Poverty meets the market

December 18, 2007


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It was during the bumpy bus rides between rural Honduran farms and over the mountains to Guatemala that the fourteen passengers of the Oxfam Learning Journey got past the formalities with each other.  It was then, while bouncing and lurching over potholes and getting stuck (and unstuck) in muddy roads, that business savvy met community-based development expertise, that intimate knowledge of the volume and scale of multi-national food companies met with the market access needs of rural communities.  

The learning journey was an opportunity to compare Oxfam’s community-based livelihoods approach for overlap with the product-based production model that supplies the private sector. Organizers said the goal was to understand where the opportunities to collaborate might be between the goals of sourcing product responsibly and strengthening the fabric of rural communities.

The experience exceeded organizers’ expectations.  Juan Chaez, one of the hosts of the trip and regional policy coordinator for Central America, Mexico and the Caribbean with Oxfam GB said, “I expected to sensitize people, to exchange ideas, to tell them about our work and get some feedback or suggestions. I didn't really think we would get to a specific initiative and that people would want to participate in this as a collective effort.”

Over the course of five days in October, staff members of the Central American Regional Office of Oxfam Great Britain led Sustainable Food Lab members to project sites and through the framework of the organization’s market-based poverty alleviation approach.

The journey started in San Pedro Sula and Santa Rosa de Copan where Oxfam staff and local partners oriented the group to the sustainable livelihoods framework, to the Hondruan context, and to the policy environment of the Central American Free Trade Agreement (see Oxfam Learning Journey Report).

Oxfam is widely respected as one of the most experienced development organizations in the world. One of its guiding beliefs is that, “in a world rich in resources, poverty is a morally indefensible injustice which must and can be overcome.” The organization acts on this belief with 2,500 staff members in 74 countries and an annual budget of several hundred million dollars. Oxfam’s work falls along three inter-linking fronts: humanitarian support for immediate relief, capacity building for longer-term results, and mobilizing and informing policy changes to create more enabling environments for the currently poor.

Oxfam has launched a Global Agricultural Scale Up Initiative (GASUI) with Honduras, India and Ethiopia as case studies in order to prove that small-scale agriculture has an important roll to play as a mechanism to reduce poverty. Sonia Cano, country program manager with Oxfam, said the Honduran branch of the program has a target of reducing poverty for 110,000 people over 10 years and has reached 17,000 so far with sustainable agriculture education, a community bank and credit systems, and capacity building.

The approach she described was the backdrop for all the field visits that followed.

Through collaboration with local partners, they use a train-the-trainer model to increase the decision-making power of women and people with little or no land by building their business skills and helping to identify market opportunities and sources of investment. Farmers show each other improved farming practices and better environmental resource management. Key improvements include increased production, product diversification, conservation of soil and water, and lower input costs through use of organic fertilizers and biological pest control. 

The interventions depend on the scale of current operations, from improving basic production of corn and beans in order to improve food security for the poorest populations, to expanding family gardens for local markets, to organizing production among families and beyond to take advantage of regional and international markets.

The Oxfam approach takes community sustainable development as a starting point and looks from there at building market services, market chains, and the enabling policy environment. The business representatives on the trip had a different approach.

Dave Boselie, managing director of Agro Fair Assistance and Development Foundation said, “While you consider it in one way, our approach is to be guided by the product quality, variety, planning of production and harvest. We are only focused on the export market. We make a realistic assessment of what groups can really make it to the export market. How does all this relate to a pro-poor approach?”

The question stayed with the participants as they visited farms, traveled the countryside, and met the people and products they produce in rural western Honduras, home to some of the poorest communities in the country. The experience was a multi-day emersion.

“Through several days participants were brought face to face with the very difficult conditions through which the small farmers operate and despite all the limitations of the policy environment, of infrastructure, all the lack of access to basic social services, what they are doing even in those conditions,” Chaez said.

For Shane Sampels, director of quality assurance at SYSCO, the poverty and equal parts energy and vitality of the people hit a nerve.

“From the social aspect, I was surprised by the pride of the people, to see how even though the level of poverty was high, to see the pride, the eagerness of the people. They’re very resilient,” he said. “I could talk about it all day long but until you spend three or four days seeing it, feeling it, touching it, it’s very difficult to describe. In the U.S. you don’t see poverty at that level, or you have to go look for it. There, it’s everywhere, yet in the environment, in the climate and the soil, the potential to do so much is also there.”

One of the sites that stood out the most for him was a farm coop in the hills of Corquin that produces potatoes and carrots for local and Salvadoran markets. Cheaz also identified this place as a highlight of the journey Cheaz knows this place well but seeing this group of farmers in the context of this diverse set of colleagues helped him identify that what impresses him is the technical capacity of this group considering the harsh conditions in which they live. 

“They are so isolated in the remote highlands, so far away from and still their enthusiasm to make things work is right there. If, in those conditions and with the little resources they have they are doing this, what could the do if we unify efforts to support them?” Cheaz wondered.

Another highlight, according to participants, was a product fair in which small growers brought exhibits of their wares. Different farming cooperatives brought passion fruit, pineapple, honey, coffee, apples, pears chilies, plantains, cabbage, cashews, and aloe vera shampoo.

“The diversity of the products these people are producing and manufacturing was impressive,” Sampels said.

Issues of scale remained on participants’ minds. Boselie told the group that as a general rule of thumb, unless his company can grow five containers of bananas per week (100 hectares) they don’t consider a source worth the investment. Pineapples are at a similar scale. Sampels had the same thought. He said, “the volumes are miniscule compared to what a SYSCO or Unilever needs. There is a disconnect between scaling up volume to where a large purchaser can step in and increasing the education of small local growers on good agricultural practices.”

But increasingly, members of the group became interested in how to structure supply chains to strengthen the social fabric of rural smallholder communities.

Participants said that together they wrestled (and are still wrestling) with the points of connection and disconnection between market objectives and community production. They asked, “What can we do together as a collaborative process? Could it be that all we need is to do things a little differently and much more effectively?”

Though no clear answers emerged as to how global markets would have to be structured to ensure the health of small rural producer communities, participants did come up with ways to test whether business can meet real market demands in ways that contribute to livelihoods and other development goals such as building social and economic capital and increasing access to health and education in rural communities.

For example, business representatives on the trip saw that the technical expertise and market intelligence they can offer has the potential to help identify the most promising sourcing opportunities.  

“With the needed investment and leadership, these people can also have access to markets. We need to create the conditions for them to be able to also eat a piece of the pie,” Cheaz said.  “And this aspect of the global food system cannot be solved by looking at individuals or individual segments of the chain. This goes to the heart of what we are up to in the Food Lab.”

Oxfam is already engaging in a mapping process to identify likely products that would work well from a community perspective. Participants of the Oxfam learning journey have launched a joint initiative in which businesses will use their market intelligence to help identify products with potential. Through the joint initiative titled, “Food Lab in Practice: Policy Equity and Resources (FLIPPER),” member companies will look for products that create a match between sourcing needs and the community based production potential in Central America. Member companies will also explore developing local infrastructure and micro-finance.

All of this is more than Cheaz had hoped for. “I expected them to find the reality of subsistence farmers so far away from the reality of dynamic markets that there was nothing to do together, but there is some light at the end of the tunnel,” he said.

The specific market opportunities for the target communities in which they work was only part of the benefit. Cheaz said, “I learned how to better interact with the private sector, and the capacity to interact with others who are coming from a very different perspective is so important. The questioning, listening, challenging each other is a fantastic learning. If we want to transcend what we do on a daily basis we can’t expect to do that without bridging differences.”

For his part, Sampels said the experience wasn’t going to go away any time soon.

“This trip humbled me and broadened my horizon in the view of the world of agriculture. It left me with a desire to be part of the solution.”

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