Latin America in 2020: Stronger, more sustainable farmers
Drought, heavy rainfall, disappointing harvests, and of course the coronavirus pandemic: smallholder farmers in Latin America faced more than their share of challenges in 2020. Rabo Foundation gave them a hand to help them get through it. The result? Almost all of our partner cooperatives ended the year in the black!
How we work in Latin America
We use a variety of methods to help farmers’ cooperatives in Latin America grow sustainably. Our mission is to help our partner organizations to become self-sufficient and to improve the lives of our partner smallholder farmers economically, socially and ecologically. We achieve the latter by helping them to become more resilient to climate change.
Financing
Farmers’ cooperatives borrow money from us on favorable terms. If our partners do well, helped by their existing repayment track record built up with Rabo Foundation, the organizations become eligible for local bank funding. In 2020, in Latin America, we provided a total of € 12.1 million in loans, technical assistance, trade finance and grants.
With our short-term loans, producer organizations could buy products from farmers, pay them on time, or purchase agricultural equipment that farmers could use to increase their production. And with our long-term loans, the cooperatives were able to issue microcredits of their own to help farmers invest in improvements such as better processing and storage of their harvests.
Technical support
Local partners help farmers diversify their crops. This allows them to fall back on alternative sources of income if the harvest fails, and reduces the risk of food shortages. Our partners also offer the farmers access to better agricultural techniques and resources to improve their yields, and teach them how to deal with extreme drought or rainfall. Farmers then apply the new knowledge themselves and share it with others within their cooperatives. In 2020, 59% of our project partners received technical assistence.
Local teams
Our local consultants are spread across our focus countries in Latin America to offer our local partners technical support. They speak the language, and understand the culture and the environment. That allows them to quickly form a bond with the partners and their member farmers. It also helps us to quickly identify new challenges and potential solutions.
Our focus in 2020
Although we had to maintain social distance and avoid coming into physical contact with each other in 2020, we were actually closer to our farmers than ever in order to help them get through the pandemic. For example, we were able to provide safety toolkits paid for by an emergency fund, but we also hired more local consultants to reinforce our local teams. Because farmers need to be able to reach us in these trying times.
We support farmers’ cooperatives to become stronger through diversification. Farmers who only grow cocoa or coffee beans are extremely vulnerable to fluctuations in the global market and prices. By diversifying to grow other crops as well, farmers and their cooperatives can better adapt to sudden drops in prices.
In addition to economic and social changes, since 2019 we have placed even more emphasis on our ecological impact. We increasingly support projects that improve the farmer’s influence on their environment. In Peru, for example, we participated on multi-stakeholder initiatives to address key sustainability issues on the value chain of cocoa; these interventions will hopefully prevent further loss of biodiversity as well as providing incentives to smallholder farmers to increase carbon sequestration.
A brief selection of what we’ve achieved
Despite the coronavirus, most farmers ended up having a good year in 2020. They shipped enough products, paid back their loans, could benefit from a better price than the local market price and from member services provided by producer organizations. They are accustomed to setbacks, and with the right support they proved to be extremely resilient.
By financing both farmers’ cooperatives and microfinance organizations, we contribute to making farmers stronger socially. That’s because as members of a cooperative, they have a sense of belonging and often receive support as if they were family. Many cooperatives have an emergency fund to help members who have bad harvests, and some even offer health care services. Many of the microfinance organizations we support also work to improve the social well-being of the farmers they finance.
So far in 2021
We will continue to pay even more attention to climate change in 2021. Many farmers have seen their soils damaged by drought, extreme rainfall or erosion. In addition to technical assistance, we are increasingly emphasizing technological solutions by agtech companies that can help farmers with services such as timely weather forecasts and targeted messaging to support them throughout the crop cycle.
We are also paying more attention to the younger generation, who often don’t feel motivated to take over their parents’ farms. But as the likely successors to their parents, they are vital for the continuity of global food production and the generation that will play a part in innovation of each sector. We therefore support more and more projects that teach them how to farm intelligently or to become an entrepreneur in the same crop value chain, for example by marketing their own brand of coffee with their own coffee bar.
