San José, Costa Rica, since 1956

MCC Helps Put Farms Back to Work

LEÓN – Perhaps nowhere else in Nicaragua are farmers more anxiously awaiting the start of the rainy season than in the scorched dustbowl outside of Nagarote, in the northwestern department of León.

For dairy farmer Marlon Baltodano, even his 42 hectares of farmland can’t yield enough vegetation right now to support the handful of cattle he owns. The parched conditions of April and May once forced him to dole out large sums of money each year to purchase bundles of cattle feed to get through the end of the dry months.

“For every 10 cows I owned, I would have to sell three just to feed the other seven,” Baltodano said, his boots covered in dust. But with the recent help of the U.S.- funded Millennium Challenge Corporation (MCC), Baltodano and his neighboring dairy farmers are now seeing greener pastures, both figuratively and literally.

With the help of agricultural specialists and some basic startup assistance, Baltodano and his neighbors have changed their traditional farming practices and are now growing sugarcane on irrigated plots of land to feed their cattle. They are also supplementing their livestock’s diets with fortified salt and other vitamins to keep them fat and productive even during the driest months.

The result has been 30-50 percent increases in milk production, plus savings on feed costs.

Now, instead of selling his cows to get through the dry season, Baltodano is focused on breeding his cattle to expand his farm’s production capacity next year.

“Before we were just trying to survive, but now we are planning on growing,” Baltodano said proudly.

“I feel my pockets are a little heavier these days,” jokes fellow dairy farmer Carlos Manuel Contreras, referring to the extra income he’s making thanks to MCC assistance.

The northwestern region of León and Chinandega, an area referred to as the “occidente,” was once Nicaragua’s agricultural breadbasket before falling into abandon in the 1980s, after the cotton industry bottomed out. So when the MCC awarded Nicaragua a five-year $175 million compact in 2006, the program was designed to reactivate this historically productive region by providing assistance to farmers and rural entrepreneurs, improving road infrastructure and issuing property titles to put more farmland back to work (NT, Sept. 22, 2006).

Over the past three years, the program has been held up as an international poster child for MCC success, due to the on-time effectiveness of its implementation and the life-changing impact it has had on the lives of some 5,000 agricultural producers.

Many of the farmers say the MCC program represents the first time they’ve ever received any type of assistance in any form. And some say it has been life-saving.

“It came just in time, when I was up to my neck in water,” said cassava (yucca) farmer Luis Salazar, who credits MCC agronomists for helping him turn around his farm after a difficult harvest in 2007.

With help in the form of fertilizers, seeds, equipment and training on how to combat crop plagues, Salazar’s farm is now exporting to Guatemala and the United States and has become a model for others in the area.

Not only are his crops taller than his neighbors’, but Salazar has also become more resourceful by setting up a modest biogas system to convert cattle manure into methane to power a small gas stove. Now his wife doesn’t have to spend four hours each morning in search of firewood, he says.

After just two years of working with the MCC, Salazar’s economic situation has improved dramatically, he says. He’s bought a pickup truck, put his kids into a private school and is paying for them to take English classes.

And there’s still money saved to purchase more fertilizer and continue with the new practices he’s learned from MCC agronomists.

“My income has increased by 70 percent,” he said. “Without this help, I would be in the same situation today as I was before.”

Punishing the ‘Good Son’

Despite being a model project in many ways, Nicaragua’s program received a major blow last December when the MCC’s board of directors in Washington, D.C. made the decision to suspend the remaining $64 million “in response to the government of Nicaragua’s manipulation of municipal elections and a broader pattern of actions inconsistent with the MCC eligibility criteria.”

At the time the program was suspended, the MCC was finalizing the bidding process for construction of the $34 million “carretera vieja León,” a roadway connecting Managua to León. That highway project, the MCC’s largest scheduled public works project in Nicaragua, is now suspended, as is the $15 million secondary roads project and $15 million for the land-titling program.

The initial suspension was extended for 90 days last March to give the government of Daniel Ortega one last chance to address the issue of electoral fraud and find a “Nicaraguan solution” to the problem before the board makes its final decision on June 10.

Ortega, however, has apparently decided it is easier to write off the MCC program than address the issue of election fraud – something presidential aide Bayardo Arce has said the Sandinista government is unwilling to discuss “even with the historians.”

Ortega has since said that the MCC suspension makes Nicaragua “feel a bit freer” and has mocked MCC assistance as “so-called cooperation” that he considers down payments on a historic war debt the United States owes Nicaragua.

Ortega has also said Venezuelan President Hugo Chávez will give Nicaragua $50 million to replace the lost MCC aid – one of dozens of promises Chávez has made to Nicaragua.

Yet despite the political rhetoric from Ortega, the MCC’s in-country General Director Juan Sebastian Chamorro says the program here functions very smoothly and cooperatively with the government ministries and with local municipal governments, most of which are Sandinista.

“It’s a situation that is a bit difficult to understand because people think we have a conflictive relationship (with the government) based on what they see in the media and the way the political situation is managed here. But on a technical level, the relationship with the government is excellent,” Chamorro told The Nica Times. “I feel completely supported by the government ministers who have been very respectful and cordial and interested in the success of the program.”

The problem, therefore, appears to be on an isolated political level. Canceling MCC aid to Nicaragua has been likened by some to punishing the son for the sins of the father.

Still, Chamorro added, the situation could have been a lot worse if the MCC-Nicaragua had not been so efficient in spending its funds in a timely manner. Otherwise, he said, the amount suspended could have been a lot more than $64 million.

Because the MCC was able to contract $111 million of its compact in the first three years, all three of its road and highway projects currently underway – including the beach road from León to Ponoloya – will continue, as will the agricultural assistance programs.

Of the $111 million in designated funds, less than $50 million has been spent, meaning that some $60 million will continue to be injected into Nicaragua’s economy “regardless of what happens in June,” Chamorro said.

“If we weren’t the good son, it would have been much worse. They could have canceled everything,” Chamorro told The Nica Times.

“Many other countries have had a hard time contracting their funds in the short term. But this has been a program that contracted its resources quickly, efficiently and at a good price.”

Ortega’s Baggage

At MCC headquarters in Washington, D.C., the issue of Nicaragua is considered a “difficult case.”

Rodney Bent, the acting Chief Executive Officer of the MCC, told The Nica Times during  a recent exclusive interview in El Salvador that the MCC had high hopes it could work with the Sandinista government, but they have been frustrated by Ortega’s “huge amount of emotional baggage.”

Personal problems aside, Rodney said the MCC’s decision to suspend aid was due to issues of democracy, not past baggage.

Bent said, “In the case of Nicaragua, where you see really a huge variation from the norm of good governance, we say ‘Hold the phone, is this a partner we can do good stuff with?’

“The previous administration in Nicaragua was pretty good,” Bent continued. “But then, like a lot of things, you get a bad administration and they take over and immediately start doing bad things.”

Still, he said, the MCC was initially willing to “suspend judgment” and continue its program here because “we really wanted to prove that we could make it work.”

Then came the fraudulent Nov. 9 municipal elections and the MCC could suspend judgment no longer.

Nicaragua now risks becoming the first country in the world to have its MCC compact canceled due to bad governance. At the end of the day, Bent said, the whole idea of the MCC, is “to find good development partners” and create “good projects in good countries.”

Unfortunately, despite the thousands of success stories from MCC beneficiaries in León and Chinandega, the board of directors will ultimately have to decide whether Nicaragua has finally crossed the line from “good country” to bad.


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