BC Business
Santos Machado takes off his baseball cap and wipes the sweat off his brow. It’s early August and Machado is lying on his back on the dirt driveway of his 3½-hectare farm in León, Nicaragua, halfway underneath his sembrador – a large seed and fertilizer dispenser meant to be hitched behind a pair of oxen.
He takes a breather before torquing a wrench to make adjustments to the machine. Fruit trees shade the yard from the hot midday sun while a half dozen pigs loiter nearby in a swale of cool mud. The sound of Machado’s two young children, helping their mother grind coffee beans, can be heard from inside the family’s partially walled home. Machado is getting ready to plant a new sesame crop. In a few days, he’ll use the sembrador – bought with help from a Canadian-funded aid project called Produmer – to plant seeds for their future.
Machado is one of more than 800 Nicaraguan farmers being helped by this unglamorous but progressive initiative – one that’s showing measurable results and attracting investors and philanthropists from across North America. Produmer is managed by the Mennonite Economic Development Associates (MEDA), a not-for-profit organization, and gets funding from private investors and the Canadian International Development Agency (CIDA). Its focus is small – the tiny sesame seed – but its ambitions are large: to bring financial independence to farming families who have been frequent victims of indiscriminate natural disasters and unforgiving world markets. Produmer takes a different approach than that of a typical development project, where money and technology are dumped into countries without collaborating with the people meant to benefit. Instead, it hinges on the idea that poor farmers are perfectly capable of taking responsibility for improving their own lives – so long as they can access the necessary cash, equipment and training.
As far as needy locales go, Nicaragua is near the top of the list. While the World Bank reports that the country’s economy is slowly growing and stabilizing, it remains one of the poorest countries in Central America, with the third-lowest per-capita income in the Western Hemisphere. Almost 70 per cent of rural Nicaraguans still live in poverty. Farmers have worked at organizing themselves here, bartering collectively in co-ops to gain some leverage when they sell their goods, but many still distrust the handful of exporting companies that dominate their commodity markets. Bank loans that could allow them to grow out of their dependent positions are extremely hard to come by.“It was eye-opening how these people are denied funds,” says John Toews, owner of Oakhill Enterprises, an Abbotsford home-building company, and an investor in MEDA’s work. He took part in a MEDA-sponsored tour of Nicaragua in early April, visiting rural communities north of León. “These are hard-working, family-oriented people, and sesame seeds are their main income.” Toews invested $25,000 into MEDA’s microfinance program, which enables farmers to access small loans for equipment and training, and he expects to net a seven per cent return in five years. (Ninety-seven per cent of MEDA’s microfinance loans have been repaid.) MEDA holds that a business-like approach is better than straight charity – a key reason why the organization has attracted the support of private investors such as Toews.
MEDA has been doing development work in Nicaragua since 1990 and started the Produmer project specifically to assist farmers in 2001. After four years of working with various crops, MEDA determined that sesame was the best fit for the people, the land and the economy. Produmer program director Keith Poe, an American raised in Nicaragua, knows first-hand that sesame is a hardy crop that can tolerate fierce rains and poor soil and has a strong natural resistance to pests. “Sesame is something that will last forever here because it’s easy to grow and it doesn’t take much money to start,” he says. It takes a lot of manual labour, he adds, but requires neither irrigation nor vast tracts of land and can be grown where coffee can’t. It bucks the trend of industrialized agriculture by suiting the land it grows on, and small growers benefit the most from it.The grain arrived in Latin America from Asia via Spanish conquistadors and is now found wherever hamburger buns, sushi or tahini exist. The worldwide sesame market is sizeable and growing rapidly, driven by the expanding middle class in India and China and a growing international appetite for hamburgers. Worldwide trade was valued at $850 million last year, up 70 per cent since 1993. In 2006 Nicaragua’s sesame industry exported 3,000 tonnes within Central America and to Japan and Europe.
Since 2001 MEDA has managed to convert $2.8 million in CIDA money into training and development for Nicaraguan sesame farmers, with the goal of keeping them prosperous in perpetuity. But to get the benefit out of sesame, funding and expertise had to get into the hands of farmers. According to CIDA’s head of aid in Nicaragua, the agency turned to the Mennonite organization because “there was no local agency that could provide sesame farmers with comprehensive support.” (Another reason for the hands-on approach is that corruption is endemic in Nicaragua: the country ranks 123rd out of 179 nations in Transparency International’s 2007 Corruption Perceptions Index.)
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Farmers under Produmer boosted their production of conventional sesame by 68 per cent between 2006 and 2007, although those gains took a heavy hit from Hurricane Felix. But it’s not a project for the unmotivated: those who don’t buy into the methods taught in Produmer’s classrooms are cut off from further assistance. So far, about 24 per cent of the initial farmers have been turfed. The 825 who remain are scattered over 300 kilometres of coastal plains, punctuated by half a dozen dormant volcanoes, and last year their gross incomes went up 24 per cent. That’s the kind of return Toews says he wants from his investment. “It’s important the money helps other people, rather than just having it grow for myself,” he says. “Microfinance is not there to make money on the backs of the poor.”
In the village of Malpaisillo, three hours down a pothole-ridden highway from León, farmers such as Carmelo Silva plant their sesame seeds using oxen and local labourers. As a result of Produmer’s training, Silva now plants only certified seeds, which guarantee a high yield and which buyers welcome as a sign of quality. “Buyers don’t even bother offering low prices for my crops anymore,” he says with a smile. After weeks of 15-hour days in the field, Silva will harvest his plants by machete, pile the stalks together in clusters, whack the sun-dried seeds out of their pods and sell them to a buyer pre-arranged through his co-op.
Luis de la Cruz Sotelo, the soft-spoken president of the farmers’ co-op in Las Lomas, in northwest Nicaragua, is equally upbeat. “It’s 100 per cent easier to make money now,” says Sotelo, 49. Twenty years ago, he scraped by on rented land, but today he owns several acres and adds more land each year. Rather than focusing on creating value-added sesame products – which would depend on Nicaragua’s unstable manufacturing infrastructure – Produmer is helping farmers establish a stable niche in the sometimes volatile global sesame markets now dominated by China, India and Myanmar (Burma). One way to do that, as Sotelo discovered, is to go organic.“If you want to sell, you go conventional. But if you want to keep your money, you go organic,” says Sotelo, referring to the lower costs of pesticide-free production and higher prices fetched by the organic product. The three-year wait for certification made for some lean times, he says, but it was worth it: Sotelo and other organic farmers saw their incomes soar by 69 per cent between 2005 and 2006. Hugo Ramon Moreno, a Nicaraguan agronomist working for MEDA, points out that the new techniques are making a difference, as he tours farms around León. “Farmers weren’t using their land that well, the seeds were of low quality and chemical products were destroying the land,” he says. “Now Produmer is providing us with an answer for all these problems.”
This is the kind of slow and steady progress many foreign aid projects assume the rural poor won’t wait for, says a Vancouver expert on international development. “There may be a perception that the poor don’t think about the future,” says Hisham Zerriffi, an assistant professor at UBC’s Liu Institute for Global Issues. “But a stakeholder is not just some farmer who sits back and receives foreign aid, then goes back to doing what he did before.” Zerriffi says MEDA carefully considered the amount of time farmers are willing to forego present value in favour of future cash flow and financial stability. By providing the farmers with classroom and in-the-field instruction on how to properly plant, thin, fertilize and control weeds, Zerriffi says, the project also avoids a “technology dump” problem, which occurs when foreign aid agencies pick up and leave after introducing new technology. Having provided training specifically on growing sesame since 2005 – training that augments farmers’ traditional knowledge – Produmer has, according to Zerriffi, established a succession plan for when the project ends, likely near the end of 2008.
Nicaraguan farmers have received foreign aid before, but success on this scale is new, and some sesame farmers fear the end of MEDA’s involvement as advisor, advocate and agent. They feel it will be difficult to tap into the competitive world sesame market without MEDA’s assistance. At the 2006 Baking Association of Canada conference, a Nicaraguan delegation was unable to wean Canadian importers away from cheaper conventional sesame from India. That said, MEDA’s $3-million microfinance treasury will remain after Produmer is gone, with the goal of growing into a stable source of financing far into the future. Larger institutional investors are also starting to come on board.
Indeed, the Nicaraguan farmers have already proven they can weather the most severe of storms. Last September’s Category 5 Hurricane Felix (and ensuing rains) destroyed some 31 per cent of the sesame fields planted under Produmer – and yet many farmers still turned a profit due to the higher quality of plants that survived. Now they’re using the funds to invest in their futures by buying equipment, building sturdier homes and sending their children to school. In a country with a history of disasters, both acts of God and man-made, it’s only natural for there to be some trepidation about the future. But as they begin to take over their own finances, technology and training, farmers such as Santos Machado, Carmelo Silva and Luis de la Cruz Sotelo are starting to believe that they can make it on their own.
Greg Amos is a 2007 graduate of Langara College’s School of Journalism and the first winner of the CIDA-Langara Journalism-International Development Scholarship, which provided funds and support to research and write extensively on Canadian international development abroad.