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New watershed management model will improve living conditions of small farmers in Capira Panama

Dec 4, 2014

The Multilateral Investment Fund (MIF), a member of the Inter-American Development Bank (IDB) Group, has recently approved a technical cooperation grant of  US$505,000 for a project with Fundacion Natura Panama that will design and incentive model for environmental services that will improve the environmental conservation of the Lake Gatun, which provides potable water to Panama’s most populated area and regulates the water level of the Panama Canal, as well as increase the income of 300 small holder farmers’ , living in the Ciri Grande and Trinidad river basins.

The project is to increase the number of hectares of land sustainably managed in the basins by introducing a Payment for Watershed Services (PWS) model that incentives small farmers to adopt sustainable farming techniques and conserve forest coverage. In-kind contributions such as training on environmental protection and post-harvest techniques for better crop quality and quantity as well as agricultural inputs such as seeds and fertilizer will be provided in exchange for small farms adopting conservation friendly production techniques.

Mono-crop and slash-and-burn practices, which are commonly used in the area, coupled with the use of non-organic fertilizers and pesticides, impoverish soil nutrients, affecting the quality and quantity of water, crop yields, and negatively impacting on the local ecosystem’s biodiversity.  Moreover, increased cattle farming have led to augmented erosion, water pollution and sediment flows into Lake Gatun. This in turn creates a vicious cycle in which unsustainable watershed management results in low quality of the agricultural product and smaller yields leading to diminishing incomes for small farmers which then looks for more land for cattle farming which in turn leads to more deforestation.

In order to address these issues the project establish a viable PWS model with a new pricing and incentive system for watershed management through consultations and participatory assessments of participating farms. It will also strengthen the capacity of the local farmers’ association (ACACPA), including technical assistance and equipment for post-harvest, branding, certification and effective commercialization techniques. A key component of the project will be the creation of a communication campaign to promote the model and increase local understanding of environmental conservation through awareness events and communication modules for schools.

The project will have an execution period of three years. The total budget is US$ 1,131,500 of which the MIF will contribute US$505,000 and Fundacion Natura together with the Panama Canal Authority (ACP) will contribute to the local counterpart of US$625,500.

About the MIF

The Multilateral Investment Fund (MIF), a member of the Inter-American Development Bank (IDB) Group, is funded by 39 donors and supports private sector-led development benefiting low-income populations and the poor - their businesses, their farms, and their households. The aim is to give them the tools to boost their incomes: access to markets and the skills to compete in those markets, access to finance, and access to basic services, including green technology. A core MIF mission is to act as a development laboratory - experimenting, pioneering, and taking risks in order to build and support successful micro and SME business models. More information at

About Fundacion Natura Panama

NATURA is a non-profit organization founded in 1991. Its mission is "the conservation of ecosystems and biodiversity, to contribute to the protection and integrated management of priority watersheds according to their environmental and economic assessment, participatory processes and funds management”. NATURA is the leading organization in watershed management in Panama. Its highest authority is the Board of Trustees, composed of representatives from governmental institutions, private sector and academia, including the National Environmental Authority (ANAM), the Panama Canal Authority (ACP), the Panamanian Association of Business Executives (APEDE), and the City of Knowledge, among others. More information at
«December 2018»