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Paraguay’s formal supply chains – fruits, vegetables, milk and organic yerba mate for export, nutrition-rich grains and beans as inputs for processed foods – have excellent potential. Yet barriers prevent many of the country’s small-scale rural producers from entering these markets. Obstacles include a lack of critical assets, limited know-how and coordination, weak infrastructure and vulnerability to climate change.

An FAO Investment Centre team helped design a USD 110 million World Bank-funded project to improve market access for small and medium size agricultural producer organizations and indigenous communities in eastern Paraguay. This included preparation of a financial and economic analysis, project costing and financing, and ex-ante greenhouse gas emissions accounting.

As the COVID-19 pandemic evolved, the design team reworked the project to also provide emergency support to help restore the livelihoods of more vulnerable farmers and indigenous populations and ensure food security and the functioning of key supply chains. The six-year project, which FAO will help implement, focuses on building the capacity of rural producers to integrate sustainably into formal and lucrative supply chains and better manage climate risks. It will also strengthen public sector institutions to create an environment conducive to improving partnerships between organized producers and firms.

The development of productive alliances in selected value chains will help link producer organizations with commercial buyers. FAO has worked closely with the World Bank and governments to carry out productive alliance projects in many countries throughout Latin America and the Caribbean. Such alliances provide rural producers with a reliable market for their goods, while giving buyers a consistent supply of products that meet certain quality and safety standards.

The project will support competitive and climate-resilient subprojects for business investments and ventures established by the producer organizations and indigenous communities. Subprojects with clear market access potential will receive matching grants – a move that will encourage producers to adopt modern technologies that can improve productivity, profitability and competitiveness.

Through targeted trainings, the project seeks to redress gaps in access to economic opportunities and credit, especially for women and women’s organizations.

Overall, more than 59 000 farms and 245 000 people stand to benefit, directly and indirectly, through better public services, improved food and nutrition security, more jobs and a more inclusive rural economy.