In recent months, Guatemala has made headlines for the wrong reasons: A lack of economic opportunities continues to force many Guatemalans to migrate. Those that remain are seeing their communities ravaged by the COVID-19 pandemic. With one-third of Guatemalans employed in the agriculture sector, chronic under-investment in farming — particularly in smallholder farmers — is both a contributor and potential solution to the current crisis.
Food and economic insecurity have plagued Guatemala for decades, threatening the country’s ability to survive a major crisis. Almost half the population cannot afford a basic food basket.
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Many of these are Indigenous peoples, concentrated in rural communities that are highly vulnerable to climate change and lack basic services such as health care. Inadequate resources, reduced farm productivity, and unsustainably low incomes have created a cycle of poverty — one of a number of drivers of migration from rural to urban areas, and further afield.
Despite the challenges, I firmly believe that Guatemala has the potential to support its people to live healthy, fulfilled lives. Boasting a beautiful, diverse landscape where natural resources abound — from tropical rainforests in the lowlands producing some of the world’s best coffee, to mountainous forested highlands where smallholder farmers grow specialty spices including cardamom and allspice. The country is rich in agricultural potential.
Cardamom is one of Guatemala's four main export products, yet many of the approximately 350,000 smallholder cardamom farming families live in poverty. For the agriculture sector to be profitable enough for everyone across the value chain to recover and thrive beyond even pre-pandemic conditions, the government and international community must invest in the tools, training, and infrastructure to make these businesses sustainable.
Growing opportunity: How supporting Guatemala's farmers keeps them rooted at home
USAID is investing in private sector partnerships to deter migration. But that approach has its limits.
Many individual smallholder farmers do not have a defined market for their products and are forced to accept unfairly low prices. This power imbalance can be attributed to five key factors that must be addressed to elevate smallholder farmers’ status in the value chain.
First, many individual smallholder producers are not organized in formal farmer producer organizations, or FPOs. This means they are not collaborating or learning new and improved methods to collectively improve production and productivity.
Second, such smallholders do not have access to working capital in the formal system. They are not eligible to receive credit, nor do they have guaranteed backup funds. In Guatemala, the public sector does not provide support to small-scale cardamom producers, so they lack access to adequate technical assistance and training in production, processing, and markets. The lack of a defined market for farmers means cardamom exporters control the market — and thus the pricing.
Third, most smallholders depend on a single crop to generate income, which is inherently risky because a family’s entire earnings are at the mercy of external factors such as the weather. Additionally, by only working with one crop, farmers are beholden to other actors in one product supply-chain. Case in point: Smallholder cardamom farmers do not have the drying equipment, so they are forced to sell it fresh to intermediaries who define the price, making farmer incomes unpredictable and varied.
By focusing on smallholder agriculture in Guatemala, the international development community can support rural farming families to improve productivity, access markets, and achieve living incomes.
—Next, farmers lack access to training in proper production methods. For cardamom farmers, genetic quality loss leads to low yields. At the same time, farmers do not nurture their plants adequately, and the crop is often affected by invasive insects such as thrips, fungi, and other diseases.
Finally, smallholder farmers lack capacity to engage in other aspects of the production process along the value chain. For cardamom farmers, the processing piece is critical as cardamom has to be dried within 12 hours of being picked or the whole crop spoils. Currently, farmers lack access to drying infrastructure, forcing them to sell to intermediaries and lose out on value-addition activities.
Current production processes also generate a significant carbon footprint, estimated at a loss of more than 4,000 hectares (9,884 acres) of natural forest per annual harvest because “mountain firewood” is used for the drying process. This includes precious woods, such as cedar, mahogany, zapotillo, laurel, and many other species.
First and foremost, being part of an FPO is fundamental to smallholder farmers growing their businesses to be sustainable and profitable. FPOs provide farmers access to the tools, training, and markets necessary to turn a profit. Once smallholders are associated and trained, they can access credit lines to invest in new and improved agricultural inputs, putting them in a better position to be able to access the national and international market.
Access to necessary infrastructure and new markets is key to smallholder farmers being able to set the price of their products. At Heifer Guatemala, we have found there is an international demand for certified organic cardamom, so we are helping certify cardamom producers.
In order to access new markets, smallholder farmers need access to credit. Heifer Guatemala is addressing this issue through the creation of a financial inclusion platform to promote a guarantee fund and open lines of credit for producers, in partnership with Inter-American Development Bank Group Lab, the National Federation of Savings and Credit Cooperatives of Guatemala, or FENACOAC, and other organizations.
These partnerships are critical to providing the highest level of support to farmers by making use of available funding and expertise.
For market access to be sustainable, agriculture supply chains need to serve smallholder producers equitably. Heifer International and its impact investing arm, Heifer Impact Capital, created Nueva Kerala, a Guatemalan spice supplier that will allow companies such as McCormick & Company to source directly from farmer cooperatives, strengthening their cardamom and allspice supply chains in a way that’s good for farmers and the planet.
The private social enterprise affords smallholder spice farmer cooperatives more ownership across the value chain, as Nueva Kerala has committed to ensuring at least 15% of the net profit of each sale goes back to the farmer.
Even with new market access, reliance on a single crop is a threat to farm sustainability and regular income. Crop diversification and product transformation help farmers to add new income streams, while benefiting local ecosystems. Green Business Belt supports cardamom producers to add other culinary spice crops, such as black pepper, allspice, cloves, cinnamon, and spices to their crops.
Affordable access to technology and equipment is essential for smallholder farmers to increase crop yields and productivity. For spice farmers, more efficient and sustainable dryers are key.
Through strategic alliances with various actors, such as Engineers Without Borders, and the recently announced Cardaforestry Project with Nueva Kerala and McCormick & Company, we are investing in the design and implementation of low-carbon, energy efficient dryers that use electricity and propane gas to replace firewood. We are also implementing a new fuel-efficient accessory for traditional wood burning dryers to reduce the amount of firewood needed by 20%, which will save 1,000 hectares of forest per cardamom harvest.
By focusing on smallholder agriculture in Guatemala, the international development community can support rural farming families to improve productivity, access markets, and achieve living incomes, helping to build resilient and thriving communities.
Breaking this cycle of poverty will be necessary for the country to recover from the global pandemic and reverse decades of systemic food and economic insecurity. Replicating a market access model, within the framework of natural resource management, will increase equity in the food system, creating a more sustainable agricultural sector for Guatemala and its people.
Visit the Future of Food Systems series for more coverage on food and nutrition — and importantly, how we can make food fair and healthy for all. You can join the conversation using the hashtag #FoodSystems.