Fintrac Harvest Spring 2007

Market link triggers profit increases for Salvadoran farmers

SAN SALVADOR — For 32 small cabbage farmers in Las Pilas, Chalatenango, sales are booming.

Since September 2006, production, postharvest and marketing assistance from Fintrac’s Agricultural Diversification Program (ADP), which is funded by USAID, has helped these farmers increase average sales per farmer from $4,050 to $6,750 per year, a 67 percent increase.

The program has also helped them establish a new marketing arrangement with a local processing company.

Prior to this, the farmers typically marketed their produce on an ad hoc basis to wholesalers. The cabbage was also sold directly from the field without cleaning or proper packing, resulting in wildly fluctuating prices. Indeed, the price level often determined whether the farmers sold product or left it in the field.

The technical assistance provided by Fintrac at the farm level, combined with the new market linkage, has changed that.

“Having a fixed price permits us to plan for our future by reducing the risks involved in selling,” said Raul Regalado, one of the Salvadoran farmers who received assistance in improved farming techniques, and who saw his production and quality improve dramatically.

With training and the establishment of standards and delivery scheduling, farmers have adopted good postharvest practices and are able to deliver a quality product in a timely manner. The buyer is happy because the farmers are supplying produce on a consistent basis that meets quality standards with fewer rejects.

“This has been a great opportunity for the farmers in our area,” Regalado said.

Since the implementation of the new marketing arrangement, 16 permanent workers have been hired in the field and eight permanent workers have been hired at the processing plant.

Fintrac ADP, which started in June 2006, is a three-year project that increases sales and rural incomes, generates employment, improves farming and food safety practices and boosts Salvadoran exports.

The program also links farmers to processors, supermarket chains, importers, and other marketing agents, strengthening the commercial sustainability of El Salvador’s agribusiness value-chain.