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Economic Growth

USAID/Paraguay's Program to Improve Agricultural Value Chains in the Northern Zone is implemented by local partner FECOPROD. The presence of agricultural cooperatives and other producers’ organizations in Paraguay has expanded in recent years as a growing opportunity, and has helped improve agricultural practices on small farms, link more small-scale producers to global value chains, and provide an alternative source of credits.  Cooperatives and producer associations linked to value chains have also demonstrated a positive impact on the economic development in the communities where they exist.

The main challenge to strengthening these linkages is to build the capacity of producer organizations that aggregate large numbers of small-scale producers. While many different types of producer organizations exist in Paraguay, many lack effective internal organization, cohesiveness, and connection to the private sector and government resources. They also have difficulty connecting with and improving the production of small-scale producers, particularly the most vulnerable. Women’s membership in rural farmer organizations and cooperatives has been increasing, but their position as leaders in decision-making roles remains low.

To respond to these challenges and opportunities, under the highest level Project Goal of a More effective government institutions and greater economic inclusion of women, the disabled and the rural poor particularly in the northern zone of the Country, USAID/Paraguay established the following Project Purpose and Sub-Purposes for the Economic Growth sector activities:

Project Purpose: Increased inclusive and sustainable economic development for small-scale producers, especially vulnerable populations.

  • Sub-purpose 1: Increased net income of small-scale producers’ organizations and enterprises through value chains and market access.
  • Sub-purpose 2: Increased employment and business opportunities for women and the disabled.

USAID provides technical assistance to strengthen the capacity of local agricultural cooperatives, farmers associations and other productive enterprises that promote agricultural productivity and sustainability of small-scale farmers. USAID/Paraguay also works to promote inclusive value chain development by building up these producer associations and enterprises that can engage the participation of small-scale producers and provide support and services (technical assistance, access to credits, purchasing of inputs, and marketing) to their members, and offer economic opportunities in selected value chains.

To develop and expand the alliances and partnership between agricultural producer organizations and private sector firms in agricultural value chain, relationships with buyers, either commercial or industrial, is pursued and encouraged.  Building long-term business relations between producers and buyers will contribute to the sustainability of the project’s objectives.

USAID’s main contribution is to build confidence relationships and capacity among key actors within the value chain in the agricultural sector, particularly in the Northern Zone of the country.  Once the relationships have solidified the process will continue on its own and will generate increased income of small-scale producers through improved value chains and market access.

USAID/Paraguay seeks to increase the Paraguayan governments’ and the private sectors’ direct involvement in project implementation by leveraging planned investments, particularly in productive infrastructure to support selected value chains. Investing in small agricultural infrastructure for irrigation, warehouses, packing plants, transportation, or roads will contribute to increased productivity. The project will seek out appropriate opportunities for co-investment in small-to-medium sized productive capital assets and provide matching funds to stimulate that investment.

USAID does not explicitly mention which Value Chains, or limited to a few, because this could be different in each department based on market opportunities, therefore the value chains will be identified later at the beginning of the project implementation based on a selection criterion. 

The Mission also prioritizes activities to advance women. Through improved capacity and empowerment of women in agricultural value chains on and off farm, the project will seek to increase the participation of women in the formal labor force, particularly in the agricultural sector, by addressing the gender gaps that still prevail in the rural areas.

The sought purpose is to achieve inclusive economic growth, therefore the Mission likewise works to increase the capacity of People with Disabilities (PwD) to access and participate in social and economic development activities.  USAID/Washington has awarded USAID/Paraguay with funding for the Fundación Saraki to implement labor integration for persons with disabilities and work on governance policies. 

Complementarily, targeted interventions with related public institutions and local governments will focus improving the policy and governance environment to promote small producer development.  This will take advantage of windows of opportunity and provide the project with flexibility to target technical assistance that can really make a difference.

The Paraguayan Government's Strategic Plan to diversify the modes of commercialization and integration of Family Agriculture into productive value chains is consistent with the concepts embedded in the design of this new project, which includes: strengthening small family agriculture, linking to value chains, strengthening value chains, encouraging diversification of production, and stimulating, to the extent possible, the value-added production of products.  The USAID project also seeks to establish relationships with others donor’s program such as Japan’s JICA, Germany’s GIZ, Canada’s CIDA, Spain’s AECI, Korea’s KOICA, FAO, IDB, EU, and IICA.

USAID promotes alliances with private entities under GDA-similar arrangements.  Such arrangements have already been successful in Paraguay under Paraguay Productivo (PyP) and Northern Zone Initiative (NZI) programs. These companies are working in different value chains such as: maize, organic soy, sesame, cassava, medicinal herbs, milk, fruits, among others.

Last updated: April 23, 2014

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