Farmer Cooperatives, Not Monsanto, Supply El Salvador With Seeds

In the face of overwhelming competition skewed by the rules of free trade, farmers in El Salvador have managed to beat the agricultural giants like Monsanto and Dupont to supply local corn seed to thousands of family farmers. Local seed has consistently outperformed the transnational product, and farmers helped develop El Salvador’s own domestic seed supply–all while outsmarting the heavy hand of free trade.

This week, the Ministry of Agriculture released a new round of contracts to provide seed to subsistence farmers nationwide through its Family Agriculture Program. Last year, over 560,000 family farmers across El Salvador planted corn and bean seed as part of the government’s efforts to revitalize small scale agriculture, and ensure food security in the rural marketplace. Drought conditions across the country made access to seed all the more vital for rural livelihoods, making the seed packets supplied through the government program the primary means for thousands of families to put food on the table.

In 2015, rural cooperatives and national associations will produce nearly 50% of the government’s corn seed supply, with 8% coming from native seed—a record high. In the Lower Lempa, where seven farmer organizations have produced corn seed since 2012, this means over 4,000 jobs and income for rural households, primarily employing women and young adults. The public procurement of seed—or the government’s purchasing power through contracts—signifies over $25 million for a rural economy still struggling to diversify and gain traction.

The success of locally-bred seed varieties, compounded with their low production costs, allowed the Family Agriculture Program to contribute to historically high yields nationwide for corn and beans. Last year, more farmers produced more corn and beans at the most efficient yield per acreage than any other year over the last decade. This has also led to a significant adjustment in El Salvador’s trade balance on corn: Imports of white corn in 2014 were a full 94% less than 2011.

Producing seed locally was no small feat. It involved savvy farming techniques, better business practices, and advocacy. It also required a government willing to take a critical look at the transnational agribusiness model that dominates the farming sector the world over.

The previous administration under Mauricio Funes understood this model, and its impact on a relatively small agricultural market like El Salvador’s. It also understood how to break these cycles of dependence on foreign agribusiness, and simultaneously build a more robust private sector through the power of public procurement. In answering his call, growers’ associations, categorized as small or medium-sized enterprises, had a steep learning curve in providing seed to meet government standards, including germination, yield rates and packaging. They also had to conform to government contracting guidelines, a task that proves difficult to navigate for many small-medium sized enterprises.

Throughout this process, EcoViva and partners at the Mangrove Association labored to prepare local cooperatives to successfully bid for and execute these contracts for corn seed. Our efforts paid off: in 2014, El Salvador successfully sourced quality seed from 16 national enterprises. Over 20% of corn seed originated in local cooperative fields in the Lower Lempa region, and participating families saw their annual income double—while saving the government hundreds of thousands of dollars by providing affordable seeds. In 2015, that number has risen to nearly 50%.

Despite these successes, some questioned the validity of Salvadoran businesses providing seed. In 2013 and 2014, the United States Trade Representative and the Interagency Trade Enforcement Center circulated an annual report that cited concerns about government purchases, including seed, under the Central American Free Trade Agreement (CAFTA). Coincidental to these reports, the American Chamber of Commerce in San Salvador complained in the press that their members were being denied contracts for seed, and Salvadoran farmers denied a superior product. These members included Monsanto, Dupont and Pioneer, whose affiliates had provided seed in the past to the Salvadoran government. CAFTA Chapter 9 outlines the standards for how contracting governments, such as El Salvador’s, can purchase goods and services. It sets the rules for open, competitive and transparent contract approval. It also stipulates that governments cannot discriminate against foreign businesses.

During the period questioned by the USTR, the government of El Salvador ironically conducted a contract process that allowed more businesses to provide a better product at a cheaper price. Prior to 2013, the Salvadoran government bought 70% of its annual demand from a Monsanto affiliate, purchasing a seed variety with no field trial validation and at a price over double that being offered by local seed producers. In 2014, EcoViva and allies proved that the Salvadoran government denied this affiliate a contract because its seed was expensive and lacked proper field trials- not because it was a foreign company.

Nevertheless, in 2014, the United States threatened to deny foreign aid to El Salvador unless it opened its seed contracts to foreign businesses, then stepped back when its power to use foreign aid as leverage on free trade standards was publicly questioned. Today, the United States now says that it supports El Salvador’s current contract process on seed—a process in which national seed producers continue–as before–to offer a better, more competitive product.

Local seed producers like the Mangrove Association and cooperatives in the Lower Lempa can guarantee the government of El Salvador seed varieties that have better yields and lower prices than what is found in the transnational agribusiness market. Salvadoran businesses have learned to compete for and win government contracts, which allows small and medium sized enterprises to innovate and employ hundreds of people in rural communities. Improving the rural economy is critical for these areas, such as the Lower Lempa, that have high rates of unemployed young adults fleeing to the United States in search of jobs and opportunities. National cooperatives and businesses have also helped to protect El Salvador’s own seed lineage, and reduce the quantities of harmful chemicals applied daily to Salvadoran soil. It’s initiatives like these that provide a way forward for El Salvador and its domestic economy in a globalized trade environment.