Mercy Corps, USAID and Wal-Mart Forge Alliance for Guatemalan Farmers

March 5, 2008

Photo: Amy English/Mercy Corps

Guatemala City, Guatemala - The global relief and development organization Mercy Corps, the United States Agency for International Development (USAID), Wal-Mart (NYSE: WMT) and the Guatemalan nonprofit Fundación ÁGIL (Fundación Apoyo a la Generación de Ingresos Locales) today celebrated the launch of an alliance to improve the lives of small-scale farmers in Guatemala. Heralding the Inclusive Market Alliance for Rural Entrepreneurs as a bold solution to Guatemala's persistent rural poverty, the founding organizations introduced the first farmers who will benefit from its training and market connections.

The Alliance, a three-year effort, will build the capacity of small-scale farmers to help them move from traditional corn and beans production to demand-driven production to supply major retailers like Wal-Mart in Central America. A first wave of farmer groups - including the Santa Marta agricultural group, El Esfuerzo agricultural group and the "Asociación para el Desarrollo Integral y Ecológico Sacapulteco (ADIES)" - has been chosen as candidates to participate in the Alliance. Additional groups from the departments of Sololá, Chimaltenango, San Marcos and Alta and Baja Verapaz will be selected in coming months. These groups will supply retailers with targeted crops like tomatoes, peppers, potatoes and onions.

"The Alliance will create tremendous opportunities for small-scale farmers to become productive and prosperous entrepreneurs. As a result, farmer families will have higher incomes and, we expect, better access to education, health services and other resources to improve their lives," said Paul Dudley Hart, Senior Vice President of Mercy Corps. "This is a fantastic example of nonprofits, business and government working with local communities to make a lasting difference."

Guatemala's overall poverty rate stands at 51 percent, with nearly three-quarters of the poor living in rural areas and working in agriculture. With the resources provided by the Alliance, small-scale farmers in these rural areas will be able to grow into entrepreneurial producers of premium horticultural products. It is expected that higher, more consistent incomes will lead to increases in education, health and food security for their families and communities.

"Wal-Mart is committed to the future of Central America, and we are proud to be part of efforts to promote economic growth and improve quality of life in the region," commented Ignacio Perez, CEO of Wal-Mart Centroamérica. "Through this Alliance, we will be able to buy more quality product directly from more small, family-run farms. Farmers' standards of living will increase, and our customers will benefit from access to a wider variety of better products at competitive prices."

Farmers will participate in training on crop diversification and good agricultural practices, processing and post-harvest techniques to meet national and international agricultural standards, and business and management skills including the use of critical pricing information. They will also receive assistance to buy tools, equipment and other agricultural resources.

The Alliance is backed by financial commitments of $1.1 million from USAID, $600,000 from Wal-Mart, and $500,000 from Mercy Corps. Through other groups working with the Alliance, such as AMANCO and Fundación CRYSOL, farmers will have the opportunity to access resources ranging from irrigation equipment to loans tailored to the needs of small farmers.

The Inclusive Market Alliance for Rural Entrepreneurs was developed and funded as part of the USAID Global Development Alliance (GDA) initiative. According to Wayne Nilsestuen, USAID mission director for Guatemala, "This important alliance builds on our previous efforts with Mercy Corps and other partners to develop sustainable value chain alliances in Guatemala. This alliance was expressly designed so small-scale farmers could enter the program at levels appropriate to them and receive the assistance they need at the right time. This increases the likelihood that all actors—producers, buyers, distributors, and consumers—are winners."

Each Alliance member will contribute distinct skills and expertise. Mercy Corps will provide overall management and work directly with small-scale farmers to increase productivity. They will cooperate closely with Fundación ÁGIL, a Guatemalan non-profit that will help groups improve post-harvest techniques to meet the standards required by the retail sector. Wal-Mart, through their wholesale buying agent in Central America, Hortifruti, will provide crucial market information to participating farmers and supply them with a reliable market for their produce. USAID/Guatemala will provide oversight of management-for-results using its extensive experience with post-conflict families and communities as well as value chain alliances.