The Productive Development Project (PDP) was one of three large-scale projects financed under the 2006 compact between the Millennium Challenge Corporation (MCC) and the Government of El Salvador. The main objective of the PDP was to assist in the development of profitable and sustainable business ventures for poor individuals in El Salvador's Northern Zone. Between 2008 and 2012, the PDP used nearly $72 million in allocated funds to serve over 13,500 participants and create more than 11,000 full-time equivalent jobs. The PDP comprised three activities: Production and Business Services (PBS), Investment Support, and Financial Services. The PBS Activity -- the subject of this impact evaluation and the largest of the three activities -- provided technical and material assistance to farmers and small-scale producers to support the Northern Zone's dairy, fruit, horticulture, handicrafts, tourism, forestry, and coffee sectors.
The design for the impact evaluation of the PBS Activity is a randomized rollout design, in which some producers were offered PBS assistance several months before other producers were offered similar assistance. The goal of this design is to attain the highest level of rigor possible without significantly altering existing implementation plans. The evaluation is limited to three value chains: (1) handicrafts, (2) dairy, and (3) horticulture. Among all value chains in the PBS, these three chains were most amenable to random assignment, and were expected to yield impacts in the one-year interim timeline specified for the evaluation.
Treatment groups were offered PBS assistance in the first implementation phase (beginning in late 2009 for handicrafts and mid-2010 in the case of the dairy and horticulture chains) and control groups in the dairy and horticulture chains were offered PBS assistance roughly one year after the treatment group. As over 15,000 individuals had participated in the PBS Activity by August 2012, this evaluation sample of 1,736 individuals (518, 593, and 625 in the dairy, horticulture, and handicrafts chains, respectively) includes only 11 percent of the individuals served under the activity.
Units of Analysis
Producer level and household level data were collected. The evaluation measured the impact of PBS assistance on employment creation and producers' investment and income, on household income, and intermediate outcomes, such as production levels, business practice adoption, technology adoption, and product diversification.
Income was tracked at the producer and household levels because income at the producer level provides the most direct measure of the economic impact of PBS assistance, whereas income at the household level provides a measure of the ultimate effect of assistance on the well-being of producers' households.
Kind of Data
Sample survey data [ssd]
The PBS Activity targeted poor farmers, organizations, and micro-, small, and medium enterprises that benefit poor inhabitants of the Northern Zone. Therefore, the sample covered only geographic regions in El Salvador's Northern Zone, including Cabanas, Chalatenango, Custcatlan, Morazan, San Miguel, Santa Ana, and La Union.
Agriculture & Rural Development
Producers and Sponsors
Mathematica Policy Research, Inc.
Millennium Challenge Corporation
Metadata Produced By
Millennium Challenge Corporation
Documentation of the Study
Version 1.1 (January 2014). This version uses the new MCC metadata template.
Metadata ID Number
MCC Compact and Program
Compact or Threshold
El Salvador Compact
The main objective of the Productive Development Project (PDP) was to assist in the development of profitable and sustainable business ventures for poor individuals in El Salvador's Northern Zone. Over approximately four years, the PDP used nearly $72 million in allocated funds to provide over 13,500 participants with technical and material assistance and create more than 11,000 full-time equivalent jobs. The PDP comprised three activities: Production and Business Services (PBS), Investment Support, and Financial Services. The PBS Activity offered training and technical assistance, in-kind donations, and other business development services to small farmers and business owners. The Investment Support Activity offered investment capital (in the form of long-term loans of over $50,000) for viable business proposals. Lastly, the Financial Services Activity supported two loan guarantee programs targeting micro-, small, and medium enterprises, as well as a small technical assistance program to financial institutions. This evaluation investigates the impact of FOMILENIO's offer of PBS assistance on employment creation, household income, and other factors.
Agriculture and Irrigation (Ag & Irr)
PBS service providers offer technical assistance and in-kind donations to farmers and artisans. In addition, small-scale producers receive training through use of demonstration plots (in the case of the horticulture and dairy chains), which allow for observation and hands-on exposure to new crops, production technologies, and irrigation techniques. A portion of PBS participants also have access to investment capital through Activity 2 of the PDP (Investment Support), as well as small loans through Activity 3 of the PDP (Financial Services). This capital can help producers transition to high-value crops and finance new production technologies such as greenhouses and irrigation systems. As a result of training and assistance, farmers develop stronger business and technical skills. With these new skills as well as donated inputs and increased investments, farmers generate increased and more diversified production. In addition, enterprises supported by FOMILENIO provide participating farmers with cheaper inputs and pay farmers a higher price for their production. This leads to increased sales, income, and profits. As defined in the compact, PBS participants were expected to increase their annual income by 15 percent, on average, as a result of assistance.
Over 15,000 individuals had participated in the PBS Activity by August 2012 and the evaluation sample of 1,736 individuals (518, 593, and 625 in the dairy, horticulture, and handicrafts chains, respectively) includes only 11 percent of the individuals served under the activity.