In most progressive political circles, Wal-Mart is more reviled than revered. So it can come as a shock to hear the massive American retailer has teamed up with Global Envision's parent, Mercy Corps — a humanitarian agency known for its leanness and innovative approaches to poverty — on a project that benefits small indigenous farmers in impoverished Guatemala.
Wal-Mart reputation is far from spotless. It is sued between two and five times every weekday in federal court, according to a group that tracks Wal-Mart litigation and supports lawyers for plaintiffs fighting the retail giant. It's also been cited for child-labor law violations in three states, accused of aggressively fighting employee efforts to unionize, and criticized for squeezing suppliers and threatening the health of local retail.
Among the questions the partnership raises: Is Mercy Corps being used as public relations window dressing? How do Wal-Mart's business motives align with Mercy Corps' charitable ones? And most importantly, would training farmers to be Wal-Mart suppliers eventually lead to their exploitation?
The deal between Mercy Corps and Wal-Mart also involves the U.S. Agency for International Development, which is keen to see humanitarian groups team up with U.S. corporate interests to put a dent in developing-world poverty. The so-called "Inclusive Market Alliance" is backed by financial commitments of $1.1 million from USAID, $600,000 from Wal-Mart, and $500,000 from Mercy Corps.
Here's why the agreement made sense from Mercy Corps' perspective. Rural Guatemala remains stubbornly poor. In 2000, 75 percent of Guatemala's 6.4 million poor resided in rural areas. Until now, the agency's programs in Guatemala have focused on helping indigenous groups to gain ownership of land, and to farm that land productively.
Most small Guatemalan farmers sell to market middlemen, who have earned the pejorative nickname "coyotes" — they're the ones who profit from the transactions, rather than the farmers. Farmers could earn a higher return selling high-value products to large-scale buyers, i.e. supermarkets.
Wal-Mart controls a large share of Guatemala's supermarket industry. They have an interest in finding good, reliable suppliers, and in cutting out those same coyotes that are despised by farmers. They're willing to invest money in training and equipping farmers with the knowledge and tools they need to grow quality produce that supermarket shoppers want to buy.
As part of the program, farmers participate in trainings on processing and post-harvest techniques to meet national and international agricultural standards, and critical pricing and negotiation skills.
"Due to a great variety of buyers," explains Douglas Ovalle, who manages the project for Mercy Corps, "there is no danger of Wal-Mart owning the market 100 percent. What this project helps to do is expand options for the farmers."
And those expanded options, he says, will lead to greater income for small-farm families — many of whom lack even electricity and running water.
To many Americans, Wal-Mart is a wanna-be monopolist. To Mercy Corps and the struggling Guatemalan farmers it's trying to help, Ovalle says, Wal-Mart is "just another buyer."