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Rural Market Opportunities in the Gulf of Fonseca

The Dry Corridor is one of the most impoverished and economically depressed areas of Honduras. Here, 65% of households live below the poverty line, while 48% are extremely poor and experience high rates of malnutrition and other negative social consequences. Commercial agriculture for export is the main source of seasonal jobs for poor people, while small-scale agriculture is the dominant economic activity and the greatest source of income in the area, especially for the extreme poor.

The two compete for water and land, mainly in coastal areas. Extreme climate events are exacerbating the situation by exposing vulnerable rural economic activities to further risk. In addition, gender and other social inequities in access to, control of and benefits from productive assets increase the vulnerability of marginalized groups such as women and youth. The Government of Honduras and its development allies believe that inclusive economic growth can break the cycle of poverty trap and social alienation in the Dry Corridor. Agriculture is considered a priority sector with required efforts concentrating on productivity issues, market and infrastructure development. Non-farm rural activities also provide opportunities by generating a vibrant and diversified local economy.

The Project

The “Rural Market Opportunities in the Gulf of Fonseca” project addresses entrenched poverty and low economic productivity in the Dry Corridor by enabling rural MSMEs, including agricultural producers, to take full advantage of the agricultural and non-agricultural market opportunities available to them.
The project approach to rural private sector development, is to build strength throughout the local economic system – supporting small businesses to operate more efficiently and effectively; helping them gain access to and meet the demands of local, national and export markets; and fostering an enabling environment that is conducive to their success. It will also link local economic development plans to broader regional and national strategies to harmonize efforts and make them more efficient. The project covers 33 municipalities additional geography by supporting selected value chains such as organic dried or tropical fruit, concentrates, cashew, sesame, honey or rural and ecotourism.

Objectives

The project will reach 7,000 households comprising 36,000 people, 70 percent of them women and/or youth. The project is expected to have achieved three intermediate outcomes:

  • Improved business, technical and/or financing practices by small-scale enterprises, especially those led by or mainly employing women, youth and/or marginalized people living in poverty
  • Increased productivity and sales by small-scale enterprises and producers, especially those led by or mainly employing women, youth and/or marginalized people living in poverty
  • Strengthened support within the local economic development system for small-scale enterprises and producers, especially those led by or mainly employing women, youth and/or marginalized people living in poverty
  • Additionally, the project will enhance MSMEs’ access to local, national and export markets and enhance their ability to use resource-efficient, climate-smart technologies for producing and processing products that meet the quality, environmental and social standards demanded by the markets activities and outputs will include studies, training, technical assistance and facilitation of relationships between MSMEs and wholesalers, retailers, exporters and other market actors.
  • In addition to training, activities and outputs will include the development of institutional coordination mechanisms, the development of local economic development plans and strategies, and wide sharing of lessons learned.
  • 80 percent of beneficiaries will increase in net household income derived from productive activities by 40 percent in women and 30% in men compared to baseline, generating an estimated cost-benefit ratio of 4:1 on  investment.

Results

Results 2018

  • 802 producers (47% women) applied biofertilizers to improve soils, plant nutrition and productivity.
  • 83% of producers applied biofertilizers.
  • 619 producers (45% women) pruned and prepared their old plantations; 471 (44% women) planted a total of 56,168 cashew trees in an area of 289.6 hectares.
  • In the dairy production chain, 64 processing plants have developed tests for milk quality and analysed them; 5 of them have begun to implement tools for the analysis in their commercial context and business model.
  • 223 non-agricultural MSMEs are implementing tools for market analysis and their business models (95% of which are women). 41% of these companies are aimed at the tourism sector and provide food and accommodation services.
  • 21 new companies refined their business model through a structured advisory process. New entrepreneurs have stated that they have managed to open and use bank accounts; they have focused the business on the most promising customer segment and have applied the cost of their products.
  • The Project promoted a gradual process of changes in dairy processing companies, 43% of them tested the quality of raw milk as a prerequisite for the purchase of it. For now, companies know the importance of milk quality control.
  • 40% of the processing plants implement the basic level of the Central American Technical Regulation (RTCA 67.01.33: 06). This evaluation helps establish an improvement plan in the plants to fulfill gradual compliance with the requirements in order to achieve certification.
  • 33% of cashew processing plants began to perform aflatoxin analysis on the nut.

Haciendo vivieros

Project partner

  • Ministry of Agriculture and Livestock
  • Secretariat of Economic Development
  • CDEMIPYME

Project countries

  • Honduras

Project links

Project duration

2017-2022

Funding

  • Global Affairs Canada

Working area

Enterprise

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