The Inter-American Development Bank’s Multilateral Investment Fund announced today the approval of a $1,050,000 financing to foster competitive development of the Tarija Central Valley through the integration of agricultural production and related service chains to promote specialty products as part of a local economic development strategy.
“The valley is home to much of the southeastern department of Tarija’s agri-food industry,” said IDB Team Leader Claudio Cortellese. “Tarija’s economy expanded between 7 and 9 percent per year in 2000-2004, chiefly due to a vigorous hydrocarbons sector. The agriculture and food sectors, which account for around 15 percent of the regional product, have not been developed enough. The hydrocarbons sector does not employ many people or create many opportunities for new enterprises.”
“The project will promote entrepreneurship and improve the competitive performance of small and medium-sized agro-industrial enterprises engaged in products such as wine and grapes, berries, ham, honey and goat cheese,” explained Cortellese. “It will consolidate the agri-food cluster as one of the region’s mainstays of development, which could strengthen the Tarija valley development potential through support to tourism and other economic activities linked to this cluster.” The project will contribute to sustainable development, creating enterprises and employment opportunities for the local population.
Grape production, the main agricultural activity in the valley, accounts for three quarters of Bolivia’s total grape production, of which 70 percent is used to make wine and the rest for domestic market grape consumption.
The distinguishing characteristic of Bolivia’s grapes and wines is that they are produced at high altitude. Vineyards and wineries are located between 1,600 and 2,800 meters above sea level. This industry sustains more than 2,000 small-scale farming families in 39 communities and more than 10,000 people are employed every crop year. Only 2 percent of Tarija’s wine production is exported.
The project will focus on creating more awareness in businesses to strengthen the agro-industrial linkage in the valley, implementing initiatives of public-private interest for competitiveness and increasing the value of agri-food exports due to improvements in quality of production processes, particularly among small-scale producers.
The Foundation for the Technological and Agricultural Development of the Valleys (FDTA-Valles) will be in charge of the project. It is a private institution that supports sustainable agricultural development through technological innovation and modernization. FDTA-Valles is an operating unit of the Bolivian Agricultural Technology System. It is governed by an assembly of 40 active member institutions representing the public and private sectors. Local counterpart financing for the project will total $1.5 million.
The Multilateral Investment Fund is an autonomous fund, administered by the IDB that provides grants, investments and loans to promote private sector growth, labor force training and small enterprise modernization in Latin America and the Caribbean.
Financing for these operations comes from MIF’s Small Enterprise Investment Fund and the Small Enterprise Development Facility.