Good Food for Cities

Coosempoda: impactful investment in the face of climate change

September 10, 2021
Selene Casanova
International communications
Guillermo Gutierrez

At the end of August, we received videos from the farmers' organisation Coosempoda in Nicaragua. In the footage you see their staff splendidly using a new machine for washing, sorting, drying and packaging roots and tubers. As the carrots are deposited directly from the jute sacks after collection in the field, jumping from station to station on the processing line, shedding all the soil into the water, the images filled me with enthusiasm.

Nicaragua remains one of the poorest countries in Latin America where 2.1 million out of 6 million people live on US$1.76 dollars or less per day.

I have rarely seen this scene during a visit to the facilities of a Nicaraguan smallholder farmers’ organisation. A room with women washing and packing vegetables in an artisan way is the usual sight.

Access to loans to invest in improving processes, quality or infrastructure is a panacea in the Central American country. Microfinance institutions offer very low amounts at high-interest rates and banks consider vegetable and fruit producer organisations as a "high-risk sector".

The horticultural sector in Nicaragua is struggling

  • Nicaraguans spend 58% of their income on food, compared to 43% of the higher-income segment of the population.
  • Fuel (standard fuel can cost up to 8 % more and diesel 11 % more) and electricity costs are also more expensive, and there are no subsidies or incentives for the agricultural sector.
  • During 2020, there was an average drop of 20-30% in the prices of horticultural products and an increase in production costs by 20%.

Coosempoda: from professionalisation...

Since 2014, Rikolto has partnered with Coosempoda, a group of 114 farming families that supplies 80% of the cabbages in the country's supermarkets. However, economic and social instability and continued extreme weather events have kept the organisation, along with some 15,000 vegetable farmers, permanently in a vulnerable situation.

At Rikolto, we are working with the cooperative to increase their profitability and sustainability by considering the wellbeing of their members, the community, and the environment. How we do it?

  • First, we work alongside Coosempoda to increase its professionalism in organisational, productive and entrepreneurial capacity through the consistent use of Scope Insight.
  • Second, we help by connecting them with companies, social impact investors and service providers willing to do business with fair prices, shared risks, long-term income security and stable demand. Furthermore, we work with universities and research centres to support studies and innovations that address critical issues as climate change.
  • Third, we support the sustainable chain development between the organisation and supermarkets or franchises such as Subway and Walmart, and recently supported the setting up of a union between 6 vegetable cooperatives, called UCHON, to strengthen their bargaining position and the diversification of their product offer.
Coosempoda is located in the department of Jinotega. It is in the north of the country. In the background of the photo you can see the cooperative's facilities and Lake Apanas. access to impactful investments

In 2020, Coosempoda obtained a loan from the Belgian social impact organisation Kampani through Rikolto.

Coosempoda applied for the funding by presenting a solid investment plan backed by the results of the Scope assessments and the experience of working with various actors in the Nicaraguan and Central American horticulture sector.

It has not been easy to operationalise the investment due to the pandemic. For example, prices of agricultural inputs increased by up to 30%, and the importation of a new washing and drying machine took longer than expected, but Coosempoda has persevered.

  • Install a well to guarantee the quality of the water for washing products and drinking water for the staff.
  • Obtain the new washing and drying machine, that will allow them to extend the quantity of products offered as well as their safety.
  • Proceed additionally with building a mesh-enclosed vegetable garden, and they are now cultivating tomatoes and sweet peppers.
  • See the greenhouse design plans approved, and they will be installed during the next month so that they can commence the production of seedlings.
  • Continue negotiations with a large supermarket chain to secure larger volume contracts for a number of their vegetable products. In the meantime, with the washing machinery now operational, they made their first deliveries of carrots and potatoes to the supermarkets in mid-August.

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It is experiences like this that highlight the value of Kampani’s flexible, farmer-first strategy. We are working closely with our partners on the ground to support Coosempoda through this challenging time, and are collaborating with the leadership to best understand how Kampani can support the cooperative in adapting to these challenges.

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Climate change is here

The same month I participated in a meeting between an agribusiness group in Central America and a European company to explore the possibility of importing deep frozen potatoes to Niaragua.

Not surprisingly I hear the lines: "We produce potatoes and until now we have been cutting them manually. But due to the climate we will not be able to produce the volume of potatoes that our shops forecast for the next two years.... We have calculated that it is more profitable to import them from abroad now"

Picture by Rafael Guzmán.

Due to climate variability and the economic, social and environmental vulnerability of underdeveloped countries, these discussions continue to take place all over the world. People in food-producing countries will be more exposed to the effects of the climate crisis.

During 2020, besides the pandemic, Eta and Iota, two category 5 and 6 hurricanes, hit the country one week apart, causing the loss of production of several food products. Food insecurity quadrupled by 2021 due to the pandemic, crop failures and reduced job opportunities.

Impact investments like Kampani's contribute to increasing Coosempoda's resilience.

As their product portfolio expands, they strengthen their bargaining position and access to clients. In addition, Coosempoda’ s new facilities also benefit UCHON. The union, representing more than 600 farmers in the north of the country, will also use the facilities to comply with food quality and safety standards.

Rikolto also works to link Coosempoda with other organisations in the Central American region so they can exchange lessons and experiences between producers, universities and private companies, to generate synergies and collaborations that involve the needs and demands of each actor from the production to the commercialisation of vegetables.

Meanwhile on the high hills of Jinotega Department, where the cooperative's offices are located, Bismarck Meza, president of Coosempoda, says that due to the investment received by Kampani, they now have a regular place to meet with the staff. "We used to hold our meetings in the same place where the vegetables were stored and washed, but not anymore” he says.

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