Central America

ATTRACTING INVESTMENT FOR MESOAMERICAN LANDSCAPES

In 2018, Solidaridad Central America continued to grow in action and vision. We deepened impact in our anchor commodity programmes (palm oil, sugarcane, cocoa, coffee and livestock), and leveraged successes in regional commodity platforms to expand our vision to landscape-level interventions. Partnerships have grown to include additional smallholders’ associations and groups, private-sector actors, as well as philanthropic and potential impact investors. We are putting in place the foundations to facilitate a paradigm shift in the region toward regenerative landscapes, and long-term financing to support them. Our aim is sustainable economic and commodity growth that includes responsible natural resource management and inclusive opportunities for social well-being.

Regional Commodity Programmes

  • Cocoa

    From the establishment of agro-forestry plots in Honduras and integrated field schools in Nicaragua, to agro-ecology workshops for young people in Guatemala, Solidaridad Central America’s cocoa interventions represent our progress in gender and landscape. Across the region, the inclusion of women, young people in the value chain is generating new employment opportunities while also creating space for the co-design of landscape solutions.

  • Coffee

    We finalised research with True Price to establish the real price of coffee production, taking into account social and environmental externalities. This is the actual cost to society of deforestation, carbon emissions and water pollution and show that, in the long run, climate-smart coffee is cheaper and gives a better deal to farmers and workers. The climate-smart model promoted by Solidaridad aims to regenerate coffee landscapes through good agricultural and processing practices, and paying a fair price to farmers and labourers.

  • Livestock

    In Nicaragua, we promoted diversified and resilient production systems combining livestock and cocoa. The implementation of Farmer Field Schools increased the adoption of best practices by 270 smallholders in 532 hectares: establishment of improved grasses, use of multi-nutritional blocks and mineral salts as supplements to animal feed, improved animal health management, abolishment of pasture burning and natural regeneration of pastures. After two years milk production has increased by 16%, and farmers’ income by 11%.

  • Palm Oil

    To improve palm oil production, we introduced Sustainable Palm Oil 2.0. It seeks actionable commitments and measurable impacts on zero deforestation, biodiversity conservation, regenerative landscapes, inclusive business models, renewable energy and circular economy. Beyond the network-defined innovation areas, Solidaridad introduced a robust biodiversity conservation and monitoring programme for the Mesoamerican Palm Oil Alliance. We also harnessed the RSPO remediation and compensation payments of palm oil companies in Guatemala with the expectation of leveraging other funds.

  • Sugarcane

    In Mexico, we launched the first smallholder sugarcane productivity pilot in a strategic partnership with Bayer, the national farmer association CNPR, and sugar mill Plan de San Luis of Grupo PIASA. The desired outcomes are 30% productivity increase, improved occupational health and safety, decreased environmental impact, improved water resource management, increased gender equality and social inclusion, and the introduction of digital solutions and production innovations. As the project launched in September 2018, it’s too early to comment on impact.

Developments

Central America, Mexico and the Caribbean have long suffered from high levels of social conflict, corruption, and political unrest. This ongoing, long-term socio-political crisis, in addition to historical gaps in governance, has forced thousands of people to flee extreme violence, political repression and poverty. Current governments are characterized by weak and corrupt administrations that cause social instability, limiting regional economic growth. Investments in various economic sectors are currently being reduced or postponed while the political outlook stabilizes.

Economically, the region benefited from a commodities boom from 2000-2010. However, the region did not prepare for a downward trend over the past decade. Unable to convert the positive trends into long-term growth, the region’s economic struggles are having an enormous impact on upcoming political cycles.

Based on the above external analysis, while there are numerous challenges to Solidaridad’s programming, those same challenges also generate numerous opportunities to leverage the momentum we have built, particularly in Solidaridad-facilitated multi-stakeholder platforms. We understand that moving beyond the farm to integrated landscape management interventions allows for the full integration of commodity-based programmes with Solidaridad's innovation areas. This creates powerful leverage points and synergies that achieve the speed and scale of impact expressed in the Ambition 2020 multi-annual strategic plan. Furthermore, in the absence of effective and transparent governance, policy influencing in the current political context is often impossible at national level. Thus, the integrated landscape management approach, where local actors create a shared vision, is one of the most powerful options to facilitate dialogue and consensus.

Achievements

We recognized our regional commodity programmes as powerful leverage points to move beyond the farm and factory to landscape-level interventions, and we established sustainable landscapes (PASOS) initiatives in Honduras and Nicaragua. In 2018 62,029 producers implemented good practices, 62,544 producers were trained in good practices, and 1,053 producers and workers increased their productivity and/or income. At the same time, we established a sequence of activities to scope, analyze, convene and facilitate the dialogue and consensus building required for the co-design of landscape-level interventions.

In 2018, we reframed our regional strategy under the umbrella of the Mesoamerican Landscape Accelerator. The accelerator seeks to replicate the PASOS experience of multi-stakeholder co-design of landscape solutions and unlock access to investment for social, environmental and economic impacts.

Regionally, 62 companies are working closely with Solidaridad to adopt sustainable practices, on 486,683 hectares. Our vision is to eventually integrate these private-sector partners into socially-inclusive and holistic management of priority Mesoamerican landscapes. This in turn will lead to more inclusive economic opportunity, improved resilience to climate change and extreme weather events, increased biodiversity conservation, natural resource management, food security and improved livelihoods.

The partnership with Prospero Innovation Labs has opened up new relationships for Solidaridad, thereby increasing our global visibility and opportunities to deliver investment and philanthropic support to the region.

We’ve significantly increased our organizational positioning when it comes to major donor opportunities, for example, with the Global Environmental Facility in Honduras, IKI and UNEP/UNDP. The momentum is building and we believe this will lead to funding breakthroughs in 2019.

FINANCE

Solidaridad Central America has grown from a near-to-zero own-contracted budget in 2011 to a level of close to 1 million euros own-contracted income in 2018. The region is struggling to attract traditional donor funds and has therefore invested in other financing models, building momentum for substantial breakthroughs in commodity platforms and sustainable landscapes. Furthermore, the fee-for-service model of the PanameriCaña project has high potential for replication in other programs. The region’s impact investment approach, with growing interest from the Central American Bank for Economic Integration (BCIE) and other impact investors, promises to deliver new financing lines for technical assistance, deal-making, and monitoring of impacts. It is anticipated that several impact investment deals will be closed in 2019.

The more detailed financial results for Central America are included in the official audited statements from Fundación Solidaridad Latinoamericana, comprising of Central America and South America. These can be downloaded here.

Annual expenditures in thousand euros

 

Personnel in FTE

 

Organization

Solidaridad Central America has three legal entities: Guatemala (regional head office), Honduras and Mexico. The foundation of a legal entity in Nicaragua is in progress. Solidaridad Mexico achieved legal status in December 2018, and is expected to become fully operational by the end of June 2019. Due to the political upheaval in Nicaragua, it is unlikely we will achieve Solidaridad legal status in the near future. However, despite the political unrest, Solidaridad continues to implement our projects effectively in Nicaragua, and maintains the office in Managua as well as in El Rama, RACCS.

In 2018 several staff members were recruited to bring new expertise to our regional operations, including:

  • A landscapes and climate specialist who brings knowledge and experience in climate change mitigation and adaptation, including the construction of payment for ecosystem services offerings, and in particular the sale of carbon credits related to renewable energy and the leveraging of Kyoto lands for restoration activities, such as cacao agroforestry systems

  • A high conservation value and biodiversity conservation specialist to lead regional efforts in bio-connectivity and. the enhancement of production systems for biodiversity management

  • A design and content editor to elevate the visibility and appreciation of the Solidaridad brand

Monitoring and Evaluations

The following evaluations or studies were conducted or finalized in 2018:

  • The True Price of Climate-Smart Coffee Study in Mexico

  • Potential of Biological Connectivity of Palm Oil Plantations in Honduras Pilot Project Report

  • Diagnosis of small oil palm producers in Nicaragua

  • Spatial trend scenario modelling to support integrated landscape management in the Caribbean North Coast of Honduras through analyzing the potential scenario of “business as usual” vs the scenario of Integrated Landscape Management. This modelling is linked to the Sustainable Development Goals.

Communication and campaigning

The communications department developed high-quality reference materials for our commodity programmes, landscape initiatives, and innovation areas. The development of coherent and consistent messaging has been vital as we grow new partnerships and introduce innovations. The region aligned with our global brand development, while carving out a unique regional identity.

A major step was to take the leap from commodity-based platforms to attracting investment proposals for integrated landscape management. In 2018, we worked to position the Mesoamerican Landscape Accelerator among potential partners, investors and producers as the most feasible option to invest in regional processes beyond certification and landscape regeneration. We advocate that the landscape is the optimized setting for the innovation areas to achieve synergistic potential that will lead to speed and scale.

Communications efforts also focused internally in 2018 to ensure 100% of staff were aware of our organizational policies, including our code of conduct and whistleblower procedure. We also promoted the use of our regional data management system to increase our reporting, proposal development and communications capacities.

In all partner communications, we promoted dialogue and consensus-building within the multi-stakeholder platforms as the key to developing our regional vision and the co-design of interventions that will have enduring social, environmental and economic impacts.

To increase Solidaridad's visibility and improve our positioning in the region, we launched regional palm and sugar websites. In addition, we promoted forums to exchange knowledge and experiences amongst the regional platform partners. Furthermore, we expanded our media network through alliances with local TV, newspapers, magazines and websites.

Partnerships

Influential partners and donors include the Dutch Ministry of Foreign Affairs, Henkel, and Bayer. We strengthened relationships with Coca Cola, Cargill, Louis Dreyfus, Starbucks, Syngenta, Olam and ECOM. In addition, we worked with over 60 private sector partners across the region, both on a bilateral and multi-stakeholder basis.

In 2018, we established a partnership with Prospero Innovation Lab, to build a case for ecological, social and economic sustainability through the Mesoamerican Landscape Accelerator. The accelerator aims to enhance the sustainability of landscapes and supply chains across the region. This partnership has increased visibility for Solidaridad with a host of new types of partners, potential donors and investors (including impact investors) who are looking for innovative approaches to sustainability. We’re building momentum to unlock financing for sustainable landscape initiatives.

When it comes to multi-stakeholder initiatives, we’re working in Honduras with the Ministry of Environment, UN agencies such as UNDP and UNEP, and civil society organizations, to jointly develop a multi-sectoral Global Environment Facility proposal.

We continue to believe that public-private partnerships are critical for affecting change. Even though the political situation in the region is complicated, we need government support in helping shape the enabling environment for change, including political will and policies that support market incentives that allow participation of a wide range of actors along the supply chain. Private sector partners play a critical role in influencing and responding to consumer behavior and demands, which can also favour policies that are more inclusive to smallholder producers.

The full audited annual accounts and financial statements for Solidaridad in Latin America can be downloaded here. 

Michaelyn Bachhuber Baur

Managing Director, Solidaridad Central America

119 Calle A 13-20 Zona 10, Villas Marques,
Ciudad de Guatemala, Guatemala