Pilot commercial land markets project

The project will help some 375 farmers attain title to 3.5 ha or more of land, and will provide them with production credit and TA as well. The Foundation will purchase land on the open market, paying up to 50% of the price in cash; the remainder will be paid with mortgage guarantees issued by the Foundation at a negotiable maturity. The size of land parcels will be partially determined by an agrological study. Farmers who participate in the program will make a down payment of 10% of the total purchase price of each land parcel (and associated legal costs), and pay the rest in installments, leaving the land as a mortgage guarantee. Loan maturity for farmers will be up to 12 years, with interest no higher than prevailing bank rates. As a guarantee of future repayment, mortgages will be in favor of the Foundation. To obtain additional funds for the project, the Foundation will issue certificates (based on the mortgage collateral) to the local capital market. Some 1,400 ha will be sold and cultivated during the project"s first year, and 350 ha each year thereafter. Participating farmers will be able obtain production credit ranging from (Quetzal) Q200 to Q225 and TA in farm management, the latter to be provided either by the Foundation or through outside contractors.