Collection of Case Studies 2. - Seas of Change Initiative

11. El Salvador, Rural Development Project for the Central Region(PRODAP-II)Author and organization: IFADThis case is one of a series specifically prepared by IFAD and local partners for the “Seas of Change” event. Thebusiness partner involved in the case is Local Farmers.Total cost:USD 20.0 millionFinancierIFADIFAD loan:USD 13.0 millionStart-End dates: 2001-2008Value chain approach: Relational Chain, Producer-driven1. Context and backgroundBackground. The Rural Development Project for the Central Region (PRODAP II) had as its main objective that ofincreasing incomes and improving living conditions of the rural poor by strengthening their grassrootsorganizations, increasing beneficiaries’ participation and gradually transferring responsibilities for servicesdelivery to beneficiary organisations. The project aimed at generating local capacity to ensure the long-termsustainability of services delivery.The project had the following specific objectives: i) boost revenues by increasing productivity and production,improving marketing and through micro-enterprise development; ii) strengthen community-based producers’organizations both to facilitate their participation (and demand generation) in the implementation andmanagement of project activities, and to promote the gradual transfer of services; iii) implement an efficient ruralfinance system and a system for financial intermediation; iv) strengthen gender mainstreaming and reduceinequalities between men and women in the project area; and v) improve environmental conditions in the areas ofwater, soil and forest resources.2. Underlying business modelIntervention. The support to market access and micro-enterprise development was based on facilitating accessby farmers' organizations to local and regional markets for the sale of their products, by providing information onprices, trends and market opportunities. The project promoted the development of micro finance for the hiring oftechnical assistance and training (management and commercial). Through the Productive Investments Fund(FISP), potential entrepreneurs (especially women) were helped to identify and fund new business opportunities.The implementation of the strategy of this sub-component was part of the overall strategy of gradual transfer ofresponsibility for services delivery to local organizations.The project gave priority to working with small groups of micro entrepreneurs; it facilitated the formation of 18groups of producers, with a total of 276 farmers (33% women), involved in a range of commodities: fish (7groups), granulated sugar (1 group, ACOPANELA: see box below), vegetables and fruits (10 groups). Theirrelationships with firms and dynamic markets were fostered as being essential for the marketing of theirproducts.Some of the organizations moved quickly in terms of organizational consolidation and improvement of theirproduction systems. For example, ACOPANELA, dedicated to the marketing of sugar, was established as a legallyconstituted association in 2007, and received funds to hire specialized technical assistance and improve productquality. APPES, which focuses on the growing and processing of pineapple, was also legally constituted: throughits own efforts, it has managed to win support from other international organizations for the installation of anorange juice factory. The establishing of linkages with cooperating agencies, government institutions andemployers, either with support from PRODAP-II or through self-management, has been very important in the life ofAPPES and this has contributed to the sustainability of its activities.50