Access to Land Pilot (PACTA)

The PDO is to support the acquisition of land and the formation of sustainable farm enterprises by self-organized landless and land-poor peasant families. As a pilot program, the Land Access Pilot Project (PACTA) tests a public-private partnership strategy with interested private sector lending institutions for land purchase and the use of public sector funds, through the project, supporting complementary investments, and technical assistance to improve the productivity of the newly acquired properties. If successful, the Government would consider scaling up the pilot to a national fund mechanism for land purchase in several years.The concentration of the best lands among a small percentage of landholders (less than 4% of farms have more than 50% of total land) in Honduras makes it extremely difficult for family scale producers to participate effectively in the land market. Private land is available to the smallest producers, since they do not have the needed collateral and cannot bid on the larger size productive plots that more often enter the market. PACTA is therefore designed to provide an economy of scale to small rural producers who wish to purchase land for productive activities. Such transfers would be likely to result in more intensive land uses. While individuals can also be beneficiaries, the majority of the participants are expected to be groups of producers who collectively identify land for sale, develop a business plan for that land, and assume collective responsibility for investment and repayment until the loan is paid off, and they can exercise their individual rights over their own parcels.Key performance indicators:(i) Volume of lending leveraged from private financial institutions for land purchase -,,Financial institutions develop appropriate methodology to deliver credit products for land purchase by target population; and devote at least US$2.5 million to this purpose. -,,At least seventy-five percent of families identifies as eligible by the Unidades Tecnicas Locales receive private financing for land purchase. (ii) Quality of the loan portfolio -,,At least eighty-five percent of groups participating in the project are able to pay off land purchase loans and maintain viable enterprises (participant families negotiated land purchase, established legal structure, entered into credit contracts, and expanded new enterprises).(iii) Increase in income of participating families -,,At least 15% increase on family income through land productivity and output in acquired lands.(iv) Validation of a decentralized model for land access -,,Pilot evaluation leads to endorsement of expansion of program and PACTA is established as a national program operating in conformity with the tested implementation model.(v) Local social accountability and constituency building around the program -,,The functions attributed to the Consejo Directivo de PACTA have been absorbed by the Redes Regionales de Apoyo (the Regional Support Networks) to provide the constituency that would support the transformation of PACTA from a pilot project to a national program. The Regional Support Networks provide an articulation of operative local and national alliances, strengthen the project?s policies and procedures, enrich its norms and operational manual, and provide a social accountability for the use of funds.