A participatory impact assessment was undertaken by Root Capital to evaluate the socioeconomic effect of their investment in Guatemalan coffee cooperatives on farmers and the enterprises themselves.
Problems and Purpose
As a complement to their regular enterprise-level social and environmental assessment of farmers’ enterprises during loan underwriting, Root Capital began a process of participatory impact assessment to verify the viability of their market-based approach to development and generate actionable data for the investor and the enterprises it invests in. In Guatemala, the assessment involved a mixed-method study with four of their cooperative clients focussing on the role each enterprise played in promoting the livelihoods of its farmers. The firm’s goals were to investigate the impacts of the enterprises they invest in on small-scale farmers and their families and communities, and to determine the extent to which their financial support improves the livelihoods of their recipients.
Background History and Context
Root Capital began undertaking participatory impact assessments in 2011. Its first study looked at the impact of the organization’s investments on mango farmers in Burkina Faso. The organization has sought to learn from each iteration of the assessment process and, after two years of such undertakings, the organization settled on a ‘client-centric’ evaluation process which “ensure[s] that the data collection, analysis, and reporting process benefits the enterprise or community being researched, rather than (or in addition to) extracting information for the benefit of third parties.”
Organizing, Supporting, and Funding Entities
The participatory impact assessment was designed and carried out by Root Capital, a non-profit agricultural lender that aims to grow rural prosperity in sub-Saharan Africa, Southeast Asia, and Latin America by lending capital, delivering financial training, and strengthening market connections for small and growing agricultural businesses. Their approach consists of providing loans and financial training to rural businesses (such as farmers associations), in order to improve the lives of smallholder farmers.
The assessment was carried out in collaboration with the Multilateral Investment Fund of the Inter-American Development Bank Group and from the Committee on Sustainability Assessment.
Participant Recruitment and Selection
The four cooperatives were selected for participation in the assessment due to their reflection of the range of Root Capital’s Guatemalan coffee investment portfolio in terms of geography, ethnicity, length of relationship with the investment organization, and diversity of certifications and buyer relationships. The mixed-method study recruited the cooperative’s farmers, managers, governing boards, and technical staff. The assessment team also engaged non-members living in the same community to act as a control group. The use of control subjects allowed Root Capital to correlate difference in income, access to services, and production practices to measure the impact of the cooperative on its members’ livelihoods.
Methods and Tools
The mixed-method assessment included surveys, focus groups, and interviews with members and representatives of the cooperatives and non-members living in the same community. Surveys were delivered in Spanish and several different local languages such as K’iche, Ixil, and Mam.
What Went on: Process, Interaction, and Participation
The survey portion of the assessment asked questions regarding access to credit, training and other services, and productivity. More subjective questions looked at quality of life as well as quality of cooperative management, governance, and communication of enterprises with producers. Indicators included:
- Number of meetings attended, as a proxy for members’ participation and communication between the enterprise and its members
- Degree of comfort speaking in meetings, measured by members’ self-assessments
- Ratings of the degree to which members’ interests were reflected in enterprise-level decisions
Particular attention was dedicated to women’s participation in cooperative decision-making processes. The data collection was carried out at different levels: producer-level surveys, interviews of cooperative managers, governing boards, and technical staff; focus groups relating to agronomic practices and women’s roles in the cooperatives.
Influence, Outcomes, and Effects
The assessment has generated actionable data for the Root Capital as well as for the enterprises, who use the information as a baseline for decision-making, a snapshot of performance and member demographics, and for marketing materials. This data has enabled some of the participating cooperatives to prioritizing technical assistance to purchase equipment and loans to help them increase the quality of their products.
Analysis and Lessons Learned
Participating cooperatives reported that they found Root Capital’s in-person presentation of the assessment’s results to be valuable, allowing them to see their impacts on their members and to identify areas for improvement. Through their study, Root Capital found higher prices, credit advances, and agronomic assistance were the most frequently mentioned answers to the question of “Most Significant Change [of the Cooperative].” As a result, Root Capital produced a revised ‘Agricultural SGB Impact Framework’ with which to identify the most highly valued public goods and services provided by cooperatives (and Root Capital’s clients) to its members.
 A Client-Centric Approach: Impact Evaluation That Creates Value for Participants (Online: Root Capital, 2015), 3, https://rootcapital.org/wp-content/uploads/2018/02/2015-june_client_centric_approach_final.pdf.
 Improving Rural Livelihoods: A Study of Four Guatemalan Coffee Cooperatives (Online: Root Capital, 2014), 16-17, https://info.rootcapital.org/guatemalan-coffee-study.
 A Client-Centric Approach, 4-5.
 Improving Rural Livelihoods, 17.
 Executive Summary of Improving Rural Livelihoods: A Study of Four Guatemalan Coffee Cooperatives, 1, https://rootcapital.org/wp-content/uploads/2018/01/ClusterStudy_ExecSummary_Final_ENG.pdf.
 Improving Rural Livelihoods, 17.
 Improving Rural Livelihoods, 102.
 Improving Rural Livelihoods, 35.
 Improving Rural Livelihoods, 50.
 Improving Rural Livelihoods, 101-104.
 A Client-Centric Approach, 15.
 Executive Summary of Improving Rural Livelihoods, 4.
 Improving Rural Livelihoods, 19.
Root Capital: https://rootcapital.org/
Lead image: Root Capital, http://bit.ly/2DdsKj4
The first submission of this Participedia entry was adapted from a research project by the Institute of Development Studies, 'Linking Participation and Economic Advancement’ licensed and reproduced under Creative Commons (CC BY 3.0).
Original source: https://www.eldis.org/keyissues/mapping-participation-economic-advancement