While tens of thousands of Central American children stream across our Southern Border, the U.S. government scrutinizes a rural development program proven to create real jobs and opportunity in communities of origin and for hundreds of poor Salvadoran families.
Salvadoran farming communities celebrated a victory for food security and sovereignty this month. After posturing by the United States on how El Salvador purchases corn and bean seed to feed over 560,000 low-income subsistence farmers and their communities, U.S. officials backed off of the issue. The Salvadoran government proposal on seed had satisfied their demands, the U.S. Embassy said, and it would no longer hold up a much-anticipated $277 million aid package over whether or not El Salvador offered its procurement to transnational agricultural suppliers.
This was no small feat, considering current behavior of the United States in its dealings with El Salvador. For the past nine months, the United States has been conditioning a new round of development aid through the Millennium Challenge Corporation (MCC) on specific reforms to a variety of Salvadoran economic and security policies. Since 2011, the Salvadoran government has delivered on a number of policy reforms, including new frameworks to promote public private partnerships. Throughout this process, the United States has not acknowledged progress in any of these reforms unless specific laws were passed, signed and ratified in El Salvador.
But on corn and bean seed, the United States conceded that it would table the issue until the fourth quarter of 2014, substantially softening its position with El Salvador for the first time in months.
The U.S. softening on seed reflected a stark political reality evolving in Washington: the United States was beginning to look tone deaf in Central America. As you read this, tens of thousands of children are streaming across our southern border, many of whom are fleeing violent situations that persist in impoverished local communities in places like El Salvador. How could the United States make overtures toward improved cooperation in the region on one hand, while on the other obstruct rural development programs proven to create real jobs and stability for thousands in the family farming sector?
Far worse, the United States appeared to be holding up a development aid package designed to generate much-needed economic growth over a relatively modest rural food security program. As actors like EcoViva have demonstrated, the U.S. was doing so based on scant evidence to back up their position. Seed was also beginning to overshadow more important priorities like a new money laundering law. Heightened pressure from the press, as well as Democrats in the House of Representatives, also elevated the issue to a place that neither Washington nor the U.S. Embassy wanted it to be.
What transpired on seed reveals a deeper issue concerning inconsistencies with U.S. policy in the region, and Washington´s acknowledgement of the reality of the public programs that improve the lives of the majority of Salvadorans—either with those children that flee violence in their home communities, or those that stay behind to eek out a living.
As EcoViva has reported in a number of news outlets (here, here, here, and here), on this blog, and directly to U.S. officials, the Salvadoran government has made measurable progress in improving the way it purchases corn and bean seed over the last five years. In 2012, the Ministry of Agriculture opened up its procurement to purchase better, more desired corn seed at a significantly cheaper price than what had been offered historically to El Salvador by transnational companies like Monsanto and Pioneer. Through an executive decree, the government was able to procure a product that it wanted, a variety of certified hybrid corn seed known as “H59”, from 16 domestic entities—many of whom are local cooperatives consisting of the very same limited-resource family farmers that qualify for support through El Salvador’s Family Agriculture Program.
This decree also allowed the government to respond in a timely manner to seasonal requirements of their family farmers that produce corn–requirements that don’t conform to the existing bureaucracies and timelines for contracting. How can El Salvador fulfill its contractual obligations to pay seed producers to plant product in December or January, if it is obligated by law to wait until January to begin a three-month bidding process before any seed can go in the ground? Over 400,000 family farmers plant corn in May each year to correspond to the wet season, and can’t wait around for a bureaucracy to put corn in the ground, or food on their table.
All this didn’t matter, said the United States Trade Representative (USTR) in Washington. Above all, El Salvador needed to produce an “open, competitive, transparent, and rules-based” procurement process to purchase seed. Essentially, the U.S. government was under the impression that El Salvador’s seed buying process was systematically excluding certain kinds of businesses—in this case, transnational seed providers. When word got out that the U.S. was conditioning aid on El Salvador’s purchase of corn and bean seed from transnationals like Monsanto, the “anti-Monsanto”and “anti-GMO” drums inevitably began to beat on the internet and social media.
But as EcoViva reported, the actual buying process in question during 2014 had already opened up to international businesses since 2012. Requests for bids had been published openly in domestic newspapers, and the same direct purchasing methods under scrutiny for seed had taken place numerous times in the past while USTR remained silent. EcoViva and collaborators at OxFam America provided documentation and existing regulations to USTR related to the bidding process and oversight on seed , which USTR admitted they had never seen before. Moreover, seed procurement prior to 2012 also appeared less competitive: just five businesses provided seed at nearly twice the price, versus 18 currently at more affordable prices for the government.
In other words, the current procurement produced more accepted bids for a better product at a cheaper price, and information was accessible to EcoViva and other growers who applied for the bid from the Ministry of Agriculture. It even included several businesses that had imported seed, and participated in past procurements that USTR had no problem with, and allowed the government to obtain a product through a bidding process that allowed its budget to reach a historic number of farmers, each of whom receive 22 pounds of H59 and corresponding farming inputs. How was this process not competitive, open, transparent, or rules-based? And, more importantly, how did it represent a “regression” in procurement policy, as had consistenly been the USTR´s claim?
Now, it’s no surprise that those who failed to compete for the current seed procurement contracts got upset and called foul. Last April, a representative from the American Chamber of Commerce complained in a Salvadoran newspaper that the seed provided by businesses like Monsanto affiliate “Cristiani Burkard” was a superior product that should be purchased over domestic, certified corn seed like H59. Not so fast, said officials at the Salvadoran Ministry of Agriculture. Monsanto varieties like 30F-Decal and H5, they say, provide a lower grade corn by-product suitable only for tamales, exhibit lower germination rates, and have demonstrated reduced yields on Salvadoran farms compared to H59. According to El Salvador’s National Seed Law, amended most recently in 2005, the Ministry of Agriculture is obliged to purchase adapted hybrids with 80% germination rates, accompanied by field tested adaptation studies from at least 10 discrete samples. H59 met these requirements, 30F and H5 from Monsanto did not. Not to mention that these businesses were offering the 30F and H5 varieties for higher prices than the domestic cooperatives producing H59–$156 a unit versus $125 by domestic producers of H59. Currently, H59 is only grown in El Salvador by Salvadoran farming cooperatives like the five in the Lower Lempa, making it uniquely adapted to the region and growing conditions.
Of course, all policies and processes can be improved. Nearly three weeks after the Salvadoran government offered a proposal, the U.S. Embassy finally acknowledged publicly that they were satisfied with how things would progress—and only after press coverage associated with the region and child migration flows began to look untenable. USTR commented that it was willing to work with El Salvador on specific improvements to the seed procurement method, including the timing, publication, time to present offers, and open access to information for the bids among all interested parties.
By all means, let’s improve paperwork transparency and expand access to information. The corn and bean seed procurements should also be made available on El Salvador’s government contracting website, “COMPRASAL.” But again, these same issues signaled by USTR on seed procurement also occur repeatedly in other procurements throughout the Salvadoran government—procurements that conform to Salvadoran law, but could present problems under the same CAFTA-DR Chapter 9 issues being brought to bear by USTR on seed—if USTR decided to enforce them, like they decided to on seed. And it seems difficult to justify how publicizing a call for bids for 40 days versus 15 significantly improves “openness”, when the procurement is repeatedly made every year, and product standards for seed are established in a 2005 law accessible to anyone with a Google search engine.
Making government purchasing more transparent is an important goal. But does it justify an unprecedented hold up in foreign aid to a country that has proved its commitment to work closely with U.S. actors like the Millennium Challenge Corporation? As press heated up over seed procurement, U.S. officials decided that their arguments on seed no longer warranted the potentially bad publicity at a time when Congress was scrutinizing the Obama administration’s actions and policies in Central America on immigration, security and development—and well they should. So far, Obama´s $3.7 billion dollar request contains $300 million for State Department actions geared toward improving the Salvadoran condition. Perhaps the United States should first clear up how its current programs contribute to addressing migration “push factors” in the region.
Salvadoran seed producers should also remain confident but vigilant. They currently provide a product that the Salvadoran government prefers at a competitive price. If the U.S. is serious about improving transparency and competitiveness of this bid, this should only be made more apparent in the months to come.
UPDATE: El Salvador’s “Action Plan”
After this blog was published, the U.S. Ambassador to El Salvador, Mari Carmen Aponte, clarified on a national television program that policy reforms such as seed purchasing, public-private partnerships, and a new money laundering law were suggested by the previous Salvadoran administration under Mauricio Funes, and included a total of 13 distinct policies to be revised to improve El Salvador´s investment climate. These policies were detailed in an “Action Plan” proposed by El Salvador, she said, and since the approval of $277 million through the Millennium Challenge Corporation, the United States was seeking timely completion of these efforts.
Like any country on Earth, El Salvador has a responsibility to meet its obligations under international and bilateral agreements, including dealings with the United States. Foreign aid should also not be a blank check. However, the exact nature of these obligations, including who from Washington is ultimately responsible for enforcing their completion, seems to exist on a constantly shifting and sliding scale. Regarding El Salvador´s “Action Plan”–the details of which have not been made public–EcoViva sees a lack of consistency within Washington development agencies on who ultimately oversees the reform process, and who has final say on progress and completion of this “Action Plan” in Washington.
For its part, the Millennium Challenge Corporation (MCC) has been forthcoming in its particular requirements for an improved investment and business climate in El Salvador. Until November of 2013, these policies had included bureaucratic improvements in business start-up and transaction costs, illegal property seizure, improvements in special business zones, reforms to police actions on financial crimes, and public private partnerships. Then, in December 2013, the MCC sent a letter to the Salvadoran government which stated that El Salvador would also need to account for free trade compliance issues, alongside specific improvements to public private partnerships and money laundering policies, both of which had recently been passed and approved by large margins in the National Assembly.
Where had free trade compliance come from? It had certainly not been mentioned previously by the MCC. Nor was it on the agenda of the Council for Economic Growth in El Salvador, a private sector round table that embodies the U.S. “Partnership for Growth” with El Salvador–or at least, as far as EcoViva could discern from conversations with U.S. officials and individual members of this round table, staffed by the IMF and members of FUSADES, a Salvadoran think tank.
To date, the Council for Economic Growth’s reform agenda for spurring private sector participation in the Salvadoran economy has not been made available to the public–despite the fact that calls for greater civil society participation and transparency in the Partnership for Growth had been acknowledged by the U.S. State Department.
As it turned out, the United States Trade Representative (USTR), the federal agency charged with promoting and enforcing free trade agreements around the world, like CAFTA-DR, had pressed the issue. USTR sits on the MCC’s Board of Directors, officials said, and had raised concerns about what they considered to be “regressions” in El Salvador’s compliance with CAFTA-DR standards. These regressions, they said, were outlined in a recent report that included polices on international property rights, pharmaceutical purchases, Points of Origin, and seed procurement. USTR’s seat on the MCC Board allowed them to not only comment on approving MCC aid to El Salvador–which was granted a green light by Board members, including USTR, in September 2013–but apparently USTR could also press for specific reforms, and re-prioritize them before the MCC and El Salvador could sign and ratify the $277 million aid package, as long as the reforms added to general improvements in El Salvador’s business and investment climate.
Ah ha, okay. So perhaps USTR could help us understand whether or not progress on El Salvador’s “Action Plan” was being made or not. But in conversations with USTR, it became clear that USTR didn’t consider themselves to be either empowered or capable of assessing progress on El Salvador’s action plan. As reported by EcoViva, USTR itself acknowledges that they can neither veto an MCC aid package as a Board member, nor define what specific progress looks like in advancing policy reforms. USTR as a federal agency has its own mechanisms for enforcing free trade compliance, just as the MCC utilizes its own evaluation process for assessing good governance and trade policies in partner countries like El Salvador.
So, the search for who has final say in Washington on progress toward El Salvador’s “Action Plan” continues. Unfortunately, it may take a flood of tens of thousands of Central American children to get a reply, and perhaps from the highest levels of the Obama administration as El Salvador’s president and other leaders meet in Washington with President Obama and Vice President Biden. It’s unfortunate that our border crisis may be the only thing to jolt Washington out of its tendency to play hot potato with its diplomatic mission on El Salvador and the region.
Ultimately, El Salvador and other Central American government have the greatest responsibility for tackling the immense security and economic challenges facing the region. But this display of U.S. diplomacy, and the uncertainty it has helped engender, is not helping.
“Oh, we forgot the fish food!” Maira laughed as she turned back the way we came. I had just met up with Maira Alvarado, 22, and Kevin Quinteros, 20, at the community center in Ciudad Romero that morning. They had graciously agreed to give me a tour of the tilapia farming business they’ve launched with two of their peers from the aquaculture program at Megatec, a technical university in the department of La Unión. UDP-ABL, Unión de Personas Acuicultores del Bajo Lempa, as the business is called, is one of two youth-led tilapia farming projects in the Lower Lempa. (The other is a few miles away in La Limonera and I was also able to meet its leadership Raúl Domínguez, 21, and Jenny Chávez, 22.) After picking up the food from Maira’s house – a pine green bucket filled with small sand-colored pellets – we set off again for the project site.
Thankfully it’s a short walk from the center to the tilapia farm because even though it’s only nine o’clock the day is already hot. Turning the corner after the new community health clinic, we arrive at a verdant lot. In front is a plot of newly planted corn and behind, in a grassy patch, sit two large cinder block tanks filled with dark glassy water that glints in the sun. I’m told that each contains 1,732 Oreochromis niloticus, commonly known as grey or Nile tilapia (one tank is also home to a freshwater turtle, we later observe). Though the fish spend the day at the bottom of the tanks where the water is cooler, I can see lots of little mouths gobbling up pellets as Kevin scatters them over the surface of the water.
“We feed the fish three times a day, at 9:00 am, noon, and 3:00 pm. Every two days we rotate who’s responsible for feeding them, and every eight days we change the water. We also regularly monitor the conditions of the tanks and the development of the fish,” Maira explains. The young entrepreneurs are recent graduates of Megatec, where they’ve been studying for the last two years, in large part thanks to scholarships provided by the Mangrove Association and EcoViva. Other than Kevin, who is from Usulután, all are from nearby communities – Ciudad Romero, El Carmen – and were very involved in the Mangrove Association’s youth programs as teenagers. In fact, it was based on their leadership skills and commitment to their communities that they were awarded scholarships to continue studying.
Last year, the group was granted seed money for the tilapia project after their business proposal won top marks in a competition organized by the Organization of Ibero-American States for Education, Science and Culture (OEI). They already had some land with a tank that had been built as part of a previous initiative seven years ago. The second tank was completed in January 2014, and in April they “planted” the first batch of tilapia fry, which take about three months to mature. It’s an exciting moment because, after more than a year of hard work, Maira and her associates will be harvesting and selling the largest of the fish this weekend.
Of course, the young entrepreneurs have encountered a number of challenges. While the OEI seed money bought materials to build two tanks, fish fry, and enough food for the first few growing cycles, the entrepreneurs and their families have had to cover transportation of materials and labor costs. The project site also lacks electricity, which is necessary to run the oxygenation system for the tanks; fish growth and production have suffered as a consequence. They are seeking financial support from the Mangrove Association for the funds necessary to electrify the plot. Yet despite these obstacles, the group is confident: “It’s been a difficult process, but I told myself that if I’ve already come this far, why would I leave it now? Sure, it’s just beginning and we’re going to have to work hard but something good will come of it. We have to keep moving forward,” Kevin told me.
Now that they are fully-formed aquaculture technicians, Maira, Kevin, Glenda, and Wilson hope to continue serving their communities not only by offering a high-quality product at a good price, but eventually by providing employment to other community members, particularly youth, as they expand their operations. Poverty, lack of employment, and gang violence push many young Salvadorans to emigrate, which is why these tilapia farming projects are so remarkable. “Here there are few opportunities for young people. We’ve been very lucky and also worked really hard to build this,” said Maira.
Through our conversation, it becomes clear that the opportunities that the Mangrove Association offers to young people in the Lower Lempa – from leadership programs to scholarships to, now, grants for small businesses – are crucial to strengthening communities both socially and economically. Thanks to these spaces, youth leaders like the entrepreneurs of UDP-ABL are contributing to the development of their communities.
Recently the media has been filled with stories of unaccompanied minors heading north from countries in Central America. Gang violence, economic insecurity, and a lack of opportunities are frequently cited as the reasons youth are pushed out of their countries of origin and in to the United States
How do you address these issues head on? How do you create more opportunities for education, creative expression, and economic security within El Salvador? While the solution is complication, the first steps to take are simple- let the youth take the lead.
Since 2002, EcoViva has supported youth programming in the Lower Lempa region of El Salvador. Overtime, the programs have changed to reflect the needs of local youth to include leadership training, capacity building, educational opportunities and extracurricular activities including art and sports.
To ensure the continuation of these programs and to strengthen the future generations in the Lower Lempa, we founded the Viva Fund Campaign in 2011 at our 15th anniversary celebration. Initially a scholarship fund, the Viva Fund has expanded along with our programs in El Salvador to include support for other initiatives. This year, youth have become entrepreneurs, putting their education and leadership training into practice by creating economic opportunities for themselves and other members of their community.
Today, we kick off our 4th annual Viva Fund Campaign. Please join us in celebrating the vibrant young leaders, taking control of their lives and investing in the future of their communities. Over the next six weeks, we will be sharing stories from the Youth Program and raising money to support their continued efforts. Donate today to ensure these efforts thrive.
Here are some ways to support the 2014 Viva Fund Campaign:
- Donate- Any amount helps. $15 can buy materials to support he artisan cooperative, $54 can pay for a field trip, and $80 can buy a bicycle.
- Become a Viva Fund Ambassador. Email me (Tricia) to join our team of crowdfunding ambassadors, spreading the word and fundraising to support the youth program
- Share the link to our donation page with your friends and family – through email, social media, or a short note.
- Host a house party or happy hour to tell your friends about why you support the Viva Fund
- Have other ideas? Email me to get started!
We thank you for your support and look forward to sharing more about the Youth Program in the weeks to come!
Seed distribution is the backbone for El Salvador’s Family Agriculture Program. It is heralded by the United States Agency for International Development (USAID) and the U.N.’s Food and Agriculture Organization (FAO) as a model for rural development across the Central American region. Its seed distribution program responds to immediate food security needs of over 325,000 impoverished, small scale family farmers who would otherwise not have access to affordable farming inputs that helps them put food on their table, and feed their communities.
The Salvadoran government’s ability to respond in a timely way to seasonal and growing requirements is fundamental to the success of this program. Corn and bean crops do not conform to bureaucratic procedures or national budgeting timelines. Thanks to the particular producers who have currently supplied the kind of seed that the Salvadoran government desires, at the cheapest price, this distribution program surpassed its goals in 2013, and reached over 400,000 small scale farmers while contributing over $25 million to the rural economy that led to record corn yields nationwide.
Below is a response to the Embassy’s arguments on free trade compliance and seed procurement, published on the U.S. Embassy homepage on Thursday, June 19.
Embassy: “The U.S. government concern with the Ministry of Agriculture’s procurement program is completely unrelated to the purchase of genetically modified seeds. Any rumor to the contrary is false.”
EcoViva believes that recent civil society comments on U.S. support of Monsanto and GMOs reflect a general frustration with inconsistencies by the United States per seed procurement policy. Past procurement orders prior to 2012 clearly reflect a less competitive process that led to the acceptance of an inferior product at a higher price, from a fewer number of businesses. Through procurements prior to 2012, a Monsanto affiliate was awarded over 70% of the procurement order with more expensive seed product that offered yields achievable only with expensive chemical additives provided by the same company. Such expenses, when applied to the Government of El Salvador´s limited budget, made their outreach to the small scale farming sector less effective, in that they could not reach as many farmers that contribute to greater overall national yields. In contrast, current procurements have led to record yields and service to more farmers, thanks to a product especially adapted to El Salvador’s growing conditions.
If the United States is not providing preference to specific U.S. providers like Monsanto, it should clarify why it did not comment on procurement procedures prior to 2012, when these procedures clearly reflect difficulties in the same criteria of “openness, transparency, objectiveness and competitiveness” per CAFTA-DR Chapter 9.
Embassy: “For the past two years, the Government of El Salvador has conducted its procurement program in a manner that raises concerns with regard to its government procurement obligations under the CAFTA-DR (Chapter 9 and its associated annexes), which requires an open, transparent, objective and competitive government procurement process that does not prejudge the outcome of a tender.”
In December of 2012, El Salvador approved a procurement order that explicitly excluded non-domestic producers from eligibility for bidding. Passed by executive decree, this particular procurement order had a limited lifespan, and is now no longer valid policy. In January of 2014, the Salvadoran government produced a new call for bids, which provided a much more open bidding process with no exclusions, and even included categorical consideration of seed “importers” under its base for contractor qualifications. The government is currently working with three businesses that import seed from international sources. It’s important to note that these three businesses also participated in past procurement processes, and clearly have not been excluded based on domestic or foreign affiliation.
The timeline (the last two years) that the United States identifies per their concerns is decidedly convenient for the U.S. argument, especially when analyzing the Salvadoran government’s procurement process prior to two years ago. Records from the Ministry of Agriculture in 2009 and 2010 reveal a number of procurement orders for seed, agricultural supplies, and other goods and services (like gasoline for ministry vehicles) that were completed “by invitation” and “direct purchase” methods from a pre-selected business or group of businesses. These methods are the very same purchasing methods that the U.S. currently criticizes El Salvador for on its seed procurement starting 2012.
To our knowledge, the United States did not raise any concerns on agricultural procurement methods prior to 2012.
Embassy: “We are asking the Government of El Salvador to implement the procurement program for corn and bean seeds in a competitive, objective, and transparent manner that demonstrates to all stakeholders both El Salvador’s commitment to the CAFTA-DR, as well as its commitment to good governance. Such principles are inherent in the provisions of the CAFTA-DR.”
Salvadoran small-scale farmers that receive seed through the government distribution program indeed deserve to have access to products procured in an open, competitive, objective, and transparent way. For that reason, it is odd that the United States would criticize the current process that has allowed for product procurement from a more diverse array of businesses that offer cheaper and more competitive prices to the government, and ignore the previous, seemingly less competitive procurement methods. Prior to 2012, just 5 businesses fulfilled the procurement order for corn, compared to 18 currently. These 5 businesses, one of which garnered 70% of the procurement order alone, offered corn at nearly double the price currently offered by largely domestic producers: $350 per 100 pound unit, compared to $124 by current local producers. This price of $124 is also cheaper than what the Government of El Salvador would get on the open commodity market, BOLPROS, which currently offers corn seed at over $130.
Though the United States has yet to define what “competitive” means in practice under CAFTA-DR with seed procurement, more businesses currently offer the government of El Salvador a better product that it prefers at a cheaper price. The fact that the majority of these 18 businesses happen to be local, domestic producers should not be cause for “prejudgement” by the U.S. government and USTR.
Embassy: “[The Millennium Challenge Corporation] MCC is holding the government to its commitments in its action plan, including those related to the procurement program, prior to signing.”
An analysis of Chapter 9 acknowledges that seed procurement can be made by executive decree as long as it is transparent, open, objective and competitive. The Salvadoran government has clearly made substantial progress since 2012–especially when compared to procurement methods utilized prior to 2012. Given the Salvadoran government’s action plan to address a number of other concerns per CAFTA compliance, the United States should stop moving the goal posts on policy reform, and should cease to make an example of domestic growers for the symbolic purpose of pressing a new Salvadoran government on its intent to fulfill an international agreement.
Though USTR holds a seat on the MCC’s Board of Directors, it cannot veto compact approval based on “concerns” per El Salvador’s domestic policies and free trade, especially when no explicit legal action has taken place. Nor is USTR in a position to define for the MCC what “specific progress” means in regard to the Government of El Salvador’s Plan of Action to address, in good faith, free trade concerns. USTR has its own mechanisms for addressing free trade concerns without leveraging other agencies to pressure for things that fall outside of their mandate. Based on the federal legislation that established the Millennium Challenge Corporation, its mandate does not include enforcement mechanisms of free trade compliance. Nor do the MCC’s independent indicators of good governance and trade policy indicate a failure on El Salvador’s part, and therefore do not justify an unprecedented hold up in signing this second compact.
A few weeks ago, EcoViva published an article on TruthOut about domestic seed production in El Salvador, and how the United States under its free trade agreement seeks modifications to Salvadoran law that enables domestic, small-scale enterprises to participate in the government seed purchasing program. So far, the issue remains unresolved as El Salvador’s new administration takes the reins this week, and domestic growers prepare to supply over 400,000 family farmers with certified corn seed to improve national food security.
Having signed CAFTA-DR, El Salvador must abide by Chapter 9.2, which states that it cannot “treat a locally established supplier less favorably than another locally established supplier on the basis of degree of foreign affiliation or ownership.” U.S. concern with this specific Chapter implies that the U.S. Trade Representative (USTR) thinks that E l Salvador’s current seed procurement law is systematically discriminating against a certain kind of seed supplier—in this case, foreign or transnational interests.
However, an examination of the current seed procurement rule, El Salvador’s history with seed procurement, and national frameworks for government contracting, makes USTR claims inconsistent at best, and misinformed at worst.
El Salvador set forth the current seed procurement process during the Funes administration, through an executive decree approved by the National Legislative Assembly. At the time it was established, the Ministry of Agriculture justified this special decree based on timing and growing requirements. El Salvador’s current government contracting rules, known as the “LACAP” law, required an approved national budget before any contracts could be solicited, and at minimum three-six months to manage the bidding process. When this procurement was proposed, El Salvador’s nearly 400,000 limited-resource farmers, and seasonal requirements for a successful corn harvest, couldn’t wait for a general national bureaucracy not designed for immediate food security needs to put food on their table.
During the first phase of seed procurement, the temporary decree that was established spoke about the categorical exclusion of international producers in Article 2. However, in the current procurement order, this article was modified to open contracts to both domestic and international producers. The current law was also endorsed by the Ministry of the Economy, which is tasked with overseeing CAFTA-DR compliance in El Salvador
Such special procurement rules are not new in El Salvador, nor was this particular seed procurement unprecedented. Even since EcoViva’s earlier blog post released just several weeks ago, the Salvadoran government produced a special procurement order for fungicide to combat coffee blight. This relied on a similar direct buying process with an oversight committee of appropriate authorities at the Ministry of Agriculture—the very same oversight committee structured with seed procurement that is now being criticized for non-transparent processes.
Neither the USTR, nor the same Salvadoran actors that criticize seed procurement, spoke up about this procurement order for fungicide, nor other similar prior contract processes.
The most recent seed procurement rule, which has already expired for the 2013-2014 growing season and is no longer valid, also followed an open and publicized process. The latest procurement cycle was published in national newspaper on April 8th, 2014, and conformed to a list of contractor requirements also made available to all soliciting contractors. Within these contractor requirements, under Section 4K, the procurement rule stipulates a verifiable process that “seed importers” must abide by if they are to be competitive for the bid. Nowhere in the latest seed procurement process were international producers categorically exempted from the bidding process…in fact, this special categorization allows for the oversight committee to provide specific attention to imported seeds, and their suppliers who produce or purchase this seed from the international marketplace.
U.S. authorities also signal problems with the “competitiveness” of the current seed procurement process. This seems odd given El Salvador’s history with these programs. Before the Funes administration, Ministry of Agriculture officials confirm that just three producers fulfilled the government’s purchase orders with 70% being awarded to the largest contractor, in this case, “Cristiani Burkard Seeds.” This company made the bid from their international affiliate “Pioneer”, a subsidiary of Monsanto, and negotiated a price at more than twice the amount currently given to domestic producers today, ($350 dollars per quintal versus $124 offered currently by local producers) according to Ministry officials.
Today, 16 distinct producers directly provide over 90% of the government’s certified corn seed stock, at a price nearly $10 dollars cheaper than if the government purchased them from the open commodity market. Three of these domestic businesses also participated in seed procurement processes prior to 2009, and continue to offer quality product at the cheapest price to the government. Through the current seed procurement process, El Salvador’s small scale farmers receive certified seed from a larger, more diverse array of producers than had been contracted previously.
By and large, these 16 producers (plus two non-domestic producers for a total of 18 producers countrywide) are agricultural cooperatives that represent hundreds of limited-resource families. These producers have worked with agronomists at the Ministry of Agriculture to produce the 88,000 quintales of certified corn specifically desired by the Ministry of Agriculture, and Salvadoran farmers nationwide for its adaptability, nutritional characteristics, and timely process (“fresh” seeds are ideal for higher corn yields).
It’s true that these local cooperatives aren’t equipped with the administrative capacity, lawyers or certified accountants required to access conventional contracting processes. Among 5 of these 18 producers relied on EcoViva’s partner at the Mangrove Association to assist with the administration and oversight, as well as the technical assistance to train cooperatives to produce certified seed in line with government requirements. Gearing government procurement procedures to small and medium enterprises, with accompanying technical assistance, conforms to WTO standards and also abides by recent reforms of Article 38 of El Salvador’s LACAP contracting procedures. Again, USTR did not comment when these reforms were passed in 2012 to provide categorical inclusion of small and medium enterprises in El Salvador’s contracting processes, even when actors like Salvadoran Chamber of Commerce (ANEP) publically criticized the reform.
In many respects, the current seed procurement law is actually more competitive than El Salvador’s previous contracting process, and certainly cheaper for the government. These 16 growers are currently negotiating as a sector with the Ministry of Agriculture to offer corn seed already in the ground for the next growing cycle, are producing on credit that relies on these future contracts as collateral. Likewise, the specific variety of corn seed, H59—developed by growers in El Salvador over the last 17 years–is resistant to blight, provides enhanced nutritional value and characteristics that Salvadorans enjoy in the ubiquitous tortilla, and offers efficient yields given the limited capacity of small-scale producers in El Salvador to purchase expensive additives that other seeds require.
On my flight back to the Bay Area I had a chance to reflect on what I was feeling about my first trip to El Salvador as EcoViva’s new Executive Director. I’m sure there must be a language that has a word that expresses the sensation of feeling humbled-honored-energized all at once.
I feel humbled and honored to get to work with such amazing partners. They truly are inspiring activists and leaders who day in and day out are building the institutions and alliances and doing the hard work that is putting their communities on the path to sustainable development. I was impressed by people like Estela Hernandez, a leader with the Mangrove Association and who was elected to the Salvadoran Assembly; Marvin Alvarado who took me out on the bay to show me the work of mangrove restoration and to meet with fishermen who renounced a dangerous and destructive practice of blast fishing and are now practicing more sustainable line and hook fishing, aka Pesca Limpia; Walberto Gallegos who shared the Mangrove Association’s strategic priorities; and Juan Luna who has a vision for building a co-op that will help farmers move their goods to market and channel the profits to supports the Mangrove Association. It made me think about the experiences that our Community Empowerment Tours (CETs) participants have had.
Shameless plug: if you haven’t participated in one of our CETs, I invite you to either join us on an open trip or contact Tricia to see about organizing one with your university group, congregation, or professional association, like Engineers without Borders. It just so happened that my trip overlapped with the Engineers Without Borders, Iowa City Professional Chapter’s visit and I had a chance to meet them in Ciudad Romero. This team of experts consisting of practicing engineers, engineering professors, students and a retired firefighter with a passion for the region and its people were working on technical assessments for clean water projects.
This experience has left me completely energized because I had the opportunity to witness, experience, and participate first-hand in the impact that we’re having. Even as I travel back home, I’m excited and looking forward to my next trip to the region when I travel with the EcoViva board of Directors and other EcoViva supporters on the Climate Resilience and Local Leadership CET. During the tour, our board and the Mangrove Association board will meet to assess our programs and collaborations and chart out our next steps as movement partners.
In the face of mounting pressure from free trade agreements and transnational corporations, the people who produce, distribute, and consume food are finding it increasingly difficult to maintain a just and equitable local food system. In response, small-scale farmers around the world are calling for food sovereignty, the right of communities to healthy, culturally appropriate, and sustainably produced food, and the freedom to determine their own food and agriculture systems.
Seeds are the first link in the food chain and give life to food sovereignty. This is particularly evident in the Lower Lempa region of El Salvador, where since 2011, cooperatives have been producing certified corn seed for the government’s Family Agriculture Program, which distributes the seed along with fertilizer to 400,000 small-scale farmers throughout the country.The program helps small-scale farmers surmount economic and technical barriers to ensure their families have adequate and nutritious food.
The Family Agriculture Program is part of the left-leaning Salvadoran government’s strategy to promote food sovereignty in a country that has a long history of food insecurity, social conflict, and ecological degradation related to industrial agriculture. It has strengthened the technical ability and capacity of local agricultural cooperatives to cultivate seeds and food so crucial for the food security of the nation and the rural economy. The seed component of the program has resulted in record corn production since its implementation, and generates more than one million daily wages each year in rural areas where local economies rely almost entirely on agriculture. In 2013, through domestic seed production, the Family Agriculture Program invested $25 million in the Salvadoran economy and the rural cooperatives and associations that supply it.
Capitalizing upon the opportunity to leverage the approaching $277 million Millennium Challenge Corporation (MCC) U.S. aid package, however, the U.S. Embassy has recently called into question the legality of the seed program, citing section 9.2 of the Central American Free Trade Agreement (CAFTA). This article stipulates that both international and domestic providers receive equal consideration in the procurement of goods and services. Though clearly an issue acknowledged through El Salvador’s bi-lateral trade relationship housed with the U.S. Trade Representative (USTR), the MCC, has instead called for the opening of El Salvador’s domestic seed program to greater competition, including traditional ties with Monsanto and its respective subsidiaries. This seemingly contradicts the MCC’s own mandate, their El Salvador country performance scorecard for good governance indicators, and, ironically, the current competitive nature of the seed program.
In the Lower Lempa, EcoViva’s partner the Mangrove Association has helped five other local cooperatives access the seed program, serving as the interlocutor between these institutions, the hundreds of individual farmers and families they support and the Ministry of Agriculture. Collectively, the Mangrove Association and these cooperatives produce over 45% of the corn seed for the Family Agriculture Program. The Mangrove Association’s team of agronomists and engineers provides technical assistance to the cooperatives, who prior to the program, had little experience in growing crops for seed at such scale. The Mangrove Association also serves as the local institutional structure to manage credit, support the administrative system to pay the cooperatives and farm workers, and facilitate the certification process.
With over 20 years of experience working with the small-scale farmers in El Salvador, the Mangrove Association believes that they can compete with transnational agricultural giants like Monsanto because they offer a superior product at a better price, seed that is more suited to the unique food and agriculture systems of El Salvador. The local cooperatives and associations that supply the Family Agriculture Program must comply with strict guidelines regarding the production of certified corn seed that maintain the genetic integrity of the hybrid variety, ensure proper cultivation and processing practices, and meet the highest quality standards. The process is regulated by Ministry of Agriculture every step of the way, including several site visits to every supplier in the program each growing cycle.
In addition to greater quality control and regulation, domestic suppliers of certified corn seed produce a specific hybrid variety, H59, which is uniquely adapted to the extreme and diverse climate of El Salvador. In a program that distributes seeds all over the country, the variety must be able to thrive in the arid conditions of coastal lowlands and wet conditions of mountain highlands, and also be resilient to the increasingly frequent floods and droughts that often occur in the same growing season. The H59 variety has been bred to optimize production according to the specific conditions found in El Salvador. While transnational companies often boast seed with higher average yields, practical experience in El Salvador has shown that those yields do not stand up to the H59 variety when it comes to the harsh and varied conditions of El Salvador. As extreme weather conditions in El Salvador continue to change unpredictably and vary throughout the country, domestic producers are in the best position to monitor and respond to the local effects of global warming, and adapt the seed stock accordingly.
Surprisingly, the Mangrove Association actually provides certified corn seed cheaper than what the government has been able to purchase on the open commodity exchange market BOLPROS. This past year, the Salvadoran government purchased 9% of its certified corn seed from the BOLPROS market at $132 per 100 lbs. The Mangrove Association was able to supply the government with certified seeds at $123 per 100 lbs. The Mangrove Association seeds, as with all domestically sourced seeds in the program, were also monitored by the Ministry of Agriculture to make sure they comply with quality controls and standards.
Perhaps most importantly, domestic producers supply the Family Agriculture Program with a white corn variety that is preferred by Salvadorans. This ensures that 400,000 small-scale farmers and their families work with a variety that is familiar to them, that they know how to cook, and that they enjoy eating. It sustains the cultural heritage of the Salvadoran campesino and preserves important traditions of Salvadoran life, like the ubiquitous tortilla that no meal is complete without.
Despite the success of the Family Agriculture Program’s domestic seed production model, the Millennium Challenge Corporation (MCC) continues to pressure the government of El Salvador to open seed procurement away from local, domestic producers in order to move forward with the foreign aid compact.This unprecedented demand for domestic policy change in a partner country is even more surprising given that agriculture and food security are not part of the activities included in the compact–nor were they part of the compact negotiations. In fact, the MCC’s own country performance scorecard already lists El Salvador as having met and maintained satisfactory performance under its “Free Trade” standard.
Even after the MCC Board approved the compact this past September, El Salvador has responded to criticisms by the MCC by strengthening new illegal property seizure laws and making reforms to public-private partnership policies. However, demands that undermine a government food security program do not belong in the MCC compact or U.S. foreign aid, particularly when those demands address compliance with CAFTA. While the U.S. Trade Representative is on the MCC Board of Directors, that does not change the mandate of the MCC-which is to reduce poverty through economic growth, not enforce free trade agreements. The Council for Economic Growth, the primary entity set forth with the blessing of the United States to provide private-sector involvement in economic reforms, has not signaled that seed acquisition is a priority. Moreover, procurements made under the current legislative decree, passed in December 2013 which also served to speed-up rapid action to meet near-emergency levels of food insecurity due to drought, have come and gone. There is plenty of time to discuss a new, potential agreement without pressure behind an already lagging MCC compact.
That the domestic seed procurement is in conflict with CAFTA is in itself up for debate, given the U.S. government may soon face a dispute settlement action via CAFTA where they will foreseeably defend a change in domestic law that effectively incentivizes domestic procurement of ethanol in conflict with its CAFTA obligations.The case raises the question as to whether a party can unilaterally modify its CAFTA commitment through domestic legislation. The U.S. interpretation in this case seems to be that when a party changes a domestic law, then a free trade agreement provision tied to that law may no longer be applicable. The case is, in many ways, very similar to the reasoning behind the seed component of the Family Agriculture Program. In both situations the CAFTA party, in an effort to favor the domestic market, has reinterpreted its free trade commitment after a change in domestic law. The difference is that in this case, the U.S. is actually defending a CAFTA party’s ability to legally favor the domestic market by changing domestic legislation- the very thing the MCC and Embassy are criticizing the Salvadoran government for.
The Family Agriculture Program is an extremely popular and successful program, and has even been acknowledged by the U.S. Embassy as a leading rural development program that they themselves have invested in. The domestic seed procurement component is also a key factor to this success, by improving the country’s food security and sovereignty, increasing production capacity, and boosting the local rural economy. Domestic producers have proven themselves capable of leveraging their unique knowledge of the local agricultural and food systems to provide top quality seeds at a competitive price. While criticisms of the program appear to be unfounded, the benefits to the Salvadoran people clearly are not. This is a program that has the legal standing and the performance record to continue.