I visited twos SosteNica clients in El Sauce last week with Franklin, the departmental director for CEPRODEL in León.

Don Orlando herds dairy cattle in one of his corrals.  Thi year his cash crops are beef, milk, and sesame, and he grows corn for subsistance along with all the pasture for his cattle.

Don Orlando herds dairy cattle in one of his corrals. This year his cash crops are beef, milk, and sesame, and he grows corn for subsistence along with all the pasture for his cattle.

The first, Don Orlando, had taken a $10,000 loan out to buy cattle.  At the time that he bought the calves, the price was 27 cordoba, or roughly $1.35, a pound.  That was over a year ago.  According to the plan he initially worked out, he should have paid his load back by this August, but the price has dropped to 16 cordoba a pound, or $0.80, and he chose not to sell.  Instead, he re-worked his plan with CEPRODEL to lengthen the time frame, or plazo, of his loan.  We visited his farm to see his herd, brand some dairy cattle that he chose to designate as collateral, and see the 30 acres of sesame that he is planning to use to pay back half his loan after he harvests it in mid-November.

Don Orlando has over 400 acres, spread over two different farms that he has inherited or bought.  He is a conventional farmer who manages his land and cattle well.  He has the luxury of having enough land to rotate his cattle and crops frequently, a practice that is important for the soil fertility as well as keeping diseases and pests to a minimum.  He has almost thirty acres of pasto de corto, usually a variety sugar cane or tall grass that grows over six feet tall during the rainy winter and then is used as cattle feed in the dry summer months.  The new header image at the top of this site is a view of one of Don Orlando’s pastures and cattle.  He and his employees as use horses to herd that cattle into corrals, where there are water basins and mineral salts.  It was clear from the healthy appearance of the cattle that he is a responsible cattle farmer.

Horseback is the best way to get around these vast farms, often connected with very poorly maintained dirt roads.  Even in the drought (read: lack of mud), we nearly got the CEPRODEL truck stuck on several ruts and uneven parts of the rural roads.

Horseback is the best way to get around these vast farms, often connected with very poorly maintained dirt roads. Even in the drought (read: lack of mud), we nearly got the CEPRODEL truck stuck on several ruts and uneven parts of the rural roads.

His thirty acres of sesame were even more impressive.  In the past several years he has only dedicated five manzanas to planting a cash crop, either sesame or watermelon.  This year he chose to plant a 26 manzana section that has been cattle pasture for 20 years.  The 20 year rest out of the agricultural rotation, which is called giving a land descanso, allowed the land to absorb all the fertility from the cattle manure and natural decomposition.  This year Don Orlando says he expects the best sesame harvests he has ever had, despite the fact that other farmers complain that the drought has affected their yields.   His sesame is impressive, over six feet tall and very productive.

This is a difficult time for many farmers.  The drought, which is negatively affecting predicted yields for staple and export crops, will possibly also raise some of the market values of those crops but probably not enough to make up the difference in yields.  Many farmers in this part of Nicaragua have been relying more and more heavily on cattle, and the sudden swell in production has cut the market price by half in the past year.  This highlights one of the risks of agricultural loans, because the market price of agricultural products – cattle included – fluctuate quickly.  Because of the length of time necessary to cultivate a grain or raise cattle, loans are taken out based on market prices that may be over a year before the product will actually be sold.  It’s a gamble.  And sometimes farmers need to pay back cattle loans with a sesame harvest, which doesn’t make it clear at the end of the day whether the farmer has actually gotten ahead.  Was it worth it to Don Orlando to take out a  loan for cattle which he can’t pay back with the sale of the cattle and has to dip into his sesame income to clear?  As a responsible farmer, who clearly has a high quality product to offer, he thinks it was.  By renegotiating his loan with CEPRODEL, he has avoided needing to turn over all his collateral (double the value of his loan) and keeps his credit history intact, ensuring the possibility of future credit.  With the credit he nearly doubled the size of his herd, and while he is not sending all of the intended cattle to slaughter, he has also increased the number of his dairy cattle.  The price of milk has remained more stable than beef, and his better-than-average pasture management means that he will probably maintain good milk yields through the summer, when the price of milk goes up slightly.  So even though he will pay more in interest than originally planned by extending the length of his loan by a year, his responsible farm and credit management has at least maintained the long term growth of his farm.  For many farmers here, whether they have taken credit out in the past year or not, the slow economy and drought has made it a challenge to maintain their businesses, let alone come out ahead.

The rural credit supervisor and technical assistant for CEPRODEL, Sebastian, branding the dairy cattle for collateral. He is using acid, a safer, quicker, and more humane method of branding than using a hot iron brand.

The rural credit supervisor and technical assistant for CEPRODEL, Sebastian, branding the dairy cattle for collateral. He is using acid, a safer, quicker, and more humane method of branding than using a hot iron brand.

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