Fintrac Harvest
an update of fintrac's agribusiness activities worldwide
summer 2003
Cocoa Sector in Uganda Recovers, Exports Grow
Under the USAID-funded Uganda Investment in Developing Export Agriculture (IDEA) project, on which Fintrac is a subcontractor to Chemonics and responsible for the program’s high value crop component, Fintrac staff have been assisting producers of cocoa since 1997. Although cocoa is not considered a “high value” commodity due to relatively low returns compared to other crops such as vanilla and cut flowers, there were several reasons that the team decided to focus on the commodity. According to High Value Advisor Dr. Steve New, “the crop is easily produced by smallholders who are accustomed to lower returns from staple commodities. Cocoa therefore presents Ugandan smallholders with relatively strong commercial opportunities.” Furthermore, producers in many areas were contending with coffee wilt, which, compounded with falling prices, made growers keen to explore alternatives such as cocoa. International and local cocoa traders were confident that the long-term market prospects were good and that demand would increase for Ugandan cocoa if production could be improved and increased. The high value team’s initial production assessment revealed that, despite higher altitudes (1,000 meters or more), Ugandan growing conditions were still competitive. The major problem was that many mature cocoa trees had been neglected and were in need of rehabilitation. The team began working with the Ministry of Agriculture, Animal Industry & Fisheries (MAAIF) cocoa team and the newly formed Uganda Cocoa Association to implement a technical assistance package aimed at strengthening the industry. Assistance has included: pruning and tree maintenance to bring neglected trees back into production; post-harvest handling,
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Fintrac client Orlando Gallegos examines his onion crop in El Salvador. By next season, Fintrac client farmers will supply more than one-third of domestic demand for onions.
Farmers in El Salvador Reaping Big Profits by Supplying Local Market
El Salvador imported more than $113 million worth of fresh and processed fruits and vegetables in 2002 according to official government import statistics. Fresh vegetables imports alone were estimated at $20 million, but are likely much higher as it is thought that many imports from neighboring countries are underreported in official trade data. “The opportunity for farmers to supply their own market was too good to pass up,” says Godofredo Pacheco, Marketing Advisor on the USAID-funded Fintrac IDEA Program in El Salvador. In response, Fintrac has been implementing integrated crop-specific production and marketing programs for products with the most immediate potential: onions, tomatoes (field and greenhouse), bell pepper, cucumber, and cabbage. “Our focus on the local market achieves two goals of the Fintrac program in El Salvador,” says Boris Corpeño, Fintrac’s Chief Agronomist in El Salvador. “First, it provides for quick returns to farmers to show them that the new technologies being introduced by Fintrac can quickly increase profits. Secondly, it gives farmers experience in modern production practices for horticultural products that, along with substantially increased productivity, will eventually open export market opportunities. If farmers cannot supply the local market where prices are exceptionally high, how can we expect them to compete in the much more competitive international market?” In just one year since Fintrac started working in El Salvador, it has shown that farmers can indeed compete against foreign suppliers for a wide variety of fresh vegetables – provided that they introduce modern technologies
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from 10,000 plants to 15,000 plants per manzana, contributing to the yield increases and production practices that increase yields, along with other practices recommended by lower production costs, and provide for a conFintrac. Based on weekly sales prices, gross sistent level of quality of supply to local buyers. sales have fluctuated between $10,000/mz and Field-grown tomatoes have been one of $25,000/mz, with production costs of approxithe most widely planted crops because of high mately $4,000/mz. For the 2003/2004 season, local demand and attractive prices. Since Fintrac Fintrac’s program has targeted a 408 percent started installing drip irrigation systems, 46 increase in sales (to $1.33 million), a 58 permanzanas (1 manzana = 0.6 hectare) have been cent increase in average grower net profit (to planted. Yields on these fields have achieved $6,000/mz), a 60 percent increase in average 23-57 tons per manzana yields (to 80,000 lbs/mz), (mz), 11 to 45 tons above and a 38 percent reduction the national average. The in per unit production cost. introduction of seedling In April, the first nurseries and training in harvests of Fintrac’s onion nursery production pracprogram began in the detices have significantly partment of La Libertad. improved seedling condiDuring this first fourtion and saves producers month season, 550 tons are between $800 and $1,000 expected to be harvested per manzana as they now by 26 partner farmers prodo not need to import seedducing on 24 manzanas. lings from Guatemala. To Onions are being sold in date, 15 clients have built the fresh form (a group of seedling nurseries with a 4 to 6 onions tied by the production capacity of leaves), and will soon also 20,000 to 50,000 plants be available cured when a each, providing them with Fintrac-designed packing/ an additional source of incuring facility is comcome. Total earnings per pleted in the next few manzana depend on indimonths. Demand from lovidual farm productivity cal buyers has already A Fintrac agronomist provides client farmer Carlos Paices with technilevels, with net incomes resulted in plans to expand cal assistance in weed control of his onion crop. Yellow sticky traps seen in ranging from $4,000 to the program for the 2003/ the distance have been introduced as part of Fintrac’s Integrated Pest Man$21,000 per manzana. 2004 season to 100 agement (IPM) program . Based on the returns manzanas (100 growers) achieved during the first with new production zones season, the program will be added in the departments expanded to 145 manzanas in 2003/2004. Sales of San Miguel and San Vicente. Sales are exwith amortized investment is approximately are expected to increase from $400 thousand to pected to increase to $700,000, representing $0.12/lb. With sales prices varying between $3.0 million, average net profit will increase to 36 percent of current domestic demand. $0.21/lb and $.38/lb, growers are reaping sub$15,000/mz, average yields will expand from Through adoption of Fintrac recommended stantial profits. By the end of the 2003/2004 50,000 lbs/mz to 125,000 lbs/mz, and per unit production technologies, average grower net season, 20 greenhouses will be in operation and production costs will decline from $0.06/lb to earnings are expected to increase from $2,000/ the product range will be expanded to include $0.04/lb. mz to $3,500/mz, farm yields will increase cucumber and colored bell peppers. Fintrac has also implemented a greenfrom 40,000 lbs/mz to 52,000 lbs/mz, and unit Bell pepper, like tomato, is frequently house production program for tomatoes, production costs will decrease from $0.075 to grown during the rainy season, commands a primarily to allow growers with limited land and $0.060 per pound. good price and is one of the crops that some water resources to benefit from opportunities in Fintrac’s cucumber program is being exproducers have had experience in growing prior the horticultural sector. Greenhouse construcpanded from its current 26 manzanas to 50 to Fintrac’s arrival in El Salvador. Forty Fintrac tion is being concentrated in the departments of manzanas. With this expansion, El Salvadoran clients planted 62 manzanas during winter 2002/ Cuscatlán and La Libertad, with scattered clifarmers will be able to supply almost all domes2003. Prior to Fintrac involvement, production ents in the departments of Sonsonate and tic demand, and at the same time conduct a trial yields averaged 18 tons/mz. With introduction Ahuachapán. To date, Fintrac has 17 greenhouse export shipment of 14 containers (257 tons) to of Fintrac technology, yields have increased to clients – 2 clients with commercially purchased the US market during the upcoming winter seaup to 45 tons/mz. With the use of drip irrigagreenhouses; 2 clients that had existing low-cost son. Based on results of these trial shipments, tion, it was possible to increase plant populations
El Salvador
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greenhouses; and 13 clients that are new to greenhouse production (of which 4 are coffee producers) have been assisted in the construction and operation of Fintrac-designed, low-cost greenhouses. Four greenhouses are currently producing with the remainder recently completed and transplanted, or currently under construction. With a plant population of 1,500 bags per house (572 m˝) and an average yield of 10 lbs/plant, a client can produce 15,000 pounds per 6-month cycle. The production cost
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Fintrac Harvest - Summer 2003
production for export may increase further. Through implementation of Fintrac technology, participating growers can expect to see net earnings increase by 60 percent to $1,600/mz, yields increase from 25,000 lbs/mz to 37,500 lbs/mz, and production costs decrease from $0.068/lb to $0.060/lb. Cabbage, ejote (green beans), pipian (squash), dried beans, and baby corn are also being produced by Fintrac clients as part of its crop rotation program. Rotation crops are crops for which Fintrac does not have specific programs, but are important as alternate crops in breaking pest and disease cycles that may arise with continued plantings (back to back) of other row crops. Fintrac clients have noted productivity increases in all of these crops since they are applying the same Fintrac technologies to them as they do under Fintrac’s crop-specific production programs. Forty-six manzanas of varied rotation crops were planted during the last six months. Planted area is expected to increase by 700 percent during the upcoming production year and sales from these crops are expected to earn growers an additional $570,000. Further expansion is likely, particularly for cabbage as El Salvador imports more than $3.5 million per year in this item alone. While Fintrac is working with a variety of products, all farmers are being provided with the same package of technical assistance, tailored to meet the specific requirements of their crops. Fintrac technical assistance includes land preparation, plant nutrition, installation and management of drip irrigation systems, integrated pest management, farm chemical safety, cultural practices, nursery construction and management, greenhouse construction and management, and harvesting. Complementary assistance is also provided in postharvest and marketing operations. “As in all new countries where Fintrac begins operations, Fintrac needed to quickly show that it was different from many of the development programs that farmers saw in the past … that farmers could double or triple their incomes,” says Dennis Lesnick, Fintrac Program Director in El Salvador. “After one season, the word is out that we can deliver on our promises. In the beginning, we had to find farmers willing to take a risk on us. Now, farmers are coming to us and asking to become clients … and other development programs in El Salvador are asking us to work with them to help incorporate our farm model within their programs.”
Honduras Makes Inroads into the Specialty Coffee Market
In April, Honduran specialty coffee producers with the help of the Fintrac Centro de Desarrollo de Agronegocios (Fintrac CDA) technical and marketing staff successfully exported specialty coffee to the US after a well known US buyer and international journalist traveled to Honduras at the invitation of Fintrac CDA. Visits to client coffee farms were arranged by Fintrac CDA as part of its ongoing work with the specialty coffee sector in Honduras. Since January 2002, Fintrac CDA has been providing technical assistance to farmers who grow coffee in high altitude regions with microclimates and has been installing processing equipment to improve product quality. While global prices for traditional coffee have plummeted in recent years due to oversupply, the market for specialty coffee has remained strong. Growers who can produce specialty coffee typically receive a premium over traditional coffee prices. Fintrac CDA staff realized that certain farmers in Honduras could increase their incomes by identifying quality coffees, improving harvesting and processing techniques, and effectively marketing product. Technical and marketing assistance has been provided to clients in the departments of Ocotepeque and Choluteca. “In a relatively short time, we have already seen a marked improvement in harvesting and processing techniques that have resulted in increased prices for our client farmers,” reports Ricardo Pineda, Fintrac’s Chief Processing Specialist and supervisor of its Honduran specialty coffee program. Fintrac has aided Honduran coffee producers and processors along all steps of the production and processing chain. Fintrac CDA donated equipment to the Western Union of Coffee Producers, including a complete cupping laboratory, two static dryers, a dehuller, and a sorting belt. This enabled the farmers for the first time to fully process their coffee at the local level as opposed to transporting wet parchment to centralized exporter facilities. Willem Boot, Fintrac CDA consultant and master coffee taster, has traveled to Honduras several times to train local coffee cuppers and to help construct a flavor map for the coffee growing regions. After his most recent visit to Honduras, Mr. Boot commented that “Honduras is building an image as a serious supplier of specialty coffee. The country is a small giant in the world of coffee production.” In addition to providing technical assistance, Fintrac CDA has assisted in marketing Honduran specialty coffee by providing US buyers with samples from farms in Honduras. Fintrac has also created a web site (www.honduras-coffee.com) that provides general information about specialty coffee in Honduras and gives profiles of individual growers and their coffee.
Fintrac provides training in “coffee cupping” as part of its specialty coffee development program in Honduras.
Summer 2003 - Fintrac Harvest
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Cocoa Sector
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fermentation and grading at the village level to improve quality; and introduction of a Code of Practice incorporating basic EUREPGAP principles into production. In addition to the rehabilitation of mature trees, there is now a large demand for cocoa tree seedlings from MAAIF and private nurseries. MAAIF has estimated that more than 3 million seedlings were planted during 2001/ 2002 and will come into production within four years. Dr. New notes that “the progress and impact to date has been impressive, mainly because cocoa prices and demand have increased continuously over the past three years to reinforce our technical inputs and motivate the growers.” Export earnings are expected to increase another 20 percent in 2003 to $6 million.
Welcome Aboard
Gustavo Atuñez joined Fintrac in January as a Plantain Production Specialist based in Honduras. He previously supervised a banana and plantain production program in Bolivia. Carmen Bañoz joined Fintrac IDEA in May as an Administrative Assistant based in El Salvador. Before joining the project, she worked with the Fundación para el Desarrollo Agropecuario Salvadoreño. Mary Duncan joined Fintrac in June as Manager of Trade & Investment Services based in Washington DC. She is the former Director of Trade for the Jamaica Trade Commission/ JAMPRO office in New York, and an agribusiness manager for the CANEXPORT program in Jamaica. She has an MBA from the University of the West Indies and an MSc in agriculture from Texas A&M. Rene Gonzalez joined Fintrac in January as an Agronomist based in Honduras. He is coordinating Fintrac’s seedless watermelon program, including training farmers in EUREPGAP requirements. Zeb Jones joined Fintrac in January as a Food Marketing Specialist on the Croatia ACE project. He has more than 30 years experience in production and marketing of fresh and processed horticultural products and flowers. He specializes in greenhouse production, including hydroponics. Julie Lehman joined Fintrac in December 2002 as a Market Analyst and Program Associate based in Washington DC. She previously worked with a shipping company in Miami. She is fluent in French and has a Bachelors degree in international business from Georgetown University. Ricardo Marroquín joined Fintrac in September 2002 as an Agronomist based in El Salvador. He has extensive experience in the production of onions, chilies, and tomatoes, and worked previously as an extension agent. He has a degree in agronomy from Universidad de El Salvador. Melvin Medina joined Fintrac in October of 2002 as a Greenhouse Production Supervisor based in El Salvador. He is a graduate of EAP-El Zamorano and previously worked as chief of vegetable production for FUSADES in El Salvador. Allan Murillo joined Fintrac in January as a Marketing Specialist based in Honduras. Mr. Murillo is fluent in English and previously worked as the general manager for a Honduran importing company and for PriceSmart. Liliana Murillo joined Fintrac in March as a Special Programs Assistant based in El Salvador. She will help coordinate and implement Fintrac’s Farm Chemical Safety, Integrated Pest Management, and Business Development Services programs in El Salvador. She is a recent graduate of EAP-El Zamorano. Jaime Torres joined Fintrac in October 2002 as an Agronomist based in El Salvador. He is an experienced farmer who specializes in the production of tomatoes, chilies, and onions. He holds degrees in agronomy and agricultural engineering from EAP-El Zamorano. Claudia Urrutia joined Fintrac in September 2002 as a Monitoring & Evaluation Specialist based in El Salvador. She will also coordinate Fintrac’s Farm Chemical Safety, IPM, and Business Development Services programs in El Salvador. She previously worked as a project coordinator at FUSADES and as a consultant for IICA. She holds agronomy and agricultural engineering degrees from EAP-El Zamorano. Rafael Vasquez joined Fintrac in February as an Agronomist based in El Salvador. He holds technical and engineering degrees in agriculture from ITCA and UTLA Universities in El Salvador. He previously worked as an independent irrigation consultant for Fintrac.
Cocoa is becoming a profitable crop for Ugandan farmers. Exports are expected to grow to $6 million in 2003.
Fintrac Harvest is published regularly to share information on Fintrac’s activities with staff & clients. Clients seeking additional information can contact Fintrac at:
1746 Kalorama Road NW Washington, D.C. 20009 USA
Tel: 202-462-8475 e-mail: info@fintrac.com http://www.fintrac.com
For the latest news from Fintrac, visit us online at www.fintrac.com
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