Jorge Orozco !

1)

Bi-lateral Agribusiness Guatemala-Taiwan

Agricultural Status and Issues:

Background:
Guatemala is a Central American country, with a population of 15 million people
approximately, and one of the most diverse countries in America, culturally, linguistically
and ethnically. We have 23 indigenous ethnical groups, most of them with different
languages. Guatemala is a rural country, with most of his population in rural areas. Also
the majority of the population is Indigenous with 41%.
Also Guatemala is one of the most imbalanced countries when it comes to wealth
distribution. Most of the wealth is distributed among a small percentage of the population,
while as much as 50% of the country lives in poverty conditions, with almost no access to
education, drinkable water, affordable food, or professional opportunities. (most of them in
rural areas, and approx. 75% indigenous)
One of the most important economic sectors of Guatemala, not only for its size but for its
potential is the agricultural, food and drinks sector. Unfortunately we have only a few big
corporations controlling the market, helping the inequality of distribution of the wealth. with
most of the population, working or owning small and unproductive farms, some of them
have became a small company which can sell locally, but most of them dont have access
to export, or increase their market, so they can not become a medium or big size
company.
Factors to improve Guatemalan Economy:
As mentioned Guatemala has one of the worst poverty indexes in the world, with also one
of the worst malnourishment problems, creating a poverty cycle, mostly among rural and
indigenous populations.
One of the most important areas to improve is the economic. As when more investment,
both locally and internationally grow, the poverty will tend to be reduced, specially in Rural
areas, with less malnourished kids that can go to school and break the poverty cycle of
their families. This can be achieved with the help on the improvement on some key
areas.
Support to Small agricultural farms, to market their products and become a small or
medium company.
Consulting to run and grow this Small and medium company.
Affordable Housing.
Access to clean water, and access to a good nutrition.

Jorge Orozco !

Bi-lateral Agribusiness Guatemala-Taiwan

Current issues:
Nowadays, the Central American production system, distribution systems, commercial
strategies, infrastructure, and international cooperation, is completely fragmented, having
as a business model, the producers who can sell cheaply for international markets, having
no negotiation power, and transmitting this to the distribution systems, the sales partners,
exporters, who can give a better price for the international market, while complying with
the regulations of their local governments. This gives zero power of negotiation to third
parties.
As mentioned above, a large part of the population is employed in some part of agricultural
economics, however Agriculture contributes only to a small part of the GDP. This is related
to several factors such as lack of agricultural inputs, including the distribution of knowledge
throughout the population, the deficiency of infrastructure among the population, as basic
services, namely water, electricity, as well as the inexistent of roads, and distribution
infrastructure. However it is very important to mention, the lack of support from companies
and governmental departments, and specially the lack of interest in attacking the problem
in a deeper manner. As the problem is analyzed in depth, we can see that the
unproductiveness of our agricultural food system, is directly correlated to the unstructured
system, which allows, and facilitate the fragmentation of the agricultural land, labor, and
output; The fragmentation occurs mostly in two (2) ways, the infra-subsistence agriculture,
and the subsistence agriculture, both of which, not only make up for the majority of the
labor in the country, but also are not directly contributing into the development of the
country, nor, the sustainability of agriculture as a business model and food security for
ourselves.
Status of Agriculture nowadays:
While Guatemala is a major player in the sugar business globally, most of this is controlled
by elite families of the country, the same goes for bananas, coffee, and other traditional
crops, which are normally either controlled by a small elite group of people, or by a
multinational company. The issue with this is that normally it does not benefit directly to the
communities, and also a large part of the agricultural land is being used for this produces,
giving very few options for local consumption, relying on imports, more expensive for
locals, and a major contributor on the poverty cycle above mentioned. However everyday
more and more, companies, small communities, and subsistence to medium farmers come
together to export non traditional produces such as snowpeas, melon, broccoli, and
recently fresh fruits such as blackberries, berries, raspberries, as well as medicinal plants,
honey, and ornamentals, which is now giving the opportunity to smaller farmers to enter
the export business for the benefit of local communities. It is however this is very softly
supported besides only a couple of communities around the country, with the support of
NGOs or international cooperation, or cooperatives.

Jorge Orozco !

Bi-lateral Agribusiness Guatemala-Taiwan

Regarding subsidies and policies available for Guatemala, after an exhaustive research,
there are very few active policies benefiting the agriculture in Guatemala, surprisingly for a
country which agricultural exports accounts more of 70% of the countrys exports. There is
a decreasing policy of fertilizers, which gives subsidized fertilizers and other agricultural
inputs to small and medium farmers, but it has been dramatically being reduced every
year, from USD$355 Million to less than USD$40 Million last year. The policy is called the
National Fertilizers Programme.
The flagship policy of the ministry of agriculture is the Family Farming
Programme (PAFFEC) by its initials in Spanish, acts under all above frameworks, It aims
to create dynamic rural economies through technical assistance to farmers through the
national system of Rural Extension, the strategic territorial interventions by the
municipality, and the improvement and logistics. Currently 1.3 millions Guatemalans are
assisted by this programme.
(Other big policies are inactive at the moment of the research due to the recent political
events in Guatemala.)

2)

Identify niche for trading an agricultural produce

Where there is an incongruence there is an opportunity; fortunately as above exposed

there are several factors to improve, several no senses, that we could improve, and take
advantage into an agribusiness. Guatemala by its part is a country that counts with a
variety of altitudes, 360 microclimates, and a very capable and big labor force. Taiwan by
its part, has the opportunity of several distribution channels, one of the most convenient
countries in the world, with seven eleven, tea shops, super markets, theme restaurants,
dessert stores, and a very diverse market always evolving and changing, with a high
demand for the food industry.
The fragmentation of the Guatemalan Agriculture is one of the worse economic leak of
money, work force, but is also an opportunity. With the investment of a company that could
provide distribution channels, technical assistance, access to micro credits, access to
technology and inter-partner knowledge, compiled into a framework, could not only be a
sustainable business for the country, but also, and more importantly, a very competitive
force into the international market, not only because of the compiling of the smaller farms
into a more standardized and qualified production getting the advantage of the scale
economics, but also because of the flexibility that a multinational corporation can not have.
The fragmentation in this context and this framework could work in the favor of the fast
changing global markets, giving flexible production of different crops, fruits, honey, and
other non traditional produces demanded by the market.

Jorge Orozco !

Bi-lateral Agribusiness Guatemala-Taiwan

Maize

Distribution &
marketing Systems

Blackberry

Honey

Papaya

Technological
Resources

Watermelon

Mango

Technical & Finantial

Assistance

Regarding Taiwan, a niche market that could be focusing at the beginning is Blackberries
and honey. Currently in Taiwan there are barely a few blackberries in Taiwan, however it is
believed that this could be a high potential niche opportunity, giving the low availability, and
also the higher prices in the region.
As well, blackberry presents highly desirable health benefits, including prevention of
cancer, better digestive health, strengthened immune system, healthy functioning of
hearth, without mentioning the benefits and aids in enhancing the memory, weight
management, healthy skin, improved vision and disease-free eyes. It is also a very
valuable pregnancy food by its impressive gamut of healthful nutrients.

Jorge Orozco !

Bi-lateral Agribusiness Guatemala-Taiwan

Quoting from the Taiwan Investment and Business Guide volume 1. Other fresh fruitsnot
previously sold in significant quantities in Taiwan, such as raspberries, blackberries and
pomegranate, also have significant growth potential, both in consumer/retail and food
service channels. As there products become more widely available, they will increasingly
enter mainstream consumption and become more attractively priced for the mass
market,There is also the potential for more new niche fruits to win high value beachheads
in Taiwan as well.

3)

Design an agribusiness plan and address the vision

As mentioned before, there is a great opportunity of selling non traditional agriculture

products to Taiwan. beginning with blackberries, and shortly after including honey, not
limiting to other products according to demand, such as melon, watermelon, papaya,
raspberries, strawberries, etc.
In order to reach the goal of distributing these products in Taiwan and bring it into the
mainstream we need initially two organizations, with the majority of the investment in
Guatemala.
Production of Alimentary goods in Guatemala
Distribution B2B in Taiwan
Production in Guatemala: AGRI-CELULA, social enterprise:
The first part of the plan is the foundation of the production company, we need a name that
the people in Guatemala can relate to cooperation, and opportunity. The company is base
on the premise of defragmentation and consolidation of small and medium farms, including
subsistence agriculture. our main goal is the creation of coordinated cells of
production, with common goals, according to our distribution channels
internationally. Also we have the following goals:
Give Negotiation Power to smaller farms through our company
Meritocracy Encouragement for more productive farms.
Surplus producers through coordinated efforts
Sustainability for local farmers, assuring distribution and market channels
Human development in Rural Areas.
Create and maintain good reputation and support from local communities
Creation of coordinated cells of production, with common goals.
Our business model is bringing the smaller and subsistence farms together into common
practices and goals, facilitating knowledge, access to technology, technical assistance,
and access to micro credits; this last has been proven in small communities, such as Pea
Blanca, a small village, with a high poverty index, and no infrastructure. Small credits from

Jorge Orozco !

Bi-lateral Agribusiness Guatemala-Taiwan

USD$100 to USD$300 had made a huge difference in the production of crops, and the
quality of living of this people. A great advantage of this Business model, is not just that it
could improve the quality of living of the local communities of Guatemala, but also this is
people that are willing to work, self motivated, and very grateful for the opportunities given
to them, as this is something does not normally happen.
Through our second part of our business model, the distribution and marketing channels in
Asia, Taiwan, we could scan the demand of the products and respond in a fast and flexible
manner, changing crops, in our different cells of production, without sacrificing the
production of other crops. in other words we could selectable choose which products to
produce, and also benefit from intercropping, which could help us in the close future to
reach our goal of producing organic, due to the high demand of this products and high
value in international markets. This flexibility and good practices will give us the
competitive edge, while solving a common agricultural problem in Guatemala

Raspberry

Distribution &
marketing
Systems

Black
berry

Papaya

Melon

Technological
Resources

Honey

Mango

Technical &
Finantial
Assistance

Blackberry

Distribution &
marketing Systems

Black
berry

Honey

Blackberry

Technological
Resources

Blackberry

Blackberry

Technical &
Financial Assistance

Since our competitive advantage is focused on our PR and good reputation through our
CSR, and being a social enterprise, we would also focus on getting the necessary
certifications:

Regulatory EU 834/2007, 889/2008: In Latin America Argentina

and Costa Rica are being certified by the European Union,
however it is obtainable through private certifiers as long as is
conforming to the organic norm above mentioned, which is a
goal of our company.

Jorge Orozco !

Bi-lateral Agribusiness Guatemala-Taiwan

National Organic Program (NOP)-USDA, needs to be certified by the

USDA.

Japan regulatory JAS (Japanese Agricultural Standard) 1605 -1608,

Accredited by the MAFF, Certification for agricultural produces and
processing, needs the equivalence of the EU for its registration, this is
the most difficult to get from a Guatemalan perspective.

This certifications are sometimes costly and time consuming to get, fortunately there is an
organization in Guatemala called MAYACERT, which helps to get this certification in a
more viable manner, they also are certified to give the inspections to our cells farms, to
keep our certifications in order. We are aware of what it needs to be done and we could
take this as an advantage.
Our vision is to be a sustainable social enterprise, which could diversify the production in
Guatemala, which traditionally is monoculture, through sustainable development we want
to expand the initial company to several regions in the country, through private investment,
and create several cell system. We believe that with the success and media coverage
received with this smart and efficient business model, we could attract the attention of
investors, international cooperation, NGOs and even government. We have a clear path
for this Agribusiness, and we believe that we could serve as a good example of a
successful business model, with a non traditional approach. It is also part of our vision to
create a brand, that people could recognize, however since this is not our main goal at the
beginning, the brand will be focus in a longer term, as our business plan requires to focus
on the production and the earning of reputation, respect, reliability and sustainability, only
then we can think in creating a solid brand, with a solid base, of both knowledge and
market.
Distribution in Taiwan:
The second part of our business model is to create a distribution channel in Taiwan, all the
production and processing part in Guatemala has the goal to facilitate the marketing and
distribution of our produce in Taiwan, as above mentioned, our first arrowhead product will
be blackberry, as it is not widely available in Taiwan, and we want to bring it at a more
affordable price to once again bring it to the mainstream. We would like to have our main
distribution center and contact in Taiwan, even though it would be small, consisting of a
small warehouse in Changhua, due to a considerable lower price, but also with the

Jorge Orozco !

Bi-lateral Agribusiness Guatemala-Taiwan

necessary infrastructure for the distribution across the country. To have our own
distribution center mean for us the elimination of another player into the system, without
the intermediary the benefits would translate into the consumer and our company, instead
of a third party. It has been proven that a big part of the cost of the agricultural systems is
its distribution, we would like to avoid that cost, by having this into our business model.
Our target customers will be:
Super markets
Fruit stores
Specialized grocery stores
Universities and schools
small businesses
Also a part of the functions of this business in Taiwan would be the evaluation of the
demand and the consumer preference, as well as the requirements of the business that
we sell to. This will work synergistically with our production system to have a more efficient
production, according to the requirements of the market.
Also in the future we plan to expand into different asian markets, such as China, Japan,
Indonesia, Singapore. using the same business model.

4)

Evaluate the agribusiness plan SWOT

We present solid strengths

compared to our weakness,
our strengths could
potentially help us to fund
our project, and cover the
higher initial costs.

Strengths:

Weakness

Flexibility of production
Diversity of ecosystem
Big and capable labor
force
Social enterprise image
Solid&Sustainable
development
Free trade agreement
The most fertile soils of
the region, facilitating
organic production

High initial cost due to

both companies creation
Lack of infrastructure in
rural communities
Needs harder work as a
traditional agribusiness

Jorge Orozco !

A major concern is to earn

the thrust from local mayan
communities, it is
necessary to take some
time in this, and first have
key farmers with the right
attitude, and the clear
vision of meritocracy. It is
also an opportunity that this
local communities will be
benefited with a higher than
average payment of its
crops and access to micro
credit.

5)

Bi-lateral Agribusiness Guatemala-Taiwan

Opportunities

Threats

The first doing this

business model
Attract the attention of
organizations and media
for good practices &
project
Higher consumer
acceptance for our story

Acceptance from mayan

communities
New business model not
proven yet
Delay on certifications

Conclusion

One of the key agricultural issues of Guatemala, is that a high quantity of the population is
working on agriculture, but most of them, are working onj infra-subsistence and
subsistence farms, which not only does not produce surplus for selling locally nor
internationally, but also does not provide the necessary means for their own families.
One of the cause of this poverty cycle, is that the agriculture is very fragmented, with
miniature farms, lack of infrastructure but over all lack of opportunities for growth.
As a company, a social enterprise, we aim to help solve some of this problems, with the
defragmentation, and creation of a viable and efficient distribution channel, distributing
also the earnings in a more fair and equally manner. As a company we will provide
assistance at several levels to create a solid base, and also sustainable, of production, but
yet flexible to meet the fast paced demand of the international market, and give us a
competitive edge.
Lastly the consumers and our business partners will be benefitted with higher quality, and
lower cost produce, that also has a
back story to learn and to share, knowing
that with every bite they will be
helping the progression of the world
and the human race.