El Salvador

THE PROPOSAL

In El Salvador, the Hand-in-Hand Initiative supports investments in the coffee value chain. Tecapa Chinameca, on the eastern side of the country, was identified as a region with high potential for agricultural transformation and rural development if investments are made in the region's coffee sector.

The proposed investment program will support profitable and sustainable coffee production, which will lead to an increase in local income, generation of employment, and higher volume of coffee exports. Additionally, there will be environmental benefits.

The investment plan consists of three components for a total investment cost of US$21.3 million, with an average internal rate of return of  22%. More than 2,000 producers will directly benefit from this effort, and an additional 24,000 producers will indirectly benefit from it. It will also create some 75,000 jobs and reduce emission by 4.5 tCO2-e/ha annually.

COMMODITIES AND INTERVENTIONS

Improved Productivity and Efficiency

This intervention establishes certified plant nurseries and protocols for pest management. It also provides training for producers in techniques to boost productivity and quality sustainably. The plan is to improve specialized technical services to producers as a way to increase per capita income by US$1,439 annually.

The total investment cost for this is US$11.8 million, with an internal rate of return of 20% and a net present value of US$33 million.

COMMODITIES AND INTERVENTIONS

Better Post-Harvest Organization of Small- and Medium-Scale Producers

This component assists suppliers and actors throughout the coffee processing stages to improve their financial management skills. They will also have improved access to credit, including non-reimbursable resources. It also develops and provides services to producers through enhanced cooperative structures. This intervention will increase per capita income of producers by US$700 yearly.  

The total investment cost of this intervention is around US$7 million, with an internal rate of return of 23%. The net present value is US$13 million.

COMMODITIES AND INTERVENTIONS

Better Positioning of Salvadoran Coffee in International Markets

This intervention will create regional brands and logos for the country's coffee products and provide training in coffee differentiation, coffee-quality analysis, market positioning, B2B promotion and negotiation strategies.

It is estimated that 124 organizations will benefit from this effort. Income per capita could improve by US$1,200 annually. There are also several other beneficiaries at the national level, including small and medium enterprises, cooperatives and exporters. It will result in emission reduction of around 318,493 tCO2-e.

The total cost of this intervention is US$2.5 million, with an internal rate of return of 24% and a net present value of US$8 million.