El Salvador Invests in Reducing Dependence on Imports

The Millennium Challenge Corporation (MCC) is a foreign aid agency that aims to combat poverty around the world. A year and a half ago, they granted El Salvador $461 million – well, they granted the organization Fondo del Milenio de El Salvador (Fomilenio) the money, and that organization has committed to using the majority of that money on developing productive and profitable agriculture in the northern parts of the country, la zona norte. The goal of Fomilenio aligns with MCC; they seek to reduce poverty while growing the economy, and their work is aimed entirely in the northern zone of the country. Fomilenio describes the grant’s purpose as a way to strengthen the farmer’s access to markets, improve their productivity, and increase overall sustainability and quality of product.

Tomatoes: Consumed every day by the average Salvadoran.

Five products were identified as the most economically important in the region: Hass avocados, pineapples, tomatoes, plantains, and cacao. Hass avocados are a variety developed in the U.S. using a strain from Guatemala, and now dominate the worldwide market. El Salvador consumes about 12 thousand tons each year, but only produces a little over 2 thousand tons. Pineapples are the second most cultivated crop in the world after bananas; El Salvador imports 12 thousand tons and produces 8 thousand tons. Tomatoes are another economically important crop; approximately 70 thousand tons are imported to satisfy the local needs – only 28 thousand tons are produced in the country, demonstrating a major gap between demand and supply. Two crops that Fomilenio is hoping to boost for the export market are cacao and plantains. Cacao (Theobroma cacao), also called cocoa tree, is an evergreen tree native to El Salvador. Its seeds are used to make cocoa powder and chocolate, and typically fetches a high return on investment. Plantains are the other crop Fomilenio would like to see grown in increasing numbers. El Salvador is the third largest importer of plantains in the world, and according to experts from Fomilenio, it is a profitable crop that can be a viable alternative to sugarcane production. Under irrigation, the production levels could be very high; Fomilenio believes 130 thousand hectares of land could be devoted to this crop.

Limes: one crop where local production satisfies local demand. But is there an export demand?

Most of the funds from MCC are going towards improving the road, carretera Longitudinal del Norte, which runs the breadth of the zona norte. Improvement in this infrastructure will allow easier and faster market access. This $380 million project, apart from easing transportation for agricultural products, benefits the 423,000 residents along that road (about half of the total population of the zone). Fomilenio is also investing in extending electric lines over 400 kilometers in the area, installing 400 solar photovoltaic systems in places where it is too difficult to bring the electric lines, providing 25 communities with potable water, and offering two thousand training courses for farmers wanting to begin or increase production of agricultural products. Fomilenio firsts wants to see farmers selling their products in the large stores, such as SuperSelectos and Wal-Mart, but then their eyes are on the export prize. My hope is that they at least develop these agricultural businesses in a sustainable way, being considerate of the environment while working to achieve financial success. Time will tell…

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