FOOD SECURITY IN NICARAGUA: VISIT OF ALTERNATE

1. Summary: U.S. Mission Rome Alternate Permanent
Representative traveled to Nicaragua May 2-5 to review
efforts by the UN agencies to work with the host government
and other donors to address food insecurity in this low-
income, food-deficit country that has been hit by recurring
natural disasters and hampered by political and economic
instability. Field visits to eight ongoing projects
supported by the World Food Program (WFP) and/or the UN Food
and Agriculture Organization (FAO) in west and central
Nicaragua provided compelling evidence of the extent of food
insecurity and poverty problems, and of the positive impact
the UN agencies can have on rural communities, particularly
when they work together in a close and coordinated fashion.
School feeding activities were seen to provide important
benefits to vulnerable children and their communities, but
the continuity and sustainability of such activities appear
in doubt, given uncertain USG commitments. The Nicaraguan
government's apparent failure thus far to identify food
security as a national development priority is a matter of
concern. At the same time, prospects for enhanced trade
under the Central American Free Trade Agreement (CAFTA) and
development opportunities that come with Nicaragua's
recently announced eligibility for the Millennium Challenge
Account provide grounds for a measure of cautious optimism.
End summary.

BACKGROUND


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2. Alternate Permrep Willem Brakel, from U.S. Mission Rome,
visited Nicaragua from May 2 to 5, to review the field
activities of the Rome-headquartered UN agencies for food
and agriculture. Also participating in the field visits on
May 4 was Guatemala-based Regional Food for Peace (FFP)
Officer David Hull. This report seeks to highlight
noteworthy activities and to flag issues related to actual
or potential synergies among the programs of WFP, FAO, IFAD
and other UN agencies and their complementarity with USG
bilateral assistance. The assistance of the WFP and FAO
Permanent Representations, the USAID Mission and U.S.
Embassy are gratefully acknowledged. This cable may be read
in conjunction with a separate report covering field visits
in Guatemala.



3. Nicaragua is the second-poorest country in the Latin
America/Caribbean region, with approximately half of the
population living under the poverty line. Almost 80 percent
of the extremely poor live in rural areas prone to recurrent
natural disasters. Chronic malnutrition affects one out of
four children under age 5. Addressing food insecurity has
not been a government priority. In March 2004, FAO, WFP,
UNICEF and WHO/PAHO drafted a joint analysis on "Food and
Nutritional Security: a Strategic Element for the
Development of Nicaragua." The paper concludes that "in
recent years, actions undertaken by the various
organizations that promote food and nutritional security
have implicated significant levels of financing, but their
impact is scarcely perceptible, very isolated and with scant
coordination in most cases, without a national strategic
connection to integrate the different actors in this area
... resulting in the expenditure of resources without the
least or acceptable impact (productive, social and economic)
at the national level, with a few exceptions...." The FAO
and WFP reps sent a copy of the joint analysis to the
Presidency in early April, urging the government to rethink
its policies and to include food security more centrally in
the National Development Plan.

WFP OPERATIONS


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4. WFP's Country Program (CP) for Nicaragua aims to achieve


food security for more than 452,000 persons over the 2002-
2006 period, at a total budgeted WFP cost of $14 million for
basic activities and $9.4 million for supplementary
activities. The CP concentrates on the northern and south-
central regions of the country, where rural women and
children, small farmers and landless people are the most
vulnerable and disadvantaged in gaining access to resources.
The CP is being implemented through the following program
activities: (1) integrated assistance for vulnerable women
and children; (2) investment in human capital through
education in areas highly vulnerable to food insecurity; (3)
support to rural families in areas affected by drought and
floods; and (4) assistance to additional school children
(fully funded from the USDA McGovern-Dole initiative).
Also, Nicaragua benefits from the $66.8 million Protracted
Relief and Recovery Operation (PRRO) for Central America,
providing targeted food assistance in 2003-2006 for persons
affected by shocks and for the recovery of livelihoods.

FAO ACTIVITIES


--------------------------





5. FAO has four major ongoing projects under the Technical
Cooperation Program (TCP) totaling $1.06 million, related to
(1) support for artisanal fisheries on the Atlantic coast;
(2) expansion of the Special Program for Food Security
(SPFS) in the Dry Zone (Note: the Dry Zone is an area in
Nicaragua than extends northwest into Honduras, El Salvador
and Guatemala that suffers from frequently recurring
droughts); (3) emergency diversified production for small
coffee producers in Matagalpa and Jinotega Departments; and
(4) preparation for a coffee production conversion and
diversification program. There are new TCP projects under
consideration involving (1) sustainable development of small
watersheds in NE Nicaragua; (2) management of pine forests
affected by fire; (3) development of a forest inventory; and
(4) demarcation of indigenous lands in the Atlantic (RAAN)
region.



6. Four ongoing or recent activities supported by voluntary
Trust Fund contributions are: $1.66 million from Spain for
the pilot phase of the SPFS; $323,828 to support the
national agricultural and livestock census; and two smaller
projects studying remittances and the impact of HIV/AIDS,
respectively. Possible new Trust Fund projects involve (1)
technical education and agricultural information systems,
(2) live exports of spiny lobsters, and (3) technical
assistance for small/medium livestock producers, provided
through the Rural Credit Fund. Also under consideration is
a $10 million FAO/UNDP project on sustainable use of rural
land in areas susceptible to degradation. There are six
small (less that $10,000 each), community-based Telefood
projects in progress, and seven more on the drawing boards.
Finally, there are four regional TCP projects and five
regional Trust Fund projects currently ongoing.

IFAD-FUNDED PROGRAMS


--------------------------





7. IFAD has two approved projects in Nicaragua:

-- Program for the Economic Development of the Dry Region.
Loan amount: SDR 10.15 million ($14.6 million). The program
will enable poor peasants and microentrepreneurs to
participate in planning and implementation of business and
employment plans, ensuring improved access to income-
generating activities. Cooperating institution: Central
American Bank for Economic Integration.

-- Technical Assistance Fund Program for the Departments of
Len, Chinandega and Managua. Loan amount: SDR 10.2 million
($14.7 million).


The main objective is to improve the productive and
marketing capacity of rural, small- to medium-scale
producers and entrepreneurs in order to improve the income
and living conditions of their families. Specifically, the
program will ensure that the target groups have access to
sustainable technical assistance services. Cooperating
institution: International Development Association.

USG ACTIVITIES


--------------------------





8. USAID/Nicaragua is implementing a five-year P.L. 480
Title II program with a total budget of approximately $52.5
million. The program began in 2002 and will run until


2006. The program monetizes approximately 60 percent of the
commodities and directly distributes the rest through food-
for-work activities. A little more than half of the
program's budget supports agricultural activities aimed at
increasing the incomes of small-scale farmers through crop
diversification, markets linkages, and the adoption of new
agricultural technologies. The remaining funds support
maternal and child health and nutrition programs with a
focus on children below two years of age. In addition,
USAID is funding development of a Meso American Food
Security Early Warning Systems (MFEWS) aimed at
strengthening regional capacity to detect potential food
insecurity crises ahead of time by improving access to and
sharing of information.



9. USDA food commodities are directly distributed in
programs that support: (1) maternal child health for 115,000
children and 21,000 adults in hospitals, orphanages,
schools, and homes for the elderly; (2) food-for-education
to improve attendance, enrollment, nutrition and achievement
levels of pre-primary and primary level students in the
municipalities of Jinotega, Madriz, and Managua; (3) WFP's
protracted relief and recovery operation and school feeding
project. USDA monetization programs include support for:
(1) 260 primary school students and street children, grades
1 to 9; (2) improved productivity and income of small and
medium-sized farmers; and (3) improved attendance and
quality of education though the food-for-education
initiative.

SITES VISITED


--------------------------





10. We visited the following projects/activities:

(1) School Feeding, Las Banquitas Community, Department of
Matagalpa:

WFP provides food assistance to the El Nicarao school's 201
preschool and primary school children in this community of
760 inhabitants. During our visit on May 3 the student
association leaders presented a letter thanking the U.S. and
other WFP donors for food contributions "that fill us with
happiness." In their letter, the children highlighted the
positive effects of school meals on attendance and
children's health. "We hope that you as donors continue to
support us with food products, and in so doing shape the
future."

(2) WFP Vulnerable Group Activities, Las Banquitas
Community, Department of Matagalpa:

We visited a clinic where WFP provides food assistance in
the form of complementary rations to 46 pregnant or nursing
women and 77 infants. Recent data indicate that in this
community 20% of the children under the age of two are
malnourished.


(3) FAO Emergency Seeds Project, Las Banquitas Community,
Department of Matagalpa:

In 2003, WFP created a food-for-work program in cooperation
with the National Union of Coffee Growers, permitting 32
families to diversify their economic activities away from
coffee. Concurrently, FAO provided seeds, fertilizer and
tools to 65 families for cultivation of black beans, in its
first emergency activity that was specifically targeted to
address an economic crisis.

(4) FAO Emergency Seeds Project, La Fundadora, Department of
Matagalpa:

We visited additional families cultivating black beans with
FAO support in the community of La Fundadora. The farmers
explained that people in this area are not used to eating
black beans and there is not much of a market for them
locally; but they considered themselves fortunate to have
this variety since the beans were able to withstand an
unexpected rainy spell much better than the traditional red
beans. They will try again this year. The farmers'
experience suggests that farmers may need assistance for
more than one growing season in order to successfully adopt
new crops and techniques. They also may need more help in
accessing regional markets where demand for black beans is
stronger and prices are higher.

(5) Nutritional Recovery Center, Town of Matagalpa:

This center operated by a faith-based NGO in conjunction
with local medical authorities provides in-patient care to
children suffering from serious malnutrition. When we
visited, there were only 9 children receiving treatment, but
two were severely malnourished. The center's staff
explained that follow-up with the children's parents is an
important part of their work, since families' lack of
awareness of nutritional basics, together with economic
hardship, are the principal causes of their children's
malnourishment.

(6) WFP Interventions, Los Pochotillos Community, San
Francisco Libre:

This isolated community of 44 families -- mostly subsistence
farmers -- is located in the Dry Zone. Road access is
difficult in the dry season, and nearly impossible during
the rains. Burros are the preferred mode of transport. The
poverty rate is over 95%. Basic services are rudimentary.
The preschool, with an enrollment of 15 and using the
building of a local church, has a roof but is otherwise open
to the elements. Lessons at the one-room elementary school
(enrollment: 73) are given in shifts, with first and second
graders attending in the morning and third through sixth
graders in the afternoon. It is 7 km to the nearest clinic,
and 24 km to the nearest secondary school. In this
environment WFP provides food for work during critical times
of the year. There is a school feeding program to which
parents contribute their labor (preparing the meals) and
vegetables (to enrich the diet). A vulnerable group program
provides complementary food rations to pregnant and
lactating mothers and their infants.

(7) FAO Irrigation and Agriculture Demonstration Project,
Los Pochotillos Community and environs, San Francisco Libre:

We visited an FAO SPFS irrigation project that has been
operating since 2000. The project supports local farmers in
construction of small irrigation systems, provides training
in soil conservation and watershed management, and
encourages diversification of crops, to include onions,
yucca, high-yield maize and plantains.


(8) WFP/FAO Projects, La Trinidad Community, San Francisco
Libre.

WFP and FAO activities similar to those in Los Pochotillos
were also observed in the neighboring La Trinidad Community,
a settlement that
is slightly larger and somewhat less poor, but where
socioeconomic and climatic conditions are much the same.
The school feeding program could be enhanced by creation of
a vegetable garden on the premises to provide fresh produce
for inclusion in the menu -- FAO may be able to assist.

(9) IFAD: Foundation for the Technical Development of
Agriculture and Foresty of Nicaragua (FUNICA):

Due to time constraints, it was not possible to visit IFAD-
funded activities in the field. We met instead in Managua
with the General Manager and other officials of FUNICA, a
foundation created under the Technical Assistance Fund
Program (para 8). Under this program, public and private-
sector institutions jointly manage public funds to promote
demand-driven services in research and agricultural
extension. The officials outlined the lines of action of
FUNICA's Technical Assistance Fund (FAT) in promotion and
organization of producers, pre-investment studies, technical
assistance services, and local capacity building.

CONCLUSIONS


--------------------------





11. U.S. Mission Rome offers the following comments and
observations based on the visit.

-- WFP is managing a dynamic program in Nicaragua that goes
well beyond distribution of food. Food is seen to be used
as a tool for development. Activities such as school
feeding, by involving parents in preparation and transport
of food, are acting as a catalyst for community
organization.

-- Looming over Nicaragua's school feeding program are
proposed USG cuts for McGovern-Dole initiative. The
situation is worsened by the recent termination of a related
Japanese program. School meals for 400,000 schoolchildren
may have to be discontinued shortly if the shortfall is not
addressed.

-- During the visit to Nicaragua, we also learned that
Central American governments affected by the proposed cuts
in McGovern-Dole have agreed to a joint demarche in
Washington, led by the Nicaraguan Embassy.

-- Local expectations of foreign aid may be unrealistically
high after the extraordinary donor efforts following recent
disasters. In the long term the Nicaraguan government will
need to play a larger role in its national food security,
but it has not shown leadership in this area.

-- There needs to be a clear demonstration of political will
on the part of the GON to end hunger. Reported government
attempts to target food aid to municipalities for political
advantage should be investigated and brought to a halt.
Government policy in other areas, such as land tenure, is a
major factor in food insecurity.

-- Consideration should be given to allocating part of the
new resources available to Nicaragua under the Millennium
Challenge Account to addressing food security issues.

-- It is unlikely that the domestic private sector can do
much to fill the food aid resource gap; they may have some


commodities to donate, but not the cash required to pay for
transport, nor can they assure continuity of supply.

-- WFP Nicaragua is doing commendable pioneering work with
the international private sector, as host for volunteers
from the Netherlands-based freight/parcel forwarder TPG.
The volunteers are released by their employers for a 3-month
tour, implementing school feeding activities and small
projects in Matagalpa area.

-- More could be done to harness the influence and resources
of Nicaraguan expatriates. We learned that WFP is already
embarking on promising outreach to the Nicaraguan community
in the U.S. The power of such an approach was demonstrated
recently when a Miami Herald article on Nicaragua generated
$28,000 in unsolicited contributions from expatriates and
other well-wishers. Also, FAO Nicaragua, with the Ford
Foundation, is planning an interesting pilot project to
study the use of remittances for local development
activities in the municipality of El Sauce.

-- Commendably, the WFP and FAO offices cooperate closely
and effectively, both in the field (as seen at Las Banquitas
and Los Pochotillos) and in the capital (where the FAO and
WFP reps together spearheaded a dialogue with the Presidency
on the role of food security in the National Development
Plan).

-- We understand that close UN agency cooperation also
extends to UNICEF and UNDP, although strong pressure on the
UNDP office to generate new projects appears to have
contributed to a competitive -- rather than cooperative --
interagency environment in the development of project
proposals.

-- FAO is fortunate to have an energetic Resident
Representative in Managua, but this individual is hamstrung
by limited resources and a lack of technical experts. A
possible solution might be to give consideration to out-
posting FAO officers from Rome to a sub-regional office for
Central America that supports the FAO permanent
representations in Managua and other Central American
capitals.

-- We encourage increased regional cooperation and
information exchange on food security issues. This applies
both to coordination among the UN organizations and major
donors, as well as within USG agencies. A recently proposed
effort in that direction -- a Central American regional food
aid planning conference involving FFP officers, WFP reps and
other key players -- was reportedly scrapped. From our
conversations in Nicaragua, we believe that such a meeting
has merit, and should be reconsidered.

-- The HIV/AIDS epidemic is considered to be in its early
phases in Nicaragua and UNAIDS estimated in 2000 that only
4900 persons were infected; but, extrapolating from Health
Ministry statistics on AIDS-related deaths and factoring in
underreporting, the actual number may be in the 24,000-
36,000 range. The GON is currently implementing a grant
from the Global Fund; Nicaragua's implementing NGO
consortium has included the link to nutrition and food
security in its work plan and is receiving technical
assistance from the USAID-supported Food and Nutrition
Technical Assistance (FANTA) program.

-- FAO-Nicaragua has taken an important step in initiating a
Pilot Study on HIV/AIDS and Food Security in Rural
Nicaragua, with funding from the Livelihoods Diversification
and Enterprise Development program, and is preparing a
follow-on study for the North Atlantic region of the
country. Other UN agencies and bilateral donors need to


work with the GON to give HIV/AIDS greater attention.
Hall


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2004ROME02277 - Classification: UNCLASSIFIED