CHAPTER 4 GUAVA (FRUIT) AS A CASE STUDY
4.2 Costa Rica
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4) Increasing foreign and regional investment in the fruit market.
5) Immigrants demands for their local fruits in the United States.
4.2 Costa Rica
Description of Taiwan ICDF Project
The Guava fruit was introduced to Costa Rica in 1978 by Taiwan’s technical mission in the plantation of the National Institute of Learning [Instituto Nacional de Aprendizaje] (INA), La Uruca, San Jose. (MAG Costa Rica, 2014).
The first horticultural project was carried out in 1993 in Paquera located in the Nicoya peninsula (Please take a look at figure 4.2 location 1). Paquera was the first farmer’s association producing Taiwanese Guava that was established in Costa Rica.
Later, another project was carried out in 1998 in Cajeral and Jicaral, also located in the Nicoya Peninsula (Figure 4.2 location 2). Just as in Paquera, farmer’s associations were established in each community, Jicaral and Cajeral, respectively. After seeing the creation of two new associations in the year 2000, Taiwan in cooperation with the Ministry of Agriculture and Livestock in Costa Rica (MAG Costa Rica) decided to send an expert to Cañas, Costa Rica, to develop a facility for seedlings development and train the 5 guava farmers’ associations(The other two associations are unknown to this research). The first variety of Guava that was promoted by Taiwan’s technical mission was Thailand guava or Tai-guo-ban (Taiwan ICDF, 2002b).
According to Taiwan ICDF (2002b), in order to avoid overproduction of Thailand guava, Taiwan limited the number of farmers that could be part of the guava project. Limiting the number of farmers of guava, helped keep the price stable and allowed the producers to earn a stable income. In Paquera, Taiwan’s technical mission with help of the local government selected 23 local families and gave each 300 seedlings, which in total were 6,900 trees. The market price for guava was US$1.4/kilogram in 2002, which Taiwan labelled as a high priced fruit. Based on the number of trees and on the market price of guava, Taiwan’s report suggested that each family could earn US$200/weekly. Taiwan ICDF (2002b) concludes that this project improved the quality of life of Paquera’s families and helped diminish unemployment.
The guava project was well received by local producers and each time more and more families were interested in joining the project. Nonetheless, one suggestion was made in Taiwan ICDF of the necessity to clearly differentiate the imported guava from the
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local guava, as there’s was no clear distinction between one or the other. The recommendation was to use a sticker with the label TAIWAN or MISSION TAIWAN.
Taiwan ICDF (2003b), Taiwan deems the projects in Nicoya as successful and suggest that the locals take charge of the project. Taiwan’s technical cooperation would take this project as a model and copy it elsewhere.
Another project related to Guava was the developed in Turrialba (Figure 4.2 location 3). Turrialba is the region in Costa Rica that produces 80% of the country’s guava consumption (Taiwan ICDF, 2005), with an annual production of 1 million kilograms (Taiwan ICDF, 2002b). The farmers of the region were not making profit instead intermediaries were. Therefore, a pulp processing plant was created with a loan of Taiwan. Although this project also relates to guava, we will limit our research to the cases in which there was a transfer of guava expertise from Taiwan to Costa Rica as is the case to the Thailand guava.
Figure 4.2. Map of Taiwan ICDF guava project locations in Costa Rica
Source: Own elaboration. Please note that the area mark is only an approximation and not the exact place and extension of the project.
General results
On table 1 is a list of the locations, number of farmers, numbers of plants and farmer’s association related to each region by the year 2014. Three out of four locations are places were Taiwan’s technical mission’s projects were carried out. The number of associations that still produce guava are 3 (Procomer, 2007), this differs in number from the 5 that existed in 2000(Taiwan ICDF, 2002b). Asociación de Fruticultores de Lepanto [Asociación de Fruticultores de Lepanto] (ASOFRUL), since 2004 changed
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therefore in reality that will make only 2 associations producing and selling guava. Even 7 years after the relations were broken between Taiwan and Costa Rica, two communities Asociación de Productores de Canjel de Nicoya [Asociación de Productores de Canjel de Nicoya] (ASOCANJELITO) and Cooperativa de Productores de Guayaba Taiwanesa [Cooperativa de Productores de Guayaba Taiwanesa](COOPEPROGUATA) still produced and were financially dependent on guava production. It must be noted that Taiwan’s technical assistance never carried out a project in Alajuela, however they are the top producers of guava by number of plants of with 31,000 plants. Followed by Paquera, which is the first location of Taiwan’s technical mission, the third is Nandayure specifically in Canjelito. Lastly, is the region of Jicarral in which only 5 farmers still produce 1900 trees of guava but they are no longer selling the guava through the association.
Geographic
15 3225 ASOCANJELITO
(Asociación de Productores de Canjel de Nicoya)
Table 4.1 Producers and quantity of plants of Thailand Guava in Costa Rica Source: MAG Costa Rica (2014) & Procomer (2007).
In order to determine the exports of Guava, I have used the Central American System of Custom Classification [Sistema Arancelario Centroamericano] (SAC)
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customs classification-0804.50.2011 and 0804.50.2021 which both include only guava.Unfortunately, this classification doesn’t distinguish from “criolla” guava or the Taiwanese guava. The exports of Guava have also increased from the year 2005 until the year 2016. The average export for the past 3 years (2014 to 2016) is around 35,300kg per year. From 2005 until 2006, there was an increase of almost 1900%(Procomer, 2007) however the two following years 2007 and 2008 there was no export of Guava. From 2009 until 2013, there was a gradual increase of export almost every year with the exception of 2011. After 2013, exports of guava have more or less stabilize between 30,000 to 40,000 kg/year. Even though in general the volume of exports and value of export is not big, the impact it has on the individual families is significant.
Figure 4.3. Costa Rica's exports of guava Source: SIECA statistics
Taiwan’s departure from Costa Rica left some of the agribusiness projects halfway. Some of the producers continued with the guava project, however other seemed to struggle after. According to Procomer (2007), the break of diplomatic ties between Taiwan and Costa Rica affected “at least 50% of the members’ schedules and interests. However, there were others that wanted to continue” (p. 5). Below we will evaluate the situation of three associations that were part of Taiwan’s initial Guava
2004 2006 2008 2010 2012 2014 2016 2018
Export value(US$) Export Volume(Kg)
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Location 1. Coopeproguata- Paquera
Coopeproguata (also referred as Proguata) was established in October 1999.
According to Castro (2000) “The cooperative was established in spite of the farmers lack of faith and incentive due to all the unaccomplished promises in the past”. The associates belong to the community of La Zoila, Dulce Nombre and Rio Grande and every family member participates in the production and harvesting of guava. Every Thursday they go to the collection center with the weekly harvest. Later, guava is selected, packed and shipped to be distributed to the local markets. Every week around 800 to 1,000 kilograms are transported to the Cenada, market in Heredia (Castro, 2000).
Some of the initial problems experienced were that the demand for this new variety of guava was low but slowly started to increase (Castro, 2000). Seventeen years later, the weekly sales had increased to 11,000kg for national consumption and 1,400-1,500kg for export to Panama (Mora, 2014).
Coopeproguata is the biggest cooperative in Nicoya with 42 members (Guzman, 2014), 40 hectares (Castro, 2012; Mora, 2014) and its own collection center and commercialization activities. Initially 800 trees of Thailand guava variety were planted.
It quickly grew to more than 7,000 trees and 17 producers by the year 2000 (Castro, 2000). In 2007, they formed a cooperative called COOPEPROGUATA R.L (Guzman, 2014). According to the person in charge of administration, “it wasn’t until they became a cooperative that they started to receive financial aid from National Instituto of Cooperative Promotion [Instituto Nacional de Fomento Cooperativo] (INFOCOOP), Rural Development Institute [Instituto de Desarollo Rural] (INDER) and MAG
”(Guzman, 2014). The general manager, Graciela Hernandez, confirmed that the economy of Proguata is very stable and that they make a profit of ₡20 million monthly(USD-$35,500) which is later distributed among its members (Mora, 2014).
Coopeproguata success wasn’t achieved without any challenge. In 2012, coopeproguata was facing some difficulties such as: only being able to produce to the local market due to the lack of a fruit processing plant which did not allow the company to expand or exports its production. The profits made were just enough for the producers to cover its production costs and living expenses. Another problem was transportation since in between the collection center and some farmers there was a river.
During the rainy season it was not possible for some farmers to deliver the crops. On a news report, the farmers had requested help to the Institute of Agricultural
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Development [Instituto de Desarollo Agrario] (IDA) (Castro, 2012).By the year 2014, the cooperative was already diversifying crops to papaya and mango. In addition, it was working in conjunction with INFOCOOP and National Center of Sciences and Technology for Food on the installation of a food processing and the donation terrain for the installation of the food processing plant.
According to Castro (2000) the project was a success in part because INA’s involvement from production, training on pruning, plague control, fertilization and breeding. Guava allows a stable income throughout the whole year. The general manager of Proguata, states that their guava “product is better because the flavor is different. Our Taiwanese Guava is a product of higher quality since it was the start of the project of Costa Rica-Taiwan” (Mora, 2014). The cooperative is very important to the region because it does not only provides direct employment to 120 locals (Guzman, 2014) but it also provides indirect employment to the transportation sector, agricultural supply producers and others. One of the member states that the Taiwanese guava
“brought economic welfare to the community, you can see it, we generate jobs and it’s been an indispensable source of income for the whole community” (Mora, 2014).
Location 2. Canjelito-Nandayure
In 1995, INA bought a plantation for parceling it and giving 30 parcels of 4 hectares to locals (the terms under which it was given to them is unknown) (MAG Costa Rica, 2014). Before the introduction of Guava in Canjelito, local farmers in the community were only producing basic grains or would work in other’s farms. However, in 2000, Guava was introduced to Canjelito as alternative source of income. The idea of the project was for the farmers to create a guava agribusiness. This initiative was carried out by MAG Nandayure in cooperation with Taiwan which did the research to find a niche market for the farmers, provided initial seedlings and helped the farmers obtain experience in the production of Guava (MAG Costa Rica, 2014). By 2014, asocanjelito had 25 members, 15 producers and 10 other members. These families depended on guava as a source of income. Aocanjelito provides employment approximately to 5 members of each family throughout the year, this totals 85 people with direct employment. Additionally, indirectly provides employment to intermediaries, transporters, distributors of equipment, agricultural supply producers or distributers and additional workforce (if required).
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On a project carried out by MAG Costa Rica (2014) to increase the integration of agricultural supply chain’s an analysis was done of asocanjelito. Unlike proguata, this association has faced more difficulties. According to MAG Costa Rica (2014) their supply chain is weak, there’s slow growth due to its lack of technology and there’s no commercialization strategy. There seems to be no transformation to an agribusiness.
(MAG Costa Rica, 2014). This could be caused by the lack of integration between the members and on MAG Costa Rica (2014) report is recommended to integrate in order to solve problems and weaknesses that are faced by the association.
Asocanjelito sells most of its products during the summer specially during March and April. During the rainy season is harder to sell because of plague problems.
In most cases, guava is sold through intermediaries who later take the products to local fairs to be sold to customers. In the occasions which asocanjelito directly assists fairs and just then, guava is sold through the association as cooperative of producers. Initially asocanjelito was selling to supermarket chain ‘Unidos’ but then guava producers in Alajuela offered better price and took asocanjelito’s customer (MAG Costa Rica, 2014). MAG Costa Rica is currently working on increasing the training of the farmers and providing them with the necessary technology so that they can transform into agribusiness, as per the original plan.
Location 3. Jicarral
Asofrul is another association that Taiwan provided technical cooperation during the 1990s. This association was founded in 1994 as mango producers. In 1998, Taiwan’s technical mission in cooperation with MAG Costa Rica provided seedlings, fertilizers and training for one year. The project started with 7 producers and 566 trees.
By 1999, there were 27 members with 3,627 trees. Guava was commercialized by the association until 2004 (For more details please refer to appendix E).
According to the association, the reason why they decided to stop commercializing guava was because there was an overproduction of guava, prices were dropping and it was not a sustainable business anymore. In addition, the quality started to decrease and other independent farmers were producing guava. After 2004, asofrul continued commercializing only mango but some members continued to grow guava and commercialized it independently from the association.
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4.3 Honduras
Description of Taiwan ICDF project
A few years after the introduction of the Thailand guava to Costa Rica, it was introduced in Honduras in 1999 (Romero, 2015). Projects were carried out in two regions (please refer to figure 4.4). Location number 1 is in the central part of Honduras in the department of Comayagua and location 2 is in the eastern part of the country in the department of Olancho. Taiwan’s project consisted of providing the farmers with the initial seedlings, agricultural supplies and technical assistance. In contrast to Costa Rica, in Honduras 3 varieties of guava are currently being planted: “la perla, la millennium and the Taiwanese” (Romero, 2015).
Figure 4.4. Map of Taiwan ICDF guava project locations in Honduras
Source: Own Elaboration. Please note that the area mark is only an approximation and not the exact place and extension of the project.
Taiwan helped create a farmers’ association and on the last phase, the management of the association was handed down to the farmers (Romero, 2015). On Taiwan ICDF (2013b) it stated that Taiwan ICDF’s objective for Honduras from 2005 until 2011 had been that farmers will form as a cooperative, train the farmers produce and market their own products and the last goal for the farmer association was to export guava to other countries. Taiwan ICDF established annual goals for the members of the cooperative and recorded the progress that was made. Some of those goals included:
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accounting and financial management, sales plans, production plans and factory maintenance. Taiwan’s final objective for both Comayagua and Olancho’s cooperative was that they would become independent and a sustainable agribusiness (Taiwan ICDF, 2013b).
Despite, Taiwan’s main objective that the organizations will become agribusiness, Taiwan’s phases of development varied from one region to the other. In the case of Comayagua in 2011, the phases that Taiwan’s technical mission had been through were: first, selecting the members of the organization; two, establishing a management and/ or sales team; third, for the organization to become a cooperative which it did in 2009; and the last phase to aid the cooperative to become an agribusiness that could export it products either to neighboring Central America countries or others.
The Comayagua cooperative was so successful, that by the year 2010 sales were above US$985,000 and by the year 2011 above US$1 million and the monthly goal of keeping sales above US$80,000 was also achieved. In 2011, the numbers of members were 79 and production was around 40,000lb/weekly. In Taiwan ICDF (2013b), it states that guava produced in Comayagua is mostly for national consumption but some exports have been made to El Salvador in 2009. However, that might not be sustainable in the long run as El Salvador is also producing guava. On the final report (2013b), Taiwan makes an observation that is important for future technical projects to take into consideration, the introduction of the same product in different countries of the region.
For the case of Olancho, the phases followed were: first, the selection of the members, second, training and workshops and third the establishment of a cooperation in 2009. By 2011, the numbers of farmers were 26 members. In comparison to Comayagua, Olancho is a smaller cooperative and its growth has been slower. By 2009, they were selling their products to nearby cities in Olancho.
Taiwan ICDF (2013b) report is conclusive, by claiming that the guava project has been successful as they have been able to open many sales channels. The Taiwanese guava was being sold in 96 local supermarkets and 4 restaurants, specifically in 64 branches of Walmart supermarket and when the quality was not good enough it was sold in traditional markets. Taiwan’s technical mission hopes that guava will help open sales channels for other fruits and vegetables from Taiwan’s technical assistance.
Taiwan believes that the guava project will be sustainable as the farmers have already
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invested their profits in transportation. (All the data above was obtained from Taiwan ICDF, 2013b).
In 2012, the construction of a processing factory would be ready in Comayagua.
Taiwan didn’t provide the capital to construct the processing factory but it trained the cooperation production planning and sales skills.
General Results
Annual production of guava has seen an exponential increase in Honduras, it has gone from only producing 202,000lbs/annually in 2004 to producing more than 2,000,000lbs/annually in 2014. Data was gathered from Taiwan ICDF(2013b) and from newspaper La Prensa, Romero (2015). In a 10-year period guava experienced 890%
increase in production.
Figure 4.5. Honduras production of guava 2004-2015
Source: Taiwan ICDF(2013b) and Romero (2015). Own elaboration.
In order to determine the exports of Guava, we have use the Central American System of Custom Classification (SAC-Sistema Arancelario Centroamericano) customs classification-0804.50.20 and 0804.50.20, this includes guava and mangosteens. Unfortunately, no custom tariff classification was found that only includes guava. Exports of guava have seen an increase from 1999 but the behavior has been quite hectic. It doesn’t follow a stable pattern, some years there are exports of around 30,000kg and others none. On the chart below, the exports for year 2007 were not included as there might be an error with that data since exports are larger than national production. (2007 export more than 1,000,000kg).
0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
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Figure 4.6. Honduras' exports of guavaSource: SIECA statistics
Both graphs above confirm Taiwan’s report that guava has seen an increase in national production but the goal to export to neighboring countries still hasn’t been achieved as some phytosanitary regulations have not been passed by Honduras. Guava production plants in Comayagua lack the technology to do so. (Taiwan ICDF, 2013b).
Location 1. Comayagua
Initially, Comayagua was formed only by 7 producers. By 2007, the associates had increased to 40 producers, then Taiwan started the initiative of creating the association of producers of guava in Comayagua. Taiwan grouped the producers and help them get access to local market, they open the sales channels with the biggest supermarket chains in the country and finally assisted them with the legal creation of the association. In 2017, there are 64 producers located throughout Comayagua with 100mz of guava production (please refer to appendix F for full interview with the
Initially, Comayagua was formed only by 7 producers. By 2007, the associates had increased to 40 producers, then Taiwan started the initiative of creating the association of producers of guava in Comayagua. Taiwan grouped the producers and help them get access to local market, they open the sales channels with the biggest supermarket chains in the country and finally assisted them with the legal creation of the association. In 2017, there are 64 producers located throughout Comayagua with 100mz of guava production (please refer to appendix F for full interview with the