Aid that works: A new road, farmer co-op revitalizes rural El Salvador

Outside this small town in the rural north of El Salvador, a sleek, new ribbon of black asphalt known as the Northern Highway connects local farmers to the headquarters of El Salvador Produce, a farmers cooperative.

Here, an air-conditioned office space and spotless warehouse, which is outfitted with stainless steel sorting tables and cold storage, stand out in a region otherwise overwhelmed by poverty. El Salvador Produce – created in 2010 and funded by the United States-backed Millennium Challenge Corporation, which also paid for the Northern Highway – offers local farmers a commercial “cooperative of cooperatives” of the size and sway that enables them to directly supply the country’s major supermarket chains and boost their earnings.

Before, small growers of bananas, papaya, pineapple, tomato, avocado, and peppers had no choice but to sell their harvest to intermediaries who paid dismal prices and bundled and sold the produce at higher prices to the Wal-Mart and Super Selectos chains in San Salvador, the capital.

The Millennium Challenge Corporation is now wrapping up a $461 million investment in El Salvador under a five-year “compact,” or partnership, that officially ended last month. Under the MCC model, countries submit proposals for funding; once accepted, participating countries have to continue to meet stringent requirements around democratic governance and economic freedoms to remain eligible. Ramirez and the other member growers say they are expecting a visit by US officials flying in from Washington next week to mark the end of the compact.

The 138-mile Northern Highway anchored the compact and paved the way for economic development projects such as El Salvador Produce; technical assistance and training for 15,000 farmers; as well as an expanded technical college. The funds targeted the “northern zone,” an economically depressed region that suffered disproportionately during the country’s brutal civil war, which lasted more than a decade until a 1992 peace pact.

Farmers in the northern zone previously only had access to poor slow-going roads, but today El Salvador Produce sends its own trucks out to the farms – which are better connected by the highway – to pick up the farmers’ goods.

Growers still face logistical challenges, however. The Northern Highway cuts a stark contrast to the roads that feed into it – often in disrepair, susceptible to flooding, or unpaved and difficult to traverse. The El Salvadoran government has promised to make some fixes, but they have yet to be realized.

However, El Salvador Produce is expanding. The cooperative that began two years ago with 20 organizations representing 1,500 producers today unites 41 organizations representing 2,500 producers. Since receiving seed money totaling $5.9 million to train and equip its members, the project is on its way to sustainability: Monthly sales have climbed from $2,000 to $70,000, says manager Mario Urrutia. He projects sales will grow to $100,000 a month next year.

“The producers now have a channel to the people,” Mr. Urrutia says.