Nicaragua

THE PROPOSAL

In Nicaragua, the Hand-in-Hand Initiative supports the National Rural Investment Program 2022-2031, or PIR, which aims to reduce poverty and achieve sustainable development. Specifically, the Hand-in-Hand Initiative supports investments in the dairy and coffee value chains, namely the "National Investment Program for Low-Carbon Livestock" and the "National Investment Program for the Sustainable and Resilient Development of Coffee in Nicaragua."

The areas identified as priorities are Vía Láctea Ampilada for dairy and Zona Cafetalera Norte for coffee, as they have the potential to boost agricultural production and productivity, promote marketing, export and import substitution.

The Government's efforts focus on improving milk collection and cheese processing centers. The total cost of investment is US$49.7 million, with an internal rate of return of 29%. Another objective is to improve the management of coffee crops, for which US$19.8 million of investment is sought. The internal rate of return is estimated to be 33%.

COMMODITIES AND INTERVENTIONS

Dairy

A growing demand for dairy products combined with low milk yields and a limited number of milk collection points have led the Government to prioritize dairy products in the extended Vía Láctea zone, which comprises the departments of de Boaco, Chontales, Matagalpa and RACCS (South Caribbean Coast Autonomous Region).

The interventions:

• Improve farm management for good milking practice and adoption of low-carbon measures. These efforts will be implemented on 11,000 hectares and make improvements to 5,224 milking points.
• Increase storage capacity from 2,000 liters to 10,000 liters daily per storage; increase the production capacity of artisanal dairies.
• Upgrade laboratory equipment for quality control to increase production and build capacity of at least 108 technicians in dairy commercialization.

With an investment of US$49.7 million, these interventions would result in the collection and processing of 25.5 million liters of milk. The financial internal rate of return is expected to be 29% and the economic internal rate of return 35%. These efforts would benefit 30,000 residents and increase carbon fixation by 12.2 million tCO2 eq/ha over a 20-year period.

Coffee

A growing demand for Nicaraguan quality coffee and a limited number of eco-efficient coffee mills have led the Government to prioritize the northern coffee zone, which consists of departments of Nueva Segovia, Jinotega and Matagalpa.

The interventions:

• Improve management of coffee farms and encourage adoption of low-carbon agricultural practices to cover 10,000 hectares with agroforestry systems.
• Develop infrastructure and technology to modernize six wet processing facilities, with the goal of collecting 300,000 qq annually (or per harvest).
• Capacity development in branding and marketing of coffee products to benefit 5,000 producers.

With an investment of US$19.8 million, these interventions would enable the collection of 300,000 qq yearly or per harvest. The financial internal rate of return is expected to be 33% and the economic internal rate of return 21%. It is estimated that 120,000 residents would benefit from these interventions. Agroforestry systems are expected to increase carbon fixation to 163.88 tCO2 eq/ha.