Proposal to Redirect USAID Funding Toward a Central American "Winter Vegetable" Export Initiative Lower Fruit and Vegetable Prices for US Consumers

Objective: To re-program existing and future USAID funding from ongoing private sector and agricultural projects in Guatemala, El Salvador, and Honduras into a large-scale "Winter Vegetable" initiative. This initiative aims to increase fruit and vegetable exports from these countries to the U.S. by 100% during the October-March period, thereby decreasing U.S. supermarket prices for these products by 25%.

USAID Central America has extensive experience assisting Guatemala, El Salvador, and Honduras in producing and marketing "winter vegetables." These are high-demand crops produced during the winter months of November to March and are exported primarily to the United States. This proposal is for the establishment of a public private partnership among producers and exporters in Central America and US importers, produce wholesalers and retailers of fruits and vegetables across America.

These include:

Vegetables: Bell peppers (green, red, yellow) Tomatoes (Roma, cherry, vine) Cucumbers Zucchini Squash (butternut, acorn) Leafy greens (lettuce, spinach, kale), & Green beans

Fruits: Avocados Papayas Mangoes Pineapples & Bananas

2. Projected Quantities for 25% Price Reduction

To achieve a 25% price reduction in U.S. supermarkets, an oversupply strategy will be required. Based on USDA data, approximate current U.S. imports during the October-March period are presented in the following table. The estimated increase in production required to achieve at least a 25 percent reduction in retail grocery prices is presented in the "Targeted Increase" column.

Project Implementation Strategy

Production Plans: The program will allocate funds to expand agricultural land dedicated to export crops across the three target countries:

• Guatemala: 150,000 acres
• El Salvador: 100,000 acres
• Honduras: 150,000 acres

Production will be distributed across smallholder farms and larger commercial farms, ensuring a diversified and resilient supply chain.

Production and Export Partners: Each country will collaborate with established agricultural cooperatives, private agribusiness firms, and export companies, including:

• Guatemala: AgroAmerica, Mayacert, Cooperative Integrated Agribusiness
• El Salvador: PROESA, AGEXPORT
• Honduras: Honduran Exporters Association, Zamorano University Agribusiness Division

U.S. Importers and Retail Partners: Engagement with key U.S. supermarket chains and importers is crucial for market penetration. Potential partners include:

• Walmart
• Kroger
• Costco
• Whole Foods
• Sysco
• U.S. produce distributors (e.g., Robinson Fresh, Lipman Family Farms)

USAID Funding Reprogramming: To finance this initiative, USAID would need to redirect funds from existing private sector development and agricultural sustainability programs. A public private partnership with US and Central American entities would need to be determined. For the sake of this proposal, we are recommending a $1 billion initiative with half coming from USAID reprogrammed funds and the other $500 million coming from the private sector. The $1 billion would fund activities in the following areas:

Expected Outcomes and Economic Impact

• Increased Export Revenue: An estimated $2 billion in additional annual export revenue for Central America.
• Job Creation: More than 500,000 new agricultural jobs in the region.
• U.S. Consumer Benefits: A projected 25% price reduction for key fruits and vegetables.
• Enhanced Food Security: Diversified sources of fresh produce in the U.S.

Implementation Timeline

Phase Timeline

Planning Q2 2025 - Q4 2025

Infrastructure Q1 2026 - Q3 2026

Pilot Production Q4 2026 - Q2 2027

Full Rollout Q3 2027 - Q4 2028

Conclusion: This proposal presents a strategic opportunity to optimize USAID funding by fostering economic growth in Central America while simultaneously benefiting U.S. consumers. The "Winter Vegetable" initiative aligns with economic and diplomatic interests, offering a sustainable and mutually beneficial agricultural export program.