San José, Costa Rica, since 1956

U.S. Aid Freeze Worries Small Farmers

LEÓN – Upon hearing news of the U.S. Millennium Challenge Corporation’s (MCC) freeze on aid to Nicaragua last week, yuca exporter Antonio Caballero said he fears it will mean a return to the desperate days in which he lived with his wife and three kids beneath a zinc roof without walls.

Caballero and thousands of other farmers and small entrepreneurs in León are the ones who will bear the brunt of the United States’ decision to suspend new development aid in an attempt to pressure Nicaragua to respect political freedoms and democratic rule of law.

“They opened a window for me,” Caballero said of the MCC, which sent agronomists to train him how to use fertilizers and helped ship his yuca, or cassava, harvest to El Salvador, where he sells his product for triple the price.

Since receiving MCC assistance, Caballero says his income has doubled.

U.S. Ambassador John Danilovich, CEO of the MCC, a sustainable grant program that supports small farmers and entrepreneurs in the northwestern departments of León and Chinandega, froze $64 million in aid last week amid concerns that Nicaragua’s democracy is eroding under President Daniel Ortega.

Though the MCC planned to help 3,600 farmers and entrepreneurs develop their small businesses here, the corporation will have to settle on less than half that goal for now, according to MCC spokeswoman Judith Venegas in León. Projects to provide dozens of kilometers of roadway and tens of thousands of property titles for the rural poor could also be put on hold due to the freeze in funding, according to Venegas.

To be eligible to receive the full $175 million grant awarded to Nicaragua in 2005, the Nicaraguan government had to meet a slew of conditions, including a commitment to political freedom, Danilovich said in a statement.

Though international donors have been raising concerns for months over the political situation here, for the United States it was “deep concerns” over the fairness of last month’s municipal elections that proved to be the final straw.

“I am not satisfied that the electoral process in Nicaragua has been conducted in accordance with the principles upon which MCC awards and delivers grants to reduce poverty,” Ambassador Danilovich said in a statement.

Small producers like Caballero, who find themselves being punished for the behavior of their government, are pleading with the United States to not cut off aid.

“I personally ask U.S. leaders to find another way. We need this help,” said Edmundo Castillo, a farmer and rancher outside of La Paz Centro, León. “Nobody’s ever given me anything before.”

Castillo said MCC agronomists provided him with high-quality seeds to cultivate his sugarcane and ranchland, build a stable for his horse and help build a bio-gas chamber that converts manure into gas for his kitchen stove.

“In a country as poor as mine, it’s a shame that an organization that only comes to help would leave like this,” he said, donning a Millennium Challenge cap while demonstrating his methane-powered stove.

But León’s Sandinista mayor-elect, Manuel Calderón, brushes off the aid freeze, saying it’s part of a U.S.-backed campaign to undermine the Sandinista government.

“There will be no debacle,” he said, adding that the majority of aid has already been spent or tied up in contracts.

Besides, Calderón added, most of the aid ends up in the hands of multinational companies, such as the Italian company contracted to build roads in León.

President Ortega, for his part, said during a summit in Venezuela last week that the United States’ decision to freeze its “conditioned aid” only makes Nicaragua “feel a little bit more free.”

More than halfway complete, the five-year, $175 million MCC grant had earmarked $92.8 million to go toward roads, $33.7 million to support rural businesses, $26.5 million toward a land-titling program for more than 40,000 campesinos and $22 million for project management.

Sarah Stevenson, media relations officer for the MCC in Washington, D.C., told The Nica Times in a phone interview that the MCC has already contracted $111 million of the $175 million it committed to Nicaragua.

She said most current projects and employees of the MCC in Nicaragua will not be affected by the freeze, but the organization will not be disbursing funds for any new projects. Still, she said, the “N1” highway under construction from Managua to León could now suffer from “potential holdups.”

As many as 1,000 small farmers may not receive technical support, while tens of thousands of campesinos may not receive legal aid to get property titles – a key step in getting people out of poverty because banks require titles before granting credit, said MCC country spokeswoman Venegas.

Nicaragua’s Vice Minister for International Cooperation Valdrack Jaentschke called the U.S. decision to freeze $64 million in grants “unethical.”

“It is unacceptable to tie these resources to our domestic policy. It simply shouldn’t be done,” Jaentschke said in a statement on a government Web site.

The United States’ decision to freeze aid to Nicaragua came a day after U.S. Congressman Howard L. Berman, chairman of the House Foreign Affairs Committee, urged the MCC to suspend its program here due to concerns over the decline of democracy.

The MCC’s board of directors will discuss the next steps for Nicaragua’s eligibility during its next meeting on Dec. 11.

Out on his farm, Castillo hopes that the United States reconsiders.

“I ask the United States: Don’t abandon us; we need you,” he said.


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