Publication Date

2003

Abstract

Guatemala is in a constant state of economic crisis. The current crisis however, has placed the rural poor at more of a disadvantage that has been seen in over three years. The prices of Guatemala’s traditional staple products such as banana, coffee, cardamom, citrus, and palm oil are in a current state of decline. The country’s principle product, coffee is in a state of oversupply, and according to a report by the United States Agency for International Development (USAID) Washington office (2002), its price has declined over 75% in the last year. This phenomenon is only but one of the leading causes of the reduced employment, food insecurity, increased incidence of acute malnutrition, abandonment of farms, and increased migration out of rural areas that the overwhelming majority of rural Guatemalans have been facing for years. Further, since the people who live in the rural areas of Guatemala do not have the appropriate technology, financial support, technical experience, and/or easy access to business resources, the rural Guatemalan small farmer finds it difficult to understand the complexities of a changing world market. Moreover, many small farmers are often taken advantage of by larger production companies, independent intermediary entrepreneurs, and sometimes supporting non-governmental organizations.

It was my work as an analyst that brought this crisis to my attention. At the Foundation for the Development and Education of the Indigenous Woman (FUNDEMI) Talita Kumi, I was assigned to analyze the feasibility of the purchase of a cardamom dryer that was to be purchased by rural farmers under a micro credit loan provided by Talita Kumi. My job was to speak with the leaders of 6 different communities; all located in the same region of Samanzana, Alta Verapaz and ask them about the general problems and obstacles that pertain to their sale of cardamom. My supervisor at Talita Kumi felt that if the cardamom farmers had their own dryer, they could store their product and still maintain its quality. They would therefore be able to hold out for better prices from individual intermediary entrepreneurs (known locally as coyotes), or sell directly to wholesalers at 800% more than they were earning selling raw cardamom. Unfortunately, I had to advise against executing this project because the cost of the dryer was too expensive for the communities to cover if they were to take out a micro credit loan from Talita Kumi under the standard 24% interest rate. Further, along with the purchase of a dryer was an additional cost of constructing a storage center to hold the cardamom. Therefore, my calculations proved the project not feasible. However, the interviews that I conducted brought me in touch with many people in the region. Most of the communities that I visited only have one or two people in the entire village that speak Spanish. The majority of these people speak only the indigenous Kekchí dialect.

Although I had completed 160 hours of Kekchí training (compliments of Peace Corps) I had nowhere near enough training to carry on a conversation, much less conduct an interview. Therefore, I had to be accompanied by a technical assistant at each interview. However, I did communicate very well with the leaders and residents of one community where the majority of the residents speak Spanish. This community was Samanzana. I was able to develop friendships very quickly with the local store owners, as well as the leaders of the community organization that accepted support from Talita Kumi. I felt comfortable talking to the leaders of Samanzana because unlike the other communities in the region, I was able to understand how the price of cardamom was personally affecting their family, and the families of their neighbors. I was also able to explain the work that I did as a volunteer for Talita Kumi, as well as the purpose of me being in Guatemala as a member of Peace Corps. Although my cardamom dryer study was completed in the Samanzana area by this time, I continued to visit Samanzana to speak with the people in the community. The cardamom farmers were worried about the market in both cardamom, and coffee (which they also harvested), and they asked me to attend their community meetings to discuss what was happening in the cardamom and coffee markets, and to discuss viable alternatives. The small group of farmers from Samanzana seemed eager to look for financial alternatives to their cardamom crisis. Many of the farmers from this group also produce coffee, which has fallen in price for the last three consecutive years. I knew that I was invited to this meeting to help in some sort of way, but I also knew that I would need much more information.

My proceeding meetings with the Samanzana group helped me build more trust with the farmers, but it also built more questions in my mind about the situation at hand. I wondered just how many other groups in rural Alta Verapaz are experiencing the same effects as Samanzana. Other questions that I had pertained to the technical assistance provided by local NGOs. What attempts are made to train rural farmers about basic commercialization practices such as break-even analysis, cost of production analysis, market surveys, and channels of distribution? What is the relationship between local NGOs, and intermediary wholesalers who do business with rural farmers?

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