Central America is not usually a region associated with food insecurity. The region exports large quantities of fresh fruits and vegetables to markets in North America and around the world. Yet, despite this success, the region’s rural communities face significant food security challenges, particularly in remote areas that are not integrated with markets. To address these challenges, USAID forged a number of innovative partnerships with supermarket chains, including Wal-Mart, La Colonia and Super Selectos. These partnerships are meant to improve market opportunities for small-hold farmers, increase their incomes and improve food security for the farmers and dependents.
This past year, USAID/Latin America asked Resonance to conduct an analysis of these partnerships with supermarket chains, identify best practices and make recommendations on how they might be improved. Resonance’s team, led by Alberto Abadia, examined USAID supermarket PPPs in four countries: El Salvador, Guatemala, Honduras and Nicaragua. We interviewed farmers, supermarket chains, cooperatives, governments, NGOs and wholesalers to better understand the value of food security partnerships with supermarkets. Our analysis identified several key findings:
- Partnerships with supermarket chains appear to increase small hold farmer income through increased sales volume and improved quality and handling of produce.
- The supermarket chains are motivated by two factors. For most, the primary motive is CSR, but there is also a desire to increase the availability, quality and quantity of fresh fruits and vegetables.
- While these partnerships are effective, their impact may be limited as supermarket chains make up only a portion of sales for small hold farmers with exporters, processors and informal markets making up significant portions of sales. In many countries, supermarkets are a comparatively small part of the market.
- In a related point, the most effective PPPs took a ‘whole of eco-system’ approach whereby they not only partnered with supermarkets, but engaged wholesalers, distributors, exporters, processors and local governments.
- Partnerships need to address country and market-specific issues, while regional collaboration needs to focus on trade, market information and knowledge-sharing.
As the findings suggest, there is shared value in collaboration among donors and supermarkets to address food security concerns. By integrating other elements of the market eco-system, partners can significantly enhance the value proposition for themselves and small holder farmers alike.