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Mexico's programme for young rural entrepreneurs

JERFT focuses on 18 to 39 year olds in areas where land is held by <em>ejidos</em> (© Secretaria de la Reforma Agraria)
JERFT focuses on 18 to 39 year olds in areas where land is held by ejidos
© Secretaria de la Reforma Agraria

"Entering its seventh year, Mexico's Programme for Young Rural Entrepreneurs and Land Fund has yielded encouraging results," says Gerardo Falcon, Co-ordinator of Planning at the Secretariat for Land Reform. Known as JERFT (Programa para Jovenes Emprendedores Rurales y Fondo de Tierra) the programme focuses on 18 to 39 year olds in areas (covering 53 per cent of Mexico's territory) where land is held by ejidos, based in 31,623 nucleos agrarios (agricultural nuclei).

An Aztec community landholding system abolished by the Spanish conquest, ejidos were reinstated after the 1917 Mexican revolution. Traditionally, ejido members could grant, inherit and bequeath cultivation rights to other ejido members but not sell the land. In 1991, the ban on land sales (even within ejidos) was scrapped as part of Mexico's preparations for membership of the North American Free Trade Area. However, few commercial sales appear to have taken place.

With an estimated indigenous population of 8 million (nearly one-third of Mexico's rural dwellers), some 750,000 of them under 39 years old, ejido lands are almost entirely situated in marginal, mountainous and other locations unsuitable for modern large-scale commercial agriculture. Poverty is endemic with an ageing population of rights holders, outmigration of youth, lack of capacity building and inequitable patterns of access to land and capital.

Targeting beneficiaries

The programme targets those areas with high rates of marginalisation located in Rural Priority Attention Zones which have been duly registered, are not involved in any land dispute and show some potential, such as a minimum local market infrastructure (water, electricity, road access to sales points).

Over 5,000 youths have set up a rural enterprise (© Secretaria de la Reforma Agraria)
Over 5,000 youths have set up a rural enterprise
© Secretaria de la Reforma Agraria

"Fully reflected in the current 2007-2012 National Development Plan, JERTF's central goals are to encourage 'social' sales or rentals of ejido holdings to ejido youth within their agricultural nuclei of residence. Financial assistance is extended by a national trust fund for ejido development (Fideicomiso Fondo Nacional de Fomento Ejidal). Between 2004 and 2010, 18,000 youths have entered JERTF and 5,072 have set up a rural enterprise, for a government outlay of US$1,474 million pesos (€89 million).

The programme's sequencing was redesigned in 2006 and 2009 reflecting lessons learned, and since 2010 has consisted of two components, rather than the previous four. The first is a 'project school', a kind of full-scale 'learning by doing' training agro-enterprise run by the 15 to 30 member Youth Committees in the agricultural nuclei.

Under the second component graduates present a business plan, which if accepted is supported by a mix of grants and loans covering land acquisition (purchase or rental), fixed assets, working capital and training in business management and marketing. While women usually outnumber men in the school phase, the reverse is so for this second phase, reflecting enduring social attitudes on gender roles in ejido areas.

Learning from experience

"On the basis of experience a significant number of other changes have been introduced," says Falcon. "First of all, flexibility as to the minimum holding size, to avoid acquisitions (and related costs), way beyond the needs of the planned enterprise."

Selection of beneficiaries is no longer based just on social needs, but also on entrepreneurial potential. Increasing attention is being paid to ensuring that a market exists for the enterprise visualised. Financial procedures have been speeded up, results have been monitored and observations of external evaluators incorporated.

Young entrepreneurs from the JERFT program attended the World Youth Conference in Leon in 2010 to talk with other young people about rural youth (© FAO México)
Young entrepreneurs from the JERFT program attended the World Youth Conference in Leon in 2010 to talk with other young people about rural youth
© FAO México

FAO's survey of enterprises created during 2007-2008 found that entrepreneurs achieved an average increase in their incomes of 21 per cent. The enterprise survival rate was 90 per cent, with 62 per cent turning a profit, 66 per cent of entrepreneurs adopting technologies proposed and 23 per cent of beneficiaries being from indigenous peoples.

FAO evaluator Luis Gomes Oliver says that FAO had advised against isolated projects in favour of clusters and advocated payment of personnel, who had assisted the drafting of enterprise proposals even though they had been rejected for financing, and linking up entrepreneurs for the transport of goods to market. FAO has emphasised the importance of case studies, market research and stronger monitoring.

Oliver also feels that overall government funding of rural areas in general focused too much on income support and not enough on capacity building, while there was very little donor support to projects with the JERFT approach. So can JERFT be successfully replicated elsewhere? "Not entirely, insofar as it is designed to meet a specifically Mexican situation," Falcon says. "However, several aspects could be adopted such as the project school, location criteria for enterprises, the importance of business plans and business tutors (providing both services and advice) and a mix of subsidies and loans."

Written by: Vanya Walker-Leigh

Date published: March 2011

 

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