organic agriculture in el salvador: the case of fresh vegetables in las pilas

8/14/2019 Organic agriculture in El Salvador: the case of fresh vegetables in Las Pilas

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Case Study 4

Organic Agriculture in El Salvador:

The Case of Fresh Vegetables in Las Pilas

By Octavio DamianiConsultant, Office of Evaluation and Studies

Report prepared for the Office of Evaluation and Studies

of the International Fund for Agricultural Development


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Rome, August 2001


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Table of Contents

I. Introduction

II. The General Characteristics of Organic Agriculture

III. The Case of Organic Vegetables in Las Pilas

IV. Effects on Small Farmers of the Introduction of Organic Vegetables in Las Pilas

V. Explaining the Adoption of Organic Crops

A. The Characteristics of the Natural Resources in Las Pilas

B. The Role of the Public Sector

C. The Availability of Specialists in Organic Agriculture

D. The Role of NGOs

E. The Support of the Prochalate Project

VI. Constraints, Bottlenecks and Main Forms of Support

A. Technology and Marketing Problems

B. Financing Organic Production

VII. Conclusions and Potential Lessons for Project Design

A. Conclusions

B. Potential Lessons

References

Annex 1. List of persons interviewed


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Acronyms

CENTA National Centre of Agricultural Technology, Ministry of Agriculture and Livestock

CLUSA Cooperative League of the United States of America

GDP Gross Domestic Product

NGO Non-Governmental Organization

Ucraprobex Union of Agrarian Reform Cooperatives of Producers, Processors and Exporters

USAID United States Agency for International Development


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I. INTRODUCTION

1. This report is based on fieldwork carried out in El Salvador between 12 and 24 May 2001 as part

of the thematic study on organic agriculture that is being realized by the IFAD Office of Evaluation

and Studies. During the fieldwork, visits were made to the municipalities of San Ignacio and La

Palma in the highlands of the department of Chalatenango, which concentrates a high proportion of El

Salvadors vegetable production and almost all the organic production of vegetables. Interviews were

also conducted in San Salvador, San Ignacio and La Palma with officials and professionals at

government agencies, non-governmental organizations (NGOs), the University of El Salvador and

Prochalate, a rural-development project funded by IFAD.

2. The fieldwork involved an analysis of the attractions of organic crops for small farmers, the

problems that these farmers face in the cultivation and sale of organic products and the ways they

have been able to solve the problems. The hypothesis of the research project is that the adoption of

organic crops and animal products may lead to positive effects on the incomes of small farmers. First,

farmers usually receive premium prices for organic products, that is, prices that are higher than those

for the same products produced using conventional technologies. Second, organic technologies may

lower production costs because of the reduction in the need to purchase chemical inputs. Third,organic technologies may help reduce soil erosion and other processes of natural-resource degradation

that frequently affect small farmers in developing countries, thereby helping to promote more

sustainable models of production.

3. As in other developing countries, organic agricultural products in El Salvador are used mostly for

export and have emerged as a result of the growing demand among consumers, mainly in

industrialized countries. Indeed, several studies have shown that the demand for organic products in

industrialized countries has been increasing rapidly, in contrast to the sales of foods in general, which

have been stagnant or have risen only slowly. The sales of organic foods in the most important

markets (the US, Germany, Japan, Denmark, France, Netherlands, Sweden, Austria, Italy and

Switzerland) have been estimated at USD 11 billion in 1997 and USD 13 billion in 1998. Estimates of

the annual growth rates in demand have varied between 5% and 40%, depending on the country. Thegrowth in the demand for organic products relates partly to the increasing concern of consumers about

the effects of different types of food on health and about the potential risks of exposure to pesticide

residues in foods. In addition, consumers frequently perceive that organically produced products have

a better taste and more nutrition value. Finally, consumers usually associate organic production with

fewer potential negative effects on the natural environment relative to conventional agricultural

production.

4. Many analysts have been critical of efforts in developing countries to promote organic

agricultural production and, in general, non-traditional export crops. Some critics argue that the

demand for organic products is still relatively low and is likely to increase at a slow pace. Other

authors have criticized non-traditional export crops by using arguments that might also apply to

organic crops. In particular, they have argued that the crops may generate negative distributionaleffects by frequently excluding small-scale producers and contributing to land concentration.1 Some of

these critics have stressed that organic crops require a certification process that is too expensive for

small producers.

5. In contrast, some analysts have offered more mixed or positive views and provide evidence of a

decline in rural poverty due to the adoption of new export crops. Others have found that the effects of

agricultural export booms on rural poverty may depend on specific characteristics of the crops or on

the government policies that affect the microeconomics of the specific crops.2 Evidence from recent

1 See Barham et al. (1992), Barham, Carter and Sigelko (1994), Carter and Mesbah (1993), Conroy, Murray and

Rosset (1994), De Janvry (1981), Schurman (1993), Stanley (1994), Twomey and Helwege (1991), Williams

(1986).2 For example, see Carter and Mesbah (1993), Carter, Barham and Mesbah (1996), Damiani (1999), (2000),

Jaffee (1993).

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studies that have looked at organic crops among small producers have suggested that small farmers in

Latin America and other developing regions may have competitive advantages over larger producers

in the cultivation of organic crops because organic technologies usually rely on labour the most

available and least costly factor of production among small farmers in place of chemical inputs. 3 In

addition, research on some organic crops, notably coffee, has shown that large and more well

capitalized farmers, who usually apply an input-intensive technology, have suffered significant falls in

yields during the first few years after shifting from a conventional to an organic technology of

production. In contrast, small farmers shifting to organic agriculture have usually shown a rapid

increase in yields because they already used few or no chemical inputs, and the organic technologies

have improved the effect of the labour-intensive technologies that they apply.

6. Although small farmers might find new income opportunities in organic production, they could

face problems that jeopardize their possibilities of success. Shifting to organic production may

involve investments and the application of new methods of production that require credit and

specialized technical assistance often unavailable to small farmers. In addition, selling organic

products may require negotiating with new buyers often from foreign countries and planning the

production process in order to meet the more substantial demand of the buyers at certain times of the

year. These tasks typically involve marketing and managerial skills that small farmers usually do nothave.

7. Thus, the fieldwork has involved an analysis of the organic production of vegetables in the Las

Pilas region that addresses the following questions:

(a) What have been the positive and negative effects of organic production on the outputs and

incomes of small farmers?

(b) What have been the main constraints that small farmers have faced when they start to grow

organic crops?

(c) What interventions have government and private organizations implemented to help small farmerssuccessfully cultivate organic crops?

8. Interviews have been conducted with a total of 13 organic farmers in Las Pilas. This represents

close to one third of the farmers cultivating organic vegetables in the region. The interviews were

open-ended and lasted about one hour each. They focused on the history of the farmers as producers,

their motivations for starting to grow organic crops, the way in which they had learned to apply

organic methods of production, the benefits and costs of adopting organic crops, the problems they

faced when cultivating and selling the crops and the support they received from government and

private agencies in solving the problems. Interviews were also carried out with 26 professionals in

government agencies, NGOs, universities and the Prochalate project and supermarket staff in charge

of purchasing fresh vegetables. These interviews were also open-ended, but somewhat longer (about

two hours), focusing on issues related to the work carried out by the interviewees and the institutionsin which they worked. For example, the interviews with professionals at agricultural research and

extension agencies focused on the research policies and projects of the institutions, as well as on the

past training of the professionals, the approaches and methodologies they applied in their work and

their views on organic agricultural production.

9. The report is organized as follows. The second section offers a brief description of the main

characteristics of organic production. The third section describes organic agricultural production in El

Salvador and provides details about the case of Las Pilas. The fourth section focuses on the effects of

the introduction of organic vegetables on the output and incomes of farmers. The fifth section

analyses the forces that led to the emergence of organic products in El Salvador and the influence of

macroeconomic and agricultural policies and of government institutions, especially agricultural

3 Damiani (2000).

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research, extension and university training. The sixth section analyses the actions that NGOs and

other agencies have implemented to help small farmers in Las Pilas start growing organic vegetables

successfully. The last section offers some conclusions and preliminary lessons based on the

experience in Las Pilas.

II. THE GENERAL CHARACTERISTICS OF ORGANIC AGRICULTURE

10. Organic agriculture originated mainly because of the concerns of consumers, especially in

Australia, Japan, North America and Western Europe and more recently in developing nations about

two issues: (a) the potential negative effects on health of the use of chemical inputs in food production

and (b) the deterioration of natural resources frequently associated with conventional agricultural

technologies. Organic agriculture involves the use of organic inputs in place of chemical ones and

attempts to achieve a more sustainable use of natural resources. The major principles applied in

organic agriculture are the following:

(a) The use of chemical and synthetic fertilizers, pesticides, fungicides and parasiticides is prohibited.

(b) The use of growth hormones is prohibited.

(c) Organic products are employed to protect plants from pests and disease.

(d) Soil-conservation measures are applied.

(e) Organic materials are used to maintain and improve soil fertility.

(f) Monocultivation relying on a diversity of plant types and varieties is avoided.

(g) The consumption of non-renewable sources of energy and raw materials is kept to a minimum.

(h) The natural landscape and the natural biodiversity are conserved.

11. One of the key differences between organic agriculture and other types of sustainable agriculture

is the existence of production norms and procedures of certification. Norms were first created by

private associations at national or regional levels, and they served to give their members the right to

sell their products with the organic brands and the warranty of the respective associations. Later on,

several countries created laws and regulations on the production and processing of organic products.

In most of them, the certification of products became one of the main issues. Certification focuses on

the materials and processes that producers have used in the production of specific crops or animals

and provide a proof to consumers that organic standards have been met. Also, it attempts to set some

standards about what organic production means so as to avoid the coexistence of diverse criteria and

damage to the credibility of the producers and the associations.

12. The certification process starts with the application by a producer or a group of producers to a

certification agency. The certification agency usually sends an inspector to visit the production sites

and evaluate if the production process meets the organic standards. The inspector accomplishes this

based on interviews with producers, field visits to the croplands involved, a review of the organic

fertilizers and other inputs used and laboratory tests of samples of soils, water and agricultural

products. Some of the main requirements that must be met in order to obtain an organic certification

are the following:

(a) Over the previous three years, the land under organic production must not have been used for

conventional agriculture involving the application of chemical or synthetic inputs.

(b) Conventionally grown crops cannot be closer than 15 to 20 m, and there must be a forested area as

a barrier between the organic and conventionally grown crops.

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(c) The inputs used must be organic. Chemical or synthetic inputs are prohibited.

(d) Soil-conservation measures must be applied.

(e) Small farmer cooperatives and other associations must demonstrate that they are able to organize

their own monitoring systems in order to ensure that organic standards are met by all members.

13. Once the organic certification has been approved, it is valid for one year, during which time

inspectors usually visit the site twice a year without notice.

14. The cost of certification varies, mainly depending on the agency carrying out the certification and

its location and the location of the farm or farms to be evaluated. Certification agencies usually charge

a daily service fee, plus the travel and subsistence expenses of the inspectors. Thus, costs are

substantially lower if the certification agencies are located in the country and if the farm or farms are

not remote. In the case of farmer associations, costs will depend on several factors, among them the

following: (a) the distance of the farms one from another, as the inspectors need more time to visit

farms if they are widely dispersed, or if the roads are in poor condition and (b) the capacity of theassociation to establish its own monitoring system; if an association is efficient and able to establish a

credible system to monitor the compliance of its members with the organic standards of production,

the certification process can be based on a sample of producers: the smaller the sample, the better the

monitoring system must be. In any case, the cost of certification per farmer is lower for a farmer

association than for an individual producer.

15. Organic agriculture is not the only alternative to a conventional production system, which is based

on the intensive use of chemical inputs. Other production systems are also more respectful of the

natural environment, though they are different from the organic production system. An example is a

sustainable agriculture which does not eliminate chemical inputs completely, but relies on small

quantities of these inputs and applies techniques such as integrated pest management, integrated

nutrients management and integrated herbs management. Such a system offers a compromise betweenconventional and organic agriculture, and the resulting products may one day become significant

competitors of organic products.

III. THE CASE OF ORGANIC VEGETABLES IN LAS PILAS

16. The cultivation of organic crops in El Salvador started in the early nineties. It was promoted by

non-governmental organizations (NGOs) that were funded by the United States Agency for

International Development (USAID). As explained later, these NGOs were working on the

implementation of a USAID project that been undertaken in 1988 and that aimed at encouraging the

production and marketing of non-traditional export crops. While the project focused on

conventionally grown crops, these NGOs identified the great opportunities offered by organic crops

and helped farmer groups to change their methods of production, obtain the organic certification andsell their products.

17. By early 2001, the estimated total area under organic cultivation in El Salvador was close to

3 800 ha, about 0.5% of the cultivated area in the country (see Table 1). Coffee was by far the most

important crop, with 2 100 ha (55% of the organic area). It was cultivated mainly in the highlands of

the central region, including the departments of Santa Ana, La Libertad, Ahuachapn and Uzulutn. 4

Most organic coffee is exported through the Union of Agrarian Reform Cooperatives of Producers,

Processors and Exporters (Ucraprobex), a second-tier organization comprising 57 farmer cooperatives

of which seven grow organic coffee that was created in 1988 to market coffee. Other important

4 The total organic area has been estimated based on data provided by the Cooperative League of the United

States of America (CLUSA), which provides technical assistance to a large share of the organic producers, andthe Union of Agrarian Reform Cooperatives of Producers, Processors and Exporters (Ucraprobex), which

represents most of the certified areas of coffee.

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crops were cashews (840 ha) and sesame (700 ha), though the significance of the latter has been

falling rapidly due to decreasing international prices. These crops were cultivated mainly in the

departments of La Unin, San Miguel and La Libertad and were also sold mostly through

Ucraprobex. The area accounted for by organic vegetables was about 40 ha, half of which was

certified, while the other half was expected to be certified soon, and it was all being grown in Las

Pilas.

Table 1: Estimated areas of organic crops, 2001 (ha)

Coffee 2 100

Cashews 840

Sesame 700

Bananas 56

Soybeans 50

Peanuts 22

Vegetables 40

Total 3 808

Source: Based on data of CLUSA and Ucraprobex.

18. The Las Pilas region defined here as the municipalities of San Ignacio and La Palma in the

highlands of the department of Chalatenango is the most important producer of fresh vegetables in

El Salvador (see map 1). By 2001, the total area cultivated with vegetables in Las Pilas had reached

about 1 400 ha, which represented 36% of the total area of 3 900 ha cultivated with vegetables in the

country (see Table 2). The main crops were cabbages, potatoes and tomatoes, which have traditionally

been grown with conventional technologies that rely on large amounts of chemical inputs.

Map 1. Location of organic vegetable production in Las Pilas region, El Salvador

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19. Las Pilas also accounts for almost all the areas cultivated with organic vegetables of El Salvador.

The certified areas reached close to 18 ha in 2001, with an additional 18 ha in the process towards

certification. While these areas are small compared to those of organic coffee, cashews and sesame,

they are important for several reasons:

(a) As in other Latin American countries, the production of fresh vegetables with conventional

technologies has been characterized in El Salvador by the significant use of chemical pesticides,

fungicides and other inputs. The use is much more significant for fresh vegetables than it is for coffee,

cashews, sesame, or other crops. The use of chemical inputs has led to serious problems in El

Salvador, including health problems among farmers and increasing production costs.

(b) While organic coffee, cashews and sesame are all exported, there has been no substantial change

in the marketing, as farmers have relied more or less on the same marketing channels that they used

for the conventional products. In contrast, new market channels have been established for organic

fresh vegetables, including supermarkets, restaurants and hotels, to which farmer groups sold their

output directly, in contrast to the situation in conventionally grown cabbages and tomatoes, which are

sold on the food market (La Tiendona) in San Salvador, mostly through middlemen. Thus, themarketing of organic vegetables have benefited from a reduction in the costs of the intermediaries.

Table 2: General characteristics of Las Pilas region

Population (inhabitants) 23 400

Urban 5 300 (12.6%)

Rural 18 100 (77.4%)

Population density (inhabitants/km2) 81

Economically active population (%)

Agriculture 63.3

Industry 11.6

Services 5.7

Unemployment 19.3

Area of main crops (ha)

Cabbages 840

Potatoes 630

Tomatoes 214

Sweet peppers 87

Other vegetables 105

Source: Vice-Ministry of Housing and Urban Development (2000),

CENTA (2000).

(c) The organic production and marketing of vegetables in Las Pilas involved the collective

coordination of tasks among small producers. Because the buyers were demanding substantial

volumes of vegetables that were impossible for individual small farmers to obtain, the farmers neededto sell their products collectively. Collective action led to new challenges for these small producers.

First, all producers had to meet the same quality standards and to apply properly the organic methods

of production. If one or more producers did not comply, all the farmers might lose their organic

certification and their access to the market. Second, because buyers required a constant supply of

specific amounts of products, farmers needed to plan the cultivation and harvest of the various crops

in order not to concentrate the supply correctly at specific times of the year. Third, the buyers of

organic vegetables required a constant supply of products of good quality. Because many vegetables

are highly perishable, they cannot be stocked without losing quality and value, so they need to be sent

to the market immediately after the harvest, as any delay involves losses in quality and thus the

rejection of the product. In order to avoid delays, the farmers in Las Pilas needed to have labour

available for the harvesting and packing of their output, and they had to contract trucks to bring the

products by road from the fields to the supermarkets, hotels and restaurants, a trip of 125 km from Las

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Pilas to San Salvador that takes about four hours. All these tasks demanded great effort, including

negotiations, the signing of agreements and planning.

(d) Farmers who grow organic coffee, cashews and sesame in El Salvador all used to grow the same

crops employing conventional technologies. In contrast, farmers who grow organic vegetables in Las

Pilas have undergone a more complex process involving the introduction of new crops, technologies

and systems of production. In fact, most farmers in Las Pilas used to grow small areas of cabbages

and tomatoes with conventional technologies. They shifted to the cultivation of a large number of

vegetables with organic inputs under a system of production based on a sequencing of crops that

allowed the fertility of the soil to be maintained.

(e) In contrast to other organic crops such as coffee which have traditionally been exported, fresh

vegetables were sold on the domestic market and faced harsh competition during the nineties from

imports from neighbouring countries. Indeed, the domestic production of fresh vegetables in El

Salvador only supplied an estimated 20% of the total consumption in the country, while 80% was

imported, mostly from Guatemala and Honduras. Thus, the organic production in Las Pilas represents

a successful case of competition against imports mainly through a focus on product quality and

differentiation.

20. The organic vegetables in Las Pilas are grown by three farmer groups that include a total of 52

farmers: (a) the Los Planes Cooperative of Organic Producers, which includes 32 small farmers and is

the only organization that has obtained its organic certification from the Organic Crop Improvement

Association, a US-based certification agency and (b) two farmer groups in Las Pilas and Los Planes

(named Las Alturas and El Pital) with a total of 30 members. Although these last two groups are

using organic production technologies, they have not obtained certification yet, as they are going

through the three-year transitional period from conventional agriculture. During this three-year

period, farmers cannot use chemical inputs or they will not become certified.

IV. EFFECTS ON SMALL FARMERS OF THE INTRODUCTION OF ORGANIC

VEGETABLES IN LAS PILAS

21. The introduction of organic vegetables in Las Pilas has generated several positive changes in the

production and incomes of small farmers. Some of these changes relate to characteristics of the new

crops without consideration of whether they are organic or conventional, while others are effects

associated with the organic production of the crops. The most important effects have been the

following:

22. (a) Crop diversification. The adoption of organic crops has led to the diversification of productionand incomes, as all the farmers who have adopted organic vegetables have continued to grow the

crops that they used to grow, cabbages, tomatoes and potatoes, but in smaller areas and in addition to

several new crops.

23. (b) A reduction in the area cultivated. Organic crops require substantial amounts of labour inorder to perform all the tasks needed to produce a good-quality product all year round. These tasks

include soil-conservation measures, planting, harvesting, weeding and the preparation and application

of numerous kinds of organic inputs. Because they have not had access to credit, most farmers do not

hire extra wage labour, but rely only on the labour available in their households. Thus, labour has

become the main constraint on expanding the cultivated area among the farmers. As a result, most

farmers who have started to grow organic vegetables have had to reduce their total area under

cultivation. Most of them used to cultivate a yearly average of 2 ha each: 0.7 ha of cabbages, 0.7 ha of

tomatoes and 0.6 ha of potatoes. After the introduction of organic vegetables, the total average

cultivated area fell slightly to 1.9 ha, including about 0.5 ha of organic vegetables and 1.4 ha of

cabbages, tomatoes and potatoes.

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24. (c) A reduction in production costs. All producers of organic vegetables in El Salvador adoptedorganic technologies at the same time that they introduced new crops, so it is impossible to compare

current production costs for organic crops and the previous costs for the conventional production of

the same crops and by the same farmers. However, a comparison can be made between the organic

producers and other conventional producers of the same crops in the region. This comparison shows

that the production costs for all organic crops are lower than the production costs for the same crops

cultivated using conventional technologies (see Table 3).

Table 3: Production costs for selected organic and conventional crops, Las Pilas

Crop Organic* Conventional*

Broccoli 5.5 5.7

Coriander 12.6 14.0

Lettuce 11.5 12.7

Sweet onions 14.9 15.7

Green beans 2.2 11.7

Source: Based on Prochalate (1998), CENTA (1999) and information from Technoserve.

* USD per 10 m2.

25. (d)A decrease in marketing costs. In contrast to conventionally grown crops, organic vegetablesare sold directly to supermarkets, restaurants and hotels. Most farmers in Las Pilas sold their

conventionally grown cabbages, tomatoes and potatoes through middlemen who purchased the

products on their farms and brought them to La Tiendona the most important central market for

fruits and vegetables in the country in San Salvador. The Cooperative League of the United States

of America (CLUSA) and Technoserve, a non-profit organization of US origin, both of which played

an active role in the marketing of organic vegetables in Las Pilas, initiated contract negotiations with

supermarkets, signed stable agreements with them and provided trucks to the farmer groups so that

they could sell their output directly. In this way, farmers had been able to reduce the costs of

intermediaries.

26. (e)An increase in incomes and income diversification. The introduction of organic vegetables inLas Pilas generated a substantial diversification in incomes. The organic farmers used to produce

cabbages, tomatoes, or potatoes during the dry season and corn in the rainy season. Thus, the income

of the farmers depended on two crops, that is, corn and cabbages, tomatoes, or potatoes. In contrast,

the farmers who subsequently introduced organic vegetables produced an average of six organic

crops. Because most of the farmers also continued to grow corn and cabbages or tomatoes, their

income relied on an average of eight crops rather than on only two. In addition, the organic vegetables

were produced all year round, in contrast to the conventional cabbages, tomatoes, potatoes and corn,

which were highly seasonal. Thus, the production of organic vegetables resulted in more constant

sources of income throughout the year.

27. (f)Employment creation. The organic production of vegetables in Las Pilas led to an increase inthe demand for on-farm labour. However, there was little creation of wage labour, as farmers reliedbasically on family labour. Post-harvest activities mainly packing and transportation also led to

the creation of a limited number of jobs, principally among women. The three packing facilities for

organic products in Las Pilas employed about 45 workers, most of whom were women (in total 40

women, or 89% of all the wage workers in the facilities).

28. (g)A reduction in soil degradation. The adoption of organic crops has had a positive effect on thenatural resources available to small farmers since it implied the implementation of soil-conservation

technologies. First, all farmers who adopted organic crops have had to eliminate completely the slash-

and-burn method of cultivation that was common in the region. Second, the use of terraces and level

curves has replaced crop cultivation in the direction of the slope, thus reducing soil erosion and the

loss of nutrients and water. Third, in contrast to the most common crops in Las Pilas (cabbages,tomatoes and potatoes), which are grown as monocultures (that is, always planting on the same plots

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of land), organic vegetables are being grown following a rotation plan, which facilitates the

maintenance of soil structure and fertility. The application of these technologies has been very

important considering the steep slopes slightly above 50 degrees on average and thus the risk of

erosion characteristic of Las Pilas.

29. (h) Potential benefits for the environment and human health. Because they have replaced

chemical inputs with organic ones, there are other potential benefits over the medium and long term:

(i) On the spread of pests and diseases that affect crops . Agricultural research has long demonstratedthat the continuous use of chemical pesticides and fungicides is likely to lead to pest resistance and

thus to the increasing use of the inputs to maintain crop yields. Organic methods of production may

lead to a better control of pests and diseases without a rising amount of inputs.

(ii) On the health of farmers and rural wage workers and their families. The excessive use ofchemical inputs in agriculture has been frequently associated with health problems among farmers

and wage workers. In the case of El Salvador, this issue has been receiving increasing attention.

Newspapers have presented reports on the health problems caused by pesticides, and the Ministry of

Health has carried out relevant research. A study that was awarded the National Medicine Prize in2000 indicated that a high proportion of patients with kidney problems had been exposed to

pesticides. The study analysed 202 patients who had been accepted at the National Rosales Hospital

with renal insufficiency between November 1999 and March 2000. It found that, while 67 of these

patients showed recognized risk factors for their health problems, such as high blood pressure or

diabetes, 135 did not exhibit any apparent risk factor. About 73% of the members of this latter group

had been exposed to pesticides at their workplace, and most of them came from areas where

cultivation was characterized by the intensive use of pesticides, including La Paz, San Salvador,

Sonsonate and other coastal zones where cotton was being grown.5

30. Their concern over the possible health problems associated with the use of chemical inputs was

one of the most important reasons organic farmers mentioned when responding to a question about

why they had adopted organic methods of production. One of the farmers said that, I am the father ofsix children, and I was worried that my children and myself could become sick because of the use of

pesticides. Similar opinions emerged in most of the interviews carried out with organic farmers in

Las Pilas.

31. Finally, interesting issues revolve around the potential bias against women in organic farming and

whether organic crops provide job opportunities for women. Most farmers who cultivate organic

vegetables in Las Pilas are men, and the share of women is lower than their corresponding share in the

rural population in general and in the farmer population. This is due to several factors: (a) The

cultivation of organic vegetables in Las Pilas involves investments mainly in soil-conservation

measures that require stable forms of land tenure. In addition, they require irrigation systems in order

to be able to produce vegetables all year round. Thus, one possible reason for the relatively low share

of women might be the lower share of women who benefit from stable forms of land tenure and whohave access to irrigation systems. Unfortunately, information on these factors are not available. This

represents an area of research that should be addressed in the future. (b) The technologies applied in

the organic cultivation of vegetables in Las Pilas do not require special abilities in which men or

women are especially skillful, or in which their participation could be affected by cultural factors.

However, some of the most important technologies notably the implementation of soil-conservation

measures require a substantial amount of physical effort, making it more difficult for women to

participate. While it might be possible to hire workers to carry out these tasks, most farmers do not

have the resources to hire wage labour, and no credit is available for paying for labour.

5 SeeLa Prensa Grfica (20 May 2001), pages 4C and 5C.

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V. EXPLAINING THE ADOPTION OF ORGANIC CROPS

A. The Characteristics of the Natural Resources in Las Pilas

32. While El Salvador is relatively poor in natural resources compared to neighbouring countries, it

does possess areas with a high potential for agriculture. In the case of organic vegetables, some of the

characteristics of Las Pilas provide competitive advantages for the production of vegetables:

33. (a) Las Pilas is located between 1 800 and 2 000 m above sea level, so the average temperature is

significantly lower than in the rest of the country. The average temperature is 15.2 degrees Celsius,

with average highs of 21.4 degrees and lows of 12.2 degrees. Annual precipitation is 1 600 mm, with

the rains concentrated between May and October. These climate conditions are very appropriate for

the production of vegetables. Pests and diseases affect crops significantly less in the highlands than in

the lowlands, where temperature and humidity are greater. However, Las Pilas is characterized by

fragile soils and steep slopes, with crops usually grown on lands that slope between 30 and 40%.

34. (b) The availability of a large number of sources of good-quality water in the highlands makes it

possible for farmers to irrigate their crops at low cost. A recent study has identified 76 sources ofwater in the highlands of the municipalities of San Ignacio and La Palma, of which 45 (59%) had not

yet been used. Because water is located in the highlands, farmers do not need to invest in pumps and

to spend money on fuel or electricity to bring the water to their plots. Water is channeled to the farms

by tube wells, stored in water reservoirs at the farms and used for irrigation systems which usually

rely on aspersion technology. Although the water is quite plentiful, not all small farmers have access

to the irrigation systems. Investments are needed for off-farm (tube wells) and on-farm infrastructure

(land preparation and aspersion devices).

35. Although the Las Pilas region has good potential for the production of fresh vegetables, other

important variables make it difficult for farmers to compete even on the domestic market. First,

neighbouring countries especially Guatemala, but also Honduras have more extensive areas and a

greater variety of ecosystems than El Salvador and thus a larger supply of a wide variety ofagricultural products. Second, the labour costs in Honduras and Guatemala are lower than they are in

El Salvador, contributing to lower production costs. Third, although Las Pilas is located closer to San

Salvador, which concentrates a high proportion of the domestic demand, the roads are in poor

condition, and this leads to higher transport costs and negatively affects the quality of products.

B. The Role of the Public Sector

36. This section argues that the public sector has had a marginal role in the development of organic

agricultural production in El Salvador. Indeed, the emergence and growth of organic production have

taken place in the context of economic policies that are generally unfavourable to agriculture. In

addition, the main institutions involved in rural development in particular, agricultural research and

extension are not supportive of organic agriculture.

1.Economic and agricultural policies

37. The emergence and growth of organic production have occurred in the wake of policies that were

in general unfavourable to agriculture. During the nineties, the Government implemented economic

reform policies that had a significant influence on the agricultural sector and on the institutions

involved in agricultural and rural development. The most important economic policies related to trade

liberalization, the reduction of fiscal deficits, financial reform, the reduction of the role of the state in

the marketing of inputs and products and the reform of the government agencies in agriculture. El

Salvador is in the Central American Common Market, which also includes Costa Rica, Guatemala,

Honduras and Nicaragua, and, like other Latin American and Caribbean countries, it joined the World

Trade Organization during the nineties. As a part of the commitments implied in these agreements, El

Salvador lowered dramatically the levels of protection during the nineties. In addition, the exchange

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2. The role of government agencies

42. Public-sector agricultural research and extension had a marginal role in the emergence and

development of organic agriculture in Las Pilas and in El Salvador in general. This was due partly to

the difficulties that agricultural research and extension experienced as a result of budget cuts and the

consequences of public-sector reform.

43. Public-sector agricultural research and extension are carried out by the National Centre of

Agricultural Technology (CENTA), which is part of the Ministry of Agriculture and Livestock. While

El Salvador has a long tradition of financing for agricultural research and extension and of strong

interaction with international research centres, the CENTA budget has been declining because of the

efforts to reduce public deficits. In 1996, the CENTA budget was equivalent to 1.5% of the GDP in

agriculture, while CENTA research activities was equivalent to a little under 0.5% (World Bank,

1997). In addition, most research funds during the nineties came from loans and grants from

international organizations and donors, especially the World Bank, the Inter-American Development

Bank, USAID and the German Agency for Technical Cooperation.

44. In the early nineties, CENTA had undergone a major reform as a part of a World Bank-financedproject that aimed at strengthening the organization through investments in infrastructure, equipment

and training. The Government closed CENTA in 1990 and dismissed the 2 700 staff. It then reopened

the organization a few months later under new management and with a staff of 700. Although

CENTA retained its old name, the organization was officially opened once more in 1993, following

the implementation of several changes. CENTA had become autonomous and was now mandated to

serve small-scale farmers, a substantial change from the previous focus on commercial crops for

export. By 1996, the CENTA staff had grown to 900, of which 650 were technical personnel, and the

rest support staff. The technical personnel consisted of 74 researchers and 576 extension agents.

45. In addition to its budget problems, a major weakness of CENTA has been the low level of

training among the staff. By early 2000, the number of researchers had fallen to less than 70; none of

these had a doctoral degree, and fewer than ten had a masters degree.

46. CENTA research activities focused on basic grains (corn, beans and sorghum) until the early

nineties. As a result of the reorientation, research and extension work at CENTA started to

concentrate on small farmers. In addition, new products were joined on the agenda, including

livestock and pastures, fruits, vegetables, fibres and oil seeds. However, the research on organic

products was almost non-existent and involved only one researcher who was part of a new project

supported by the Japanese International Cooperation Agency and who was examining organic

fertilizers (locally called bocashi). The project sought to promote vegetable production and hadsome interest in organic methods.

47. The interviews carried out at CENTA indicate that most of the researchers are not very willing to

undertake research projects on organic products. Most researchers have been trained in conventionalmethods of production and are not convinced of the potential of organic production. Most of them

raised questions about the possible technological and marketing problems and did not express a desire

to open new lines of research.

48. While the public-sector agencies dealing with agricultural and rural development have not been

especially supportive of organic agriculture, the Prochalate project implemented by the Ministry of

Agriculture and Livestock become an important actor in the development of organic vegetables in Las

Pilas. Designed by IFAD in agreement with the Government, Prochalate aimed at improving the

incomes and the quality of the lives of the rural poor in the department of Chalatenango, one of the

poorest in the country and one of the most affected by the war. The project was cofinanced by several

agencies and by the Government for a total of USD 39 million, including an IFAD loan of

USD 13 million. The project objectives were to: (a) recover the production base, (b) raise incomes

and living conditions among rural populations and (c) strengthen peasant organizations.

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49. The Prochalate plan did not involve a specific mention of organic agriculture as a possible

alternative for diversifying agricultural production among the project beneficiaries. However, organic

agriculture came to be included through the initiative of one of the consulting firms contracted by the

project to provide extension services. Prochalate provided extension services to small farmers through

public (CENTA) and private agencies (NGOs and consulting firms) that were contracted and then

monitored and evaluated by the project executive unit. Although the project established some

common criteria, these NGOs and consulting firms applied different approaches, strategies and

methodologies in their work with farmers. In Las Pilas, Prochalate contracted Technoserve.

Technoserves actions were market oriented and emphasized the search for new crops that could find

a demand in dynamic domestic or international markets. Technoserve did not focus only on

agricultural technology, but also on marketing and on improving the managerial skills of small

farmers. In Las Pilas, Technoserve explicitly took into account the experience of CLUSA, which had

already been successful in promoting the organic production of vegetables in the region.

C. The Availability of Specialists in Organic Agriculture

50. The interviews carried out with agricultural professionals in El Salvador suggested that the lack ofprofessionals with the knowledge and ability to provide technical assistance in organic technologies

has been one of the main obstacles to the expansion of organic agriculture. By 2001, there were

virtually no agronomists, agricultural specialists, or extension workers in the country who had studied

organic agriculture as part of their preparation. All those working in organic agriculture had only

followed training programmes, mostly in other countries. Most of them had participated in the same

training programmes as the farmers and said that they were learning from the farmers rather than

teaching the farmers about the new organic technologies.

51. In 2001, 12 universities in El Salvador had programmes in the agricultural sciences and

agronomy. In all cases, the curriculum was based on conventional agriculture and the use of Green

Revolution technologies. Only very recently, a few universities had begun addressing the issues of

sustainable development and environmental conservation. In 2001, the School of AgriculturalSciences at the University of El Salvador started a new two-year masters programme in sustainable

agriculture. The programme was based on experiences in foreign universities mainly the University

of Chapingo in Mexico and had attracted a total of 30 students during the first year, most of them

mid-career professionals working in the public and private sectors. Matas Delgado University had

started a one-year diploma in organic agriculture. Other universities had programmes that did not

concentrate specifically on sustainable or organic agriculture, but which focused on related themes,

such as a masters programme in environment at the Central American University and a masters

programme in natural resources at the National University of El Salvador.

52. These initiatives represent great progress in the provision of opportunities to students in

alternative production technologies and methods. However, they are recent and thus did not play a

role in the emergence and growth of organic farming in El Salvador.

D. The Role of NGOs

53. NGOs had a dominant part in the emergence and expansion of organic agricultural production in

Las Pilas and in El Salvador in general. Organic crops were first introduced in El Salvador in 1993,

when they were being promoted by the Salvadoran branch of CLUSA, a US trade association

representing the cooperative business community. CLUSA had been implementing international

programmes in developing countries since 1953 and had become established in El Salvador in 1988.

At that time, it started to work through a USD 14.2 million USAID project the Non-Traditional

Agricultural Export Production and Marketing Project which aimed to increase the production and

marketing of non-traditional agricultural products by rural cooperatives, small farmer groups and

exporters. The major agricultural exports at that time included traditional crops such as coffee, sugar

and cotton, the exports of which had been declining since the early eighties due to several factors,

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including increased production costs, the conflict that affected El Salvador and low world market

prices.

54. CLUSA initially focused on a mix of conventionally grown crops, including melons, watermelons

and other fruits and vegetables. After the conflict ended in 1990, leaders of Ucraprobex a

Salvadoran second-tier cooperative organization comprising 57 cooperatives approached CLUSA to

obtain assistance in discovering ways to begin farming again on their lands, much of which had been

abandoned during the conflict. CLUSA undertook field research and found that, because large areas

given over to coffee crops had remained unexploited for a long time, there was a great opportunity to

turn them into organic areas. Following discussions, CLUSA started to promote among Ucraprobex

members the idea of cultivating organic coffee. The main actions of CLUSA were to: (a) link

producers with the agencies that provided the certification of organic products and (b) furnish

technical assistance and training to farmers so that they would be able properly to apply organic

methods of production and obtain organic certification.

55. CLUSA began working with two cooperatives of coffee producers in 1993. It brought in

specialists and foreign consultants to train cooperative members in organic production. It also

contacted the Organic Crop Improvement Association, a recognized US certification agency oforganic products, to carry out inspections and certify the coffee crops. The first certified organic

coffee was exported in 1994, and Ucraprobex started marketing a new brand (Caf Pipil).

56. During this same period, CLUSA started working in other regions of the country and with other

crops, including sesame, cashews and vegetables. Its promotion of organic vegetables concentrated on

Los Planes, where CLUSA found favourable climate conditions for growing organic vegetables.

CLUSA initially worked with only five farmers, but others soon joined. CLUSA provided training

and technical assistance with organic crops, as well as with organizational matters to encourage

collective action. This eventually led to the creation of a formal organization in 1996, the Los Planes

Cooperative of Organic Producers, that originally included 36 farmers.

57. CLUSA helped the Los Planes Cooperative of Organic Producers to establish links withsupermarkets and hotel chains. As a result, the Los Planes cooperative began selling organic

vegetables to two supermarkets in San Salvador (La Despensa de San Juan and Hiper Europa) and

three hotels (Camino Real, Radisson Plaza and El Salvador). The main actions that CLUSA carried

out to promote organic crops and help small farmers overcome certain bottlenecks that arose after the

introduction of organic crops will be analysed in more detail in Section VI.

E. The Support of the Prochalate Project

58. Following the successful experience of CLUSA, the Prochalate project became involved with two

other farmer groups. It provided technical assistance to farmers through several specialized NGOs. In

Las Pilas and Los Planes, it contracted Technoserve, which had been active in a large number of

developing countries and started to work in Las Pilas in 1998 with a group of 15 farmers. In 1999, itbegan assisting another group of 15 farmers in Los Planes (see Table 5).

59. Since 1999, through Technoserve, the two farmer groups have been selling to Super Selectos and

Hiper Paiz, two of the main supermarket chains in El Salvador. In addition, Technoserve has been

selling to two other supermarket chains Hiper Europa and La Despensa de San Juan through the

Federation of Irrigation Farmers of El Salvador, a second-tier organization that comprises four

associations of irrigators. Hiper Paiz, a supermarket chain based in Guatemala, has one large

supermarket in San Salvador and 19 smaller stores elsewhere throughout the country. Super Selectos

is a locally based firm with 74 stores throughout the country, but mostly San Salvador. Hiper Europa

has four large stores in San Salvador, while La Despensa de San Juan has 28 stores, of which 60% are

located in the capital. Farmers were also able to sell organic vegetables to some restaurants in San

Salvador for time, but they stopped due to the small level of demand.

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Table 5: Prochalate and Technoserve: area of organic vegetables, Las Pilas and Los Planes (ha)

Carrots 1.9

Sweet onions 0.8

Cilantro 1.0

Lettuce 0.4

Beet carrots 0.1Broccoli 0.2

Radishes 1.0

Perejil 0.0

Spinach 0.0

Guicoy 0.1

Green beans 0.4

Tomatoes 3.9

Cauliflower 0.2

Apium 0.1

Repollo 0.2

Escarola 0.1

Total 10.4

Source: Technoserve.

VI. CONSTRAINTS, BOTTLENECKS AND MAIN FORMS OF SUPPORT

60. To succeed in selling to supermarkets and hotel chains, farmers needed to solve several problems.

Not all these were specific to organic vegetables; some were specific to any production of vegetables

for the market niche that the farmers had selected. The most important problems were the following:

A. Technology and Marketing Problems

61. (1) Mastering organic methods of production. To obtain the full benefit from selling organicproducts, farmers had to acquire certification as organic producers, which in turn required the

adoption of organic methods of production. While all the farmers interviewed stressed that they did

not find organic technologies difficult, they needed to be convinced of the advantages of switching

from conventional to organic methods, and they had to learn how to apply the organic technologies.

The adoption of organic production required training and technical assistance to accomplish this.

62. (2) Marketing. Small farmers who grow organic vegetables used to sell their conventionallygrown crops (cabbages, tomatoes and potatoes) through middlemen who came to their farms to

purchase the output and then sold it in La Tiendona market in San Salvador. In contrast, small farmers

sell the organic vegetables directly to supermarkets and hotels, as La Tiendona does not pay a price

premium for organic products. Thus, small farmers have had to negotiate and establish contacts with

supermarkets and hotels.

63. (3) Obtaining a product of high quality.Supermarket and hotel consumers of organic and non-organic vegetables assign great importance to the characteristics of the product, such as colour, size,

uniformity and taste. These characteristics have to be as uniform as possible, and products of different

sizes and different taste have to be avoided. To obtain these quality characteristics requires: (a) the

application of a production technology that prevents the attack of pests and ensures as much as

possible uniform, visually pleasing products, (b) careful harvesting, classification and post-harvest

processing to eliminate any pests that might damage the product after harvest and (c) transport under

controlled humidity and temperature. The small organic producers in Las Pilas needed to apply an

appropriate technology to obtain a high-quality product and acquire appropriate harvest facilities and

transportation.

64. (4) Obtaining a constant and reliable supply of products. The supermarkets in San Salvadorrequired a substantial and constant supply of vegetables (both organic and non-organic), which the

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farmers in Las Pilas needed to send three times a week all year round. If the farmers could not meet

this requirement, they would very likely lose access to the market, as the supermarkets would start

buying from other suppliers. To obtain a constant and reliable supply of products, three conditions

had to be met: (a) the farmers needed to organize themselves to market collectively in order to have

available the volumes of product required by the buyers, (b) the farmers had to plan production in

order to harvest products every week and at the same time avoid harvesting all the vegetables all at

once and (c) farmers needed irrigation in order to be able to grow vegetables all year round.

65. (5) Coordinating a high number of tasks. In contrast to most manufactured products and to grains,most vegetables in Las Pilas are highly perishable and cannot be stocked without sacrificing some

quality and value. Thus, the products need to be delivered to the supermarkets soon after the harvest.

Any delay involves losses in quality and thus penalties, usually the rejection of the product without

any payment. In order to avoid delays, producers need to have labour available for the harvest and

packing and trucks to bring the output by road from the fields to San Salvador.

66. Both CLUSA and Technoserve were instrumental in identifying the potential of the promotion of

organic crops among small farmers in Las Pilas and in helping them apply organic technologies and

obtain certification as organic producers. Both organizations provided several services to farmers,including training, extension, loans and outright grants. In the case of CLUSA, the extension and

training were furnished by foreign and local agronomists with great experience in organic production.

In the case of Technoserve, they were supplied by three agronomists who were hired and trained by

the organization. Two of the agronomists were technology specialists, and the other was a marketing

specialist.

67. The technical assistance and training focused on three major areas: (a) the technologies associated

with the new crops and the organic methods required to obtain organic certification, (b) the

establishment of contacts with supermarkets and other buyers and coordinating product deliveries to

them and (c) the organization of tasks, including the planning of production and harvesting. In

contrast to the emphasis of most extension services on agricultural technology, the most important

issues in Las Pilas were the last two: the negotiation of marketing channels and assistance in planningproduction and marketing.

68. Because CLUSA was initially working with a small number of farmers, it had a limited amount of

products available, so it targeted domestic consumers. It first contacted supermarkets, and, because

consumers were still not particularly aware of the organic nature of the product, CLUSA had to

undertake an intensive promotion campaign among managers and supermarket workers. The organic

market then started to develop rapidly. In order to make the process more sustainable, USAID urged

the creation of a local organization that could carry out the marketing of non-agricultural products. As

a result, the Producers and Exporters of El Salvador was established in 1994 as a cooperative

company. Starting with a fund of USD 7 000 provided by CLUSA, the company initially had 11

members, including a mix of producer, exporter and cooperative groups who purchased a minimum of

SVC 20 000 (USD 2 286) of the shares of the company, receiving in return marketing services and ashare in the year-end profits. By 2001, the company had 12 members, most of whom were

cooperatives and farmer groups, which represented about 2 500 producers.

69. Because the supermarkets required a constant flow of product, the farmers in Las Pilas and Los

Planes had to plan their production so that they could harvest every week. The climate in the region

permits this sort of year-round production. However, the farmers were used to growing their crops in

only two seasons. Irrigated cabbages, tomatoes and potatoes were grown during the dry season

(between November-December and April-May), followed by corn in the rainy season (starting in

May-June). In contrast, the vegetables for the supermarkets had to be grown all year round. This

required planning the production of all the farmers as a group and individually. Each farmer had to

plant and harvest every week.

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70. Organizing this programme of production was quite a complex job. It required the collection of

information from all farmers in order to determine the availability of the output expected for the next

week, communicating this information to the supermarkets, noting the needs of the supermarkets and

distributing quotas among the farmers according to this demand. Then, members would harvest their

product and send the output on Thursdays to the packing facilities. Once the product had been packed,

trucks would collect and transport it to the supermarkets in San Salvador. In the case of Super

Selectos, the product would be transferred to smaller vehicles and distributed among the branches.

71. With respect to the training, in 1998, technicians of Technoserve and Prochalate identified a

training centre in Costa Rica that provided training in organic agriculture. The centre, the Organic

Agriculture Training Centre, was located and managed by a private firm (Jugar del Valle) in Laguna

de Alfaro Ruiz (province of Alajuela), which grew vegetables and had obtained organic certification

in the early nineties. Jugar del Valle had substantial experience in the production and marketing of

vegetables. At the centre, they provided training based on their experience to farmer groups desiring

to undertake the cultivation of organic crops.

72. Technoserve arranged with the Organic Agriculture Training Centre to train farmers and

extension workers from Prochalate. The training sessions took place in 1998 and 1999, and theyincluded an eight-day programme that emphasized practical issues. Thus, the farmers were able to

learn by doing. They were instructed in the inputs appropriate for soil fertilization and for combating

pests and disease. Almost all the farmers interviewed had participated in the training sessions and

stressed that they had learned most of the technologies of organic production there.

73. To sum up, training was effective mainly for several reasons. (a) The participation of trainers who

were also farmers facilitated the learning process because of the similar language and the closer

understanding of the problems and difficulties involved in the adoption of organic crops. (b) The

sessions were very practical, and the farmers learned how to produce organic inputs independently.

(c) Rather than encouraging the farmers to adopt organic crops based on price and market advantages,

the training emphasized the benefits of organic crops for human health, the conservation and long-

term productivity of soils and the potential reduction in the costs of production.

B. Financing Organic Production

74. (1) Carrying out essential on-farm investments. The lack of access to credit to pay for investments

such as farm machinery and equipment is one of the most common constraints in the promotion of

change among small producers. For this reason, most IFAD projects include a component to help

make credit available to farmers, usually by the establishment of credit funds or guarantee-fund

schemes. While the role of credit has been important in making possible the introduction of new crops

and improving agricultural production, credit components have often faced several problems,

including high default rates.

75. Interestingly, the cultivation of organic vegetables in Las Pilas did not require the purchase of anymachinery or equipment, as all tasks were manual and relied on simple materials. However,

individual farmers had to undertake some essential on-farm investments. Some of these investments

were specific to organic production, while others were common to vegetable production in general.

On-farm investments had to be undertaken in the following areas:

76. (a) Soil-conservation measures. Most farmers who started to grow organic crops had cultivatedconventional crops without applying any conservation measures. Therefore, the shift to organic

production required cultivation on level curves and terraces to prevent erosion. These conservation

measures only provide returns after a several years. For example, one farmer explained that the

investments are really only at the beginning, when we had to implement the conservation measures.

Afterwards, organic crops are not that complicated, although we do need to work more to do the job

that pesticides used to do for us. This represented the opinion of most of the farmers interviewed,

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who all emphasized that the soil-conservation measures were quite costly in terms of labour and

represented the most important investment in the shift to organic production.

77. (b) Irrigation infrastructure. The use of irrigation technology was not necessary in organicproduction, but it was essential for growing vegetables all year round and obtaining a constant flow of

the product, especially in the dry season. All the farmers who belonged to farmer groups already had

irrigation available, as this was a condition that CLUSA and Technoserve had imposed when they

created the farmer groups that would work in organic agriculture. Thus, these farmers did not have to

make new investments. However, small farmers without irrigation needed to invest in on-farm

equipment and in infrastructure to bring water from the source. The amount of these investments

depended on the distance from the water source to the farm. It was around SVC 2 000 (USD 229) for

1 000 m of tube wells and the aspersion devices. The distance over which the organic farmers in Las

Pilas had to bring the water varied from between 1 to 4 km, which represented an investment of

between SVC 2 000 (USD 229) and SVC 8 000 (USD 916).

78. Interestingly, the organic production of vegetables in Las Pilas emerged mostly in the absence of

formal sources of on-farm credit. The most relevant on-farm investments revolved around soil-

conservation measures. Because these measures involve mainly labour, farmers implemented themusing family labour. In addition, the farmers who have continued growing the same crop, but who

have shifted to organic methods of production stress that yields fall substantially in the first two or

three years and then start to stabilize at levels normally slightly lower than the levels of the yields

accruing to conventional methods of production. However, in the case of Las Pilas, because the

farmers shifted to other crops for organic production, they did not experience this phenomenon.

79. Farmers growing perennial crops like mango or grapes must carry out significant investments, but

they must also wait for two or three years to obtain the first revenues from the plantation. Thus, they

need to obtain investment credit and other sources of revenue to maintain their families. In contrast,

the farmers in Las Pilas grow annual crops that can be harvested a short time after plantation (usually

between two and four months), so they have been able to obtain the incomes necessary to maintain

themselves and their families.

80. (2) Off-farm investments: packing facilities and transport. The marketing of fresh organic

vegetables has required facilities where the products could be classified according to quality and then

washed and packed before being sent to the supermarkets. These facilities could be simple, as were

the ones owned by the farmers working with Technoserve, which were located in an open space and

included a wood structure with a metal roof, wood tables and plastic tanks cut in half for washing the

vegetables, or they could be more sophisticated, like the ones owned by CLUSAs farmers, which

were made of regular construction materials and included a freezing room. While facilities like the

former can cost about SVC 10 000 (about USD 1 100), the latter would cost about SVC 150 000

(about USD 17 100). In the latter case, CLUSA provided a combination of grants and credit so that

the farmers could build the packing facilities and buy a truck.

81. In contrast to the on-farm investments, the off-farm ones were not affordable for individual small

farmers. Moreover, a single small farmer would not be able to produce enough to keep the facilities

working at full capacity. Thus, both CLUSA and Technoserve promoted the construction and use of

collective packing facilities and transportation and helped farmers to obtain the necessary funds for

them. CLUSA helped the Los Planes Cooperative of Organic Producers to obtain grant funds from the

Inter-American Foundation to build packing and storage facilities. In addition, the cooperative

obtained a soft loan from USAID for the purchase of a truck. Prochalate also provided long-term

credit (SVC 115 000, or about USD 13 100) to the Los Planes cooperative for the construction of a

greenhouse that could serve the collective production of lettuce plantings. This allowed the

cooperative to obtain plantings at a much lower cost, since members used to purchase them from

Guatemalan producers. In the case of the other farmer groups that were assisted by Technoserve,

Prochalate provided them with outright grants for the construction of packing facilities.

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82. The interviews carried out among farmers showed that there were conditions that had to be met in

order to render the investments practical. These included the following:

(a) The farmers needed to have land that was under stable forms of tenure. Because the returns on the

soil-conservation measures would be obtained only after several years, farmers with unstable forms of

land tenure were not willing to carry them out. For example, one of the organic farmers stressed that

it would have been impossible for me to do organic vegetables if I were not the owner of the land.

Anyone can rent a piece of land to cultivate cabbage or tomato with fertilizers and pesticides for only

one year, but one has to wait for years to see the fruits of starting with organic crops. You work a lot

without much return the first year, but the soil gets better year after year because of the organic

fertilizers and the soil rotation, and the productivity keeps improving. You cant make all this effort

one year and then leave the gains of your effort for others to obtain.

(b) Farmers needed resources to pay for the labour required to implement the soil-conservation

measures. The soil-conservation measures required a lot of labour. Part of the labour was supplied by

the families of the farmers, and part was supplied by hired workers.

VII. CONCLUSIONS AND POTENTIAL LESSONS FOR PROJECT DESIGN

A. Conclusions

83. This analysis of the organic production of vegetables in Las Pilas shows that:

84. (1) NGOs have played the dominant role in the emergence of organic production in Las Pilas and

El Salvador in general. These NGOs have not been specialized in organic agriculture or in

environmental issues, and they have not promoted organic production as a result of a specific concern

for the conservation of natural resources. They are specialized in agricultural and rural development

and have a business-oriented perspective, and they participated in the implementation of a USAID

project that promoted the production of non-traditional crops for export. They identified organic

production as one of the possible non-traditional alternatives for small farmers.

85. (2) Government policies and institutions have in general not been supportive of organic

agriculture, and they have frequently posed obstacles for the development of this agriculture. During

the nineties, agriculture in general faced a policy environment that was characterized by the

overvaluation of the exchange rate, the reduction of tariffs and non-tariff barriers, the reduction of

public expenditures through government agencies specialized in agriculture mainly extension and

research and the lack of agricultural credit. A value-added tax was even imposed on fresh

agricultural products in May 2000. These policies favoured imported goods and made access to

agricultural services more difficult for small farmers. Furthermore, the government agricultural

research and extension agency did not include a research programme in organic agriculture. The

IFAD-funded Prochalate project, which was implemented by the Ministry of Agriculture and

Livestock, was an exception because it contracted out to public and private agencies the provision ofextension services to small farmers. The private providers include NGOs and consulting firms with

differing perspectives, strategies and methodologies. One of them (Technoserve) become essential in

the development of organic vegetables in Las Pilas.

86. (3) Universities and training institutions in El Salvador have recently initiated programmes in

organic agriculture both at the doctorate and the masters levels. However, no professional has yet

graduated from these programmes. Most of the professionals who are working in the public and

private sectors have been trained in conventional agriculture. Thus, most researchers and extension

workers have little knowledge of organic agriculture and have even frequently opposed it.

87. (4) Because most farmers in Las Pilas have continued growing the same crops they grew with

conventional technologies, the shift to organic vegetables has meant a diversification in production,

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with the substitution of organic vegetables for conventional crops and a slight decrease in the total

cultivated area.

88. (5) Organic vegetables in Las Pilas have represented an attractive alternative for small farmers

and have had a positive effect on output and incomes. They have involved lower production costs and

better prices for the products. In addition, they have led to the more sustainable use of natural

resources and, according to the farmers, to positive effects on the health of farmers.

89. (6) The adoption of organic vegetables has not required significant on-farm investments. The

most important of these has been the investments in soil-conservation measures. All the farmers have

been able to implement these on-farm investments which have involved mainly labour without a

need for credit and by relying on their own resources. The most important off-farm investments that

organic farmers have had to make have included collective investments in packing and storage

facilities and transport.

90. (7) The chief forms of the support that NGOs and the Prochalate project provided to small

farmers who adopted organic vegetables in Las Pilas included training, technical assistance, support

for collective action, and a mix of credit and outright grants for collective post-harvest infrastructure(packing and storage facilities) and transport (refrigerator trucks).

B. Potential Lessons

91. The case of Las Pilas offers some potential lessons for policy design and implementation that will

be tested in the other cases in this research project. These potential lessons include the following:

92. (1) Organic production may be an attractive alternative for small farmers. However, the adoption

of organic crops requires a careful selection among farmers, as not all small farmers are likely to

succeed. In particular, farmers should have land that is under a stable form of tenure preferably

ownership so that the required investments in soil conservation can be carried out. Soil-conservation

measures are the most important on-farm investment required in organic production, and the returnsto them will only be obtained in the medium to long term.

93. (2) Technical assistance and training in organic production technologies are essential, and they

should focus on meeting the standards for obtaining organic certification. Organic certification will be

essential if farmers are to sell their products on the market and receive premium prices. In addition,

the technical assistance must help farmers plan their production so that their products become

available when the market requires or when the market pays the best prices.

94. (3) While assistance in agricultural production is essential, it is certainly not sufficient if small

farmers are to succeed. Technical assistance and training should also promote and strengthen

collective action so that small farmers are provided with the skills necessary to organize effectively.

Collective action is a key because small farmers need to have a sufficient amount of product to meetmarket demands and to gain the benefits of economies of scale in quality-classification, packing,

transport and marketing.

95. On-farm credit may not be necessary for all organic crops. Soil-conservation measures that

involve basically only labour account for the main on-farm investments involved in organic

vegetables, so small farmers may be able to take advantage of the availability of family labour. Thus,

the availability of credit for hiring labour could help them expand the area under cultivation, but the

absence of credit would not render the adoption of organic crops impossible. Grants could be

provided to cover the labour involved in soil-conservation measures.

96. The off-farm investments are the most important investments required in the production of

organic vegetables. The investments relate to packing and storage facilities and vehicles for the

transport of products to markets. In the case of small farmers, these investments should be collective,

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References

Barham, Bradford, Michael Carter and Wayne Sigelko (1994), Agro-Export Production and Peasant

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Development Economics, Vol. 46, pages 85-107.Barham, Bradford, Mary Clark, Elizabeth Katz and Rachael Schurman (1992), Nontraditional

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Carter, Michael, Bradford Barham and Dina Mesbah (1996), Agricultural Export Booms and the

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Aspects of Rapid Agro-Export Growth?. World Development, Vol. 21, No. 9, pages 1085-1100.CENTA (1999), Diagnstico de la Situacin de las Hortalizas en El Salvador, perodo 1994-1998.

San Andrs, El Salvador: National Centre of Agricultural Technology, Ministry of Agriculture and

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CENTA (2000), Las Pilas: Una Alternativa para la Autosuficiencia de Verduras en El Salvador.

Agroinnovacin, pages 16-18. San Salvador, El Salvador: National Centre of AgriculturalTechnology, Ministry of Agriculture and Livestock.

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Annex: List of persons interviewed

1. Professionals and officials at government agencies, NGOs and farmer associations

Omar Lara, coordinator, Technoserve-Prochalate

Roberto Vega Lara, executive director, Technoserve

Mario Montano, director of operations, Prochalate

Jaime Bran Recinos, Las Pilas area manager, Prochalate

Pablo Sanabria, technical analyst, Technoserve

Salvador Arvalo, technical analyst, Technoserve

Wilfredo Cullar, marketing manager, Technoserve

Jorge Antonio Gmez, marketing manager, ROCA Project

Crdenas, ROCA Project

Godofredo Pacheco, Encargado de Negocios, Producers and Exporters of El Salvador

Nstor Palma, general manager, Ucraprobex

Carlos Mario Garca, management subdirector, CENTA

Hctor Ren Milla, marketing researcher, CENTA

Adonis Moreira Rivas, natural resources specialist, CENTAMiguel Romn Corts, Investigador en manejo integrado y hortalizas, CENTA

Pablo Posada, chief, Agency of La Palma and Las Pilas, CENTA

Martn Antonio Fuentes, extensionist, Agency of La Palma and Las Pilas, CENTA

Eduardo Huidogro, director, Oficina de Agronegocios, Ministry of Agriculture and Livestock

Francisco Mrques, Direccin de Estadstica Agropecuaria, Ministry of Agriculture and Livestock

Stanley Kuehn, national director, CLUSA

Jos Len Bonilla, director-president, CLU

organic agriculture in el salvador: the case of fresh vegetables in las pilas

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