ANALYSIS OF FUNDACIÓN PARAGUAYA’S FINANCIALLY SELF-SUFFICIENT AGRICULTURAL HIGH SCHOOL

DOCUMENTING A MODEL OF A FINANCIALLY

SELF-SUSTAINING SCHOOL AND THE OPPORTUNITIES AND

CHALLENGES FOR REPLICATION

Paraguay

February 9, 2008

This study was prepared by Andrew Baird and Whitney Harrelson of Making Cents International for the Inter-American Development Bank. Any errors or omissions are

solely the responsibility of the authors.

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Table of Acronyms

BTA Bachillerato Tecnico Agropecario

CCF The Christian Childrens’ Fund

CGAP The Consultative Group to Assist the Poor

DAP Desarrollo Agricola de Paraguay

FMSD Fundación Mario Santo Domingo

FPS Fundación Paraguaya School

FROSEP Fundación Redentorista de Obras Sociales y Educacionales de Pilar

IDB Inter-American Development Bank

MAG Ministry of Agriculture and Livestock

MEC Ministries of Education and Culture

OM Opportunities for the Majority

PBS The Public Broadcasts Service

SENACSA Sevicio Nacional de Calidad y Salud Animal

SIAB School in a Box

TAM2F Teach a Man to Fish

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Table of Contents

1. Introduction ..................................................................................................................... 5 2. Background on Fundación Paraguaya ............................................................................ 5 3. Description of School’s Model ....................................................................................... 7

3.1 Student Selection and Admissions ............................................................................ 8 3.2 School Management, Administrators and Teachers ................................................. 9 3.3 Programmatic/Academic Approach ........................................................................ 12

3.3.1 Technical training ............................................................................................ 13 3.3.2 Entrepreneurship and business training ........................................................... 14

3.4 Community Connections ........................................................................................ 17 3.5 Financial Sustainability ........................................................................................... 17

3.5.1 Income streams ................................................................................................ 18 3.5.2 Importance of an “Anchor” industry ................................................................ 19 3.5.3 Costs ................................................................................................................. 20 3.5.4 Balancing the goal of self sufficiency with academic objectives .................... 20 3.5.5 Market Linkages .............................................................................................. 21 3.5.6 Accounting Systems ......................................................................................... 22

4. Graduates ...................................................................................................................... 23 5. Key Conditions Needed for Replication of Model ....................................................... 28 6. Building Blocks and Next Steps Needed to Successfully Replicate Model and Increase Impact ............................................................................................................................... 31

6.1 Assessment of “School in a Box” for School Administration ................................ 31 6.2 Recommendations for “School in a Box” for Curriculum ...................................... 32 6.3 Teacher Training ..................................................................................................... 33 6.4 Network of Schools and Technical Assistance ....................................................... 34 6.5 Creation of Specific Educational and Administrative Tools .................................. 34 6.6 Communications Strategy ....................................................................................... 35 6.7 Financing the Model’s Start-Up Costs .................................................................... 36

7. Identification of Opportunities for Replication of Model in Latin America ................ 36 7.1 Escuela Agricola San Isidro Labrador de Pilar, Paraguay ...................................... 37 7.2 Cafetalera La Bastilla, Nicaragua ........................................................................... 38 7.3 Other Organizations Interested in Model in Latin America ................................... 40

8. Linkage of FPS Model to IDB ...................................................................................... 41 8.1 Self-Sustainable Agricultural High School as an OM Business Model ................. 42 8.2 Meeting the OM Criteria to Obtain IDB Support ................................................... 43 8.3 Connection to Other IDB Operations ..................................................................... 47 8.4 Exploration of Possible IDB Support for FPS Model ............................................. 48

9. Conclusions ................................................................................................................... 50

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Case Analysis: Fundación Paraguaya’s Self-Sufficient Agricultural High School and the School’s Potential for Replicability

1. Introduction The Fundación Paraguaya, a non-profit social enterprise founded in 1985, has developed an innovative financially self-sufficient agricultural high school that equips students from low-income rural families with the skills, knowledge and attitudes to become rural entrepreneurs. Having just completed its fifth year of operation with Fundación Paraguaya, the school provides a high-quality education that has enabled 100 percent of its graduates to create self employment opportunities, become employed in the agricultural sector, teach at other agricultural schools, or continue their educations at the university level. In addition, as of fiscal year 2007, the school attained its goal of becoming financially self-sufficient. The Inter-American Development Bank (IDB) contracted Making Cents International to: • document the model and the experience of creating a financially self-sufficient

agricultural high school; • identify key factors for the success with the object of replication; • review the “School in a Box” series that describes the administrative functions of the

school with a view to replication; • assess the potential of the model as a vehicle for expanding economic opportunities

for the majority; and • identify opportunities for replication in other schools and countries throughout Latin

America. The consultant team traveled to Paraguay from December 3 through December 14, 2007, meeting with senior staff at Fundación Paraguaya; the San Francisco School’s staff, teachers, students, board members, and alumni; current and potential employers of the school’s students; government representatives; and IDB staff. The following report documents the findings of the team.

2. Background on Fundación Paraguaya Fundación Paraguaya develops innovative, integrated, and self-sufficient programs that aim to reduce poverty and unemployment. It is based in Paraguay and has global reach through its networks and dissemination strategies. Founded in 1985, the Fundación created Paraguay’s first microcredit institution so as to increase the access of low-income microentrepreneurs to finance and business opportunities. Fundación Paraguaya’s microfinance operation has become one of the Fundación’s many programs. According to Fundación Paraguaya, its 18 branches in 10 departments have helped create 30,000 new jobs through their lending of over US$97.6 million and by providing technical

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assistance to 47,000 microentrepreneurs. It currently manages a portfolio of 24,000 clients and US$9.5 million. The Fundación is a founding member of the ACCION International network in Latin America, and complies voluntarily with all the regulations that the Central Bank of Paraguay imposes on microfinance institutions. However, it has remained a non-profit institution and does not accept deposits. (Kehler 2008) Fundación Paraguaya has received international awards and recognition for its social innovation (e.g. IDB Award for Excellence in Social Entrepreneurship – 2004; Schwab Foundation – 2004; Skoll Foundation – 2005); its high-performing microfinance program (e.g. IDB League of Champions – 2004, 2005, 2007); and its financial transparency (CGAP – 2004, 2005, 2006; MarketMix – 5-star rating). In 1995, Fundación launched Paraguay’s first entrepreneurship, technical and financial education program for young people. It is based on Junior Achievement’s model and offers courses to promote financial literacy and entrepreneurship skills to children and youth in grades 1-12, as well as simulations, mobile and rural trainings on information and communication technology, incubators for youth businesses and entrepreneurs, special events, and access to finance. To date, more than 91,000 young people from 50 towns have participated in this program, and more than 5,000 members of Paraguay’s private sector have served as volunteers. Also, 30,600 young entrepreneurs comprise Fundación Paraguaya’s portfolio of borrowers, and have repaid their loans at a rate of 96 percent. (Burt bio 2007) In 2002, the Congregation of the La Salle Brothers approached the Fundación to discuss the financial strains the agricultural school it managed with the Congregation of San Francisco Missionary Brothers was enduring and because it felt its school needed a more entrepreneurial focus. The La Salle Brothers became aware of Fundación Paraguaya because the Fundación taught Junior Achievement courses in some of the La Salle Brothers’ schools. They thought that by integrating some Junior Achievement programs, the school could be more effective at preparing students to overcome poverty. Since 1980, the La Salle Brothers had been offering low-income students from around the country a Catholic high school education at this agricultural boarding school, which is located 46 kms. from Asuncion in Cerrito, Paraguay. Cerrito is in the Department of Presidente Hayes in Paraguay’s Chaco region. The Brothers concluded they could not continue to operate their agricultural school in Cerrito because the government had cut back its subsidies to the school and they could not cover the school’s sizable deficit without jeopardizing other educational programs. The Congregation of the La Salle Brothers offered to transfer the agricultural school to Fundación Paraguaya in the hope that the Fundación would be able to rescue the school from bankruptcy and continue the mission of educating the children of Paraguay’s poor farmers. (Kehler 2008)

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3. Description of School’s Model Fundación Paraguaya saw an opportunity not just to educate the rural poor, but to transform them into rural entrepreneurs who would have the entrepreneurial and technical capacity to lift themselves and their families out of poverty, while simultaneously ensuring the sustainability of the school. They also saw the school as fertile ground to test their theory as to why rural poverty has persisted in Paraguay. Fundación Paraguaya believes that the main causes of rural poverty in Paraguay are related to farmers lacking an understanding of how to live off the land via farming; entrepreneurial skills; access to finance; knowledge on how to use available natural resources; and experience working in groups (e.g. cooperatives) so they can take better advantage of economies of scale1. (San Francisco 2005) While the Fundación had found most small-scale farmers to be skilled in production, they often saw them not earning any money because they did not have business or entrepreneurial skills. Fundación Paraguaya agreed to take over the school and purchased 14 of the campus’s 62 hectares while the Congregation donated the rest along with the school’s buildings, active telephone lines, and artesian wells. At that point, the school effectively became Fundación Paraguaya’s third program, which contributes to the Fundación’s synergistic model by adding value to the microfinance and youth entrepreneurship programs while maintaining a separate budget and finances. The San Francisco Agricultural High School under Fundación Paraguaya’s management has the mission of being a financially self-sufficient high school that promotes the entrepreneurial spirit among poor rural youth. The Fundación also committed to the Congregation of La Salle Brothers when it took over the school that it would do the following:

1. Continue providing a technical education to young, rural farmers on agriculture and livestock;

2. Introduce academic and administrative reforms into the school; 3. Invest resources to bring the school out of bankruptcy and build new

infrastructure; 4. Maintain the boarding school system; 5. Open credit lines for graduates and facilitate their access to credit for production; 6. Develop mechanisms for graduates to apply what they learned at the school in

their communities of origin; and 7. Provide technical assistance to graduates.

1 The Fundación also recognizes other factors that contribute to rural poverty, which include: land reform, traditional charity and aid, equipment and subsidies that have not worked; strategies that have not effectively addressed the problem of farmer inefficiency; and the fact rural schools often teach courses that are disconnected to students’ realities.

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In order to achieve these objectives, Fundación Paraguaya has taken a multifaceted approach centered on the belief that self-sufficient farmers need to be trained at self-sufficient farm schools. The approach combines traditional high school subjects with entrepreneurship training and hands-on learning via school-based agricultural enterprises in a way that develops a mindset of entrepreneurship, independence, and self-sufficiency. Fundación Paraguaya’s experience with its microfinance program, as well as its entrepreneurship education program, informed the creation of this learning program. It aims to ensure that students graduate ready to succeed as rural entrepreneurs, obtain mid-level jobs in modern agriculture, teach at other agricultural schools, or attend university. It also intends to enable youth to lift themselves out of poverty, create new jobs, and contribute to their communities’ economic development with a new entrepreneurial mindset.

3.1 Student Selection and Admissions True to its mission, students at Fundación Paraguaya’s self-sufficient agricultural school (FPS) are recruited from across the country, from even the remotest rural areas. Fundación Paraguaya has effectively used its microfinance offices to publicize and promote the school in their neighboring communities. The first two classes (2003 and 2004) were comprised primarily of students recruited through these MFIs; however, recent classes have learned about the school through a variety of sources such as, neighbors, extended family members, siblings and government officials. Historically an all-boys school, the FPS began to admit girls in 2006. The class of 2008 will the first to include female graduates. Currently the school has 123 students, 17 of whom are girls. Students apply to the school by submitting a written application and proof of having passed the 9th grade. They are selected largely based on their meeting the following criteria:

• A demonstrated interest in the agricultural or

agribusiness sector; • Completion of the ninth grade or equivalent; • Hard work ethic and positive attitude. In addition, the typical profile of students that are selected to attend the school include the following characteristics: • Come from large families with few resources; • Come from rural communities that usually have one

economic activity; • Have sufficient family land holdings to which they

can return to put into practice what they learned at the school;

• Have low levels of academic understanding due to

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the combination of family work responsibilities, poor quality of local schools, and the distance they live from schools. (Annual 2006)

Applicants meeting these criteria are then invited to the school to interview with the school staff, take an admissions test, and participate in a two-week evaluation/orientation program. The interview is an informal interview that includes the student’s parents. The test evaluates the student’s level of understanding in areas such as Math, Language Arts, Sciences and Social Studies. Finally, the two-week evaluation is a time for both parties to assess each other and see whether there is a good fit. Applicants live at the school during this period and are given basic orientation. They also are expected to work with current students as they attend to their various agricultural enterprises. This may include working in the bio-intensive, organic garden, helping to care for the dairy herd and other animals, taking school produce to the roadside store, and assisting in the on-campus rural hotel. In addition, applicants participate in other activities typically undertaken by students such as, classroom work, up-keep of dormitory rooms, cleaning common areas and recreational activities. Applicants are thus afforded a taste of what they will be required to do throughout their three-year education at the school. Staff of the school then assesses each applicant by reviewing his or her application, admissions test scores, and recommendations, as well as input from school staff and current students at the school. Students also evaluate applicants. These student evaluations are seen as an important component of the evaluation process, as those who will be admitted will be working closely with the current students on the various agricultural enterprises. In short, students want to be sure their peers have the necessary work ethic so that they will share in the work load as required. If students are accepted, they pay G.100,000 annually, which is the equivalent of about US$21, and their parents pay G. 80,000 (or US$17) monthly to cover the costs of their food, boarding, and school supplies2. Students can elect to pay half of this month fee by performing chores on weekends. The students must also be able to bring their own basic farming implements, including a hoe, shovel and machete. However, no students are turned away simply for lack of funds. (Cateura 2007)

3.2 School Management, Administrators and Teachers The San Francisco school has a relatively lean staff comprised of the following positions: The school’s Director, who has experience in academics and business, oversees the Production Chief, Academic Director, and Finance and Administration Staff. The current Director worked for Fundación Paraguaya’s microfinance program for over 10 years 2 The average annual cost to attend a government-funded public school in Paraguay is G. 50,000, which is the equivalent of US$11. Parents associations also usually pay about G. 30,000 – G. 100,000 (US$6 – US$21) per month to schools their children attend in addition to the G. 50,000 to help the schools cover basic needs that are not being met by decreasing government subsidies.

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before he transitioned to be the school’s Director. His responsibilities largely consist of ensuring the school reaches and maintains financial self-sufficiency, while also achieving its academic mission. More specifically, he is in charge of sales (e.g. ensuring production responds to market demand and is sold); overseeing the school staff and students providing technical assistance to organizations, other schools, and entrepreneurs; ensuring graduates obtain employment or engage in other income generating activities; and supervising the school’s financial results. He also develops and maintains the school’s partnerships with the local community, members of the private sector, and representatives of all levels of government. The Production Chief has experience in academics and farming that enables him to lead the school’s production staff in their efforts to teach students rural production while raising income for the school through the school’s enterprises he oversees. The Academic Director has experience teaching and is knowledgeable about the Junior Achievement and entrepreneurship curriculum. She plans, supervises, and evaluates the school’s curriculum; coordinates learning; and ensures there is a strong connection between classroom-based learning and the production-based learning. She also helps develop the teachers’ capacities to teach courses the country’s formal education system requires as well as courses and production activities related to entrepreneurship. Finally, the Finance and Administration Staff keep track of the costs and the income the school generates to ensure the school is on track to achieve and maintain financial self-sufficiency. Most of the management and administration staff at the San Francisco Agricultural High School are new to the school, brought in by the Fundación. (“How To” 2007) The teachers who currently work at the school are from the school the La Salle Brothers managed, which created one of the first challenges Fundación Paraguaya had to overcome. As these teachers are products of Paraguay’s traditional formal education system, they had not been exposed to entrepreneurship training, experiential teaching styles, or a teaching schedule that connects classroom-based learning with technical production. Fundación Paraguaya subsequently had to go to significant lengths to build the teachers’ capacities to teach in a way the Fundación

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knew would enhance the students’ understanding of the material and also gain their “buy in” to the process. It often was not an easy feat to change the mentality of the teachers so they would think entrepreneurially and have the “entrepreneurial spirit” they must cultivate in their students. Additionally, it was difficult at times to get the teachers on board for the increased amount of work and effort they would have to generate in order to make this financially self-sufficient model work. (Acosta 2007). Fundación Paraguaya had to turn the traditional perception of how schools function on its head. For example, a common understanding is that teachers are to teach as best they can, students are to learn as best they can, and school administrators are just required to pay teachers, usually irrespective of their performance. Under the Fundación’s self-sufficient school model, the teachers have a direct impact on the financial health of the school. They are therefore held more responsible for the learning of their students because if the students are not learning the business and production concepts properly, their school-based enterprises will fail, and if their school-based enterprises fail, the school will not generate the funds necessary to become or stay financially self-sufficient - and the model collapses. (“How To Educate” 2007) Also, students are required to implement their learning through the school-based enterprises. How they do so will reflect on how well the teachers taught them, as well as on their own efforts. If the students do not make the effort to learn and implement their knowledge properly, the school-based enterprises will fail, and the school will not generate the funds necessary to become or stay financially self-sufficient - and the model collapses. Therefore, tremendous responsibility for the future of the school and its students rests with the teachers, and the teachers’ own financial stability relies on their effectiveness. Needless to say, a few teachers left after the initial few months of the model’s implementation as some were not willing to put in the extra effort, while others were not comfortable with the new teaching methodologies. Others were asked to leave because they did not show up for the required number of meetings per month, a tactic aimed to build coordination as well as a feeling of ownership in the school. To keep the teachers who were interested in being part of the FPS model and who demonstrated willingness to implement it, Fundación Paraguaya created various team-building and incentive programs targeting the teachers. The administrators also organized team-building activities for the teachers to get them on the same page as the school’s philosophy, and to change some entitlement and dependency mindsets they exhibited. The teachers also have received non-pay incentives such as opportunities to participate in international forums and provide consulting services to other schools. In January 2008, faculty and staff received a bonus of an additional month’s salary, following the school’s achieving a small surplus at the end of FY2007. The 10 technical and academic area teachers who remain appear dedicated to the model, especially as they have seen the

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impact it has had on the students3. They have also adopted more entrepreneurial mindsets, a change critical to the success of the school. As the school’s budget is decentralized, the teachers contribute to the writing of it and see the impact of their work on the school’s financial position. They are becoming increasingly conscious of decisions they make to ensure the budget is in line with the school’s objectives. For example, the teachers were the ones who decided to do away with the tractors the original school had, since the tractors’ depreciation values and maintenance costs were very high. They realized they could rent tractors when necessary and do much of the work by hand. As one school administrator said, “Everyone turns out the light.” For teacher profiles, see Annex B.

3.3 Programmatic/Academic Approach Through its unique combination of academic education and technical training, FPS’s accredited program is designed to develop and support “rural entrepreneurs4”. Students are prepared to achieve success in a range of agricultural production and processing fields, whether on their family farms, as extension agents or as employees of small to large agri-businesses. Woven throughout the fabric of the academic, technical, and social programs at the school are the concept and practice of self-sufficiency. The FPS curriculum is divided into the following three primary components: the standard state-required secondary school curriculum, technical agricultural training, and business/entrepreneurship education. A general listing of the topic areas in each of the three components follows: Table 1

Standard educational topics

Technical Agriculture Entrepreneurship/ Business Skills

Physics, Chemistry, Math

Animal Husbandry Entrepreneurship

Ethics, Psychology Agriculture Banks in action Spanish, Guaraní, English

Horticulture Business simulations

Sociology, Anthropology

Pastures “The Company”

History, Geography Forestry and fruit “The Cooperative” Economics Teams Selling Fairs

3 The technical teachers stay at the school all day, while the issue-area teachers teach their classes and then leave. They are commonly called “taxi teachers.” 4 The school awards a high school diploma, known as a Bachillerato Tecnico Agropecario (BTA), that is jointly administered by the Ministries of Education and Culture (MEC) and the Ministry of Agriculture and Livestock (MAG).

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Standard educational topics

Technical Agriculture Entrepreneurship/ Business Skills

Personal and Social development

Agricultural machinery Entrepreneurship Forums

Physical education Agricultural economics Internet Community work Rural administration Internships

Cutting across each of these topics are the following six principle competencies the school aims to impart to their students. These are:

1. learn to be (autonomy, moral justice, personal responsibility, communication, leadership)

2. learn to live together (integration with others, participation in groups, democratic leadership, acceptance of socio-cultural diversity)

3. learn to understand (manage cognitive strategies: selection, comprehension, memory, integration, and monitoring; and manage meta-cognitive strategies: planning, control and regulation of your own learning)

4. learn to do (resolute action and technical-vocational training for work) 5. learn to be an entrepreneur (initiative, self-management, and concentrating on

personal goals; spirit of research and analysis; capacity to confront contingencies and generate alternative opportunities; be proactive and look for your own good and that of others)

6. learn to make money (do a business plan, analyze equilibrium point, balance, cash flow)

In addition to these academic areas, students learn carpentry, basic mechanics and electric skills, and computer literacy. The campus computer center provides access to the internet where students are encouraged to do research, and take advantage of educational opportunities around the world. (“Escuela” 2007)

3.3.1 Technical training A wide range of technical agricultural training and practical experience is offered through the school’s hands-on approach to technical education. Student-run agricultural enterprises form the core of the technical training experience students receive during their three years at the school. Currently there are 11 such enterprises divided between agriculture, animal raising, and processing. The current list of enterprises includes the following: Intensive organic vegetable gardens Field crops Poultry raising Pork production Cattle Goats

Rabbits Aquaculture Beekeeping/honey production Milk production Dairy processing (cheese, yogurt, dulce de leche)

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Students alternate weekly between classroom-based academic instruction and field-oriented technical training. While one half of the student body is in the classroom, the other half receives technical training. In addition, smaller groups of students alternate responsibility for working on the weekends in order to maintain the agricultural enterprises. Weekend work requires feeding the animals, milking the cows, and cleaning the stalls, among other activities. Holidays and vacation periods are also covered by students. For an example of a daily student schedule and for a further explanation of their academic work, see Annex C. First-year students rotate between each of the agricultural enterprises on campus, learning the fundamental elements of each one. Second-year students begin to specialize in one or more of the technical disciplines, learning the more advanced aspects of each enterprise and beginning to take more responsibility for the business elements, including accounting and marketing. Third-year students specialize in one of the technical areas and deepen their entrepreneurial skills by assuming primary responsibility for the profitability and productivity of the agricultural enterprise in which they specialize. (Cateura 2007) The cornerstone of the third-year student experience is the development of a personal “life plan” as well as a business plan for an enterprise that can be started upon graduation. The “life plan” outlines a plan A, B, and C for avenues that graduates may be interested in going down once they leave the school. Plan A might be starting a poultry business for example. Plan B might be attending university, and Plan C might be working for an agribusiness company. The business plans are based on the learning and experience the students have gained while operating the agricultural businesses at the school and outline in some detail how they might launch their own enterprise. While not every student is expected to pursue their business plan immediately upon graduation, Fundación Paraguaya has arranged for a line of credit for each student from its microfinance institutions. If they do choose to access this line of credit the Fundación’s microfinance officers must approve their business plans. (Acosta 2007)

3.3.2 Entrepreneurship and business training The third component of the FPS curriculum is business and entrepreneurship training. Onto Junior Achievement’s model, Fundación Paraguaya has added numerous other

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practical elements which together comprise this part of the school’s curriculum. Table 1 above provides an overview of many of the elements of the business training. These include classroom-based learning activities, simulations, and hands-on experience selecting, building and running a small business in a group setting. Of note is the emphasis that is placed on learning the advantages and dynamics of doing business in a cooperative setting. Cooperatives have had much success in the Paraguayan cultural context. Recognizing this, the school has developed training materials and practical exercises to teach students how to operate a basic cooperative business. The culmination of this experience is the student-run cooperative, or student store, that the third-year students manage. Those operating the coop have full responsibility for what is sold in the store, which is often personal items, such as soap and toothpaste, but also music, books, food, and some of the produce from the school enterprises. Students are then able to use the income from the store as they see fit. (One of the current uses is to pay for cable TV in the student lounge!) In addition to the agriculturally-based enterprises, the school operates several other income generating activities, with the assistance of the student body. These enterprises play a key role in the schools financial self-sufficiency and also in the business and entrepreneurship education of the students. These other activities include a hotel operated on the school campus and a small store (or “parador”) on the main road in front of the campus. The hotel is used for a variety of purposes from hosting conferences and events, to lodging groups of eco-tourists and training participants. Students participate in all aspects of running the hotel, from helping to check in guests, to responding to requests or complaints, to general cleaning and maintenance. The school Director noted that the hotel is one of the great learning grounds for how to deal with customers in a confident and respectful way. Guests come from all over the world, which means students gain important skills of dealing with people of different backgrounds and cultures. Students are coached by teachers and other students on how to communicate effectively with the hotel clients. Another student-run store (or “parador”) is used to sell some of the school’s products in the community, including fresh milk, cheese, dulce de leche, and yogurt. Several of these products have been labeled with the name of the community “Cerrito” to build brand loyalty in the local market. Other products such as drinks, packaged food items, and cakes are also sold. Students run a small restaurant at the store, which serves breakfast, lunch, and dinner to

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members of the local community and those who drive on the main highway that goes through the Chaco, and which is located immediately in front of the parador. Students who work at the store learn about retail operations, inventory control and management, customer relations, and other skills. Finally, students participate in a weekly market in Asuncion where they are able to interact directly with customers, negotiate selling prices (within a pre-determined range) and practice their marketing skills. This market affords the students an opportunity to receive direct feedback from customers or potential customers on the quality of products or produce they are offering, and they can observe what others (i.e. the competition) in the marketplace are doing. Integration of the curriculum components – While the three components of the school’s curriculum are clearly complementary, there is still room to improve the degree to which they are integrated. This is true both in terms of the topic areas themselves and the methodology that is used to deliver them. As the curriculum is largely driven by a list of competencies to be achieved in each of the subject and technical areas, a concerted effort should be made to find the intersections of each of the components and develop integrated approaches to delivering this subject matter. Topical integration – While the business training and technical training share a number of common elements, more could be done to build business training on the real life examples of the school’s enterprises and better integrate the business and technical training with the “common” curriculum or standard curriculum components. Math classes, for example, could be taught around establishing costs and revenues of enterprises, finding break-even points, calculating unit costs, etc. Social studies classes could integrate cultural aspects of marketing, product development and communication strategies. Sciences could make use of the agricultural activities for establishing experimental environments, studying the effects of soil conditions, different types of feed, etc. Methodological integration - Many of the examples of how to leverage the experience of the student-run enterprises cited above are dependent upon all teachers and staff embracing experiential or action-based learning methodologies. This is a goal that has clearly been articulated by the school Director and staff; however, its success will largely depend upon the degree to which teachers are provided with the appropriate incentives and training that will encourage and enable them to transform their teaching methodologies. Over the first several years of the school’s transformation, several teachers were unable or unwilling to adapt to new teaching methodologies and left the school. While there has been some movement towards more experiential methodologies, more remains to be done, particularly in the “common” curriculum. In particular, these classes need to leverage better the rich environment for creating hands-on learning experiences that re-enforce more theoretical classroom-based lessons. Theory is important as a basis for understanding, but the hands-on opportunities to see the theory in practice are what will bridge the gap between understanding and knowing.

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3.4 Community Connections

In regards to the school’s connection to the local community, Fundación Paraguaya has gone to great lengths to enhance the relationship which was largely non-existent under the La Salle Brothers’ leadership. The La Salle Brothers had essentially separated the school from the community, as it did not interact with community members or engage the community in any of the school’s activities. Under Fundación Paraguaya, the school offers a store, restaurant, and hotel the community can use, its students volunteer in the local indigenous community, and its teachers and students are starting to offer technical extension services to local agricultural producers. As discussed in the section on the school’s graduates, many former students of the school also return to their home communities to start their own or support their family’s farming operations, sharing their knowledge with their family and community members. (Solomon 2007)

3.5 Financial Sustainability One of Fundación Paraguaya’s explicit goals from the outset in 2002 was to transform the San Francisco school into a financially self-sufficient agricultural high school. This goal seemed a long way off when the management team of the Fundación Paraguaya informed a surprised Ministry of Agriculture and Livestock that they would not take the government subsidies offered to the school, and they were faced with large operating deficits. However, after five years, as of December 2007, the school had attained this important and challenging goal. As aforementioned, when the FPS was transferred to Fundación Paraguaya, the school was in need of significant investment to rebuild an aging and run-down infrastructure. This initial capital investment was made through several grants received by the Fundación, while the operational costs of the school were and have been to date supported by the microfinance division of the Fundación. The FPS has been guided by a business plan that presents the school’s existing financial position, planned initiatives, costs and income streams, and strategic management information. The table below provides a summary of the operating costs and income generated by the school over the past five years. Figures for 2008 are projections derived from its current business plan. Table 2

US$ 2003 2004 2005 2006 2007 2008 Income 42,814 45,182 97,434 233,601 253,016 336,112 Costs 199,239 223,261 277,993 316,110 250,710 323,931 Results -156,424 -178,079 -180,559 -82,510 2,306 12,180Self-sufficiency 21% 20% 35% 74% 101% 104%

(“Escuela Agricola” 2007)

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In the long-run the school hopes to generate enough income to achieve the following goals:

• cover it’s operations costs with-out a loan from FP’s microfinance program, or at a minimum be able to pay interest on the loan;

• have sufficient funds make capital investments and be able to service any necessary loans; and

• have the resources to invest in the growth or development of new school-run enterprises.

3.5.1 Income streams The re-organization of the school in 2002 included identifying a diverse set of income generating opportunities. These opportunities came in the form of independent school/student-run enterprises – each its own profit center that simultaneously provided a teaching platform for agricultural technical topics. Each enterprise developed its own business plan, taking into account such considerations as: • available resources, such as land and

access to fodder; • potential markets; • appropriate scale that would produce

income, but remain small; • storage and transport considerations; • teacher and staff competencies; and • relevance to students’ ability to

become rural entrepreneurs. These enterprises are closely monitored on a daily basis through the school’s accounting system; as a result, changes to profitability, income or costs can be identified quickly and addressed as necessary. Challenges - Generating income in the first few years proved to be a daunting task for a number of reasons including: • Lack of markets for produce - (professors and staff had been allowed to take much or

most of the produce from the school’s agricultural activities for their personal use and had never had to seek outside markets).

• Production needed to be transformed to be more in line with market demand. For example, the pig raising enterprise now primarily serves the market for suckling pig, a high margin market, rather than for other pork products that do not offer as high a yield.

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• Poor infrastructure needed to be refurbished in order to reach proper scale efficiently. For example, the dairy processing needed investments in storage tanks and boilers to meet the required production capacity to commercialize.

In addition to the student-run agricultural enterprises, four other income streams have been developed at the school. These include the two mentioned previously – the hotel and the store-- as well as a conference center and consulting services school staff and teachers perform as technical experts. They offer these services currently to other schools and institutions hoping to replicate the achievements of the San Francisco school. The attached Excel file summarizes the income and expenses from each of the 18 current sources of school generated income for calendar year 2007. One additional source of income includes school fees paid by the students and their families.

3.5.2 Importance of an “Anchor” industry A review of the table below reveals that the student-run agricultural enterprises generated approximately 16% of the school’s revenues in 2007, while the hotel generated 17%, events and courses 23%, and technical assistance provided by staff and faculty of the school accounted for the largest percent of income at 31%. These figures underscore the importance of an “anchor” industry or industries that provide a steady source of income to the school. The largest gains in income over the previous several years have been in the conference and event income and the consulting services.

Sources of income: • Animals: 13% • Crops: 2% • Dairy industry: 1% • Hotel: 17% • Events and courses: 23% • Student fees: 5% • Community store: 2% • Technical assistance: 31% • Others: 4%

Distribution of costs: • Salaries: 45% • Depreciation: 18% • Balanceados : 13% • Food for people: 8% • Electricity, Internet, and phone: 6% • Maintenance: 4% • Fuel and transport: 4%

Looking to future growth in income, while some gains may be made from the agricultural industries, the hotel (at less than a 50% occupancy rate in 2007) and revenue from conferences will likely be the most significant growth areas. The importance of the hotel’s revenues in the school’s overall income reflects the shift that needs to take place in rural communities from a dependence on crop income to a provision of a broad range of agricultural products and services.

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3.5.3 Costs In its efforts to become financially self-sufficient, the FPS was required to become extremely cost conscious. Measures included: • reducing staff – the largest single line item in the school’s budget; • reducing dependence on capital-intensive production methods – for example, the last

tractor has been sold and when field crops are planted, tractors can be rented locally. Dispensing with the tractor reduced not only the operating costs, but reduced the high depreciation costs related to the tractor;

• requiring that students provide their own basic farming tools – far fewer tools have been lost since this policy was initiated; and

• relying more heavily on the production of the school to feed the student body and staff.

The combination of this fiscal discipline and the increase in income generated by the school has resulted in the FPS being able to cover 101 percent of its total operating costs for 2007.

3.5.4 Balancing the goal of self sufficiency with academic objectives A clear danger exists in this model favoring income generation or cost savings at the expense of learning objectives and academic goals. While all teachers and staff are deeply implicated in the efforts to achieve financial self sufficiency, those involved in the technical instruction are particularly responsible. Each of the technical teaching staff is ultimately responsible for the financial result of the enterprise under his or her supervision, and in meeting the results forecast in the enterprise’s business plan. The FPS has mitigated this danger to an extent by requiring each enterprise to develop detailed business plans that are approved and agreed upon by the school Director. These plans establish realistic goals for each of the enterprises, not pitting one against another in terms of it ability to generate revenue, but balancing the academic and training value with the potential financial cost or benefit of that enterprise. Nothing indicates the school’s commitment to this principle better than the fact that at least three of the school’s enterprises - rabbit raising, beekeeping and aquaculture – are projected to lose money each year. However, they are maintained as a part of the curriculum for the learning they provide. In each of these cases the lack of scale is one of the largest contributors to these

After attending separate agricultural schools their first year, Anna, who attended a local school, and her brother, who had attended the FPS, were comparing educational experiences. Overhearing the conversation and learning about how practical the FPS curriculum had been, their parents decided then and there that Anna would transfer to FPS and become part of the first class of girls to graduate from the school. Anna is due to graduate next year and she and her parents could not be happier with their decision.

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enterprises’ inabilities to cover their own operating costs. The school would need to increase scale significantly to improve revenues, or make capital investments to upgrade equipment in order to make these operations viable at their current scale. Therefore students interested in these sectors in their professional careers following graduation have received an object lesson in the importance of reaching scale in each of these industries. Students’ roles in assisting the school to become financially self-sufficient must also be carefully considered. While there is a clear danger of a student’s role becoming merely day labor on the school grounds, by alternating weeks between classroom studies and field work, the FPS seems to have balanced the work load of the students in an effective manner. In interviews with a number of students and graduates, not one expressed the feeling that they were somehow being over-worked or taken advantage of to generate income for the school. In fact, when asked about the burden of responsibility they carried to help the school survive, most students responded that they were proud of the fact that they were entrusted with this responsibility and that it motivated them to work even harder. Other students spoke of the advantage of the practical nature of the education they received – not only learning the technical aspects of raising goats or pigs for example, but learning about the business aspects as well. They expressed a confidence that they could be successful in launching their own businesses due to their experiences.

3.5.5 Market Linkages The FPS has worked to develop strong linkages with local and regional markets, and to identify individual clients for the school’s products and services. This has helped to create stable enterprises at the school and has provided the students with production benchmarks they need to achieve. However, a more systematic method for analyzing market information and market trends while identifying new opportunities along each respective value chain would strengthen the programs and lower the schools exposure to shifts in the market. While the school understandably relies heavily upon personal connections to develop markets for its products, it must develop the means to anticipate changing market trends and demands. In addition, more can be done to integrate these activities into the students’ educational experience in order to strengthen their ability to conduct market assessments, analyze value chains and think strategically about how the businesses should operate on the campus. While the store and the weekly market afford students the opportunity to interact directly with clients, students have little responsibility for developing new clients or gathering market information. There is great learning potential to be gained from developing market

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assessments, value chain analyses and other tools that will assist the school and the students to gather and interpret market information. These may include:

• The addition of a value chain/market assessment course; • Requiring students to negotiate or re-negotiate contracts for the sale of items; • Developing production or quality standards for products with clients; • Group work on providing maps of markets; or • Maintaining a market information data-base.

The school’s ability to do this effectively likely rests on the capacity of the teachers to develop and implement such learning activities. As many of the teachers come from either technical or academic backgrounds, teacher training will be essential to improve their ability to analyze market information and identify opportunities for current or new enterprises. Specific teaching materials will need to be developed or adapted to the context of the Paraguayan market. Additional events that will supplement classroom training and field work could also be developed. These could include:

• Attending agricultural trade fairs; • “Shadowing” appropriate agribusiness (production, processing, and support)

business leaders for a day, or series of days; or • Hosting events that bring agribusiness leaders together.

3.5.6 Accounting Systems The school utilizes an extremely robust accounting and management system that tracks the performance of all if its enterprises. AgroWin allows for the school to track daily costs and revenues from each of the enterprises, or profit and cost centers of the school. Student labor is accounted for and calculated as a part of the cost of production for each enterprise – and is therefore accounted for in the price of the product. Teachers’ labor is not accounted for in the enterprises, as it is considered to be offset by the higher amount of student labor used in each enterprise. (Students are assumed to be less efficient workers – and may spend more time in an enterprise then a typical private sector worker.) In addition, the AgroWin software is able to track transfers from one of the school’s enterprises or cost centers to another. For example, the pepper from the organic garden that is used in the production of pepper cheese is credited to the garden enterprise and against the cost of the cheese-making enterprise. In the same way milk, beef and dulce de leche, which are consumed by the students in the cafeteria, are shown as a cost to the school and a credit to their respective enterprises. These costs are shown as close to market value as possible. (Annual 2006) Here again there would appear to be a great opportunity to involve students more closely in the business operations of the school and to more closely integrate the “common” curriculum with the business and technical training. While careful to maintain the

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integrity of the system and information, students could be more involved in data input and analysis, preparing reports on each enterprise using the data in the system, and making recommendations for improving or diversifying their enterprises. Exercises for Math, Language Arts, and other areas could all be derived from working more closely with the accounting system. The school maintains a separate accounting system that uses these numbers to help project the schools overall cash flow needs, income and costs for all areas. This includes costs for teachers’ salaries, utilities, capital acquisitions as well as income from consulting, conferences and the hotel. It is notable that from the start, depreciation has been factored into the accounting of the school’s budget. This strict accounting discipline has clear ties to Fundación Paraguaya’s experience in microfinance.

4. Graduates The results of the San Francisco Agricultural High School’s academic model are impressive. To date, 100 percent of graduates have become rural entrepreneurs on their families’ farms, gained employment in the agricultural industry, been hired as teachers at agricultural schools, or continued their education at university. The following chart demonstrates the paths graduates have followed under the Fundación’s leadership: Table 3

Activities of Graduates of the San Francisco Agricultural High School

Activity 2003 2004 2005 2006 2007 Totals Studying in Paraguay 3 4 7 4 11 29Studying abroad 0 3 1 1 0 5Agricultural sector jobs 6 9 14 13 8 50Working on family farms 2 4 7 9 9 31Extension agents 0 1 2 4 0 7Teachers at Agr. Schools 1 5 1 0 1 8No data 6 1 0 0 0 7Students/graduating class 18 27 32 31 29 137

(Acosta 2007) For a more detailed description of the destinations of graduates from 2006, please see Annex D. Students who decide to return to their communities of origin to work on their family’s farm or start their own agricultural initiatives have access to a line of credit provided by Fundación Paraguaya’s microfinance program. While many have returned to their home communities, only a few students have accessed this line of credit. Of the graduating class of 2007, only three students have taken advantage of this opportunity. There appear to be a number of reasons for this, including the deeply-rooted fear of borrowing, uncertainty about how to manage the loan initially, and simply the reality that most students do not become self employed immediately after graduation.

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The requirements the students must meet to obtain a loan is to submit a viable business plan to a Fundación Paraguaya microfinance officer who uses it to determine an appropriate loan amount, interest rate, and repayment plan. Graduates are able to repay their loan at a Fundación Paraguaya branch office or at a branch of the Banco Nacional de Fomento, the only bank in Paraguay that has national coverage. The Fundación established a partnership with the Banco Nacional de Fomento so Fundación’s microfinance clients can make a deposit directly into a Fundación account if the Fundación does not have a branch in the area. The students who have gained employment upon graduation are thriving in agribusiness, with environmental foundations, in tourism, and as

agriculture extension agents. One striking example is the experience Desarrollo Agricola de Paraguay (DAP) has had with Fundación Paraguaya’s agricultural school. DAP is a large soy bean agricultural enterprise in Paraguay that aims to achieve a “triple bottom line” of long-term profitability, environmental sustainability, and social inclusion. Guillermo Terol, a Manager for social and environmental issues for DAP, explained in an interview that DAP sees the FPS as being in line with these elements, and it has been impressed with the highly-trained, entrepreneurial, and socially-conscious graduates that have emerged to date. DAP believes these graduates are able to meet the demand DAP has for employees who have the technical skills to work in a large agribusiness, and the ability to connect with and relate to low-income farming families who at times have expressed their concerns about an agribusiness operating in their community. Not only are the FPS grads most often from these communities, but they often understand the perspective of the low-income farmers and can effectively work with them to achieve “win win” solutions. Mr. Terol explained how DAP has established partnerships with 250 low-income farming families who are using a certain amount of land to crow their crops.

Box 1.Edison and Ever Morínigo, Class of 2004 at the San Francisco Agricultural High School, are twin brothers from Horqueta, which is in the Department of Concepción, Paraguay. They are currently 22 years old, come from a farming family, and have 5 siblings. Due to his experience at the San Francisco Agricultural High School monitoring the national vaccination campaign against hoof and mouth disease, Ever got a job with SENACSA, the government agency under the Ministry of Agriculture that is in charge of Animal Health and Quality. Ever invests all of his salary in the family farm. He has bought milk cows, hogs, and even a computer to keep track of how his business is doing. In addition, he is thinking of starting a university program in rural business administration in Concepción. Meanwhile, his brother, Edison, was hired as an instructor at the Agricultural School in Arroyito, Concepción. (“Getting” 2007)

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In addition, DAP has given 15 scholarships to children of low-income farming families so they could attend Fundación Paraguaya’s school, with the hope these students will become future DAP employees. It is important to note that these scholarship recipients are not obligated to become DAP employees; however, if they complete their studies satisfactorily and want a job, one will be available to them. Two factors Mr. Terol said which place FPS apart from other agricultural schools are that it teaches youth to think entrepreneurially and they also learn how to organize themselves. (Terol 2007) An example of an FPS graduate who gained employment at an agro-business is that of Ariel Cuevas. Ariel is from a small village named Horqueta, which is in the Department of Concepción. He is one of four children of a single mother. When he graduated from FPS in 2004, he was hired by Frutika, a fruit processor and producer of high-quality natural fruit juices and concentrate. Frutika is a modern agro-business that produces for the domestic market and also exports its products to European Union (EU) member countries, notably Germany and the Netherlands. It therefore must comply with strict quality controls and meet hygiene standards the EU requires. Frutika hired Ariel as a production supervisor because he not only had an agro-technical high school diploma, but he also had exemplary leadership skills and significant experience supervising teams of workers. Ariel developed these capacities and life skills at the San Francisco Agricultural High School. Another example is Edison and Ever Moringo, twin brothers from the Department of Concepción, Paraguay. As Box 1 describes, Edison gained employment with SENACSA, a Paraguayan government agency under the Ministry of Agriculture that is responsible for Animal Health and Quality. His brother became a teacher at the Agricultural School in Arroyito, which is in the Department of Concepción. Bernardo Servin Cuella from the class of 2006 demonstrates the interest Paraguay’s tourism sector has had in the school’s graduates. The Reserva Tati Yupí, an Itaipú Dam

nature reserve that attracts many tourists, hired him for his experience in hotel and restaurant management, which he acquired while studying at the San Francisco Agricultural High School. Bernando had worked at the school’s hotel, which is one of the school’s on-campus enterprises. Rolando Ruiz Diaz, Daigo Cuevas and Ignacio Rivas are examples of graduates who have been hired as agricultural extension agents, as described in Box 2. Other graduates have become agricultural extension agents with some cooperatives in Paraguay, such as the

Box 2. Louis Dreyfus Commodities, the largest trader and merchandiser of raw cotton in the world, with operations in more than 20 producing countries, including Paraguay, hired five members of the San Francisco Agricultural High School’s Class of 2006 as soon as they graduated. Rolando Ruiz Diaz was hired as an extension agent, and assistant to the Manager of Dreyfus´ project in Tacuara. He also is the supervisor of two of his former classmates. Dreyfus also hired Daigo Cuevas and Ignacio Rivas to work as extension agents on the Campo 9 project in Caaguazú and on a project in Encarnación, Itapúa. (“Getting” 2007)

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Cooperative Volendam of the Mennonites in San Pedro, the Cooperative de Lolita in the Chacom, and another cooperative in Encarnacion, which is also run by the Mennonites. In the near future, the Fundación would like to hire some of FPS’s graduates directly to become microfinance officers and agricultural extensionists for the Fundación. They could, for example, develop and oversee new village banking groups in which low-income farming women would participate. The Fundación believes the graduates could provide them with technical assistance to help the women increase their agricultural production, their access to new market niches, and their ability to form associations that could develop into formal rural cooperatives. (“Getting” 2007) Finally, Angel Brusquetti, the Manager of Rural Development for the Fundación Moises Bertoni, described in an interview the Fundación’s experience with 2 young people who have passed through Fundación Paraguaya’s school. Fundación Moises Bertoni is a non-profit environmental organization that promotes conservation through its programming and advocacy of environmentally-friendly public policy; sustainable business practices through its partnerships with members of the private sector; and scientific research through its engagement with local communities, workshops, and environmental education programs. It manages 2 nature reserves: Mbaracayu National Forest and Tapyta Natural Reserve. For many years, Patricio Armarillo served as the doorman at Fundación Moises Bertoni. He is illiterate and has 3 children for which he is solely responsible as his wife left him. Mr. Armarillo told Mr. Brusquetti one day that his son, Miliciades, wanted to attend Fundación Paraguaya’s school. Mr. Brusquetti decided to write a letter of recommendation for Miliciades to attend the school, especially as he knew Miliciades was the top student in his primary school. Miliciades was accepted and ultimately graduated third in his class from FPS. The Fundación Moises Bertoni hired Miliciades immediately upon graduation as a technical extension officer. Miliciades now works with communities of 10 to 15 people on sustainably producing products that will increase their incomes. The Fundación has been impressed with Miliciades’ technical skills, as well as his ability to maintain a database on a computer; speak and write in Spanish, a skill many agricultural schools do not teach; obtain and maintain the trust of the people with whom he works in the communities; and help members of local communities in areas that are outside of his usual scope of work. Through his attendance at Fundación Paraguaya’s school, Miliciades has effectively broken his family’s cycle of poverty. He came from a community that is 80 percent illiterate and where most people do not even earn the minimum salary of US$1,300 per year. Without the education FPS provided him, Miliciades would likely have been condemned to follow the path his father had to follow, which was the same path his grandfather followed. Miliciades has a higher job now than his father and will likely have many more opportunities than his father ever had. Additionally, Miliciades’s young sister, Maria, is now a student at FPS. The effects of the school’s education will likely be felt by this family for generations. (Brusquetti 2007)

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A few FPS students have also become teachers immediately upon graduation. Alberto Pimental, for example, graduated in 2004 and was hired as a teacher at the Agricultural School in Arroyito, which is in the Department of Concepción. One of his classmates, Mario Dima Gaona, who is from the town of Lima in the Department of San Pedro, is now an instructor at the Agricultural School in Santa Rosa del Aguaray in San Pedro.

A few students have also continued to university, both in Paraguay and in other countries. Jorge Guerrero is an example of a student who arrived at FPS from a family that endured a cycle of poverty, and emerged as a capable entrepreneur who had the skill set and knowledge to attend university. Box 3 explains the powerful effect the school had on him, his family, and his community. Jorge is now a role model for other young people5. Jorge Martinez and Alfredo Sanchez, both of the class of 2004, and Ruben Ramirez of the class of 2006 received full scholarships to attend Earth College in Costa Rica, and Amalio Enciso of the class of 2005 received a full scholarship to attend Zamorano in Honduras. As a way to stay connected to the school and also continue to support each other, alumni of the school – along with their families – created an alumni cooperative. The cooperative aims to support the alumni in their projects, create new opportunities for farming businesses, provide technical assistance to producers in their communities, promote the integration and socio-economic improvement of other alumni, spread information about the school in their communities to identify potential future students, generate funds through productive projects that can support alumni communities and their families, and develop a database of job and educational opportunities for alumni. Each graduating class has its own representative. The Fundación is planning to create an Alumni Weekend as a 5 Iniciativas Ciudadanas. 2006. Cuando el esfuerzo supera a las carencias, surge un emprendedor.

Box 3. Jorge Guerrero, FPS Class of 2005, comes from a family of 19 children of which he is the tenth. Before attending the San Francisco Agricultural High School, he had lived his entire life in the small and isolated rural community of San Joaquín in the Department of Caaguazú, Paraguay. When Jorge first arrived at school, he knew little Spanish and got by mostly speaking Guaraní, an indigenous language and Paraguay´s second official language. While at the school, he concentrated on his studies and was also active in the Toba indigenous community, which lives very close to the school. He organized a group of students to lead study groups for the youth in the community, and also taught them music and art. Jorge graduated first in his class in 2005, and was accepted to the Faculty of Agronomy in the National University, which is located in Paraguay’s capital city, Asunción. To cover his university and living expenses, he began growing organic vegetables in a plot of land belonging to an old-age home. In return for room and board, he supplied the old-age home with fresh vegetables, selling the surplus for the cash he needed for books and other expenses. When he goes home to San Joaquín, he provides agricultural extension services to his family and neighbors. Jorge has said in an interview with Iniciativas Ciudadanos, “My dream is to be an agricultural engineer that works in the country and can provide work to others in my community, strengthening the agriculture and livestock, to get out of our precarious situation.” (“Getting” 2007)

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way of continuing to engage the graduates of the San Francisco Agricultural High School.

5. Key Conditions Needed for Replication of Model One of Fundación Paraguaya’s primary objectives related to its financially self-sufficient agricultural school is to replicate its model on a massive scale. This replication intends to expand the access poor rural children have to a quality education in sustainable agriculture and entrepreneurship, while ensuring the financial self-sufficiency of the schools they attend and demonstrating the impact this approach can achieve in various contexts. During the next decade, through an effective replication of the “Education that Pays for Itself” model in at least 50 countries, the Fundación believes these new schools will enable more than 120,000 disadvantaged rural youth to become successful rural entrepreneurs, employers, and employees, and that these schools have the potential of improving the standards of living of 600,000 students and members of their families and communities. The Fundación believes by that time, the model will be internationally recognized as a proven means for providing poor rural youth with a quality education that enables them to overcome poverty and create jobs. (Clinton 2007) In order for a replication of this model to be successful, there needs to be an enabling environment that meets certain criteria. These criteria largely determine the feasibility of replicating the model in particular contexts. Because of the need to assess each case for replication individually, due to differences in context and the background of the target group each case represents, the following general criteria intend to help guide the selection of future replication sites for the financially self-sufficient agricultural high school model:

• The organization or school interested in replicating the model needs to have a mixture of social and economic motives for doing so, and a commitment to the concept of the “financially self-sufficient agricultural school”. All of the organizations that to date have been interested in replicating the model have seen the model as a means for addressing their financial needs and social development objectives. This mixture is important for the model to succeed, as an overly strong emphasis on the social objectives might hinder the school’s ability to reach financial sustainability, and an overly strong emphasis on meeting the school’s financial sustainability might infringe upon the school’s educational objectives.

• The school needs to be accessible to low-income youth from rural communities. As the FPS model intends to provide a meaningful education to those who comprise the bottom of the economic pyramid, the school needs to be located in an area that relates to the school’s mission. While students may come from far away to attend the school, the school will not be achieving its mission if it is located in a high income, well-developed country. Attention should also be paid to the fees charged to students and the students’ ability to board at the school if they come from far distances.

• The school needs to be located in close proximity to a functioning market. As the school relies on the income it generates, the school has to be able to produce

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products markets will purchase. At least in the beginning, being located close to a market that attracts higher income consumers will help the school bring in the funds it needs to achieve financial sustainability. As time progresses and the necessary infrastructure is in place, the school could explore export markets.

• The school needs to have adequate land and facilities to house the school’s economic and academic activities and security to protect the school’s students and teachers. While there is no set amount of land or infrastructure needed, it must be appropriate for generating income for the school and providing students with the type of education that pertains to this model. Some useful facilities include: dormitories, classrooms, and housing for animals. The available land and facilities could also be used for “tag on” income-generating activities, such as open air education, tourism, and cultural events. In terms of security, adequate mechanisms should be in place to ensure the school provides a safe environment for those living, working, and studying there and prevents theft.

• School managers and/or partners need to have access to start-up funding and the school needs to be able to support staff, make necessary adaptations to curriculum and buildings, and purchase relevant production equipment. The Fundación estimates it will cost on average US$500,000 per school to replicate the model. Some factors that will determine the ultimate cost include: the size of the school if one already exists, the amount of land and infrastructure that is already available, the type of enterprises that will operate at the school, and the amount of time it will take the school to reach financial self-sufficiency. Some of the organizations that have expressed interest in replication already have their own sources of income to invest (e.g. microfinance institutions), as did Fundación Paraguaya. Some also see the prospect of future cost savings as a source of “financing.” Those who have to seek significant investment from outside organizations have to be able to manage financial contributions in a way that supports the school’s mission.

• School managers and staff need to have entrepreneurial, business, technical, and leadership skills, as well as passion. School managers and the staff they hire must be committed to and knowledgeable about producing and selling goods and services that will contribute to the school’s financial sustainability. The managers and staff must also be passionate about the model, which will help motivate themselves, as well as the teachers, students, and other staff to take on the immense challenge and effort involved. They must also be able to instill the entrepreneurial spirit in others, and be devoted to combining traditional subjects with practical and technical learning that is fused by experiential methodologies to ensure the students emerge equipped to be successful entrepreneurs, employees, teachers, or university students. The school managers and staff also need to be able to balance the income-generating needs of the school with the educational needs of its students.

• The school often needs at least one local partner to help it implement the model and achieve desired goals. Local partners can come in the form of non-profit organizations, members of the private sector, representatives of governments, volunteers, and donors. These partners can help provide start-up capital for the school, connect the school with the community or new markets,

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facilitate the school’s participation in value chains, and offer the school technical or other assistance that might be needed. Obtaining a non-profit partner is a priority, especially one which has strong financial backing, a solid network, and a visionary management team that believes in the model and has business experience. It would also be desirable for a school to establish a partnership with a microfinance institution that could provide capital to school graduates to support their entrepreneurial initiatives. These partnerships can help the school form a network that can raise awareness on the school’s activities and attract useful information to the school.

• The school needs a strong financial management system to monitor the school’s performance. A financial management system must be sophisticated enough to handle all aspects of the school’s finances and also user-friendly for teachers without an accounting background to participate in the budget process. It also should be able to generate reports the school can analyze.

• The school must be able to attract high-potential students. Potential students must be able to see the school’s competitive advantage. A school’s reputation will drive its future success, and the school needs to be able to compete genuinely with other schools. While not necessary, enabling the students to board at the school will help build their ownership in the school and enhance their experience and learning. Dormitories will also likely help increase the number of students from across a country who could attend the school.

Some organizations have various aspects of these conditions in place and have already started to replicate the FPS model. They approached Fundación Paraguaya to explore how they could implement the model because they appreciated its educational approach, the way the school generates incomes so it does not have to rely on outside funding, how the model gives schools institutional independence, and the access the school has to technical assistance and networks. Beyond ensuring that the aforementioned conditions are in place, these organizations also will have to overcome various challenges that relate to perceptions while implementing the model. These challenges include: reversing traditional teaching practices that rely on passive students and little accountability to use experiential (“learning by doing”) teaching methodologies, overcoming prejudices about integrating income generation and production into education by ensuring all production is connected to understanding principles and techniques that will be useful to students after graduation, gaining acceptance of the value that youth working at the school adds to their educational experience, attracting quality teachers and staff who are willing to give an extra effort, demonstrating to the Ministries of Education and Agriculture that students receive quality education without the school needing government subsidies, ensuring the school’s degree is recognized, and getting over the fear of change. To support the replication of this model, a feasibility study will need to be conducted for each case and various building blocks will need to be developed in order to ensure the model is solid and to help it overcome these challenges.

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6. Building Blocks and Next Steps Needed to Successfully Replicate Model and Increase Impact

Fundación Paraguaya has been an active participant and a natural player in efforts to replicate the success of the FPS both in Paraguay and abroad. As the demand for information about the FPS experience has increased, the Fundación has been working to capture the learning it has gained on administering the school and make it available to other schools via a set of manuals it calls “School in a Box”. The sections below will examine the “School in a Box” manuals as a tool for replication, provide recommendations for ways it can be strengthened, and discuss several other tools or initiatives that will increase the probability for successful replication of financially self-sufficient agricultural high schools.

6.1 Assessment of “School in a Box” for School Administration The “School in a Box” (SIAB) series of manuals, currently in draft form, are designed to assist a school or organization in implementing the administrative aspects of a financially self-sufficient agricultural school. Ten separate manuals begin with “Getting Started,” which walks one through a strategic thought process of defining who the school will serve, what is the market for its graduates, and what are the risk factors for success - in other words, helping schools and organizations make the decision on whether or not to proceed with implementing the FPS model. Other manuals include “How to Organize Your School”, How to Generate School Income”, “How to Educate Successful Rural Entrepreneurs” and “How to Finance Your Plan”. A full listing of the manuals can be found in Annex E. “School in a Box” is valuable today, as it provides extremely useful guidance to any organization that wants to create a financially self-sufficient agricultural high school or school that is contemplating transforming itself into a financially self-sufficient agricultural high school. The manuals are easy to read and provide concrete recommendations without being overly prescriptive. While billed as a “cookbook” for replication, it provides the cook with guidelines and a list of key decisions to make, but allows flexibility in order to adapt the model to different environments and settings. Its modular approach allows for users to target specific aspects of their development or decision-making process, and should allow the users to focus clearly rather than get lost in the enormity of the task. Strengths: • Provides broad guidance for establishing/transforming a school; • Provides suggestions for how to develop a team approach necessary to transform the

school successfully, including teachers, administrators, staff and students; • Suggests ways to instill a more entrepreneurial mindset into the development of the

technical program; • Emphasizes the necessary entrepreneurial approach to instill in all staff and teachers;

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• Promotes critical analysis of available resources and potential challenges that may be faced;

• Allows for multiple paths to be taken to reach the same goal. Recommendations: • Provide additional “lessons learned” that might offer helpful context to those using

the guide; • Package the large amount of material in a way that allows for ease of use at new sites.

This may include advice on how to organize training and meetings around critical decisions or topics;

• Increase the amount of material on the connection between the “common” curriculum and the technical and business teachings;

• Develop a separate series of manuals that pertain to developing the school’s curriculum that will also teach training methodologies and transitioning the curriculum to a more fully experiential-based program. Separate modules could include, “Transforming Curriculum – Incorporating Experiential Learning Methodologies”, “Teacher Training – How to Become Effective Facilitators of the Learning Process”, “Integrating Technical and Academic Learning”, or “Leveraging Private Sector Market Linkages to Strengthen the Educational Process;”

• Include exercises designed to instill key lessons, for example “thinking like an entrepreneur”, or “working as a team.”

6.2 Recommendations for “School in a Box” for Curriculum

Based on expressed demand at the recent conference on self-sufficient agricultural schools, the creation of an equivalent “School in a Box” series that focuses on curriculum will be an extremely welcome tool to assist the field. While some attention is paid to how to integrate entrepreneurship training into the curriculum in the current manuals, there is no comprehensive approach suggested for how to structure the overall academic program. While each institution will clearly establish its own priorities for curriculum, there are enough commonalities to warrant the development of guidelines and methodologies to integrate the various component parts to the curriculum. Recommendations for key topics to be covered in such a series of manuals include: • Integration of technical, standard, and business/entrepreneurship curriculum – As

noted above, a current weakness of the FPS curriculum is the lack of connection between its “common” curriculum subjects and the technical and business subject matter. There is a need to develop methodologies and to provide concrete examples of how to achieve this integration.

• Promote experiential and active learning methodologies to be used in the “common” curriculum – In some ways a corollary to the above recommendation, transforming the methodologies utilized to teach the “common” curriculum will be an important step to integration, and to increasing the learning retained by the students. Much has

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been written on the benefits of experiential and active learning already and these lessons could effectively be transferred to the context of agricultural schools.

• Embracing transformation – The experience of the FPS and other schools that have begun to move towards developing a financially self-sufficient school has demonstrated that it is often a challenge to gain acceptance from staff and teachers. In order to be successful, the entire school must embrace the concept and work to achieve these goals. Such a manual would outline strategies and tools necessary to help promote this acceptance of the model, and provide indicators of when achieving financial self-sufficiency may not be possible. Not all staff or teachers may have the appropriate skills, desire or attitude necessary to promote such a transformation successfully.

• Tools for analyzing the competencies being learned through each enterprise – This step is necessary to match learning objectives and competencies with the appropriate experiences, and to recognize where additional materials and curriculum approaches may need to be developed.

6.3 Teacher Training

A lesson clearly illustrated by the experience of the FPS is the important role teachers play in the success or failure of promoting an experience-based school curriculum. The push-back from teachers noted in earlier sections underscores the need to develop programs that address teacher training and capacity building that allow them to become an integral part of the transformation process, rather than an obstacle to it. Such training could include: • Experiential and action-based

learning methodologies; • Entrepreneurship and business

training – enhancing their skills so that they can see connections between the subject matter they teach and business topics; and

• Agricultural technical training – for many of the same reasons cited above.

Teachers need to have incentives to be creative and explore new avenues for learning. Prizes for innovation, designing new teaching programs, and introducing new topics can be used. Other possibilities include developing committees of teachers and students that are charged with developing ways to address deficiencies in the current curriculum, and rewarding the entire committee. For example, the committees could look at ways to leverage the learning potential of the accounting system in math classes, or find ways to conduct market surveys using techniques learned in social studies classes and then conduct statistical analyses of the results in math classes.

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The essential element is to engage the teachers proactively in the process of transforming the curriculum so they have a stake in its success.

6.4 Network of Schools and Technical Assistance To facilitate the replication process, the Fundación and its sister organization, Teach a Man to Fish (TAM2F), are prepared to offer necessary technical assistance to interested organizations. Teach a Man to Fish is an international network of educational institutions and non-profit organizations that work on agricultural and vocational education and are interested in the concept of “education that pays for itself”. It started in 2006 to provide a forum where those interested in replicating the model could share ideas and experiences, receive information resources, take part in workshops and conferences, and solicit technical assistance. As of early February, 2008, the network has over 800 members in 82 countries, a few of which have already received technical assistance from Fundación and TAM2F staff. It also publishes a monthly bulletin and quarterly newsletter, which are disseminated to thousands of subscribers. TAM2F also has 28 small-scale projects across 10 countries that are designed to show how self-sufficient education can be applied in different environments and educational contexts. Additionally, it has organized two international competitions: one in 2006 for students and teachers to create entrepreneurial projects that would generate income for their schools, and one in 2007 to identify entrepreneurial teachers in Africa. They also co-organized with Fundación Paraguaya the First Annual International Conference on Financially Self-Sufficient Agricultural Schools, which was held at the Fundación Paraguaya’s self-sufficient agricultural school in December, 2007. (Teach 2008)

6.5 Creation of Specific Educational and Administrative Tools The addition of several educational and administrative training tools could significantly enhance the learning experience at Fundación Paraguaya’s self-sufficient agricultural school. Several of these have been alluded to in prior sections, but will be explicitly mentioned here. In some cases, the tools or resources may already exist. In others, these tools may need to be developed or modified to be appropriate for a high school setting. 1. Value chain assessment methodology – Students need to develop skills to analyze

markets and identify opportunities within those markets. Current value chain analysis methodologies provide the lens through which this can be achieved. The missing component is a methodology that lends itself to use by students with limited business experience. The value of this tool will be teaching students how to conduct on-going market assessments, where to look for market information, and an understanding of where to enter the value chain in order to secure the highest profits.

2. Market linkages and assessment – Such a tool would promote student involvement

in developing new markets, finding new clients and assessing demand for particular products or services. This tool would provide a framework for conducting market assessments by future rural entrepreneurs. It differs from the Value Chain tool mentioned above in that it will focus on developing specific relationships among the

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market and enterprises at the school, as opposed to developing understanding of the relationships throughout the sector at all points on the value chain.

3. Negotiation skills – This material would provide students with the background to be

successful negotiators in a variety of business settings. From negotiating sales contracts to terms of loans, these skills are often lacking in inexperienced entrepreneurs and can mean the difference between the success and failure of an enterprise.

4. Human Resource Management – These tools would assist the school to understand

its human resource needs, rationalize hiring strategies, establish HR policies, set payment and incentives schemes and serve as a management tool for school Directors.

5. Tracking system for graduates – This tool would be designed to allow the school to

track where students have gone and what activities they are engaged in. As the alumni network develops further, this may be a function that can be administered by the network.

6.6 Communications Strategy An important building block in the replication process is to develop an effective and long-term communications strategy that has at least regional reach. It will raise awareness of the FPS model, make a strong argument for why this model holds promise for reducing rural poverty, and demonstrate how it intends to reduce rural poverty. It should also provide examples of schools that have already replicated or are in the process of replicating the model, since it is often easier for organizations to follow something already in progress rather than to be the first out the gate. The communications strategy can also help achieve the educational goals of the school by promoting the importance of entrepreneurship, experiential learning, and competency-based curricula through Public Service Announcements, radio programs, and articles that have community-wide or country-wide reach. On a global level, a solid communications strategy can help the model achieve scale by strategically utilizing international networks of which Fundación Paraguaya is already a member, such as the Teach a Man to Fish network, the AVINA Foundation network, the Schwab Foundation for Social Entrepreneurship network, the Skoll Foundation network, and the Clinton Global Initiative6, among others. The communications strategy can also involve Fundación Paraguaya and Teach a Man to Fish in organizing regular learning events and in involving the media, corporate employers of school graduates, and others in the process. The communications strategy can therefore be used for marketing the model

6 In 2007, Fundación Paraguaya was invited to join the Clinton Global Initiative. It did so by making a pledge to replicate the financially self-sufficient school model in 50 countries over a 10 year period. The Clinton Global Initiative has helped raise further awareness on the model among large donors, including the Nike Foundation which is discussing with Fundación Paraguaya the possibility of Nike financing an all-girls school based on the Fundación Paraguaya model in northeastern Paraguay.

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and helping to achieve the school’s educational objectives. It can also build off of the communications tools Fundación Paraguaya has used to date that include articles on school graduates, a film that became part of the Public Broadcast Service’s (PBS) “New Heroes” series, interviews, and conference presentations.

6.7 Financing the Model’s Start-Up Costs Identifying sources of financing to support the replication of the model is a key building block, as well as a stumbling block, in scaling up this initiative. To date, each specific case of replication has required specific fundraising efforts. As many NGOs that are interested in replicating the model do not have significant funding available to them to implement the model, the process stops. There is therefore a strong need to have a funding mechanism - whether grants or loans - available for NGOs to access once a feasibility study has been conducted to determine whether they have met established criteria and are ready to replicate the model. Fundación Paraguaya is considering the feasibility of creating a regional or global fund to support the scaling up of financially self-sufficient agricultural schools, which could attract financing from corporations interested in qualified future employees who would receive training at the school, foundations interested in revamping traditional education systems, multi-lateral development agencies interested in supporting innovative approaches towards social and economic development, bi-lateral development agencies that see an opportunity to meet their development objectives through a sustainable model, and governments that could direct funds to other schools that do not have the conditions to replicate the model and still need support to offer quality education. Therefore, if governments could concentrate their funds on a reduced number of schools, thanks to many financially self-sufficient schools operating without their help, education around the world could arguably get a boost in resources that could lead to a boost in quality.

7. Identification of Opportunities for Replication of Model in Latin America Fundación Paraguaya in collaboration with Teach A Man to Fish has been working with a few organizations in Latin America and in other regions to start the dissemination of the financially self-sufficient agricultural school model. While the replication process is in the early phases, its momentum is growing and generating new interest. Therefore, strengthening the model is an important priority for ensuring that replication leads to greater impact, both in terms of the number of disadvantaged young people involved, as well as the increased educational, entrepreneurial and employment opportunities these schools can create.

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7.1 Escuela Agricola San Isidro Labrador de Pilar, Paraguay The first and most advanced case of replication is the Escuela Agricola San Isidro Labrador de Pilar (“San Isidro”) in Pilar, Paraguaya. Pilar is the capital of the Department of Neembucu, and is located 326 kms. from Asuncion. It has a population of 28,000. In 2006, FROSEP of the Rendentorista Congregation of Paraguay approached the Fundación to request technical assistance in replicating the FPS model at the co-ed agricultural high school they managed in Pilar. Like FPS, the Congregation wanted to reorient the educational program offered at the school so it would have a focus on competencies and entrepreneurship and also be able to generate its own income in a sustainable way. The Congregation also wanted to start organic farming at the school in order to help graduates become “guardians of nature” while also improving their standards of living. Finally, the Congregation wanted the school to have a positive impact on the social and economic development of Neembucu, and be able to demonstrate the viability of replicating the model in other locations. The Congregation’s school had a significant amount of land and facilities already in place when the Congregation contacted the Fundación. Their school was operating on 200 hectares of land, 40 of which could grow crops and 160 of which could be used for grazing. The school also had electricity, a phone line, drinking water, and room to board 120 students. Technical experts from Fundación Paraguaya and its agricultural school went to Pilar to assess the potential the San Isidro school had to take on the FPS model. It found the school to be in severe financial difficulty due to government subsidies that either had not materialized or were insufficient to cover the school’s costs. However, the Fundación also found an opportunity to apply the lessons it had learned from its microfinance, youth economic education, and agricultural school programs to improve the administration of the school; teach the students entrepreneurship, business, and financial concepts that would complement Paraguay’s formal educational curriculum; and to develop criteria for offering lines of credit to graduates. A Fundación Paraguaya microfinance office that opened in Pilar in 2007 would be able to manage the lines of credit for the graduates. The Fundación also recognized other benefits the school’s location bestowed. The location is attractive to tourists, and could offer a venue for open air learning, business and social events, and scientific study, among other activities for which San Isidro could charge. Also, the school is located only 3 kms. from route IV and very close to Pilar, which offers it easy access to a market where it can provide the local community with fresh, organic fruit and vegetables. The school’s produce would be the only organic produce offered to the local community.

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The Fundación’s assessment evolved into a business plan for the San Isidro school, which aims to reach financial self-sufficiency by 2012. The Fundación and the Congregation signed an agreement to proceed with the replication process on June 27, 2006. The Fundación provided US$100,000 in initial investment, and the school requires at least another US$400,000 to help it reach self-sufficiency. While income is starting to be generated from the school’s new organic vegetable and fruit gardens; its pig, hen, honey, and dairy products; its store that offers Internet access; and its hotel and conference center, San Isidro estimates it will have to increase student fees from G.30,000 (US$6) per month for 10 months plus the G. 30,000 (US$6) registration fee to G. 50,000 (US$10) per month for 10 months plus a registration fee of G. 80,000 (US$16) per year. It is also fundraising to cover the additional costs involved in the replication. The following is a projection of the financials required for the school to reach self-sufficiency by 2012: Table 4 Funds in US$

2008 2009 2010 2011 2012

Projected Costs

$163,641 $174,001 $190,554 $208,765 $237,369

Projected Income

$80,141 $102,294 $130,253 $156,680 $237,447

Shortfall $83,500 $71,708 $60,301 $52,085 $-78 Self-Sufficiency

49% 59% 68% 75% 100%

(Pilar 2006)

7.2 Cafetalera La Bastilla, Nicaragua Another case of FPS replication that has started to make some headway involves the Bastilla Coffee Estates and its subsidiary, Cafetalera La Bastilla, SA which operates in Nicaragua. The Jacobs Foundation in Switzerland, which has a partnership with Cafetalera la Bastilla, contacted the Fundación about the FPS model after it read a Teach A Man to Fish paper that described it. The Jacobs Foundation explained it was collaborating with the Cafetalera La Bastilla to start a nursery, primary, and secondary school in the mountains of Las Colinas, which is located in the Department of Jinotega, and it wanted to use the FPS methodology to offer an agricultural technical degree. Their ultimate goal was to provide a high quality practical and entrepreneurial education to rural youth who lived in the area so they could graduate as rural entrepreneurs capable of increasing their standard of living. They also saw the FPS model as a promising strategy for reducing rural poverty, especially as it addressed many of the causes of rural poverty (e.g. lack of agricultural knowledge, lack of access to credit, low productivity, etc.). To provide some background, the Cafetalera La Bastilla had been for some time the only large company that was operating in this rural, remote, and impoverished area. The surrounding community had been pressuring it to provide more jobs and otherwise ease the community’s social problems. The Cafetalera therefore saw this school as a way to

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enhance its relationship with the local community and also contribute to the community’s social and economic development. Fundación Paraguaya agreed to visit the school and in late 2007 conducted a feasibility assessment of it. The Fundación found there was significant demand in the local community of Las Colinas for meaningful education that led to sustainable income generation. It was an agricultural community that did not offer many job opportunities to graduates of the area’s formal education system. Additionally, technical schools – including agricultural schools -- were inaccessible to the area’s youth because of cost and distance. La Bastilla wanted to ensure that its educational initiative would give students skills they needed to create their own opportunities and be able to contribute to local development. It also noted the school was located in a protected forest reserve, which already attracted tourism and could become a draw to more. Additionally, there were 60 coffee farms in the area that could potentially hire graduates, and the markets in Jinotega – which is located 20 kms from the proposed school site and has 25,000 inhabitants – and Matagalpa – which is located 50 kms. from the proposed school site and has 100,000 inhabitants – could offer consumers for the products the school generates. There are collective transportation options (e.g. buses, vans, taxis) available to help bring the products to market. La Bastilla contracted the Fundación and Teach a Man to Fish to provide technical assistance to: 1) write a business plan; 2) create a methodology for comparing graduates of the Bastilla agricultural school with graduates of other schools in Nicaragua; 3) develop an education plan based on competencies that integrates the country’s official curriculum with entrepreneurship and productive on-campus enterprises to achieve self-sufficiency; and 4) implement an accounting system. The costs related to the replication pertain to contracting this technical assistance, improving the school’s infrastructure, and installing new private enterprises on the school’s campus. The Jacobs Foundation is considering financing up to 50 percent of the total cost. The business plan Fundación Paraguaya and Teach a Man to Fish produced in September, 2007 documents some ways the school could produce income to support is efforts towards achieving self-sufficiency. It finds that the school’s hotel will likely be the school’s primary source of income or “anchor enterprise.” The school intends to target the 800,000 tourists that visit Nicaragua each year and do targeted outreach to travel agencies and other organizations to raise awareness on the school. Fundación and Teach a Man to Fish estimate the hotel could generate about 40 percent of the income for the school in the first year, equaling US$155,790, and bring in about US$419,215 over 5 years. Other than the hotel, the school will likely host many enterprises, including: 1) a dairy production enterprise to respond to demand from the local market for more dairy products; 2) a bee and honey production enterprise that will be geared towards exporting; and 3) a nursery for coffee plants that can be sold to the Bastilla company and other coffee companies in the area. The following chart projects the financials as they pertain to the school reaching financial self-sufficiency in 2012:

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Table 5 Funds in US$

2008 2009 2010 2011 2012

Projected Costs

$210,365 $258,749 $303,042 $338,287 $385,931

Projected Income

$36,038 $140,494 $220,574 $286,856 $388,154

Self-Sufficiency

17% 54% 73% 85% 101%

Members of the local community are also expected to play large roles in the sustainability of the school. For example, La Bastilla organized a committee of parents who will provide input into the school’s development. Additionally, the Ministry of Public Education; the National Institute of Technology; the Ministry of the Environment; Jacobs Foundation; Culculmeca, an association that focuses on environmental sustainability; and the Zamorano University in Honduras are engaged in building and implementing the concept. (“Escuela Agricola La Bastilla” 2007)

7.3 Other Organizations Interested in Model in Latin America While these cases of replication are the most advanced, other discussions are underway to replicate the model in additional parts of Paraguay and in other Latin American countries. For example, the Fundación Paraguaya and the Nike Foundation are discussing the possibility of the Nike Foundation financing an all girls school in Villa Ygatimi, which is located in the northeastern part of Paraguay, which Fundación Paraguaya would establish in collaboration with Fundación Moises Bertoni, an environmental organization. The outline of a feasibility study has been written and the partners are discussing a few options for moving forward. In Nicaragua, the Board of Directors of Fundación Financiera Fama de Nicaragua7 is interested in using the FPS model when developing a rural high school in Nicaragua. A representative from the Fundación Fama visited the San Francisco Agricultural High School and identified synergies with their objectives. Discussions continue. In Bolivia, two collaborations are underway with local NGOs. First, Fundación Paraguaya is working with the Escuela Agricola Tarairi in Villa Montes, a co-ed agricultural high school that was started through a collaboration between a Guarani Indian Nation boarding school and a Catholic school. Fundación Paraguaya is in the process of developing a business plan for the school to achieve financial self-sufficiency. Second, the Governor and Legislature that oversee the Department of Tarija agreed to transfer financial resources and land, which houses a former glass bottle manufacturing company, to a new school based on the Fundación Paraguaya’s model. Fundación AVINA is teaming with Fundación Emprender and the Instituto de Capacitacion

7 Fundación Financiera Fama is an ACCION International affiliate.

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Campesina to develop the replication initiative. Fundación AVINA in Bolivia and Paraguay also financed an exploratory trip of Bolivian municipal and departmental authorities to Paraguay to visit the San Francisco Agricultural High School. In Brazil, two collaborations are underway with large international NGOs. The first is with CARE Brasil in Piaui and Recife, Brazil. Through contact AVINA initiated, a representative from CARE Brasil visited the San Francisco Agricultural School in December, 2007 and expressed interest in developing a similar school in the Prefeitura Municipality of the city of Sao Joao do Arrail, Brazil. They also made arrangements for a representative from Fundación Paraguaya to visit this area of Brazil in early 2008 to develop terms of reference for possibly providing technical assistance during the replication effort. The Christian Childrens’ Fund (CCF) is the other large NGO operating in Brazil that is interested in replicating the FPS model. A team of 3 representatives from the Christian Children’s Fund visited the San Francisco Agricultural High School in October of 2007 and thought the model could be implemented into the Virgem da Lapa Agricultural Family School that CCF-Brazil, the Commission for the Development of the Jequitinhonha Valley, and the city government established in 1988. Representatives from Fundación Paraguaya will visit Brazil in early 2008 to conduct a feasibility study and write a business plan. Finally, in Colombia, Fundación Paraguaya is collaborating with the Fundación Mario Santo Domingo (FMSD) de Colombia in Barranquilla, Colombia to explore how to transform a school into one that follows the FPS model. Representatives from FMSD visited the San Francisco Agricultural High School in late 2007 to see the school in session. It subsequently expressed interest in having one of its grantee organizations, Fundación Servicio Juvenil y Bosconia Caribe, become engaged in the replication project. Fundación Servicio Juvenil y Bosconia Caribe works with homeless children. (Burt 2008)

8. Linkage of FPS Model to IDB The financially self-sufficient agricultural school model Fundación Paraguaya has developed is in line with the Inter-American Development Bank’s (IDB) Opportunity for the Majority Initiative and current strategies and operations in Latin America and the Caribbean. The success the school has achieved to date in reaching financial self-sufficiency -- while taking a market-based approach towards producing graduates capable of supporting their own entrepreneurial endeavors, becoming employed at leading agribusinesses, teaching in other agricultural schools, and attending university -- shows the impact the school has had in increasing economic opportunity for those who comprise the bottom of the economic pyramid, while also contributing to the socio-economic development of a country. This school is providing the essential service of education to the low-income majority in a sustainable way. Grassroots organizations in many developing countries are also highlighting the model’s potential to have an even greater impact, as many are already replicating the model. It is therefore important to take the

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time to strengthen the model in order to ensure it provides students from a variety of contexts with a relevant and practical education that can lift them out of poverty.

8.1 Self-Sustainable Agricultural High School as an OM Business Model The following is a brief explanation of how Fundación Paraguaya’s self-sufficient agricultural school model fits in a unique way the type of corporate business model that the Opportunities for the Majority Initiative supports, as described in the IDB’s PowerPoint presentation on the Initiative: • Promote higher quality and lower prices: The education Fundación Paraguaya’s

school offers is arguably of a higher quality than other schools in Paraguay and it is offered at a lower carrying cost. Additionally, the organic produce the school sells is often of higher quality than the non-organic produce usually sold in markets close to the school, as well as in Asuncion, at competitive prices. The Fundación made the conscious decision to teach students how to grow organically so they would be healthier while at the school, sell healthy products in the community, and be able to transform their learning into production processes that happen on their families’ farms to support environmental sustainability.

• Build local value chains: While students in Paraguay’s and Nicaragua’s self-sufficient agricultural schools sell or will sell agricultural products into local value chains, through the new value chain curriculum proposed in this report, students will be better equipped to identify new access points and create new value chains upon graduation. For example, the business plan drawn up for the La Bastilla school in Nicaragua calls for students to sell coffee seedlings to the local coffee companies in order to supply their growers with new plants to expand their plantations.

• Foster co-creation of opportunities for businesses and local entities: During the school’s development, the Fundación established partnerships with businesses, hotels, and other organizations that decided to purchase agricultural and animal products the school sold. Additionally, through a collaboration with local government and indigenous authorities, students at the school provide tutoring to local indigenous children and develop cultural activities with the indigenous community. The school has also become a site where organizations hold health clinics, conferences, outdoor education programs, and cultural and sporting events. It has become a community center. Finally, school graduates employed at some agribusinesses, such as DAP, are serving as liaisons with low-income communities comprising the majority, helping to promote the joint development of solutions to meet the communities’ demands.

• Adapt products, services and distribution channels to increase access: Fundación Paraguaya has adapted microfinance products to offer school graduates lines of credit to start their own entrepreneurial initiatives, and has worked with students to develop new distribution channels for the school’s products. Many of the students come from families that would not be able to access credit from commercial banks, and many microfinance institutions in Paraguay still do not lend to young people to start their own businesses. Therefore, the Fundación’s microfinance program has increased the access low-income people in Paraguay have to credit through its operations at the

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school. Additionally, the Fundación built a store on the school’s campus, which provides organic produce, meals, and household products to the local farming community that did not have regular and immediate access to these products before. The school also plans for its teachers and students to offer technical assistance to women-run cooperatives operating near the school to increase their productive capacity and access to finance.

• Enhance product value: If education can be considered a “product,” the Fundación has increased its value considerably by making it more relevant, practical, and innovative. Additionally, the school has enhanced the value of agricultural products by making them organic. Organic products are still not widely available in Paraguay, and they contribute to healthy communities.

• Offer opportunities to repeat successful experiences: The school offers opportunities to repeat its successful experiences through the tours, technical assistance, and learning programs it offers schools and organizations interested in the model. Its Teach a Man to Fish Network and connection to AVINA, the Schwab Foundation, the Clinton Global Initiative, and the Skoll Foundation, among others have helped increase awareness of the model and spark the beginning of the replication process. Additionally, the First Financially Self-Sufficient Schools Conference was a knowledge-sharing event that offered other organizations the chance to learn more about the model to potentially repeat it in their countries. (“Opportunities Business Models” 2008)

8.2 Meeting the OM Criteria to Obtain IDB Support Fundación Paraguaya’s financially self-sustainable agricultural high school meets the IDB’s criteria for supporting Opportunities for the Majority projects in the following ways: Developmental impact and majority focus: Projects must be designed with the objective of having a positive economic or social development impact for the majority. They should address the needs of majority communities for products and services and/or create wealth or provide benefits in majority communities. They must provide evidence of the value added for the target population, contributing to the incorporation of the majority in the general current of economic growth and social development. Fundación Paraguaya’s financially self-sustainable agricultural high school model is making a positive social impact by improving the access young members of the majority have to quality education that helps them get jobs, start entrepreneurial initiatives, or attend university upon graduation. In terms of the school’s impact on economic development for the majority, students at the school learn valuable entrepreneurial and business skills that increase their capacity to start their own businesses and help other members improve their businesses and productivity. The school also builds students’ life and financial skills so they will be prepared to manage their money, including the micro loans they obtain, and be better able to become positive contributors to the economic development of their communities and country far into the future. Finally, a student’s attendance at the school often transforms families, breaking the cycle of poverty and enabling future generations of families formerly from the majority to contribute to the country’s economic

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development. The aforementioned examples of graduates highlight the transformative effects the school has had on families and communities. In terms of addressing the needs of the majority to create wealth, students learn critical entrepreneurial, business, financial, and life skills in a practical and participatory manner that feeds their entrepreneurial and employment pursuits. Students also gain experience running enterprises based at the school and contributing to the school’s financial sustainability that helps build a foundation for starting their own income generating initiatives upon graduation. The school provides evidence of value added for the target population through the results of its graduates to date, and the interest this model has generated among members of the public, private, and civil society sectors around the world. In terms of graduates, in the last few years, 100 percent of the school’s graduates have obtained jobs, started their own businesses, or continued to university. Those who returned to their home communities have taught their family and community members skills they learned at the school, which has increased productivity and led to new business and income-generating initiatives within majority communities. The school helps incorporate the majority into economic growth and social development by building the business and entrepreneurial skills of young members of the majority so they can more effectively contribute to rural development through business-oriented agriculture, provide healthier and organic agricultural products to members of the majority living in both rural and urban areas, and offer innovative solutions to problems that have plagued rural development in Paraguay for decades. In regards to social development, members of the majority (both students and parents) are directly involved in the educational revolution that is happening in rural Paraguay, as they have helped form the school’s curriculum and other programs and regularly provide feedback to them. Members of the majority are therefore directly engaged in improving access to quality and relevant education that is immediately applicable upon graduation. In the future, the Fundación aims to use its existing Community Training Center to develop community leadership and help additional members of the community take the lead in improving their own standards of living.

Innovation: Projects should be innovative, whether for a specific market or country or the region. The innovations can include new ways of doing business and accommodating the needs of the majority. Innovation may entail the engagement of a private sector entity in a significant role, use of a hybrid or novel business model or process, or partnerships or new relationships with a majority community, NGOs, subnational governments or the public sector for the benefit of the majority. This self-sufficient agricultural school model is innovative in the following ways: • The model’s approach -- “education that pays for itself”—is unique: After a short

period, schools can become self-financing, obviating the need for on-going financial support from outside sources or prohibitively high school fees, which exclude the poor.

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• The model is highly replicable. Financial self-sufficiency opens the door to replication on a massive scale and the creation of many more educational opportunities for poor, rural youth. Even schools without much capital up-front can start some income-generating activities to finance program improvements and add an entrepreneurial dimension to their educational programs. Replication of this model will likely result in a widespread movement toward financially self-sufficient schools that offer an entrepreneurial education and empower poor youth to overcome poverty.

• Massive replication will result in profound equilibrium change. It could be argued the world will move from a situation in which poor, rural youth are neglected and marginalized to one in which their untapped economic potential is released, ending their exclusion and marginalization and providing them, and society at large, a better future. This could be a permanent change that brings permanent benefits for poor rural youth and society.

• The model has a strong market orientation. This market orientation serves two purposes: income generation and the provision of a highly relevant education that equips students to overcome poverty. Before establishing a school, a careful study of local market conditions needs to be carried out in order to decide which school enterprises to create and which competencies to incorporate into the curriculum. Once established, these on-campus enterprises are to be run as separate businesses. As students mature, they take increasing responsibility for business management, thereby developing leadership, entrepreneurial skills, and financial and computer literacy. Since the school depends on the income that these enterprises generate, teachers and students must keep up with and adjust to market trends8. This market feedback mechanism ensures that students learn skills that are immediately useful to employers and/or in creating their own rural enterprises.

• The school’s partnership with local government. Fundación Paraguaya’s school also has partnered with representatives of the local public sector, such as mayors and governors, to ensure there is a connection between the school and surrounding community. The mayor of Benjamín Aceval, the municipality to which the community of Cerrito belongs, has been pleased with the school improving educational quality and supporting its graduates returning to their home communities to build local capacity. The mayor and governor have attended graduation ceremonies, provided a few scholarships to students, and are supporting the school’s engagement in local value chains. In an interview at the school in December, 2007, the mayor of Benjamín Aceval expressed his appreciation to the school for wanting to collaborate on various initiatives, but not asking for money in the process.

• The school’s participatory and long-term approach towards education. The school is also innovative in its participatory approach to providing entrepreneurial and technical education that is relevant in an agricultural and rural context, and directly addresses the needs of the majority for quality education that leads to income generation. Additionally, graduates gain access to loans to help them execute their business ideas and are connected with potential employers that are looking for employees with relevant skills, entrepreneurial mindsets, and the ability to connect

8 Fundación Paraguaya’s school also generates income through the technical assistance it provides other schools and organizations that request help in replicating the model.

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with members of the majority. Employers have provided feedback on their needs to the school – and some are providing scholarships to students who might become employees upon graduation. The school has engaged private sector entities to learn what they need the school to teach its students so graduates will have skills these entities demand.

Scalability: Projects should have the potential for being replicated or adapted for broader needs inside the country or beyond. Fundación Paraguaya has developed a holistic and integrated model that can be adapted to and replicated in new contexts, pending available funding and technical support. The “School in a Box” for the school’s administration is a significant step towards providing organizations interested in replicating the model with a guide. It also offers an opportunity to create a “School in a Box” or similar mechanism for transferring the curriculum framework and lessons learned to other agricultural or rural schools that want to incorporate entrepreneurship, business, life, and financial skill building, as well as experiential learning methodologies. Fundación Paraguaya’s self-sufficient agricultural school has also had an exponential increase in the number of its beneficiaries – in terms of students and members of the community – and has generated interest in the model from organizations around the world. Organizations such as AVINA, the Skoll Foundation, and the Clinton Global Initiative are also supporting it. Therefore, the school not only has strong potential for being replicated or adapted, it already is in the process of being replicated in Paraguay, in other Latin American countries, and beyond. Additionality: Projects should demonstrate additionality in areas such as financial additionality and/or institutional strengthening; new access to products and services; regulatory risk mitigation; environmental, social, health and safety improvements; catalytic demonstration effect; and corporate governance additionality. Fundación Paraguaya’s financially self-sufficient agricultural school model offers additionality in that any IDB investment would set off a permanent stream of income generated by the school, which would be re-invested to solve the problem of rural poverty. Therefore, the IDB or other financing mechanism would enable a school to start on-campus enterprises and other income-generating activities that would lead the school on the path towards self-sufficiency. Also, additionality would be evident when a replicating institution gives some of its own resources to start the model’s replication. Environmental and social impacts: Projects must be designed to have positive environmental and social impacts as sought under the relevant IDB's policies. As mentioned previously, the school positively impacts the environment through its teaching of environmental sustainability to students, the low level of waste it produces, its production of organic products, and its bio-intensive approach that emphasizes soil improvement as a way to achieve higher yields on a sustainable basis while conserving water. The school’s social impacts are evidenced by the employment and entrepreneurial opportunities to which the school’s graduates have access, the transformative effect the school has on a student and his/her family that is part of the majority, the potential the school has to break cycles of poverty and uncompetitiveness, and the ripple effect the school has on the country’s social and economic development over time. The school also

47

addresses many of what Fundación Paraguaya deems to be the principal causes of rural poverty in Paraguay, which are a lack of: understanding of how to live off the land via farming; entrepreneurial skills; access to finance; knowledge on how to use available natural resources in a sustainable way; and experience working in groups (e.g. cooperatives) so they can take better advantage of economies of scale. The school improves agricultural productivity, which has a tremendous impact on rural poverty, through a better educated workforce9. (“Opportunities Criteria” 2008). It also is oriented towards the community, emphasizes service to the client, promotes transparency, and supports staff development, all points ACCION International noted in its social impact evaluation of Fundación Paraguaya in 2006. (Evaluación 2006)

8.3 Connection to Other IDB Operations Beyond, the FPS model’s connection to the IDB’s Opportunities for the Majority Initiative, it also relates to some IDB strategies and projects. For example, the FPS model relates to the following priority area of the IDB’s Strategy for Agricultural Development in Latin America and the Caribbean: development of human resources and rural infrastructure for production and improvements in the quality of life in rural areas (IDB 1999). The Strategy’s related objectives are to: promote productive employment in poor rural areas, promote the reduction of rural poverty, develop the rural economy, integrate marginal areas in national development, decentralize government activities, and expand opportunities for productive agricultural and nonagricultural development in rural areas. The FPS model shares these objectives and is already starting to meet them. The FPS model also pertains to the following goals of the IDB’s Country Strategy for Paraguay (2004-2008): 1) “laying the foundations for sustainable economic growth based on the market economy”; and 2) “reducing poverty and improving the quality of life of low-income sectors of the population through the development of human capital and provision of greater access to quality basic services.” For all the reasons mentioned in the section on Opportunities for the Majority, this model will help improve Paraguay’s agricultural and business climate, as well as help develop new services for small and medium enterprises through the technical assistance it offers, and help boost agricultural productivity through the new skill sets students -- and by extension their family and community members -- will have. The model will also will help reduce poverty by providing access for members of Paraguay’s poor rural communities to new production opportunities and means to build their human capital. With Paraguay’s population being quite young (an estimated 26 percent is under the age of 10 and the average age is 23), it is imperative that these young people have access to quality education that can lift them out of poverty; otherwise, the country will face the severe consequences of additional unemployment, low productivity, and slow economic growth. Maximizing the potential of this youthful population will

9 A study the UK Department for International Development commissioned in 2001 found that on average every 1 percent increase in agricultural yields reduced the number of people living on less than US$1 a day by .83 percent (Thirtle 2001).

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directly contribute to Paraguay’s social and economic development, as the IDB recognizes in its Country Strategy document. (IDB 2004) The IDB has also supported technical cooperations and loans in these areas that are too numerous to mention in the scope of this report. From the IDB’s collaborations with cooperatives the Mennonites manage, to its “Youth Business Training Program” project, to its “Supporting Labor Markets to Benefit the Majority” program, it is clear the FPS model complements and supplements some of the IDB’s existing operations in Paraguay. There might also be ways to connect activities happening at the school to some of the IDB operations still in execution.

8.4 Exploration of Possible IDB Support for FPS Model Interest in developing self-sufficient schools, whether they are agricultural high schools or otherwise, was strongly demonstrated by the high number of participants at the recent conference on self sufficient schools that was previously mentioned. (List of attendees may be found in the Annexes.) While at a nascent stage, this movement would seem to be generating momentum and may compare in certain ways to the beginnings of the microfinance industry 30 years ago when conventional wisdom held that one could not “bank on the poor”. So too, many doubt whether schools can truly become financially self sufficient. The experience of the FPS has demonstrated that given the right circumstances, it is in fact an attainable goal. Also, like the microfinance industry, if the movement is to continue to grow and add new success stories; it will need a “champion” willing to invest in pushing it forward. In order to succeed, financing will be needed for start-up or transformation efforts, and for developing stronger teaching modules and teacher training materials. At this stage in the movement, developing some combination of loans and grants will likely be needed to “seed” the field with models that bear replication. The Inter-American Development Bank could support strengthening and replicating the model throughout Latin America and the Caribbean through one or more of the following approaches: • The IDB could help disseminate information about the model more broadly across

Latin America and the Caribbean. Although Fundación Paraguaya has made a number of promising contacts in many countries, it has by no means made the model known in all countries. The IDB could do this dissemination directly (e.g. via IDB publications) or by affording opportunities for the Fundación Paraguaya to present its experience in international conferences or other fora.

• The IDB could help improve the model and replication materials by financing the

development of new curricula and teaching methodologies. While the graduate placement results from the schools are extremely impressive, it is currently a small pool of the “best” graduates in the country. If replication is successful, competition will increase and an entrepreneurial mind-set will become increasingly important to generate new jobs and opportunities. This would include the development of tools for student-driven value chain and sector analysis, market assessment, and teacher

49

training materials, as well as developing stronger private sector partnerships with each of the school enterprises.

• The IDB could identify promising partners for replication, especially:

o private sector entities that would like to exercise Corporate Social Responsibility by improving education in countries where they have operations, improving living and security conditions in zones where they operate, or enhancing the quality of the local labor pool from which they hire;

o other microfinance institutions (or foundations attached to them) that already support microentrepreneurship and have surpluses to invest;

o NGOs and other entities that support educational institutions and would like to both increase the relevance of the education they offer, enhance the employability of their graduates and reduce annual carrying costs of supporting such institutions.

• The IDB could provide grants to allow Fundación Paraguaya to provide technical

cooperation to institutions wishing to replicate the model. Such cooperation would include a diagnosis of the replicating institution’s institutional strengths and weaknesses and a road map for improvement; a study of the local market to determine the demand for goods and services (which would determine which on-campus enterprises to start) and skilled labor (which would help inform which competencies to teach); and a school business plan. Fundación Paraguaya has already provided such assistance to the San Isidro Agricultural School in Pilar, Paraguay and La Bastilla in Nicaragua. If Nike decides to finance the development of a new school in northeastern Paraguay, these studies would be among the first steps taken to establish that school.

• The IDB could provide grants or loans – or a blend of the two – to institutions

replicating the model. The appropriate financing package will have to be designed on a case-by-case basis. Schools that have, or intend to have, a principal income-generating business (such as a hotel or commercial sized agro-business, or other large-scale business operation) could probably support a loan, as long as the terms were appropriate.

• The IDB could finance the creation of model schools in each sub-region of Latin

America and the Caribbean that would serve as examples to others in the sub-region for further replication.

• The IDB could fund or conduct studies on the model, its long-term impact on students

and communities, the replicability of its various key elements, and other related topics. These studies could help raise awareness of the model, especially if supported by a comprehensive communications strategy.

• The IDB could support the development of a comprehensive communications strategy

that the Fundación Paraguaya and Teach a Man to Fish could deploy. Staff of the

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IDB’s Opportunities for the Majority and External Relations team could engage with staff from the Fundación Paraguaya and TAM2F to develop long-term development communications mechanisms to build support for the model, as well as for entrepreneurship and relevant education in rural settings. The IDB might also be able to use its media tools and networks to support this effort.

• The IDB could provide Fundación Paraguaya with funding to start a regional fund for

financially self-sufficient schools to start around Latin America and the Caribbean. Schools and other organizations interested in replicating the model could apply for funds from this regional fund when they require technical assistance, new curriculum, and other tools that will help their new school achieve self-sufficiency while offering a relevant and high-quality education that lifts young people and their families out of poverty.

9. Conclusions The following summarizes some of the important conclusions of this report: • Fundación Paraguaya’s self-sufficient agricultural school effectively achieves its

value proposition of making a systemic change in the educational system to offer high quality technical and entrepreneurial education to underprivileged Paraguayan youth who graduate with usable skills they can immediately apply on their family farm, in a new business venture, as an employee in the agricultural industry, or in university while also having access to credit and follow-up services. One hundred percent of the school’s graduates have been placed in one of these tracks every year since the school has followed the new model.

• The school’s sustainable advantage lies in its:

o ability to recruit and select high potential students from a large pool of candidates;

o ability to regularly produce high school graduates qualified to run their family’s farm, get a job, or go to university;

o business approach and practical training that promote constant innovation and cost-controls;

o reputation as an institution that provides graduates that possess the skill sets needed in the agricultural community, ie employers.

• While the school’s model provides significant business skills and entrepreneurship

education, it can be further strengthened by adding market assessment and value chain analysis components, giving more of the cost accounting and market development responsibilities to the students, and better integrating the business and entrepreneurship curricula with the school’s “common” curriculum. Support for developing these components will be necessary, and added to the School in a Box materials, they will significantly increase SIAB’s value.

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• The school has achieved its stated goal of becoming financially self-sufficient through income generated by both student-run agricultural enterprises and school-run enterprises. It is early at this point to determine the capacity that school has to generate additional income that will allow for capital investments, expansion of businesses, etc. That said, the school’s business plan projects that income will exceed operating expense by 25% in FY2008.

• The students’ ability to access credit for their enterprises through Fundación’s

microfinance operations is a significant value added. However, its potential benefit has not been fully maximized as few students have accessed these lines of credit to date. Further examination of how to leverage fully the relationship with Fundación Paraguaya’s microfinance institutions should be conducted.

• The school targets young people from families that comprise the “majority.” As

stated in the IDB’s presentation on Opportunities for the Majority, “This low-income sector has not benefited substantially from the region’s recent economic growth, and meeting its needs requires new investment approaches from both the public and private sectors to make a positive impact from which all will benefit.” This model provides a means for youth from low-income farming families to escape from the “cycle of informality, misinformation, and uncompetitiveness that prevents those in the majority from realizing their productive potential and creating new wealth for themselves and for the economies in which they are included.” (A Market, 2008)

• The School in a Box provides an important tool for schools looking to replicate the

model pioneered by FPS. Additional work can be done to develop the academic approach of the model and document it in a similar manner. This should include developing experiential methodologies for all subject areas, providing teacher training modules in a variety of subject and method areas, and developing linkages with the private sector to strengthen academic programs.

• Great interest in replication in the region exists, as evidenced by the number of

schools who are already beginning to transform their institutions, and by the number of participants who attended the recent conference on Financially Self-Sufficient Agricultural High Schools.

• Finding the means to finance the start-up or transformation of the school to become

financially self-sufficient is one of the greatest obstacles to replication.

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Bibliography Acosta, Celsa. Interviews. 5-14 January 2007. Paraguay. “A Market-Based Approach.” 2008. Inter-American Development Bank. http://www.iadb.org/OM/Amarket.cfm?&print=true. Accessed 20 December 2008. Annual Report 2006: Fundación Paraguaya.p. 31 Brusquetti, Angel. Interview. 11 December 2007. Burt, Martin. Biography. September 2007. http://www.ymeconference.org/agenda.asp . Accessed 25 January 2008. Burt, Martin. Interview. January 2007. Burt, Martin. Keynote speech to Global Youth Microenterprise Conference. September 10, 2007. Washington, DC. Cateura, Luis Fernando. Interviews. 5-14 January 2007. Paraguay Clinton Global Initiative 2007 Commitment Announcement. 2007 Country Strategy with Paraguay. 2004. Inter-American Development Bank. Escuela Agricola La Bastilla Business Plan 2008-2012. September, 2007. Fundación Paraguaya and Teach A Man To Fish. “Escuela Agricola San Francisco.” PowerPoint Presentation by Martin Burt. 4 December 2007. Escuela Agricola San Isidro Labrador Business Plan 2008-2012. 2006. Fundación Paraguaya. Evaluación del Desempeno Social de Fundacion Paraguaya, Paraguay. August 28, 2006. ACCIÓN International. “Getting Started.” Chapter 1. School in a Box. 2007 “How To Educate Successful Rural Entrepreneurs.” Chapter 6. School in a Box. 2007. p. 22 “How to Organize Your School.” Manual 3. School in a Box. 2007. Iniciativas Ciudandas. 2004. Alumnos trabajan la “doble excavación.”

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Iniciativas Ciudadanas. 2006. Cuando el esfuerzo supera a las carencias, surge un emprendedor. Kehler, Mary Liz. Interview. 25 January 2008. “Opportunities for the Majority: Business Models.” IDB website. Accessed 25 January 2008. http://www.iadb.org/OM/Models.cfm?language=English “Opportunities for the Majority: Criteria for Opportunities for the Majority Projects.” IDB website. Accessed 25 January 2008. http://www.iadb.org/OM/criteria.cfm?language=English “Opportunities for the Majority Initiative.” 2007. PowerPoint presentation. Inter-American Development Bank. “Pilar, Paraguay Business Plan.” 2006. San Francisco Agricultural High School Business Plan. 2005. School in a Box. 2007. Fundación Paraguaya. Solomon, Luis. Interviews. 5-14, 2007. Paraguay. Teach a Man to Fish. Website. Accessed 25 January 2008. http://www.teachamantofish.org.uk/ Thirtle C., Irz L., Mckenzie-Hill V. and Wiggins S. 2001. Relationship between Changes in Agricultural Productivity and the Incidence of Poverty in Developing Countries. Report commissioned by the UK Department for International Development, London. UN Habitat, 2006. State of the World’s Cities 2006/7. UN Habitat Publications: New York, USA. “What We Do: Financially Self-Sufficient Farm School.” http://www.Fundaciónparaguaya.org.py/index.php?c=307. Accessed 25 January 2008.

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Annex A

Individuals Interviewed Names/Addresses

Celsa Acosta, Academic Director, San Francisco Agricultural High School, cacosta@Fundaciónparaguaya.org.py Solomon A. Adebola, P.H.D., HOD Business Administration & Marketing, Babcock University, Soladeb1010@yahoo.com Halimah Awang, Deputy Dean, Faculty of Economics and Administration, University of Malaya (Kuala Lumpur), halima@um.edu.my Natalia Bareiro Gulino, Incubadora de Empresas y Emprendedores, Junior Achievement, Fundación Paraguaya, nbareiro@Fundaciónparaguaya.org.py. Angel Brusquetti, Gerente de Desarrollo Rural, Fundación Moises Bertoni, abrusquetti@mbertoni.org.py Diane Espinoza, Centro Cultural Melodia Villa Hayes, info@ccmeoldia.org Sylvia Finlayson, Director of Program Development, Rising Star Outreach sfinlayson@risingstaroutreach.org Makonen Getu, Director for Strategic Alliances, Opportunity International, mgetu@opportunity.org Mary Liz Kehler, Director of Planning, Fundaciónparaguaya, mlkehler@Fundaciónparaguaya.org.py Anthony K. Murathi, Program Manager, Africa Now, akmurathi@africanow.org Isidro Romildo Roussillon Pascottini, Gobernador, Gobernacion XV Departamento de Presidente Hayes, iroussillon@telesurf.com.py Jose Luis Salomon, Director, Junior Achievement, Fundación Paraguaya, jlsalomon@Fundaciónparaguaya.org.py

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Luis Fernando Sanabria, Director of Microfinance, Fundación Paraguaya, lfsanabria@Fundaciónparaguaya.org.py Jeffrey Shannon, Program Director, MercyCorps, jshannon@af.mercycorps.org Guillermo Terol, Gerente Social-Ambiental, Desarrollo Agricola del Paraguay, gterol@dap.com.py Professor James Tooley, President, The Education Fund, jnt@orientglobal.com Jennifer Ungemach, Latin American Program Liaison, Ecology Action, jennungemach@growbiointensive.org Roberto Urbieta, Executive Director, Junior Achievement, urbieta@Fundaciónparaguaya.org.py Graduates of the Escuela Agricola (Interviewed) Daniel Astigawaga – Graduated 2007 Jorge Flores – Graduated 2007 Daigo Cuevas – Graduated 2006 Abel Noguera – Graduated 2004 Adalberto Ojeda – Graduated 2004

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Annex B -Teacher Profiles The majority of San Francisco Agricultural High School teachers are professionally certified, are on average 40 years old, and live with their families in the local community. The furthest some travel between home and work is 60 kms. All teachers have an understanding of rural areas and life in the countryside. Over the past few years, the Fundación has reduced the number of teachers who teach at the school and increased the number of subjects each teach to keep teachers more connected to the school. For example, one of the teachers, Lilian Lorena is now in charge of all classes related to the exact sciences (e.g. Math, Physics, and Chemistry). The following chart provides additional information on the school’s teachers. The “Common Plan” denotes schooling in general subjects (e.g. history, geography, literature, etc.) while “Technical Plan” denotes schooling in vocational subjects.

Name Age Profession

Location of

ResidencyClassification of

Studies

Annual Salary US$

Date Started

Working Mario Eduardo Mendieta Fernández 45 Economist

Benjamín Aceval

Common Plan - Historia y Geografía

3.048 01/03/1999

Lilian Lorena Llano Ojeda 31

Bio Chemist

Benjamín Aceval.

Common Plan- Ciencias exactas

4.437 25/02/2002

Virgilio Borges 49 Professor Benjamín

Aceval

Technical Plan, General Services, Machines and Production

7.410 01/11/1994

Celso Javier Rolón Lezcano 44 Veterinarian Luque

Specific Teaching Plan- Animal Production

4.239 01/03/2000

Juan Carlos Núñez Paredes 44 Professor

Benjamín Aceval

Common Plan - Gimnasia, Deporte y Recreación 19/02/2003

Tomas Ramon Sotelo Pagliaro 34

Agronomist Engineer

San Lorenzo

Technical Plan- Vegetable Production

5.042 25/04/2000

María Fermina Martínez de Paredes 47 Teacher

Benjamín Aceval

Common Plan – Spanish language, 3.956

In November, 2003 asked

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Guarani language, and Literature

for leave to be with ill son; Joined school again 21/01/2008

Espinoza Acosta, Rufino 46 Teacher

Benjamín Aceval

In charge of animal production

4.998 01/09/2008

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Annex C- Students’ Average Daily Schedule and Academic Activities TIME

CLASSROOM SESSION

FIELD WORK SESSION

5.45 Wake up call Wake up call 6:00 Dorm clean-up Compost 7:00 Breakfast Breakfast 7:30 Classes start Field work practices

start 9:30 Break Break 9:50 Classes Field work practices 11:00 Field work practices

end 11:20 Classes end 11:30 Lunch Lunch 12:00- 13:00

Break Break

13:00- 16:00

Afternoon classes begin

Afternoon field work practices begin

16:00 Afternoon snack Afternoon snack 16:15- 18:00

Sports and extra-curricular activities

Sports and extra-curricular activities

18:10 Study hall Study hall 20:00 Dinner Dinner 20:30 -21:45

Leisure Leisure

21:45 Quiet time Quiet time 22:00 Lights out Lights out What type of activities take place in the classroom? The theoretical foundations of the school curriculum are delivered in the classroom where the teacher and students explore the concepts and develop specific subject matters. Instruction is supported by the traditional teaching resources such as classroom boards,

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textbooks and notebooks. Library resources and computers are also available to aide the learning process of the students in the media center. What type of activities take place outside the classroom? The field work practices represent the main activity outside the classroom. During these events, students have the opportunity to put into practice the concepts and ideas explored in the classroom and apply their knowledge in the field of action. Students rotate between the different productive units in the field to maximize learning and gain practical exposure to the diverse areas of agriculture and farming.

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Annex D

WHAT WAS THE CLASS OF 2006 DOING THREE MONTHS AFTER GRADUATION?

(Activities as of February 2007, 3 months after graduation)

1. Rubén Ramirez, first in his class, was studying on a scholarship at EARTH

University in Costa Rica. 2. Mario Cristaldo was working for a goat-raising livestock business in Luque. 3. Milciades Amarilla was working for the Moíses Bertoni Foundation, Paraguay’s

premier environmental organization. He is an agricultural extension agent in charge of the Britez Cué Project.

4. Aldo Moreira was working as an extension agent for the Volendam Cooperative. 5. Rolando Ruiz Diaz was working as an extension agent for Dreyfus. He was the

assistant to the Manager of Dreyfus´ project in Tacuara and was supervising two of his former classmates.

6. Gustavo Acuña and (7) Aldo Ponce were working for Dreyfus on the Tacuara

Project, with their classmate Rolando Ruiz Diaz. 8. Carlos Rodriguez was working for an agricultural enterprise in the Chaco. 9. Alcides Iturbe was working for an agricultural enterprise in the Chaco. 10. Robert Garay had joined the ESOFAER unit of the armed services. 11. Cristian Caballero was preparing to enter university in School of Agricultural

Business in Santa Rosa del Aguaray and was working on the family farm. 12. Daigo Cuevas had been hired by Dreyfus to work on the Campo 9 project in

Caaguazú. 13. Ignacio Rivas had been hired by Dreyfus to work in Encarnación, Itapúa. 14. Cristóbal Ortigoza and (15) Jesús Mosqueira were working for SENACSA (the

national animal health inspection agency) overseeing vaccinations against hoof and mouth disease.

16. Denis Rios was working for a cattle-raising company in Filadelfia.

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17. Brian Gorman was preparing to take the entrance exam for University veterinary program in Caazapá.

18. Bernardo Servín Cuellar had been hired by the Reserva Tati Yupí of Itaipú, for his

experience with the rural hotel and hotel services. (Ch. 1 School in Box)

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Annex E -- List of School in a Box Manuals/Chapters Chapter 1: Getting Started Manual 2: Self-Evaluation Manual 3: How to Organize Your School Manual 4: How to Generate School Income Manual 5: How to Run A Self-Sufficient Agricultural School Chapter 6: How to Educate Successful Rural Entrepreneurs Manual 7: How to Organize Student Life Manual 8: How to Achieve Sustainability Manual 9: How to Develop a Business Plan for an Agricultural School Manual 10: How to Finance Your Plan

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F. List of Attendees at Financially Self-Sufficient Schools Conference; Paraguay; December 4-6, 2007

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65

66

AGRICULTURAL SCHOOL All Operational Units Until: 12/31/2007

STATE OF RESULTS Livestock % Agriculture % Hotel %

Center Comm. Capacity Building % Parador (store) %

Dairy Industry

% tudent Stor %

Technical

Assistance % AcademicsINCOME 151.671.042 12% 23.384.083 2% 226.325.202 18% 218.100.724 18% 15.987.568 1% 16.195.545 1% 0 #¡REF! 401.162.581 33% 61.867.506 MILK 79.753.844 COW 1.500.000 PIGS 22.450.271 CHICKEN, EGGS 34.065.408 GOAT MILK 9.200.081 RABBITS 3.183.879 BEE HONEY 1.517.559 GARDEN SALES 5.939.832 SMALL FARM SALES 17.444.251 LODGING 226.325.202 CAPACITY BUILDING CENTER 218.100.724 REGISTRATION FEES 61.867.506 STORE SALES 15.987.568 DAIRY 16.195.545 TECHNICAL ASSISTANCE 401.162.581VARIOUS INCOMERENTAL OF CHICKEN SHEDARTESANRY PRODUCT SALESSOUVENIR SALESSALE OF MOTORIZED VEHICLESCOSTS 204.274.922 17% 23.822.236 2% 91.840.664 7% 78.415.526 6% 8.523.733 1% 6.563.212 1% 0 0% 74.045.614 6% 465.013.464 SALARIES 21.484.039 11.819.946 36.928.815 49.948.008 0 0 0 54.313.470 237.766.446 ELECTRICAL ENERGY 1.994.800 1.595.840 2.992.200 2.992.200 3.989.600 3.989.600 0 0 15.958.400 INSURANCE 145.913 19.455 486.375 593.378 97.275 87.548 0 29.183 4.377.377 DEPRECIATIONS 3.287.365 438.315 10.957.883 13.368.617 2.191.577 1.972.419 0 657.473 98.620.947 TELEPHONE/INTERNET 0 0 0 0 0 0 0 0 5.137.695 MAINTENANCE 452.386 60.318 1.507.955 1.839.705 301.591 271.432 0 90.477 13.571.594 AGRICULTURAL PRODUCTS 0 8.638.361 0 0 0 0 0 0 0 LIVESTOCK PRODUCTS 8.703.561 0 0 0 0 0 0 0 0 SCHOOL DINING 0 0 0 0 0 0 0 0 77.447.859 GASTRONOMIA 0 0 28.524.551 0 0 0 0 0 0 BALANCEADOS 166.368.679 0 0 0 0 0 0 0 0 FODDER 0 0 0 0 0 0 0 0 5.795.616 TOOLS 0 0 0 0 0 0 0 0 564.274 COMBUSTABLES 192.000 1.250.000 1.680.375 1.680.375 1.262.875 0 0 1.262.875 1.645.182 OFFICE SUPPLIES 6.455 0 49.500 49.500 0 0 0 0 487.739 DORMITORY COSTS 0 0 0 0 0 0 0 0 782.235 TAXES 44.800 0 41.364 0 0 70.371 0 0 0 TRIPS & PER DIEMS 55.455 0 26.182 0 16.200 0 0 0 971.894 DIVERSE COSTS 823.582 0 6.865.282 6.865.282 199.900 72.090 0 17.692.136 536.273 PHOTOCOPIES 16.000 0 124.228 124.228 0 0 0 0 565.575 LOCAL CLEANING 699.887 0 1.655.955 954.234 464.715 99.753 0 0 784.358 Results -52.603.880 -438.153 134.484.538 139.685.198 7.463.836 9.632.333 0 327.116.967 -403.145.958

74% 98% 246% 278% 188% 247% 0% 542% 13%

Transferences between sectionsGarden products 0 2.954.830 0 -500.000 -153.580 0 0 0 -2.301.250 Farm and fruit products 0 7.463.125 0 -500.000 -151.575 0 0 0 -6.811.550 Livestock products 0 0 0 0 0 0 0 0 Cow meat 4.630.000 0 -1.044.000 0 0 0 0 -3.586.000 P ig meat 5.528.700 0 0 0 0 0 0 -5.528.700 Eggs 7.586.000 0 -469.000 -300.000 -3.262.500 0 0 0 -3.554.500 Chicken 1.694.260 0 -54.000 -750.000 -830.860 0 0 0 -59.400 Milk 40.133.525 0 -411.500 -875.000 -2.344.575 -12.508.800 0 0 -23.993.650 Cheese 0 0 0 0 0 0 0 0 Goat milk 655.000 0 0 -7.000 -288.000 0 0 -360.000 Milk products 0 0 -112.000 -1.695.570 2.963.490 0 0 -1.155.920 Mercaderías 0 0 -56.700 65.900 -9.200 0 0 0 Restaurant 0 0 0 0 0 0 0 0 Compensated consumption 60.227.485 10.417.955 -2.147.200 -2.925.000 -8.379.760 -9.842.510 0 0 -47.350.970 Result of transfers 7.623.605 9.979.802 132.337.338 136.760.198 -915.924 -210.177 0 327.116.967 -450.496.928

104% 142% 244% 274% 89% -97% 0% 542% 3%Income to realizeChickensMilk 0 Goat milkRabbitsMercaderíasEvents of hotel and center 0 0 Technical assistance 0 0Motors, etc. Total income to realize 0 0 0 0 0 0 0 0 Result 7.623.605 9.979.802 132.337.338 136.760.198 -915.924 -210.177 #¡REF! 327.116.967 -450.496.928