Financial Inclusion as a Key Driver of Growth in Sustainable Agricultural Production

Initiatives focused on sustainable projects that bring together the public and private sectors will be vital for achieving short- and long-term benefits in matters of climate, water, and the environment. That is why we are proud to be pioneers in achieving collaboration among government actors, the private sector, academia, and farmers.

At Grupo Modelo and the German Cooperation for Sustainable Development – GIZ, through their Aguas Firmes program, we mark a milestone in the history of sustainability in the Mexican countryside by reaching the collaboration Agreement with FIRA, and we set a precedent in collaboration between Governments and the Private Sector

What is FIRA and what does it aim for?

FIRA - Fideicomisos Instituidos en Relación con la Agricultura (Trust Funds for Rural Development) is an institution dedicated to supporting the development of the country's rural, agricultural, forestry, and fishery sectors through loans, guarantees, training, technical assistance, and technology transfer.

FIRA's main objective is to facilitate access to credit through financing for producers, with a single mission: "to promote and consolidate an inclusive, sustainable, and productive agri-food and rural sector"

Agreement between Grupo Modelo and FIRA

This past April 28, the Official Launch event of the Agreement between Grupo Modelo and FIRA took place in Zacatecas. This agreement is unprecedented, being the first of its kind, since it brings together the participation of government entities, the private sector, and farmers.

The event was attended by more than 70 farmers, financial intermediaries who explained the features of the loans, irrigation technology companies that were able to show farmers the benefits of drip irrigation, and the authorities involved, all in favor of sustainability.

The welcome message was given by Rafael Sánchez, Director of Operations at Grupo Modelo, who spoke about the context and relevance of the signing of the agreement and reaffirmed the commitment to sustainability and the care of water: "This agreement shows the joint commitment and that there is only one way to reach the objectives: by each of the sectors coming together, taking real responsibility, and acting and deciding to be part of the solution"

Genaro Chávez, Western Regional Director of FIRA, explained how the agreement with Grupo Modelo works and highlighted the benefits both for farmers and for the aquifers: "I want to emphasize that this project we are working on together with Grupo Modelo meets our priority objectives, and for us it is significant that we can be growing this project and that it has an impact not only on the Calera aquifer, but on the entire state"

For her part, María Atuesta, Regional Sustainability Manager at Grupo Modelo, was emphatic in speaking about the definition of the Aguas Firmes project and its five pillars focused on the preservation and availability of water in Calera. "We know that in Zacatecas there is a water availability problem, and we wanted to tackle this problem with this project that brings us here today to talk"

Regarding the signing of the Agreement, she said: "It is an innovative project, and it is the first time one of this kind has been signed between the private sector and the public sector. We are setting a milestone today, making history today, and all for the benefit of the environment and the Mexican countryside. Sustainable agriculture is what brings us to talk about modernizing irrigation, about how we can reduce the amount of water we use from the aquifer in agriculture. This is done through modernization, so that we can move from furrow irrigation to drip irrigation, where we can save up to 50% of water. Our goal is to reach 500 farmers with access to financial products, not only modernization but also subsidies, and to have nine thousand hectares under conservation agriculture and modernized irrigation"

At this event we also had the presence and participation of authorities from CONAGUA and the Ministry of Water and Environment, who shared their vision of the project.

Víctor Reyes, Director of the National Water Commission in Zacatecas, warned of the urgency of taking action to reverse the overexploitation of the Calera aquifer and highlighted the importance and good progress of the Aguas Firmes project in the care of water resources, since the results are becoming visible and tangible through CONAGUA's monitoring and measurements.

Meanwhile, the Undersecretary of Water and Environment of the Government of Zacatecas, Juan Antonio Rangel Trujillo, shared very important data on the use of and extraction from the Calera aquifer, noting that 93% of the water used in that municipality and in the neighboring municipalities is extracted from that aquifer, and that 75% of that water is used for agriculture. "That is why I believe these are precision shots. This is where we can act to truly have an impact on the rational use of water," he said.

Aguas Firmes is a project that stems from Grupo Modelo and the German Cooperation for Sustainable Development - GIZ. At the opening event of this Financing Fair, we had the participation of Carolina Alcalá, who serves as an advisor to the latter institution. Carolina spoke about the importance of integrating government, the private sector, farmers, and academia. In this regard, she said: "Aguas Firmes is a project in which different efforts come together. On the one hand, the private sector, which has a very important participation and contribution; but the government also joins in, we (GIZ) join in as well, and most importantly, the rest of the actors join in: farmers and academia. So our role is precisely for all those experiences to be shared among everyone, and for us to be able to strengthen and, above all, propose technical assistance"

She also said that the project's goal is to modernize irrigation and establish sustainable agriculture on nine thousand hectares, which is almost 40% of the agricultural land of the state of Zacatecas.

Finally, Sigfrido Chávez, Representative of Fideicomisos Instituidos con la Agricultura at FIRA, said: "The objective of this project is to promote efficiency in the extraction and use of agricultural irrigation water and to give sustainability to the Calera aquifer. The Calera aquifer is very important for the State because most of its production is based on growing vegetables with irrigation systems. The loans will be for making extraction more efficient in the pumping stage and in the irrigation stage, and amounts of up to 5.6 million pesos per borrower will be eligible"

The impact of this agreement is of the utmost importance, since these financing alternatives are intended not only to benefit five hundred farmers and the nine thousand hectares we have set as our goal, but will also be reflected in water savings and efficiency of water consumption, and in the infiltration and recovery of the Calera aquifer.

In an environment like the countryside, financial inclusion is a key driver of growth in sustainable agricultural production and a means of achieving greater financial well-being for the community at large.

"The financing system is very good, with a very low interest rate for all farmers. I think it is excellent help, and there is no reason not to get involved in this project" – Eulogio Félix Serrano / Farmer from Calera Víctor Rosales

Achievements like this make us a global benchmark in the responsible use of water. We continue working for the benefit of water, the countryside, and the community.

Tags: Sustainability, Partnerships, Water conservation