Agriculture is a key sector in Nicaragua. In the 1990s the government drastically reduced its intervention in agriculture, but this liberalization was not accompanied by the provision of credit or technical assistance to farmers. Few households had access to services, and most agricultural producers had no resources to invest in research or training in modern technologies. Agricultural research and extension activities lost relevance to the ongoing needs of the agricultural sector, as the links between researchers and farmers had atrophied during the previous decades. Given the still limited public resources available in the late 1990s, there was a clear need to attempt to focus research efforts sharply onto the priorities of producers, particularly small and medium sized farmers who had no capacity to finance research on their own, and to strengthen the links between agricultural training and research.
The Agricultural Technology project sought to address this problem by establishing an efficient, demand-driven agricultural technology, knowledge and innovation system. The focus of the project was mainly to provide rural households and communities with a broader access to sustainable agricultural, forestry and natural resource management services and innovations and to stimulate higher productivity. The project was the main instrument of government support to small and medium farmers and made a significant contribution to results outlined below.
Over the project period, yields of basic staples (maize, beans and rice) rose by 23 percent on average, the largest increase within the six Central American countries. Farmer incomes in surveyed representative farms increased 25-84 percent.
Highlights:
- Maize productivity increased by 37 percent, and beans productivity by 63 percent between 1999 and 2003.
- Nicaragua now meets 85 percent of internal demand for basic grains certified seed.
- By the end of the project, one third of small and medium farmers were in direct contact with extension services, and 70-90 percent of them were satisfied with the quality of services (as demonstrated by beneficiary surveys), and adopted recommended improved technologies. Over 68,000 producers benefited from project-financed services.
- In a survey of 200 farmers performed as part of project valuation, all reported at least a 60 percent productivity increase; 55 percent reported at least a 25 percent cost reduction; and 45 percent reported a 20 percent increase in sales price due to higher quality of production.
- Through competitive grant funds, over 240 new entities (NGOs, producer groups and others) got involved in agricultural research and services.
- The most important long-term effect of this project is increased food security, especially for the poorest.
- In addition, the project has strong positive environmental effects, documented in a study commissioned by FAO. In particular, the project was one of the interventions that helped substantially reduce slash-and-burn agriculture, which decreased the incidence of fire by 80 percent, and promoted natural pesticides management and use of organic fertilizers that also helped reduce production costs.
- Project design was based on IDA’s international expertise in the agriculture sector and experience in other Latin American countries (Chile, Colombia, Ecuador and Venezuela, among others). It continued an earlier Agricultural Technology and Land Management project in Nicaragua, drawing on valuable country experience.
- As the key donor, IDA was able to leverage co-financing from bilateral and multilateral donors by creating a framework of assistance that many donors could support.
- Total project cost was US$41.8 million of which IDA provided US$24.04 million, the government US$6.81 million and beneficiary communities US$1.36 million. Co-financing was provided by the International Fund for Agricultural Development (US$1.81 million) and the governments of Switzerland (US$2.31 million) and the Netherlands (US$4.56 million).
Despite recent progress, the country continues to face many of the same challenges as at the start of the project. Project achievements need to be sustained and scaled up. A Second Agricultural Technology Project (US$12 million), effective on September 15, 2006, will focus scarce IDA resources on effectively leveraging coherent external assistance for the whole rural sector. In particular, it seeks to broaden the access of rural households and communities to sustainable agricultural, forestry and natural resource management services and innovations, thereby stimulating higher agricultural productivity.
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