Sand in the gears

Rethinking the 00 mile diet

by Ed Epp

Miguel is a small bean farmer in the highlands of Nicaragua. His farm can produce world quality beans. His local market is not large enough to support his family and he must rely on bean markets in Mexico and the United States. His work will provide him with the income to feed his family, send his children to school, and even expand his farm. Miguel does face competition from North American farmers even in his local market, but he is confident that with a level playing field and equal access he can thrive.

Miguel’s story can be repeated millions of times, in all parts of the world. The products might change but the underlying facts do not.

The effect of the 100 mile diet could drive Miguel back into poverty.

The motivation for the 100 mile diet is laudable. It is also a wonderful educational exercise helping people understand more about the path food takes before it reaches our table. Buying locally does provide markets for local producers, and cuts down on the environmental impact of transporting products to faraway markets. If everyone in North America bought into the 100 mile diet however, global poverty would rise astronomically. If followed by all, the 100 mile diet, now in vogue by people who do not know Miguel, would drive his family and many others like them back into poverty. Even many Canadian farmers outside the 100 mile radius of major urban centers would go bankrupt.

The idea behind the 100 mile diet is for consumers to limit their food purchases to 100 miles. It does not speak to producers limiting their market to that same distance. A pure 100 mile diet plan should limit purchases from farmers who certify that they will only sell within that distance. Most agricultural producers, even in Canada, would be hard pressed to make a decent living if their market was limited to 100 miles. I wonder how many of these producers would sell locally if that meant certifying that they were limiting their market to that same locale.

Producers in Canada have access to world markets, and naturally wish that to continue. Farmers want access to both the local and global market chains, and I don’t blame them. Miguel wants that same opportunity.

Even in their own local market, farmers from poor countries face competition from global producers. Many times, North American and European products are subsidized by governments, driving the price downward and putting even more pressure on the Miguels of this world. Our economy is increasingly global and interdependent. Global commerce that eliminates barriers for small and poorer producers reduces poverty. The issues are much more complex then just buying locally. They include equalizing access to global markets, reducing subsidies on production, and ways in which small producers in poor countries can access global market chains.

In the last decade the poor have begun to make the global market work for them. Now we, in our rich world, want to keep their products from our table without restricting our own access to theirs. This will drive Miguel and millions like him back into poverty. I don’t think that they will much care if our motivation behind this was good.

I would rather live in the world where Miguel, and millions like him, are proud of their self-sufficiency through the products they can sell, than wait to exercise our good will through Christmas charity. ◆

It sounds good, in theory at least, to limit food purchases to a 00 mile radius. Unfortunately, it would drive a lot of peasant farmers deeper into poverty.

Former MEDA staffer Ed Epp now works for Tourmagination in Waterloo, Ont.

Tiny seed, big ambition

The seeds on that hamburger bun are helping Nicaragua’s small farmers beat hurricanes and poverty

by Greg Amos

Santos Machado takes off his baseball cap and wipes the sweat off his brow. It’s early August and Machado is lying on his back on the dirt driveway of his 3½-hectare farm in León, Nicaragua, halfway underneath his sembrador — a large seed and fertilizer dispenser meant to be hitched behind a pair of oxen. He takes a breather before torquing a wrench to make adjustments to the machine. Fruit trees shade the yard from the hot midday sun while a half dozen pigs loiter nearby in a swale of cool mud.

Machado is getting ready to plant a new sesame crop, and in a few days, will use the sembrador — bought with help from a Canadian-funded aid project called Produmer — to plant seeds for his family’s future.

Machado is one of more than 800 Nicaraguan farmers being helped by this unglamorous but progressive initiative – one that’s showing measurable results and attracting investors and supporters from across North America. Produmer is managed by Mennonite Economic Development Associates (MEDA), and gets funding from private investors and the Canadian International Development Agency (CIDA). Its focus is small — the tiny sesame seed — but its ambitions are large: to bring financial independence to farmers who frequently fall victim to indiscriminate natural disasters and unforgiving world markets.

Produmer takes a different approach than some development projects, which dump money and technology into countries without collaborating with the people meant to benefit. Instead, it hinges on the idea that poor farmers are perfectly capable of taking responsibility for improving their own lives — so long as they can access the necessary cash, equipment and training.

As far as needy locales go, Nicaragua is near the top of the list. While the World Bank reports that the country’s economy is slowly growing and stabilizing, it remains one of the poorest countries in Central America, with the third-lowest per-capita income in the Western Hemisphere. Almost 70 percent of rural Nicaraguans still live in poverty. Farmers have worked at organizing themselves here, bartering collectively in co-ops to gain some leverage when they sell their goods, but many still distrust the handful of exporting companies that dominate their commodity markets. Bank loans that could allow them to grow out of their dependent positions are extremely hard to come by. “It was eye-opening how these people are denied funds,” says John Toews, owner of Oakhill Farmers are getting help finding a niche in a volatile global Enterprises, an Abbotsmarket. One solution has been to go organic. ford, B.C., homebuilding

As managers of develop-

company, and an investor in MEDA’s work. He took part in a MEDA-sponsored tour of Nicaragua this year, visiting rural communities north of León.

“These are hard-working, family-oriented people, and sesame seeds are their main income,” he says. Toews put $25,000 into MEDA’s microfinance program, which enables farmers to access small loans for equipment and training, and he expects to net a seven percent return in five years.

While interest can be as high as 25 percent annually for clients, repayment terms are flexible. The bottom line is farmers are able to get a loan, without requiring access to cash as collateral — and 97 percent of the loans are paid back.

And the firsthand results are eye-catching, says Catherine Tegelberg, 23, a Vancouver-based intern who spent seven months as the field coordinator for MEDA Trust, which secures the donations that provide the capital for microcredit.

“Microfinance is an amazing mode of develop-

ment that gives people a lot of dignity,” she says. “One farmer who lost his thatch roof in a hurricane has already been able to replace it — with a metal roof, thanks to the profit he’s now making.” ment projects in Nicaragua since 1990, MEDA put experience to work in launching Produmer in 2001. A four-year trial run showed sesame was the best fit for the people, the land and the economy. Since then, MEDA has converted $2.8 million in CIDA money into training and development for Nicaraguan sesame farmers, with the goal of fosterSesame grower Santos Machado and his son. Behind him is the sembrador bought ing a crop industry that will keep with Produmer’s help. them prosperous in perpetuity. Produmer program director Keith Poe, an American raised in Nicaragua, knows firsthand that sesame is a hardy crop that can tolerate fierce rains and poor soil and has a strong natural resistance to pests. “Sesame is something that will last forever here because it’s easy to grow and Ideal for small it doesn’t take much money to start,” he says. It takes a lot farmers, this of manual labor, he adds, but requires neither irrigation nor hardy crop vast tracts of land — and it can be grown where coffee can’t. It tolerates fierce bucks the trend of industrialized agriculture by suiting the land rains, resists pests it grows on, and small growers benefit the most from it. and grows where The seed first arrived in Latin America from Asia via Spanish conquistadors, and is now found coffee can’t. wherever hamburger buns, sushi

A farmer plants certified sesame seed using an ox-drawn plow.

or tahini exist. The worldwide sesame market is sizeable and growing rapidly, driven by the expanding middle class in India and China and — no joke — a growing international appetite for hamburgers. Worldwide trade was valued at $850 million last year, up 70 percent since 1993. In 2006 Nicaragua’s sesame industry exported 3,000 metric tons within Central America and to Japan and Europe.

Between 2006 and 2007, farmers un-

der Produmer boosted their production of conventional sesame by 68 percent, although those gains took a heavy hit late last year from Hurricane Felix. Crops were lashed by wicked winds and driving rain, but not destroyed altogether.

MEDA holds that a businesslike approach is better than straight charity — a key reason why the organization has attracted the support of private investors such as Toews. The program’s 825 farmers say their gross incomes rose 24 percent last year. That’s the kind of return Toews says he wants from his investment. “It’s important the money helps other people, rather than just having it grow for myself,” he says.

To get the benefit out of sesame, funding and expertise had to get into the hands of farmers. According to Kerry Max, CIDA’s head of aid in Nicaragua, the agency turned to the Mennonite organization because “there was no local government structure set up that could provide sesame farmers with the comprehensive support that MEDA is providing.”

In the village of Malpaisillo, three hours down

a pothole-ridden highway from León, farmers such as Carmelo Silva plant their sesame seeds using oxen and local labourers. As a result of “One farmer who Produmer’s training, Silva now plants only certified seeds, which lost his thatch guarantee a high yield and which buyers welcome as a sign of quality.roof in a hurricane “Buyers don’t even bother offering low prices for my crops has already been anymore,” he says with a smile. After weeks of 15-hour days in able to replace it the field, Silva will harvest his plants by machete, pile the stalks — with a metal together in clusters, whack the sun-dried seeds out of their pods roof, thanks to and sell them to a buyer preranged through his co-op. arthe profit he’s Luis de la Cruz Sotelo, the soft-spoken president of the farmers’ co-op in Las Lomas, in now making.” northwest Nicaragua, is equally

upbeat. “It’s 100 percent easier to make money now,” says Sotelo, 49. Twenty years ago, he scraped by on rented land, but today he owns several acres and adds more land each year.

Rather than focusing on creating value-added sesame products — which would depend on Nicaragua’s unstable manufacturing infrastructure — Produmer is helping farmers establish a stable niche in the sometimes volatile global sesame markets now dominated by China, India and Myanmar (Burma). One way to do that, as Sotelo discovered, is to go organic.

“If you want to sell, you go conventional. But if you want to keep your money, you go organic,” says Sotelo, referring to the lower costs of pesticide-free production and higher prices fetched by the organic product. The three-year wait for certification made for some lean times, he says, but it was worth it: Sotelo and other organic farmers saw their incomes soar by 69 percent between 2005 and 2006. Hugo Ramon Moreno, a Nicaraguan agronomist trained at a national university and working for MEDA, points out that the new techniques are making a difference, as he tours farms around León.

“Farmers weren’t using their land that well, the seeds were of low quality and chemical products were destroying the land,” he says. “Now Produmer is providing us with an answer for all these problems.”

This is the kind of slow and steady progress many foreign aid projects assume the rural poor won’t wait for, says a Vancouver expert on international development.

“There may be a perception that the poor don’t think about the future,” says Hisham Zerriffi, an assistant professor at UBC’s Liu Institute for Global Issues. “But a stakeholder is not just some farmer who sits back and receives foreign aid, then goes back to doing what he did before.”

Zerriffi says MEDA carefully considered the amount of time farmers are willing to forego present value in favor of future cash flow and financial stability. By providing the farmers with classroom and in-the-field instruction on how to properly plant, thin, fertilize and control weeds, Zerriffi says, the project also avoids a “technology dump” problem, which occurs when foreign aid agencies pick up and leave after introducing new technology.

Having provided training specifically on growing sesame, Produmer has, according to Zerriffi, established a succession plan for when the project ends.

Nicaraguan farmers have received foreign aid before, but success on this scale is new, and some sesame farmers feel it will be difficult to tap into the competitive world sesame market without MEDA’s assistance. At the 2006 Baking Association of Canada conference, a Nicaraguan delegation was unable to wean Canadian importers away from cheaper conventional sesame from India.

Produmer staff, like agronomist Rommel Morales, give on-field training in how to plant, thin, fertilize and control weeds.

That said, MEDA’s $3-million microfinance

treasury will remain after Produmer is gone, with the goal of growing into a stable source of financing far into the future. Larger institutional investors are also starting to come on board.

Indeed, the Nicaraguan farmers have already proven they can weather the most severe of storms. Last year’s Category 5 Hurricane Felix (and ensuing rains) destroyed nearly a third of the sesame fields planted under Produmer — and yet many farmers still turned a profit due to the higher quality of plants that survived. Now they’re using the funds to invest in their futures by buying equipment, building sturdier homes and sending their children to school.

In a country with a history of natural and human disasters, it’s only natural for there to be some trepidation about the future. But as they begin to take over their own finances, technology and training, farmers such as Santos Machado, Carmelo Silva and Luis de la Cruz Sotelo are starting to believe that they can make it on their own. ◆

Greg Amos is a 2007 graduate of Langara College’s School of Journal‑ ism and the first winner of the CIDA‑Langara Journalism‑International Development Scholarship, which provided funds and support to research and write extensively on Canadian international development abroad.

A little good news for the global poor?

Sarona report gives an unusual twist to the economic crisis

Is there any good news on the economic front?

A rare break from the continuing financial gloom is the recent annual report of the Sarona Risk Capital Fund, one of the mechanisms MEDA uses to establish private investment as a solution to global poverty.

“While markets have crashed in North America, the Sarona funds sail on” and performance “has been strong,” say officials of MEDA Investments Inc., which manages Sarona.

“Though MEDA would like to say this performance was due to excellent management, the fund’s seeming indifference to Western markets is largely due to its isolation from these markets,” it adds.

It notes that MEDA’s investments are not as tightly linked to the performance of troubled domestic markets and to some extent may even be used to counter world market disturbances. Payments by micro-farmers in a developing country, for example, are much more affected by local weather than by commodity prices in North America.

“The general consensus of the hedge investment community is that emerging markets and microfinance institutions both are good places to counter volatile investments in highly integrated world markets,” the report states.

But the report was written before the deep-

est parts of the financial crisis arrived in September and October, and this notion may now be severely tested as the financial crisis grows. “It now appears,” says Gerhard Pries, director of MEDA’s investment department, “that this crisis will in fact have serious consequences for the financial sector in developing countries. But we do hope to confirm previous data that shows that investing in the poor through microfinance institutions is not correlated to the risks inherent in major financial markets. We have seen again and again that, as times become difficult, the poor roll up their sleeves, work harder, and keep paying their debts.”

Pries sees a smidgen of silver lining in the dark economic clouds. “It is important to note that the most basic reason for the rise in oil and food prices that occurred prior to their dramatic drop in October, was the success of everything we have been working toward — poverty reduction. We have worked to increase the incomes of the poor, but when poor families in India and China began eating more and driving cars, it drove up demand, which drove up prices. The world’s success has become its woe!”

There are, of course, other contributory factors that affect commodity prices or diminish the ability of poor countries to deal with them. Even more important than short-term spikes caused by speculation are market distortions and climate change, he notes.

“Agricultural subsidies in rich countries are a disincentive to development. When it is cheaper to import subsidized food from the U.S. and Europe, the agricultural sector in developing countries stagnates. Ethanol subsidies have also driven up food costs by shifting farmland from food to fuel production,” he says. “Drought and hurricanes have also put pressure on commodity supply. And as global consumption grows, so does climate change. We know now that the ways of the old economy — ‘just increase drilling’ — can’t save the planet nor feed a richer world. The world needs new solutions — now.”

Pries notes that more than a billion people still live on less than $1 a day. But some impoverished regions are making progress. In the past five years sub-Saharan Africa has experienced economic growth of nearly six percent a year. “Interestingly, a recent report of the World Bank sug-

Will the strength of developing economies pull the rich western world through?

“As times gests that the strength of North American and Eurobecome difficult, pean consumers has pulled the world through previthe poor roll up ous global recessions,” he says. “This time around, their sleeves, things look different. While American consumption is expected to dip into negawork harder, tive growth territory, it will be the strength of develand keep paying oping economies that will pull the rich western world their debts.” through this crisis.” And, he adds, as more developing countries make strides to raise their own living standards, they are poised to become the next frontier for investors. MEDA Investments was an early player in establishing private investment as a solution to global poverty.

“That means investing where many investors fear to tread, proving that it can be done, and inviting others to follow our lead,” says MEDA Investments chair Lowell Peachey, a former banker.

“A few years ago, only donors and courageous investors believed that making loans to the poor might be viable. It took a long time to prove it to them, but today even the New York banks are ploughing capital into microfinance banks that lend to poor entrepreneurs. Our challenge now is to prove that other sectors of developing economies also warrant capital investment,” Peachey says. In the last year MEDA Investments moved $13.8 million in incremental capital to benefit the poor. “Every $1 million invested benefits 2,000 to 4,000 families per year,” says Pries.

He adds that MEDA Investments is launching new initiatives to enhance the environment and support economic vibrancy in poor communities.

The Sarona Green Fund carbon offset website (meda. org/green) went live this summer. Companies and individuals can calculate their carbon footprint, offset that with a donation, and follow the investments made with those funds.

To see the full Sarona report go to sarona@meda.org ◆

New Malaria Shoppe opens its doors

by Nate Overly

It is a cool and cloudy Friday morning in Dar es Salaam, the commercial capital of Tanzania. Antony Haji, the owner and operator of Textile Mills of Tanzania Limited (TMTL) — a local manufacturer of polyester mosquito nets — is standing on the sidewalk in Kariakoo, the crowded commercial district of the city, outside of his new factory outlet store, the Malaria Shoppe.

Haji is waiting to receive visitors from MEDA, the logistics contractor for a government project called the Tanzania National Voucher Scheme (TNVS), locally known as Hati Punguzo. With support from the Global Fund to Fight AIDS, Tuberculosis and Malaria (GFATM) and the President’s Malaria Initiative (PMI) from the United States, Hati Punguzo works to prevent malaria infection for pregnant women and infants using insecticide treated mosquito nets. MEDA has worked closely with TMTL and three other local manufacturers since 2004, when Hati Punguzo began, and today Haji is excited to show off his latest venture.

TMTL began its operations in 2004, the same time that insecticide treated mosquito nets (ITNs) were first being used as a means to prevent malaria infection. Soon after production started, TMTL began bundling each of its mosquito nets with an insecticide treatment kit. The net and kit together are now known as an insecticide treated net (ITN). Today, ITNs are recognized as one of the most effective ways to prevent mosquito-borne malaria. Through Hati Punguzo, pregnant women and caretakers of infants receive discount vouchers that can be used to purchase ITNs produced by local manufacturers, like TMTL, at a reduced price. Vouchers are issued through medical clinics and redeemed at registered retailer outlets. Haji’s visitors arrive; they exchange greetings and begin talking over cups of hot tea. Haji is excited and discusses his vision for this new venture.

Factory outlet is latest initiative in the battle against malaria

Kariakoo commercial district, home to the Malaria Shoppe Amina Kassim (right), the Malaria Shoppe’s first customer, with company owner Antony Haji.

Bringing a life-saving product downtown: Left, warehouse manager Ally Figa and general manager Butchard Patrick.

Prior to the Malaria Shoppe, TMTL only serviced larger retailers and wholesalers selling ITNs; it did not make an effort to sell to individual customers. In order for a customer to purchase an ITN at factory cost they would have to travel all the way to the factory. Despite the inconvenience, many people (including smaller retailers without physical shops) did just that in order to save money. As a result of this demand for factory priced nets, Haji decided to save his customers time and money by taking the shop to them, a move that he hopes will attract even more business and further aid the fight against malaria.

In addition to increasing ITN sales, Haji believes the Malaria Shoppe will change the way people in Tanzania view malaria prevention. It will be the first commercial store in Tanzania to focus solely on malaria-related products and services. Thus far, indoor residual spraying — another method of malaria prevention — has been done only through government-run programs. But starting now, the Malaria Shoppe will sell World Health Organization (WHO) approved insecticide kits and sprayers made specifically for indoor residual spraying. Haji also plans to offer a commercial spraying service that will travel to people’s homes. According to Haji, this bold new idea makes the Malaria Shoppe the first of its kind in Tanzania.

While Haji and his visitors are chatting, the first official customer walks into the store. Her name is Amina Kassim and she frequently purchases ITNs from TMTL. For many years Kassim was a nurse at a hospital in Dar es Salaam. As someone who issued vouchers for the government program, she began to see the change in the way people viewed malaria prevention and ITNs. As a result, she quit her job and began selling nets herself. She heard the news about the Malaria Shoppe and decided to pay a visit. She brings with her a number of redeemed vouchers that she will use to purchase more nets.

This is good news for Haji and for the TNVS, and in only its first hour of business it appears the Malaria Shoppe is off to a very good start. ◆