Smallholder farmers ready to sell beans to supermarkets
Since the beginning of the P4P implementation in El Salvador, the strategy has been to strengthen smallholder farmers’ capacities and link them to sustainable markets beyond WFP. Despite facing numerous challenges, the P4P-supported farmers have now organized themselves, developed logotypes and created barcodes for collective sales to supermarkets and other stable buyers.
For almost five years, P4P and its partners have developed the capacities of farmers’ organizations across El Salvador by helping participating smallholders understand staple grain markets, the importance of quality and commercialization, and how to manage a small business.
Thanks to funding from Howard G. Buffett Foundation – the main donor to P4P in El Salvador - more than 15,000 smallholder farmers have been trained in agricultural techniques, post-harvest management and grain processing since 2009. In addition, almost 2,500 of these farmers have received further training in organizational management, institutional capacity building as well as the many legal aspects to be considered when dealing with the retail market.
The training sessions have been conducted by P4P’s technical experts or by strategic partners such as El Salvador Chamber of Commerce (CCIE), University of El Salvador, Instituto Salvadoreño de Fomento Cooperativo (INSAFOCOOP) and Comisión Nacional de la Micro y Pequeña Empresa (CONAMYPE).
Organised in P4P clusters to access markets
Thanks to their new skills, the farmers have been able to produce high quality grain and sell their surplus in formal markets. This has provided them with more sustainable livelihoods which in turn have improved food security and helped families become more resilient.
In order to further respond to the retail market’s demand for beans, 20 farmers’ organizations with over 8,000 smallholder members have organized themselves into three P4P-supported clusters. The largest one, Asociación de Productores de Granos Básicos de Occidente de R.L (PROGRANOS) consists of over 4,000 farmers from the Western part of El Salvador. The remaining two are Asociación Cooperativa de Comercialización y Producción Agrícola "Compañero Erick", de Responsabilidad Limitada (ACOPROERICK) that consists of farmers from the Eastern part of the country and Asociación Cooperativa de Aprovisionamiento Agropecuario San Sebastián de R.L. (ACAASS) that covers the central region. On average, 34 percent of the members are women.
The cluster structure of the farmer’s organizations has allowed them to sell greater volumes of grains and therefore to negotiate better prices. By selling quality products in bulk, the farmers have gained access to various markets beyond WFP. As an example, the farmers in PROGRANOS cluster collectively sold some 45 metric tons of produce to El Salvador’s farming product stock market Bolsa de Productos y Servicios (BOLPROS), putting over US$ 44,000 in the pockets of the smallholders.
Preparing smallholder farmers for retail markets
In the beginning of 2013, the three clusters initiated a legal process to create their own brands and patents in order to sell their beans to retail- and supermarkets. A partnership was formed with the Intellectual Property Unit from the National Registration Center (CNR) while farmers’ organizations received training on how to proceed with the official trademark registration for their products.
The farmers also came to understand the importance and impact of the commercialization of their grains. For example, they learned about how their beans have to go through a nutrient analysis and health inspections in order to access supermarkets and local shops. They also learned that the product needs a packaging design and appropriate retail barcodes. Through navigating the demanding process of meeting all the criteria, the participating farmers strengthened their business and management skills. As a result, they also reduced the need for intermediaries, allowing the farmers’ organizations to sell products directly to stores.
Despite successful progression many challenges remain
As the clusters recently finished the legal process of creating their brands, logotypes and patents, they are now in the process of strategically planning for entering the retail markets.
The P4P-cluster brands and logotypes have recently been approved and will soon be entering the retail market in El Salvador.
“Being able to join as one has given us the ability to access other markets. We can now negotiate the sales of better volumes of beans during negotiations rounds, as well as access local supermarkets with our own brand" said Leonidas Ramirez, president of Progranos cluster and treasurer of his farmers’ organization Adesco-Agrisal.
By becoming a part of the retail market for beans, farmers will be able to get revenues from the sale of beans year-round and not only after harvest.
Since the clusters now have the capacity to negotiate better prices for their high quality production and be competitive in new markets, one of the goals is to further diversify their customer base through direct sales to shops and supermarkets. These achievements will increase both profit and income stability for farmers, since intermediaries no longer receive a share and because food prices in retail markets are typically less volatile.
However there are still challenges that farmers’ organizations must overcome in order to access food markets - low production and aggregation capacity, lack of access to credit through financial institutions, competition with larger agroindustry and the risk of defaulting if the contracted quantities are not achieved.
While collective marketing and the cluster structure mitigate some of the challenges mentioned above, WFP and its partners are committed to continue support smallholder farmers in El Salvador.
Story by Marta Ortiz and Luis Penutt, WFP El Salvador