Guatemala

The Odd Couple

In most progressive political circles, Wal-Mart is more reviled than revered. So it can come as a shock to hear the massive American retailer has teamed up with Global Envision's parent, Mercy Corps — a humanitarian agency known for its leanness and innovative approaches to poverty — on a project that benefits small indigenous farmers in impoverished Guatemala.

Wal-Mart reputation is far from spotless. It is sued between two and five times every weekday in federal court, according to a group that tracks Wal-Mart litigation and supports lawyers for plaintiffs fighting the retail giant. It's also been cited for child-labor law violations in three states, accused of aggressively fighting employee efforts to unionize, and criticized for squeezing suppliers and threatening the health of local retail.

Among the questions the partnership raises: Is Mercy Corps being used as public relations window dressing? How do Wal-Mart's business motives align with Mercy Corps' charitable ones? And most importantly, would training farmers to be Wal-Mart suppliers eventually lead to their exploitation?

The deal between Mercy Corps and Wal-Mart also involves the U.S. Agency for International Development, which is keen to see humanitarian groups team up with U.S. corporate interests to put a dent in developing-world poverty. The so-called "Inclusive Market Alliance" is backed by financial commitments of $1.1 million from USAID, $600,000 from Wal-Mart, and $500,000 from Mercy Corps.

Here's why the agreement made sense from Mercy Corps' perspective. Rural Guatemala remains stubbornly poor. In 2000, 75 percent of Guatemala's 6.4 million poor resided in rural areas. Until now, the agency's programs in Guatemala have focused on helping indigenous groups to gain ownership of land, and to farm that land productively.

Most small Guatemalan farmers sell to market middlemen, who have earned the pejorative nickname "coyotes" — they're the ones who profit from the transactions, rather than the farmers. Farmers could earn a higher return selling high-value products to large-scale buyers, i.e. supermarkets.

Wal-Mart controls a large share of Guatemala's supermarket industry. They have an interest in finding good, reliable suppliers, and in cutting out those same coyotes that are despised by farmers. They're willing to invest money in training and equipping farmers with the knowledge and tools they need to grow quality produce that supermarket shoppers want to buy.

As part of the program, farmers participate in trainings on processing and post-harvest techniques to meet national and international agricultural standards, and critical pricing and negotiation skills.

"Due to a great variety of buyers," explains Douglas Ovalle, who manages the project for Mercy Corps, "there is no danger of Wal-Mart owning the market 100 percent. What this project helps to do is expand options for the farmers."

And those expanded options, he says, will lead to greater income for small-farm families — many of whom lack even electricity and running water.

To many Americans, Wal-Mart is a wanna-be monopolist. To Mercy Corps and the struggling Guatemalan farmers it's trying to help, Ovalle says, Wal-Mart is "just another buyer."

Children who Work

A young girl working in Guatemala. Photo: <a href="http://flickr.com/photos/noesunjoc/300356800/">noesnjoc (flickr)</a>
A young girl working in Guatemala. Photo: noesnjoc (flickr)

According to Unicef estimates, one in six children (158 million) aged 5-14 are engaged in child labor. These kids aren't working at the local shopping center. Rather, they sell goods on the street, clean houses, or work in small factories and stay away from the watchful eye of local law enforcement or inspectors.

Despite being considered exploitative by many organizations and countries, child labor is still common and occurs in countries like India and Guatemala, as well as the United States and the U.K.

The problem of child labor is complex and stems from adult poverty. For many poor families, working children contribute much needed income that prevents their family from falling deeper into poverty. Product boycotts and factory raids over child labor can sometimes prove more harmful as children turn to more dangerous jobs like mining and prostitution to earn money.

Slate Magazine's Today in Pictures captures images of working children dating back to 1942. What's most striking to me is how young and tiny some of the children are in the photos. I'm used to seeing adults performing the jobs that these small children are doing.

From the Archives

A Second Look at Microfinance

Topics: Economic Development, Microfinance
Countries: Guatemala, Uganda
Previously filed under: South America, Microfinance
A study by the Cato Institute's Center for Global Liberty and Prosperity questions the effectiveness of microcredit in the developing world.

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