, but made an early commitment to long-term development. By hiring the best Salvadoran agronomists, USAID built on local knowledge and became context-driven. It learned hard lessons about its approach and adapted the program accordingly. If the US funded more long-term aid programs like this one, just imagine what could be accomplished in the fight against rural poverty."

Learn more about Oxfam America's Aid Reform initiative.

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