Rethinking U.S. Foreign Assistance Blog
MCC Compact Results in Honduras: Turning Farmers into Businessmen





You know the old maxim: “Give a man a fish and he eats for a day; teach a man to fish and he eats for life.” Well I’d like to amend it to include the following: “Show a man how to catch the most expensive fish and then sell it to a guaranteed buyer for a hefty profit and he, his family, and his community will all be eating whatever they want for life.” Trade fishing for farming and that’s exactly what you have as a result of the Rural Development project from the Millennium Challenge Corporation’s (MCC) recent compact in Honduras.

In this extremely tight U.S. budget environment, it’s all about the sustainability of U.S. foreign assistance, and the MCC made sure to build long-term sustainability into each of its investments in Honduras. The compact officially closed in September 2010, meaning Honduran farmers have had 14 months to either expand upon MCC investments or drop them completely and revert back to inefficient ways of producing. “Expand upon MCC investments” seems an understatement. The MCC’s method of farmer training turned over 6,000 farmers into businessmen who have amplified their incomes since the compact’s conclusion by purchasing more land and further increasing yields.

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By Casey Dunning of the Center for Global Development (CGD)

How was the MCC’s brand of training different? In a nutshell, the MCC investments in the Rural Development project included farmer training, increased access to credit, grants for agricultural innovations, and rehabilitated rural roads. Specifically, the farmer training entailed an intensive two-year commitment that taught a farmer new methods of planting including high-value crop production, soil and pest management, and novel irrigation systems. The training also included business instruction on how to sell the product in local and regional markets and how to locate and secure dedicated wholesale buyers. Other donors (in the U.S. and elsewhere) surely engage in this type of training, but the MCC difference lies in the criteria-based selection of beneficiaries, the result that was demanded, and the integration of multiple projects to achieve the final goal of increased farmer incomes.

The results are evident in rural Honduran farmers like Juan Carlos, a participant in the MCC’s program. It’s been over three years since his training ended, and, with his new-found skills, he has purchased more land to farm, expanded his portfolio of high-value crops, hired other farmers, and is in the process of building his family a brand-new house. The MCC program demanded that each farmer who received training earn at least $2000 per hectare by the training’s end. Juan Carlos is making well over $2000 on less than a hectare. (Keep in mind the GNI per capita of Honduras is $1,880 – MCC demands over-achievement.)

Or take the rural community of Ajuterique. Its farmers benefited from a triple investment of training, new access to credit, and a rehabilitated secondary road that allows for the quick conveyance of produce to market. Mario Palencia, the mayor of Ajuterique, described the MCC model difference and the continued results of the compact:

With other donors, people knew that the funds had come but they didn’t see any results. We had to convince people to adapt to the Millennium Challenge way of working with its different, more strict rules. The MCA gave us a model of how to successfully run a program in a transparent manner and it also convinced the people that the work they did must be of the highest quality to last into the future. With the MCA, all the projects were interrelated and well thought-out. It was all about supporting the farmers to produce a good product and then teaching them commercial skills so they have a solid foundation to build upon.

Our farmers have been taken advantage of in the past because they didn’t know how to market their product and so they always lost. The MCA came and it focused on reviving interest in the small producer that sometimes is very ignorant but is also very intelligent. The MCA was a school for us on how to manage funds and how a program should be run…the MCA administered it well, executed it well, and achieved the best results.

The breadth of agricultural training the MCC compact offered was impressively comprehensive, but the real highlight is the training’s sustainable results over a year later. Because the MCC model mandated that sustainability measures and results (in this case a farmer receiving a much higher income) be at the forefront of project design, the MCC is seeing its investments flourish well over a year later. After the MCC training dollars and spotlight have left the Honduran countryside, Juan Carlos continues to grow his family’s income. He has a standing agreement to sell his produce to Wal-Mart in Honduras and plans to use his increased income from this deal to expand his business and export internationally, and he will keep growing until he meets that goal.

MCC Compact Results in Honduras: Turning Farmers into Businessmen

 


2009. Millenium Challenge Account. Tegucigalpa, Honduras.

This web site was made possible through a grant given by the people of the United States to Honduras through the Millennium Challenge Corporation under the terms of a compact signed between the two countries. The information provided on this Web site is not official U.S. Government information and does not represent the views or positions of the U.S. Government or the Millennium Challenge Corporation.