The Inclusive Market Alliance for Rural Entrepreneurs:

Mercy Corps, Wal-Mart and USAID

From Small Farm to Small Business: New Directions for

Sustainable Food Security IFADC, Kansas City, June 2011

IMARE Launched

In October 2007, Mercy Corps, Wal-Mart, the United States Agency for International Development (USAID) and the Guatemalan nonprofit Fundación ÁGIL (Fundación Apoyo a la Generación de Ingresos Locales) joined forces to launch The Inclusive Market Alliance for Rural Entrepreneurs.

Building on Land Tenure

• In the mid-2000s, Mercy Corps successfully worked with smallholder farmers in Guatemala to attain tenure to the land they lived and worked on

• Helping them increase agricultural productivity and income was a natural next step

Supermarketization

• “In 10 years, the penetration of retail markets is reaching levels that took five decades to achieve in the USA.”Agricultural Economics professor addressing CAFTA, 2006

Gaining Access to Supermarkets

Selling to supermarkets offered excellent opportunities to farmers – but supermarkets have requirements:

• Quality standards• Food safety• Predictable supply• Easier to work with

preferred suppliers/ dedicated wholesalers All difficult for smallholder farmers to achieve

Enter the GDA• Mercy Corps,

Wal-Mart and Fundación ÁGIL approached USAID’s Global Development Alliance Program

• Three-year, $2.2 million program– USAID: $1.1 million– Wal-Mart: $600,000– Mercy Corps:

$500,000

How it works

• Mercy Corps: training on farming techniques, diversify to more market-oriented crops, increase productivity

• Fundación ÁGIL: post-harvest techniques

• Wal-Mart: share information on standards, volumes needed and prices; buy from farmers if standards are met

Results (1)

• Catering to formal-sector clients: Farmers in the program have raised their sales to retail markets by over 600% since 2008; formal market sales now account for over 60% of their total.

• Increased production: Overall production by these groups has increased by 56% in economic terms. Income earned per unit of land has increased by an average of 25%.

Results (2)

• Increased quality: An average of 98.3% of delivered produce has been accepted on quality terms by retail market buyers in the past two years.

• Job creation: Successful farmers hire workers. Farmers in this program have hired over 1,300 people as their operations grow.

Results (3)

• Sustainability and community benefit: According to surveys carried out in 2010, 37% of farm profits from this program are re-invested in continuing and increasing production; the remainder is used for family and community benefit, such as schooling, improved housing, health care, etc.

• Benefits to women: Though most farms in Guatemala are owned and managed by men, 30% of program participants are women. Ten percent of participating lead farmers are women.

Success Factors

• Choose the right participants

• Aggregate producers• Respond to the market• Focus on quality• Year-round production• Business principles• Outreach to women• Strategic partners

www.mercycorps.org