• by Gonzalo Ortiz (quito)
• Tuesday, August 24, 2010
• Inter Press Service

The powerful middleman threatened them: 'I hope it lasts for you. I hope the government buys your beans forever, because I don't want you ever coming back to me!'

Ecuadorean peasant farmer Teodoro Méndez recalls the man's angry words as he describes how his group got a start in the government's new system of 'inclusive markets'.

Méndez is president of the Consortium of Associations of Farmers from the Imbabura and Carchi Valley (COAPAVIC).

The organisation groups farmers from Imbabura and Carchi, two of Ecuador's northernmost provinces, where the Chota river runs through the Andes mountains at 1,400 metres above sea level on the valley floor.

The people of the subtropical Chota valley are mainly black, like Méndez. The area's main products are sugar cane and beans. The valley is also known for producing Ecuador's best football players.

The inclusive markets began to operate a year ago, and after several changes in the rules and regulations are now 'the main mechanism in the system of public procurement,' aimed at generating inclusion and improving conditions for small farmers, Ximena Ponce, the government's minister of economic and social inclusion, told IPS.

To implement the programme, the government decided to cancel the contract that the country had with the World Food Programme (WFP) for years, including the first years of the current administration of leftwing President Rafael Correa, who took office in 2007.

'The WFP made food purchases for the different needs of the state, but its method was expensive and slow-moving, and it was not free of corruption,' Ponce said.

The state had to pay the United Nations agency a three percent commission, and delays were created by the need to get frequent authorisations from the head office in Rome, she said.

'Between 2007 and mid-2009, we paid the WFP 120 million dollars,' the minister said. 'Since then we have saved not only the four million dollars in commissions, but another nine million dollars as well, even though we have had to set up offices and install a computer system.'

The state buys food to provide meals in schools and hospitals, for nutritional programmes that target mothers and small children, and for other government institutions and programmes, Juan Carlos Acosta, national director of the ministry of social inclusion's food provision programme (PPA), told IPS.

The ingredients purchased by the ministries of social inclusion and education include flour, cornstarch and cereals to make 'coladas' (traditional smoothie-like nutritional drinks based on oatmeal, fruit and milk), traditional or fortified crackers and biscuits, and granola bars; as well as salt, sugar, 'panela' (small blocks of unrefined cane sugar), rice, beans, tuna, sardines and cooking oil.

The health ministry, meanwhile, requires fortified mixes.

Historically, the view was that 'small farmers were not technically or technologically capable of acting as suppliers for the state, which is why the authorities turned to monopolistic production systems based on a large number of intermediaries,' Acosta said.

'We don't want to bow our heads anymore to the middlemen,' Méndez said. 'The WFP put a priority on the intermediaries. We have more trust in the government. It has even helped us with credit, so that our consortium can pay the farmers who belong to the associations, in cash.'

A similar idea has been applied successfully in Brazil since 2003, under the Food Acquisition Programme put in place by the government of President Luiz Inacio Lula da Silva. The strategy there created marketing mechanisms for family farmers, who supply food for several government programmes.

Wearing a traditional embroidered blouse and 'anaco' (skirt), María Robertina Ipiales, a young indigenous entrepreneur, has won several contracts in the inclusive markets of Imbabura to sell the government granola flakes.

'I started out with one metric ton, and I now sell them 12 tons,' said Ipiales, who lives in the northern highlands town of Atuntaqui, where the population is largely indigenous. 'I did it on my own initiative. I knew I could offer better prices. Now I've provided work for my whole family, and I'm hiring extra workers.'

The markets were made possible when the National Institute of Public Procurement agreed to modify the regulations. 'The constitution itself states that the food market is strategic because it can bolster inclusion and development,' Minister Ponce said.

Farmers, whether individuals or associations, can apply on-line to become certified public suppliers. The inclusive markets set up for the purpose of public procurement are overseen by committees of technical experts.

'We have asked the suppliers themselves to help oversee the process, to ensure transparency and fairness,' Ponce said.

'During field inspections, we identified two suppliers who had been middlemen in the system of supplying the WFP, so we cancelled their contracts and banned them from selling to the state for five years,' she said.

One of the ministry's strategies is to spread demand around. 'We no longer buy products in Carchi (in the extreme north) to send to Loja (in the extreme south), like the WFP did. Our markets are provincial, in order to give farmers in each area an opportunity,' said Verónica Cevallos, with the PPA.

Roberto Salazar, president of the Association of Sugar Cane Growers of Pastaza, one of the country's Amazon jungle provinces, is pleased because 'the market was saturated. Now the state pays us fair prices. That has also enabled us to strengthen our organisation.'

In the past, he told IPS, what they were paid by the intermediaries did not even cover the cost of 12 to 15 dollars per 110-pound load of panela obtained in two or three days of work by individual farmers at the sugar mills.

'Today we have won contracts in five inclusive markets and are receiving between 33 and 35 dollars per load from the PPA, with which the association pays each member a higher price and also covers its own costs of ensuring quality, collecting panela from a broad territory, granulating it and packaging it,' Salazar said.

'We're going to distribute the annual earnings among the members and set up a loan fund…now everyone wants to join the association!' he said with satisfaction.

Minister Ponce said that is the chief aim of the markets: to promote the creation of networks of farmers.

And now there are more ambitious objectives. 'The next step will be for the state to acquire, through inclusive markets and directly from networks and associations of small farmers, not only food but raw materials and other products, like uniforms, aprons or school supplies,' she said.

© Inter Press Service (2010) — All Rights Reserved. Original source: Inter Press Service