VZCZCXYZ0009
RR RUEHWEB

DE RUEHGT #0198/01 0322227
ZNR UUUUU ZZH
R 012226Z FEB 10
FM AMEMBASSY GUATEMALA
TO RUEHC/SECSTATE WASHDC 0874
RUEHRC/USDA FAS WASHDC
INFO RUEHGT/AMEMBASSY GUATEMALA
RUEHSN/AMEMBASSY SAN SALVADOR

UNCLAS GUATEMALA 000198 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EAGR EAID ETRD PGOV GT ES
SUBJECT: Regional Visit of USDA/FAS General Sales Manager/Associate 
Administrator and Deputy Administrator for the FAS Office of Trade 
Capacity Building and Development highlights successes of USDA Trade 
Capacity Building and Food Assistance Programs 
 
¶1.    Summary:  From December 6-11, USDA/FAS General Sales 
Manager (GSM)/Associate Administrator John Brewer and Deputy 
Administrator of the FAS Office of Capacity Building and 
Development (OCBD) Pat Sheikh visited FAS programs in El Salvador 
and Guatemala. The visit of the USDA/FAS delegation to El Salvador 
and Guatemala allowed delegation members to witness first-hand how 
USDA food assistance and trade capacity building (TCB) programs are 
strongly supporting agricultural development, enhancing two-way 
trade under U.S.-Central America and Dominican Republic Free Trade 
(CAFTA-DR), and bolstering the food security of those countries. 
It also offered delegation members the opportunity to reinforce the 
partnerships, which USDA has with the Salvadoran and Guatemalan 
Ministries of Agriculture.  With regard to the Guatemalan Ministry 
of Agriculture, in particular, the USDA delegation succeeded in 
pressing a critical Food for Progress (FFPr) funding issue, which 
if left unresolved could negatively impact future USDA 
government-to-government assistance/food security initiatives with 
Guatemala. End Summary 
 
 
 
¶2.    USDA Delegation Visit to El Salvador, December 6-8:  Mr. 
Brewer and Ms. Sheikh began their regional visit in San Salvador, 
meeting Minister of Agriculture and Livestock (MAG) Manuel Sevilla. 
Minister Sevilla thanked the delegation for FAS logistical support 
during his November visit to Washington and underscored how 
valuable his FAS-arranged meetings had been, especially the meeting 
with Agriculture Secretary Vilsack.  The Minister asserted that he 
and his staff were making strenuous efforts to upgrade MAG's 
sanitary and phytosanitary analytical capabilities and increase 
public support for El Salvador's export-oriented small and medium 
sized enterprises. 
 
 
 
¶3.    Minister Sevilla strongly emphasized the imperative of 
increasing the efficiency of Salvadoran agricultural production 
through modernization and via the inculcation of an entrepreneurial 
mentality.  Along those lines, he brought up the topic of 
biotechnology.  While the Minister stated that he agreed with the 
goals inherent in biotech Sevilla pointed out that the Salvadoran 
government (GOES) needed to develop a regulatory biotech framework 
and convince the Salvadoran public in general, and the Congress, in 
particular, of the benefits of biotech.  To that end, the USDA 
delegation raised the possibility of helping the Minister organize 
a Congressional delegation to travel to the U.S. and to learn about 
biotechnology first-hand.  The Minister responded that this was an 
excellent idea on which he would like to follow up. 
 
 
 
¶4.    The Minister then asked the delegation to relay his request 
to Washington for support on MAG's Fiscal Year (FY) 2010 FFPr 
proposal.  He stressed that FFPr funds would enable him to support 
key projects designed to improve rural infrastructure and to 
promote agricultural development, adding that because of the 
current global economic downturn, the GOES was cash-strapped.  The 
delegation agreed to deliver this request in Washington. The 
Minister thanked the delegation and noted that he understood the 
value of monetization programs such as FFPr since he had seen for 
himself the benefits which these programs provide to poor 
Salvadorans. (Note:  Under USDA's FFPr program, the USG donates 
commodities to a beneficiary which are subsequently monetized 
in-country with proceeds used to fund mutually agreed upon economic 
development projects.) 
 
 
 
¶5.    USDA Delegation Visit to Salvadoran TCB and Food Assistance 
Projects:  GSM Brewer along with USAID Mission Director Larry Brady 
and Minister of Agriculture Sevilla inaugurated a Good Agricultural 
Practices (GAP) week-long workshop attended by 60 small farmers and 
GOES technicians.  This activity exemplifies the partnership 
between USDA and USAID in supporting improved food safety and 
sanitary-phyto-sanitary (SPS) standards which ultimately allow El 
Salvador and other CAFTA-DR partners to gain better access to the 
U.S. market.  The GAP training also enhances two-way trade between 
the US and its CAFTA-DR partners. 
 
 
 
Since USDA began implementing USAID-financed TCB SPS training 
activities in El Salvador, over 680 Salvadorans have been trained 
in technical areas designed to upgrade food safety standards and to 
improve export readiness.  Because USAID funding for the CAFTA-DR 
 
 
 
 
TCB program is scheduled to terminate by the end of FY2010, the 
delegation met with USAID Director of Economic Growth and Regional 
Programs Dr. Lawrence Rubey to discuss this funding issue as well 
as how important it is to share the many TCB success stories with 
Washington decision makers.   During the meeting, Dr. Rubey 
underlined the need for making these programs sustainable lest the 
USG be faced with an open-ended commitment. The delegation 
concurred with Dr. Rubey's recommendation and GSM Brewer voiced his 
commitment to raise the funding issue with USDA and USAID upon his 
return to Washington in an effort to gain leadership support for 
TCB funding beyond FY-10. 
 
 
 
¶6.    The delegation also visited several projects which had 
benefitted from both FFPr and TCB funding.  At the National 
Laboratory, delegation members learned how US$1 million in FFPr 
funds had modernized El Salvador's key agricultural laboratory, 
providing the infrastructure which helps to ensure that Salvadoran 
agricultural exports comply with U.S. food safety regulations.  The 
National Laboratory has been the venue for TCB training activities 
in food microbiology and advanced analytical methods. 
 
 
 
¶7.    Other sites visited by the USDA delegation - the San Julian 
Dairy, an agricultural diversification project in Caluco, 
Sonsonate, and PAHNAS, an enterprise which successfully exports 
Salvadoran processed food products to the U.S. - all underlined the 
success which FFPr and TCB programs have achieved in El Salvador 
within the realm of agricultural development and trade expansion. 
 
 
 
¶8.    FFPr resources invested in the San Julian Dairy had 
resulted in the provision of assistance in good manufacturing 
practices, labeling, and good agricultural practices for milk 
suppliers leading to the production of better quality and 
safer-to-consume dairy products.  The agricultural diversification 
project in Caluco, overseen by the PVO Cooperative League U.S.A. 
(CLUSA), has assisted 250 small farmers in the production of 
value-added crops such as tomatoes, black-eyed peas, baby corn, 
etc. which are being sold in San Salvador and exported to 
neighboring countries and the U.S.  The income levels of FFPr 
beneficiaries, erstwhile subsistence farmers, have increased 
substantially due to this investment of USG resources. 
 
 
 
PAHNAS is a small Salvadoran food processor which has participated 
enthusiastically in a FFPr-funded ethnic product export promotion 
project.  PVO Technoserve has assisted PAHNAS in diversifying its 
export product portfolio.  The food products this enterprise is 
exporting to the U.S. includes frozen tropical fruits and processed 
foods indigenous to El Salvador.  Despite the international 
economic recession of 2009, PAHNAS has experienced growth in its 
export products. 
 
 
 
¶9.      USDA Delegation Visit to Guatemala, December 8-10: 
Mirroring their visit in El Salvador, GSM  Brewer and Ms. Sheikh 
held official meetings and visited Guatemalan projects which had 
been supported by FFPr and TCB funding.  The delegation gained 
first-hand knowledge of the success which FFPr and TCB activities 
have had in bolstering non-traditional Guatemalan agricultural 
exports and in supporting agricultural development. 
 
 
 
¶10.    Meeting with Minister of Agriculture, Livestock and Food 
(MAGA):  The focus of this meeting was the status of FFPr funds 
(over Q34 million or the equivalent of around US$4.1 million) 
generated from an FY2006 agreement between USDA and MAGA.  USDA and 
MAGA had agreed upon specific development projects which were to be 
financed these FY-06 funds but Post had recently been informed that 
project implementation had been halted due to budgetary problems. 
 
 
 
¶11.    After brief introductions, GSM Brewer raised the issue of 
the whereabouts of the over $4 million in USG funds with Minister 
Mario Aldana.  Minister Aldana responded that MAGA had been 
experiencing difficulties executing its budget in 2009 given the 
strictures placed upon MAGA by the Guatemalan Congress and the 
 
 
 
 
current Administration via its Ministry of Finance.  The Minister 
expressed hope that for 2010, MAGA would be able to account for 
these funds and implement the agreed upon projects.  He emphasized 
that he especially supported export-readiness projects which 
strengthened Guatemala in the realm of SPS and to that end, voiced 
his intention to create a Vice Ministry of Livestock and Health 
which would presumably take the lead on SPS issues. 
 
 
 
¶12.    Minister Aldana also brought up the slaughter house in La 
Libertad, Peten, whose construction had been financed by FFPr 
funds.  He mentioned that he would soon be meeting with the Vice 
Minister of Peten to discuss further investments in this slaughter 
house, and reiterated his hope that the 2010 budget would enable 
MAGA to be successful in this endeavor. 
 
 
 
¶13.    GSM Brewer thanked the Minister for his explanation, but 
emphasized already provided FFPr funding to support the execution 
of mutually agreed upon projects must be located and allocated to 
the appropriate projects.  This action must be carried out despite 
the budget difficulties which the Minister outlined.  GSM Brewer 
continued that due to the global economic downturn of the last 
year, governments around the world have had to grapple with budget 
difficulties.  However, US assistance funds allocated for specific 
projects need to be directed to those projects.  USDA auditors and 
more importantly, the US Congress are vigilant in their identifying 
funding deviations, and quick in rectifying these irregularities. 
 
 
 
¶14.    Ms. Sheikh echoed GSM Brewer's message and added that the 
U.S. Congress, to whose members she reported to every six months, 
was adamant that U.S. taxpayer dollars were expended in accordance 
with Congressional directives.  Regarding the FFPr funding issue, 
she urged the Minister to stay in close touch with the Agricultural 
Counselor and to provide him with an update as soon as possible. 
Ms. Sheikh also advanced that the USG was looking closely at the 
food security situation in Guatemala, and that the FFPr funding 
issue, if it remained unresolved, could interfere with possible 
MAGA involvement in any overarching USG initiative to address the 
well publicized food security challenges in Guatemala.  Guatemala's 
food security situation was a topic of conversation in Washington 
and the FFPr funding issue needed to be resolved so that the 
broader food security situation could be addressed untarnished by 
the appearance that US assistance funds have been misappropriated 
by the current administration. 
 
 
 
¶15.    Minister Aldana underscored the seriousness of the food 
security situation, especially in Guatemala's "dry corridor".  He 
said that a prolonged drought had led to an overall Q114 million 
crop loss (around US$13.7 million) which was affecting many of 
Guatemala's subsistence farmers.  The Minister continued that MAGA 
had not been able to focus on helping subsistence farmers, who 
according to him, represented 95 percent of all Guatemalan farmers. 
The budget for MAGA's extension service had been reduced to almost 
nothing, the Minister confessed, but MAGA was determined to 
reassert itself in this area, via the implementation of an 
emergency plan which in addition to expanding extension services, 
would increase crop storage capacity and upgrade the technology 
available to subsistence farmers. 
 
 
 
¶16.    Ms. Sheikh voiced her support for the Minister's vision to 
help subsistence farmers and told the Minister that she and GSM 
Brewer would relay the message that the Guatemalan government was 
committed to helping its people.  GSM Brewer then thanked the 
Minister for his time and again urged him to follow up on the FFPr 
funding issue as quickly as possible.  He called MAGA USDA's 
partner and as such MAGA must be supportive and transparent.  To 
that end, he repeated, it was imperative that the FFPr funding 
issue be resolved as soon as possible. 
 
 
 
¶17.    USDA Delegation Visits TCB and FFPr Projects:  GSM Brewer 
and Ms. Sheikh were exposed to a variety of TCB and FFPr projects 
which demonstrated the effectiveness of USDA programs in supporting 
agricultural development and training Guatemalan growers and 
exporters so that two-way trade could be enhanced within the 
 
 
 
 
context of CAFTA-DR. 
 
 
 
¶18.    Visit to FINCA International Micro-Credit Program:  The 
delegation attended a briefing by PVO FINCA International on the 
impact of its microcredit program on improving living conditions of 
some of Guatemala's poorest citizens.  Since the inception of the 
FFPr program of which FINCA is a cooperating sponsor, FINCA had 
increased its portfolio from around 11,000 loans in 2006 to over 
51,000 loans in 2009.  Direct and indirect beneficiaries of this 
activity numbered over 100,000 with the average loan size a little 
bit under the equivalent of US$220. 
 
 
 
¶19.    According to FINCA's evaluation criteria, the standard of 
living of its clients had risen around 12 percent, and there was a 
60 percent drop in the number of clients who had previously 
experienced food insecurity.  Finally, 90 percent of clients 
responded that they were now able to send their children to school. 
Mr. Brewer congratulated FINCA for its efforts and opined that 
FINCA's successes should be shared with the U.S. Congress. 
 
 
 
¶20.    Visit to National Health Laboratory:  The delegation 
proceeded to the National Health Laboratory, which is responsible 
for food safety analysis of all food products registered in 
Guatemala, both locally produced and imported.  This laboratory 
benefits both MAGA and the Ministry of Health, and has received 
direct support via FFPr and TCB programs.  Delegation members met 
with the head of MAGA's Plant Protection Program (PIPPAA), which is 
responsible for certifying Guatemalan exports of fresh produce. 
PIPPAA operations, which have been strongly supported by FFPr, have 
been instrumental in increasing Guatemalan produce exports to the 
U.S., which for 2009, will exceed US$41 million.  This is close to 
95 percent increase from 2006, which was the year when CAFTA-DR was 
implemented in Guatemala. 
 
 
 
¶21.    Visits to SHARE Guatemala Operations and Cuatro Pinos 
Cooperative:  The USDA delegation rounded out its visit to 
Guatemala by acquainting itself with the operations of SHARE 
Guatemala and the Cuatro Pinos cooperative.  SHARE Guatemala 
implements food assistance programs under both USDA's Food for 
Education (FFE) and USAID's Public Law 480 Title II programs.  GSM 
Brewer and Ms. Sheikh were able to contrast the two programs, which 
illustrated the complementary activity between USDA and USAID to 
improve child nutrition and maternal health in some of Guatemala's 
poorest areas.  For FFE specifically, SHARE Guatemala had reached 
66,000 pre-primary and primary students, increasing school 
attendance and bolstering nutritional standards. 
 
 
 
¶22.    The USDA delegation finished its visit by traveling to the 
Cuatro Pinos Cooperative, which had been a beneficiary of the TCB 
program.  This cooperative, which was founded in 1979, employs over 
15,000 Guatemalans in 16 of Guatemala's 22 departments.  Cuatro 
Pinos is a major Guatemalan produce exporter with 80 percent of its 
shipments directed to the U.S.  The delegation learned that in 
addition to employment generation, Cuatro Pinos works continuously 
to support improvements within the communities which it operates. 
 
 
 
¶23.    This cable has been cleared by USDA/FAS John Brewer and 
Patricia Sheikh. 
MCFARLAND