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Multi-national snack/beverage giant PepsiCo is slowly expanding a pilot program to work directly with small Mexican corn and sunflower farmers.
Some 850 farmers no longer sell their corn or sunflowers to middlemen but directly to PepsiCo, insuring the price and allowing farmers to secure credit to buy seeds and fertilizers, crop insurance and equipment.
It saves PepsiCo transportation costs and assures corns suited for its products and processes.
“That gives us great leverage because corn prices don’t fluctuate so much, but transportation costs do,” said a spokeman.
The program has also opened-up banking and financial opportunities for the farmers.
“The minute one of these farmers gains access to the financial system, he in a sense has to become legal,” said an economist. “He may have to pay taxes, which is good for Mexico, but he also develops a credit history that might later give him access to a loan he could use to send his child to college.”
