The Benefits of Expansion of Plumpy’nut ® Production into Guatemala

A White Paper Composed for Edesia Global Nutrition Solutions

Kate Durham

Master’s of Environmental Science and Management

College of Environmental and Life Sciences

Submitted 12/11/10 Executive Summary

The objective of this project was to review the benefits of expansion of the Rhode Island company, Edesia, into the country of Guatemala to produce Plumpy’nut ® and similar ready to use therapeutic foods. Ready to use therapeutic and supplementary peanut based food products have been used with great success in various parts of the world to treat acute and chronic malnutrition in children and pregnant and lactating mothers. Many of the countries currently using these peanut based products also locally produce and source them which not only reduces hunger and malnutrition but address further socioeconomic problems as well. Locally sourcing and producing peanut based therapeutic foods in Guatemala will not only address its tremendous rate of chronic malnutrition but address its huge wealth disparity as well as improve the country’s devastating environmental outlook.

Guatemala is the prime location for Edesia to expand for several reasons. First, Guatemala has the highest rate of chronic malnutrition in Latin America. This alone warrants it as a country in dire need of humanitarian food aid. Second, Guatemala is plagued by a huge wealth disparity especially among indigenous versus ladino, or more mainstreamed Guatemalans. The indigenous are generally the rural population with knowledge of farming practices. Their local and historical farming knowledge can be employed to grow the necessary products to source Plumpy’nut ® for production in the country. Furthermore, these poor indigenous citizens often bear the burden of Guatemala’s terrible environmental conditions. Helping them to rise out of poverty, improving the socioeconomic condition of the country overall, and employing sustainable, indigenous farming practices will alleviate the environmental degradation in the country.

There are several tools available to the decision makers at Edesia to aid in the selection of production sites. Geographic information systems (GIS) and remote sensing (RS) will stand out as the preferred methods for gathering the appropriate information. These technologies will guide decisions makers on the areas best suited as well as integrate census data on those Guatemalan citizens who are most stricken by malnutrition and where they are located. It will be necessary to access GIS and RS tools and maps but several relief organization and websites provide these services free or at a reduced rate.

Introduction

Guatemala is a Central American country that is stuck in a protracted food crisis as a result of several factors. For more than two years part of the country has been affected by a severe drought and in May 2010 a violent volcanic eruption blanketing parts of the nation with ash and disrupting agricultural practices. Additionally, in that same month Guatemala was struck by hurricane Agatha that resulted in flooding, mudslides and further food security disruption. These natural disasters coupled with political instability have caused Guatemala to have the highest chronic malnutrition level in Latin America and one of the highest in the world. With properly targeted interventions, community based clinical support, and distribution and production of ready to use supplementary foods Guatemala could tremendously improve its malnutrition crisis.

Guatemala is the most populous and largest economy in Central America with a population of about 14 million people and a land area about the size of the state of Tennessee. The country is divided into 22 departments, which are then divided into municipalities and communities (Figure 1). About 1/5 of the population lives in urban Guatemala City and the country has a relatively high population growth rate of about 2.6% propelled by the high fertility rate of 3.6 children per woman. It is the least urban country of all the Central American countries with only about 39% of people living in urban regions1. The country stands out for having an exceedingly high level of poverty for per capita GDP and a

1 Marini, Alessandra, and Michele Gragnolati. Malnutrition and Poverty in Guatemala. Working paper no. 2967 huge wealth disparity. The richest 10% of citizens account for 40% or total consumption. The GDP in 2009 was $69.21 billion, number 81 in the world2.

Malnutrition

Guatemala has the highest rate of chronically undernourished children in Latin America with rural and indigenous children being most affected. Furthermore, 15% of the population is food insecure3 while 56.2% of the population remains below the poverty line and cannot afford to purchase a simple basket of food4. Overall, Guatemala has a chronic malnutrition rate of 43.4%, the highest in Latin America and one of the highest in the world5. In addition, about 50% of children under 5 are affected by chronic malnutrition and 30% of pregnant women are lacking in their nutritional needs6. According to the Guatemalan Ministry of Health, in 2009 malnutrition was the 6th leading cause of death for children and directly related to 115 reported deaths7. The government and NGOs are attempting to stop the spread of malnutrition but their efforts seem to have little affect as it is estimated that 1.7 million people are food insecure and the government can assist a portion of these on a part time and insufficient basis8. Complicating the issue almost half the people do not have sustainable access to improved drinking water sources. This is problematic for the governmentally provided gruels and other food products that need water added to them. The spread of waterborne disease will only exacerbate malnutrition problems.

Guatemala has been in a protracted food crisis for about two years due to the effects of a drought, volcanic eruption, recent hurricane, and political and economic

2 CIA world factbook 3 FIAN International. The Right to Food In Guatemala: Final Report of the International Fact Finding Mission. 4 Marini, Alessandra, and Michele Gragnolati. Malnutrition and Poverty in Guatemala. Working paper no. 2967 5 Encuesta Nacional De Salud Materno Infantil 2008­2009. Survey. Vol. V 6 Encuesta Nacional De Salud Materno Infantil 2008­2009. Survey. Vol. V 7 Ministerio De Salud. Gobierno De Guatemala. Web. .

factors. The most affected regions are the departments hit by the drought in the ‘Dry Corridor’: Quiché, Baja Verapaz, El Progreso, Zacapa, Izabal, Jalapa, Chiquimula, Santa Rosa, and Jutiapa. The dry corridor is located in the eastern and central region of the country and is home to about 2.7 million people (Figure 1). About ¾ of the poor population of Guatemala lives here and they account for 75% of the indigenous population9. In this particular region for children less than 5 years old the global acute malnutrition rate is 11% and for women of childbearing age the rate is 13%. Most troubling, as of January 2010 77.5% of people in this region will have depleted their food reserves10.

Local Production and Environmental Improvements

As a member of the Plumpyfield network, the decisions makers of Edesia are well aware of the benefits of local production of the ready to use therapeutic foods. Local production sites already exist in Niger, Malawi, Ethiopia, Mozambique, Madagascar, Tanzania, India, and Haiti. These facilities allow for rapid reaction to nutritional emergencies, to attempt to reduce chronic malnutrition in non‐emergent times, and they support local economies11. Guatemala is a prime location for local production because it has an agricultural history as well as need for environmentally sound economic development. However, there is often a “failure to appreciate the complementary relationships between environmental quality and sustained economic development and this is especially common in Third World nations.”12 Furthermore, Guatemala has failed to realize the link between economic and ecological priorities is not just a one‐way flow of exploitable resources13 because for the last 40 years the economic growth has been in the industrial sector with little to no pollution regulation. Most Guatemalans don’t perceive the

9 Mision FAO/PMA De Evaluacion De Cosecha Y Seguridad Alimentaria En Guatemala. Tech. FAO/WFP, 2010. 10 "Guatemala Food Insecurity and Malnutrition Appeal." (2010). United Nations 11 Edesiaglobal.org 12 Hoy, pg 161 13 ibid, 161 reciprocity of ecosystem services provided by a well cared for environment. Conversely, local farmers tend to the environment and have “adapted agricultural systems…that often result in the conservation of agrobiodiversity”.14 Additionally, indigenous practices preserve natural resources as they provide a long‐term outlook on successful management. They sustain organic matter, nutrients and biomass and do not rely on the harsh chemicals of modern agriculture. 15 This form of sustainable agriculture is desperately needed for Guatemala because of the multiple environmental problems the country faces. The major environmental hurdles the nation must overcome are, “watershed deforestation and associated soil erosion and depletion, inadequate and variable water quantity and decreasing water quality, urban‐industrial pollution, pesticide misuse, and fish and wildlife habitat destruction.”16 If indigenous methods of agriculture were adapted to grow the peanuts and other ingredients to go into the therapeutic foods an example could be set for the rest of the country.

Not only are the poor most affected by malnutrition they are also most affected by environmental degradation. The poor usually live and work in the most polluted regions and have minimal access to resources alleviate the situation. By having Edesia set up a production facility in an indigenous, lower income region they would provide a critical influx to the economy. This influx may raise enough of the population out of poverty that their living situation would be lightened from the burdens of pollutions as well as malnutrition. Furthermore, once Edesia sets up and begins distribution of therapeutic and supplementary foods malnutrition rates will begin to decrease and economic production rates will therefore increase. This has been proven in the past in other countries where, “the increase in the amount of calories available…have made a significant contribution to the growth rate of the per capita income of countries.”17 The impact of nutrition on long‐term economic growth could be significant emphasizing another reason why Edesia’s role in

14 Altieri, 35 15 ibid, 41 16 Hoy, 165 17 Fogel, 652 Guatemala is so crucial. Also, children’s ability to benefit from education also depends on overcoming malnutrition since malnutrition affects cognitive functions.18 Having Edesia construct a production facility in Guatemala will only produce positive outcomes for the country.

Production Location

Guatemala is a relatively large Central American country with an area of 108,889 square kilometers, or just about the size of the state of Tennessee (Figure 1).19 It has tropical areas, lowlands, highlands, mountains and volcanoes. This makes it difficult to decide where to construct a production facility for Edesia because decision makers should take into account proximity to input crops, location to those most in need of the finished product, and ease of distribution and access to the site. In order to make an informed decision where to place a facility Edesia should integrate all of the previous considerations and possibly more. The best way to accomplish this would be through the use of geographic information systems (GIS).

Hunger and malnutrition exist in Guatemala for a variety of reasons but the main reasons are access to food, education levels, indigenous background, vulnerability to natural disasters, and quality of land. GIS is a low‐cost effective way to target a production site for Edesia that would take all of these factors into account. A similar study was done in Bangladesh to demonstrate chronic malnutrition and poverty levels. This study found that when all these factors were taken into consideration they GIS proved a powerful tool in mapping poverty and malnutrition variations and occurrences in that country.20 This is important because Edesia could do a similar study and find where the most impoverished families are as well as what sort of geographic boundaries surround them.

18 ibid 19 CIA factbook 20 Haslett, SJ and G. Jones A similar study conducted in Malaysia used remote sensing (RS) and GIS to overlay environmental degradation with cases of malnutrition. From this study the researchers were able to “develop a spatial and non‐spatial environmental health database; monitor malnutrition distribution cases; identify populations in need of assistance, help evaluate nutritional and health interventions; and provide up‐to‐ date information for decision making and raise political awareness of nutritional problems.” 21 The environmental degradation information they used is similar to the degradation issues faced in Guatemala, climate change, soil erosion, crop yields, elevation data, flooding information and soil moisture. Additionally, the researchers mapped the health clinics in the region to see if there was a correlation between clinics and number of cases of malnutrition. Finally, the study concluded that health clinics had no impact of number of cases of malnutrition but that elevation data, soil moisture and flood prone areas did. Like the previous study this is relevant to decision makers at Edesia because they could use GIS to overlay all of these factors and determine which areas will be most in need of their services to treat and prevent chronic malnutrition. It would make little sense to open and operate a facility furthest from the people who need the Plumpynut ® and similar products. GIS could also be used to map the roads and transportation routes to deliver the products across the country or expand into neighboring countries as well.

Edesia is a nonprofit organization and funding a GIS project before beginning a costly construction investment may be difficult to accomplish. Fortunately, there are several free or lower cost GIS and similar products available through several websites. GoogleEarth has been in operation since 2005 and is widely used in humanitarian aid to acquire high quality images. There are free and open source software that can be a great alternative to pricier choices like those from ESRI Inc. These include Quantum GIS, gvSIG and MapWindow. Free data for humanitarian relief is also widely available on the Internet through sites like ReliefWeb, geo4ngo,

21 Murni, SU GISDevelopment, Public Health Mapping, SRTM Data, Digital Map Archive, Alertnet and more. 22

Risks

The decision to set up a brand new facility in another country does not come without risk. There are financial and political insecurities associated with such a large, important choice. Start up and construction costs will be significant as machines, materials, labor and inputs are not inexpensive. Next, will be the political hurdle of working with the Guatemalan Government as the government has tried and failed to combat malnutrition several times and they do not necessarily have an obligation to work with Edesia. Guatemala has attempted to make strides in improving the state of nutrition of children in the country. The number of stunted children declined from 59% in 1987 to 44% in 2000 but the 2% yearly change is the slowest rate in the region23. Guatemala has been a leader in micronutrient fortification programs but too few of the programs have been successful. The government has endeavored to fortify flours, sugars and salts respectively with folic acid, vitamin A and iodine.

Approximately only 16% of Guatemalan children receive their daily caloric requirements. Because so few children receive the correct amount of calories it is nearly impossible for them to get required amounts of micronutrients. Even more startling is that 12% of children do not even achieve half of their daily caloric In 1959 Guatemala began to add iodine to salt but the program has not been a success, which is unfortunate because fortified salt is Guatemalans only source of iodine. Guatemala also became one of the first countries to fortify flour with iron, vitamin B and folic acid. Despite these efforts, anemia and micronutrient deficiencies are still rampant. About 35% of women are anemic and only 2% of children meet their daily

22 Morris, Naomi 23 Marini, Alessandra, and Michele Gragnolati. Malnutrition and Poverty in Guatemala. Working paper no. 2967 iron requirements24. It is disappointing that these statistics exist in spite of government initiatives like Vitacereal, the national supplementary food25, and Bolsa Solidaria, a national subsidized bag of food and cooking supplies. Bolsa Solidaria apportions a monthly bag with 10 pounds of rice, 10 pounds of beans, 5 pounds of corn meal, 5 pounds of Atol nutrition supplement, ½ gallon of cooking oil. This is meant to complement a familiar diet especially for kids, pregnant and lactating women26.

This highlights a risk for Edesia because the government has endeavored in the aforementioned ways and many others to alleviate the malnutrition crisis but has failed many times over. Edesia needs to recognize the ways in which the government has failed and approach the crisis in a different way. The decision makers also need to be cognizant of the government programs and attempt to collaborate and work together.

Another risk facing expansion into Guatemala is a flavor preference for the products produced by Edesia. Peanut butter is not something commonly consumed in Guatemala and there have been no taste tests done yet by the company to see if the flavor would be well received. However, a study done by UC Davis proposes that a cinnamon flavored product would be best for the Guatemalan palate.27 This is not to say that the traditional flavor won’t be accepted but it was originally designed for African families who commonly eat peanuts and groundnuts and are familiar with the flavor. It is likely that children will enjoy the Plumpy’nut ® products because they are quite sweet and Guatemalan children consume a high amount of sugar in their daily diets.

24 Marini 25 Ministerio De Salud. Gobierno De Guatemala. Web. .

26 "Consejo De Cohesion Social." Gobierno De Alvaro Colom. . .

27 Warnert, Jeannette Conclusion

The decision makers of Edesia should consider the expansion of their company into Guatemala to produce Plumpynut ® and similar ready to use therapeutic foods. Guatemala needs the economic support, relief from high rates of malnutrition and a positive influence on its environment. Having Edesia use local, sustainably farmed inputs using tradition methods while creating jobs to create its products will complete this goal. Edesia will be able to identify the ideal production site by overlaying considerations such as soil type, elevation, natural disasters, and current malnutrition rates into a GIS system to map a location. This all can be done efficiently and effectively to help the country and citizens of Guatemala lead a healthier, more productive life.

References

Altieri, Miguel A. "Linking Ecologists and Traditional Farmers in the Search for Sustainable Agriculture." Frontiers in Ecology and the Environment 2.1 (2004): 35‐42. Print

“Consejo De Cohesion Social." Gobierno De Alvaro Colom. Web. .

Encuesta Nacional De Salud Materno Infantil 2008­2009. Survey. Vol. V. Guatemala: Miniterio De Salud Publica Y Asistencia Social, 2009. Print.

Edesia. Web. .

FIAN International. The Right to Food In Guatemala: Final Report of the International Fact Finding Mission. Publication. Guatemala: Magna Terra, 2010.

Fogel, Robert W. "Health, Nutrition, and Economic Growth." Economic Development and Cultural Change 52.3 (2004): 643‐58. Print.

"Guatemala." CIA The World Factbook. CIA, 3 Aug. 2010. Web. .

"Guatemala Food Insecurity and Malnutrition Appeal." (2010). United Nations. Web. .

Haslett, SJ, and G. Jones. "Local Estimation of Poverty and Malnutrition in Bangladesh: Some Practical and Statistical Issues." Proc. of International Conference on Official Poverty Statistics: Methodology and Comparability, Phillipines, Manila

Hoy, Don R., and Francois J. Belisle. "Environmental Protection and Economic Development in Guatemala's Western Highlands." The Journal of Developing Areas 18.2 (1984): 161‐76. Print.

Marini, Alessandra, and Michele Gragnolati. Malnutrition and Poverty in Guatemala. Working paper no. 2967. World Bank Human Development/Latin America and the Caribean Region, 2003. Print.

Ministerio De Salud. Gobierno De Guatemala. Web. .

Mision FAO/PMA De Evaluacion De Cosecha Y Seguridad Alimentaria En Guatemala. Tech. FAO/WFP, 2010

Morris, Naomi. "Field Guide to Humanitarian Mapping." MapAction. Mar. 2009. Web. Nov. 2010. .

Murni, SU, HB Syahrul, and A. Aflah. A. Tech. Risk Mapping of Malnutrition Distribution Using Remote Sensing and Geoinformation System (GIS) in Tumpat, North Kelantan, Malaysia. Malaysian Center for Remote Sensing, 2005.

Warnert, Jeannette E. "UC Davis's Nutributter to Go Beyond Africa." Weblog post. University of California Food Blog. UC Davis, 18 Mar. 2010. Web. .

Figure 1. Map of Guatemala showing agricultural regions and areas of chronic malnutrition. Data provided by ESRI.