Agros International: Ending Rural Poverty

Agros International: Ending Rural Poverty

Guatemala
Organization type: 
nonprofit/ngo/citizen sector
Budget: 
$1 million - $5 million
Project Summary
Elevator Pitch

Concise Summary: Help us pitch this solution! Provide an explanation within 3-4 short sentences.

Agros International works to End Rural Poverty.

Poverty is complex and pervasive. Though international development is rife with quick fixes and silver bullets, 1 in 6 people in the world today are still extremely poor.

Maria was this 1 in 6. With the same intrinsic human value and potential as every other person, she was trapped in a generational cycle of rural poverty, malnutrition, illiteracy and landlessness.

Agros makes change in the world—and for Maria—to end generations of rural poverty: addressing complex challenges through holistic development that is land-based, market-driven and long-term.

About Project

Problem: What problem is this project trying to address?

In the world today, 1.4 billion people survive on less than $1.25 a day. More than two thirds are rural, 500 million are landless. Only a few hundred miles south of the U.S. border, more than half of Guatemala’s people live in poverty. Maria did. Her life in Guatemala’s highlands was a daily battle. Her husband was a migrant worker, traveling to look for work. But often there was none, and her children went hungry. Decades of civil war in Guatemala were especially devastating to rural and indigenous families like Maria’s: today, the region’s Human Development Index is comparable to Sub-Saharan Africa. Guatemala has the world’s third highest child stunting rate, from chronic malnutrition at a young age, and, in the highlands, the rate of child stunting exceeds 64% and 81% of the population lives in poverty. Of the extreme poor in Guatemala, 95% are migrant workers; in fact, though the highlands are ripe for agriculture, families purchase 80% of their food—which means rising food prices and lack of income literally leave them starving. On average, the people of the highlands have a third grade education and only 30% are literate. These factors so constrict the margin of survival that a misstep could mean the life of a family member. But Maria’s family is thriving. Through a partnership with Agros, her snow pea crops are paying her land and her children’s education. Her daughters hold skilled jobs as teachers and textile promoters with Agros. Maria’s entire family has economic opportunities she barely imagined.

Solution: What is the proposed solution? Please be specific!

Land-based: The World Bank identifies land as a vital asset for the poor; land means stability, food security, collateral, inheritance and dignity. Though many organizations provide credit or technical assistance to farmers, Agros harnesses the market power of loans to equip the rural poor with their most powerful asset, land, and accompanies them with a long-term relationship of training and skill development. Market-driven: Agros complements land loans with microcredit for productive activities, ensuring manageable interest rates of 5-12% (by subsidizing) to encourage risk-taking. Agros staff also develop new opportunities for market access for profit. Land loan repayments (with a term of 7-10 years) help maintain and build the value over time of a permanently restricted revolving loan fund, the Noemí Fund, which disburses new land loans. Long-term: Agros’ long-term model builds relationships that reduce the risk of default and provide support; credit is a means towards the end of self-sustainability: borrowers are coached in business plans, profit projections and contract negotiation, increasing the financial impact of loans and ensuring success. Reach: Most people in remote rural regions do not even qualify for microcredit! Credit organizations are generally set up to fund urban microbusinesses with quick profits. Rural operations are expensive and profit cycles slow, such as with livestock investments. Through Agros’ unique land-based, market-driven and long-term model, we create lasting economic opportunities for underserved, hard-to-reach populations.
Impact: How does it Work

Example: Walk us through a specific example(s) of how this solution makes a difference; include its primary activities.

Agros International’s development model is land-based, market-driven and long-term. Since 1987 in the Ixil region of Guatemala, Agros has provided loans for land to 4,700 landless people who’ve formed 14 villages—increasing each family’s opportunity for success through community support and leverage. Agros staff—locals versed in regional customs—support economic opportunity through: agricultural extension services; facilitating cooperatives for bulk contract prices; and advocacy trainings. Agros fosters women’s leadership and includes men in gender sensitivity discussions. Though Agros got its start in village development, hundreds of subsistence-farming families surround Agros communities, living well below the poverty line on two acres or less. When a US importer offered a contract to an Agros village—if they could produce enough coffee—Mario Morales innovated a village-centered regional training and microcredit model throughout the Ixil, so that: • villages provide a hub of community trainings and demonstrations; • some 3,000 surrounding people leverage sustainable economic opportunities—securing more profitable contracts (including coffee and snow-pea export cooperatives), conserving natural resources and critical watersheds, and collectively advocating for more regional services. As communities have gained management experience, Agros’ involvement has decreased so the project can become self-sustaining. The entire region has experienced an economic lift, attracting new partners and support from the municipal government.
About You
Organization:
Agros International
About You
First Name

Mario

Last Name

Morales

About Your Organization
Organization Name

Agros International

Organization Country

, WA, King County

Country where this project is creating social impact

, QC

How long has your organization been operating?

More than 5 years

The information you provide here will be used to fill in any parts of your profile that have been left blank, such as interests, organization information, and website. No contact information will be made public. Please uncheck here if you do not want this to happen..

Innovation
What stage is your project in?

Operating for more than 5 years

Share the story of the founder and what inspired the founder to start this project

Agros International was founded through the visionary leadership of Seattle attorney Chi-Dooh “Skip” Li, who was deeply moved by the suffering of tens of thousands of people caught in Guatemala’s brutal civil war in the 1980s. The son of a Chinese diplomat, Li had spent several years of his childhood in Guatemala and witnessed first-hand extreme poverty. Years later, inspired by the words of a conference speaker, he had a simple idea: provide land to communities of displaced, landless farmers to cultivate until they had the resources to purchase it for themselves, securing their ability to live and provide food for their families. Li pursued his idea for addressing poverty through private market-based land reform, and established Agros in 1984. To date, Agros has launched 42 communities in El Salvador, Guatemala, Honduras, Chiapas, Mexico and Nicaragua.

Mario Morales, Country Director in Guatemala since 2001, has tremendously furthered the efficacy and innovation of Skip Li’s initial vision. Morales has guided the development of a sophisticated model, incorporating profit projections and engineering analysis in land selection process; developing strategic partnerships with major export companies to access new economic opportunities (listed below in the “Collaborations” section); pioneering Women’s Community Banks to empower women as savings managers, investors, and community decision-makers—while generating revenue to sustain Agros’ ongoing projects; and multiplying impact by spreading training and microcredit from the village hubs to the entire surrounding region.

Social Impact
Please describe how your project has been successful and how that success is measured

Agros works for the poor:
• 100 percent of Agros families become legal owners of their own land, grow from subsistence farming to producing at least three year-round sources of income, and secure housing, clean household water and improved health;
• 99 percent of loans in Women’s Community Banks were repaid on time and 96 percent of land loans in 2010—demonstrating the economic viability of entire communities;
• Women held nearly half of elected village leadership positions in 2010 as a result of community-based gender equity discussions and leadership trainings for men and women;
• Every child gains access to primary education—a significant step towards future success, especially among rural populations where children often help make up the workforce;
• Hope is restored for generations as families walk out of systemic poverty.

Agros uses a combination of family surveys and men’s, women’s, and community leaders’ focus groups to measure community development through twenty progress indicators. Annually, all families in Agros villages work together to create unique Plans, based on their democratically selected community values; Agros tailors its direct service to align with the self-directed Village Plan. The activities planned for Fiscal Year 2012 are a direct result of the community members’ priorities and goals; new activities will be planned for Fiscal Year 2013 around the same outcomes and using the same measurements/indicators.

How many people have been impacted by your project?

More than 10,000

How many people could be impacted by your project in the next three years?

More than 10,000

How will your project evolve over the next three years?

Over the next three years, Agros will increase its impact on rural poverty in Central America and around the world through three strategies that use Agros’ expertise in the most effective and impactful way:
1. Launch larger villages in Central America—growing from Agros’ previous average, 30 families, to 150 families—to leverage existing resources, improving efficiency by serving more landless families at one time;
2. Equip hundreds of impoverished families on land surrounding Agros villages for mutual sustainability;
3. Conduct market research in South America, South Asia and Africa to determine most need and best fit; work with partners to pilot Agros model in new areas of the world, impacting families equally in need of sustainable solutions to poverty.

Sustainability
What barriers might hinder the success of your project and how do you plan to overcome them?

Scaling any project in international development presents the possible barrier of growing beyond the capacity of the operating organization. In order to ensure the highest possibility for success in scaling, Agros has:
• Improved direct program oversight by transferring management from Seattle headquarters to the field—increasing efficiency of fiscal oversight and facilitating the exchange of internal best practices and strengthened leadership in the field through promotions/staff restructuring to leverage internal expertise;
• Implemented new credit management software system that integrates directly with international accounting software;
• Scaled-up Monitoring & Evaluation system through planning grant to retain an expert consultant: Improving manageability and reliability of data; Improving program by identifying and building on strengths/addressing weaknesses; Strengthening communication and transparency with stakeholders;
• Hired full-time Strategic Program Development Director in May 2011 to facilitate high-level strategic growth and program development, align Agros with international best practices and oversee model standardization across all five countries.

Recognizing that every new location has its own unique culture, specific geographical constraints and language considerations, Agros has identified the key strategy of implementing its model in partnership to overcome the cultural and linguistic barriers – as well as the constraint of limited financial resources.

Tell us about your partnerships

Partnerships are a critical piece of Agros’ model, as they leverage resources and offer long-term sustainability to the villagers after Agros ends direct support. NGO partnerships provide health and adult literacy trainings; Agros staff facilitate partnerships with local programs, and empower families to take advantage of the resources around them for ongoing education opportunities. Internationally, Agros has partnered with Habitat for Humanity, Heifer International, and public universities.

Families are connected to municipal governments to ensure legal recognition of villages and infrastructure improvements like roads, schools and water systems. Agros in-country staff give presentations to government officials on Agros’ development model and facilitate partnership through village education workshops, such as proposal writing.

Business partnerships support market access and long-term financial success. Partners in Guatemala include:
• Atlas Coffee, a US-based coffee import company;
• National Association of Coffee, for technical and training assistance, as well as a coffee cupping to ensure quality and success on the market;
• The AGEXPORT Alliance (Guatemalan Association of Exporters), connecting farmers to contacts specializing in market and financial support;
• SIESA (Integrated Export Limited Co.), Guatemala’s premier exporters to European markets;
• AGROSIXIL (Association of Agros villages in the Ixil), a formal organization of participating families in the cooperative, for certification and commercialization.

Explain your selections

Agros International, a nonprofit organization, is privately funded through a mixed revenue model of foundations, awards, select businesses, and individuals; currently, the majority of the financial support is through individuals. Forty percent of funding raised is for enterprise credit and land purchases; as participants repay their enterprise and long-term land loans, that funding is recycled into new enterprise credit or land purchases. In addition, Agros leverages partnerships with local NGOs and municipal governments to extend the services it can offer.

How do you plan to strengthen your project in the next three years?

In addition to improvements Agros has already undertaken (designing scaled-up Monitoring & Evaluation; implementing new credit management software; restructuring staff for improved oversight and efficiency), Agros is undergoing critical capacity development to refine and standardize its most successful practices. Specifically, Agros is fine-tuning its process of facilitating market access to leverage diversified sustainable profit. To that end, in early 2011, Agros hired its first full-time market specialist—a woman named Gabriela Montoya, in the Honduras office, as Agribusiness Coordinator. Gabriela will consult with villages and surrounding families on the best financial opportunities for them, given their growing conditions, local demand, the existence of export companies, and cost-benefit analyses of certifications such as Fair Trade, organic, and bird-friendly. This staff position, if successful, will be extended to all countries over the next 3 years.

Agros’ first commitment is to ensure sustainability in existing villages/regional partnerships. But even during the recession of the last 3 years, Agros has cultivated funding to support 2,500 landless people to start 8 brand new villages in Central America, paving the way to land ownership, economic self-sufficiency, and future generations free of poverty. Over the next 3 years, Agros anticipates powering economic opportunities for more than 10,000 people through new villages, surrounding regions, and pilot projects in new areas of the world.

Challenges
Which barriers to employment does your innovation address?
Please select up to three in order of relevancy to your project.

PRIMARY

Restricted access to new markets

SECONDARY

Lack of skills/training

TERTIARY

Lack of access to information and networks

Please describe how your innovation specifically tackles the barriers listed above.

Agros provides loans for land—and the resources to make the land productive—creating a market space for landless laborers to become active members of a global economy and paving the way for entire regions to create economies of scale and work cooperatively in sustainable agricultural production.

Technical trainings and microcredit are supplemented by community organization trainings and assistance in facilitating partnerships that allow farmers to cooperatively access new, more lucrative market opportunities with international export companies—like Atlas Coffee and SIESA, the premier Guatemalan company for purchasing bulk snow peas for sale in Europe.

Are you trying to scale your organization or initiative?
If yes, please check up to three potential pathways in order of relevancy to you.

PRIMARY

SECONDARY

Grown geographic reach: Multi-country

TERTIARY

Influenced other organizations and institutions through the spread of best practices

Please describe which of your growth activities are current or planned for the immediate future.

Agros has already begun growing locally, including launching a new large village of 150 landless families in Matagalpa, Nicaragua, incorporating 600 families around the village in economic opportunities. In Guatemala, Agros is scaling up its regional work around villages from just the Ixil region to the Barillas region, too.

Currently, Agros is securing a funding partnership to retain three expert consultants who can make recommendations on the location for Agros’ international pilot – in South America, South Asia, or Africa – and local partners. Over the last several years, more than 100 organizations from around the world have directly requested Agros to partner, consult or share its model of development

Do you collaborate with any of the following: (Check all that apply)

Government, NGOs/Nonprofits, Academia/universities.

If yes, how have these collaborations helped your innovation to succeed?

To date, Agros has collaborated with nonprofits, municipal governments and universities to extend the package of services Agros can offer, by providing adult literacy classes, school programs and scholarships for youth, health trainings and certifications, and opportunities for starter seedlings and animals through organizations like Heifer International.

As Agros prepares to impact more families in poverty around the world, collaboration will be the key to success: Agros will work with local partners on the ground that are experts in the cultural, environmental and linguistic situation of the new area. Agros will provide the expertise in applying a land-based, market-driven and long term development model, collaborating with local partners to tailor accordingly.