Vegetables in Jinotega, Nicaragua - PROJECT ENDED
Vegetables in Jinotega, Nicaragua - PROJECT ENDED
The food retail industry in Central America is dominated by a small number of supermarkets. Their involvement is thus key to making the vegetable market more inclusive and sustainable. A fairer relationship between farmers and companies, as well as better prices, would ensure continuity for farmers, securing the food chain and giving producers enough additional revenue to invest in environmentally-friendly technologies. We consider these steps necessary to fight climate change and feed the growing population.
The Nicaraguan vegetable market is still largely informal. However, in recent years, the formal market has expanded and become more significant. It now represents 20% of the total. In the future, supermarkets such as La Colonia and Walmart will continue to increase their influence in the region. A stable commercial chain would be a win-win situation for both sides, as the farmers would have stable prices and the supermarkets would not need to import vegetables from other countries. Walmart buys vegetables through a company called ICI-Hortifruit. Currently, this intermediary buys directly from individual farmers, which gives them no negotiation leverage and forces them to compete with each other.
COOSMPROJIN is a farmers’ organization from the Jinotega region in north-eastern Nicaragua, with 78 active members. However, it has not yet begun trading on its own. The organisation now wants to make a step forward and start selling collectively. They have encouraged the four producers who were already selling individually to ICI-Hortifruit to unite and sell through them, increasing their negotiation power. In this way, competition will turn into cooperation with farmers planning together in order to guarantee stable production all year around. The scheme is open to all members of the organization. Walmart is interested in the project because it will mean a regular influx of vegetables. The pilot programme will experiment with 6 different crops, with most farmers growing 2 or 3 species.
Generally, the farmers use traditional growing methods with large amounts of chemical inputs and no sustainable practices. They are extremely reticent to change their methods because the new strategies are seen as expensive and ineffective. However, they are very interested in finding a stable buyer because the informal market is very volatile, so they are prepared to change their practices in order to secure the Walmart chain.
- To produce the quantity and quality the supermarket demands, it is necessary to invest heavily in machinery. Farmers need access to credit to make this possible.
- There is a high rate of rejection for Walmart purchases; in some cases more of half of the products fail to meet the quality standards.
- The organisation does not have a warehouse. There are plans to construct one.
- COOSMPROJIN has no commercial experience.
- Walmart and COOSMPROJIN have an informal deal which creates insecurity in the chain.
- There are no strategies in place to secure production during drought periods, which are expected to increase due to climate change
- Only 5 farmers use Good Agricultural Practices regularly, whereas the rest prefer traditional methods because they don’t trust the new practices. This results in low productivity and high production costs.
- In most farms there is no a waste management system, which is dangerous especially due to the chemical residues that can affect the already scarce water sources.
- Lack of opportunities for women and young producers.
- We will work to strengthen the relationship between COOSMPROJIN and Walmart in order to create an inclusive commercial contract that will benefit both partners.
- We will strengthen the credit services of the farmers’ organisation so the producers can invest in new machinery.
- To strengthen the cooperative, we will offer leadership, management and market knowledge courses.
- To solve the water scarcity problem there are two strategies: in some farms we will construct irrigation systems and in others we will create mini water reservoirs.
- We will create chemical residue warehouses with all the necessary safety measures in place.
- To ease the transition to the new techniques, we will promote a combination of traditional and Good Agricultural Techniques so they can be incorporated with ease.
- To promote the participation of women and young producers in the new chain, we will prioritise their inclusion as partners in its expansion.
- The creation of a post-harvest facility will ensure that the vegetables meet the standards demanded by Walmart.
- We will promote an exchanges with other cooperatives, operating with a similar chain, to learn from their experience.
- Start selling collectively
- Rejection loss in each Walmart purchase has been reduced from 57% to 35% in lettuce.
- The organisation has a warehouse to collect and process the vegetables for delivery to Walmart.
- 10 warehouses for chemical waste have been created.
- The new agreement with Walmart has led to the sale of 5000 “estandares” per month of lettuce. (“Estandar” is the unit of measurement that the supermarket uses to buy its vegetables).
- A 2-year inclusive contract with Walmart has been signed.
- 29 producers have been incorporated into the Walmart agreement, including 5 women and 8 young producers.
What do we expect in the long-term?
- The Nicaraguan vegetable market will becomes more sustainable as other companies follow the example of Walmart.
- The growing number of young producers will secure the future of the organisation.
- The farmers are better prepared to deal with the consequences of climate change.
- Nearly all of Walmart’s vegetables will be supplied by national, small-scale farmers.