Food Cold Chain Enhancements in Guatemala Food Cold Chain Enhancements in Guatemala 1 © 2025 The World Bank 1818 H Street NW, Washington, DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved. This work is a product of the staff of the World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of the Executive Directors of the World Bank or the governments they represent. Although the World Bank makes reasonable efforts to ensure all the information presented in this document is correct, its accuracy and integrity cannot be guaranteed. Use of any data or information from this document is at the user’s own risk and under no circumstances shall the World Bank or any of its partners be liable for any loss, damage, liability or expense incurred or suffered which is claimed to result from reliance on the data contained in this document. 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Food Cold Chain Enhancements in Guatemala Index Acronyms.................................................................................................................................................... 3 Acknowledgments....................................................................................................................................... 5 Executive Summary..................................................................................................................................... 6 I. INTRODUCTION...................................................................................................................................... 11 II. DEEP DIVES IN SELECTED AGRIFOOD VALUE CHAINS................................................................... 14 1. THE DAIRY VALUE CHAIN.................................................................................................................... 14 Description of the value chain .............................................................................................................. 14 Cold chain assessment and opportunities............................................................................................ 17 2. POULTRY.............................................................................................................................................. 19 Description of the value chain .............................................................................................................. 19 Cold chain assessment and opportunities............................................................................................ 21 3. FRESH FRUITS AND VEGETABLES...................................................................................................... 23 Description of the value chain .............................................................................................................. 23 Cold chain assessment and opportunities............................................................................................ 28 III. POLICY RECOMMENDATIONS FOR COLD CHAIN DEVELOPMENT IN GUATEMALA’S AGRIFOOD SECTOR.................................................................................................................................. 33 1. BUILDING UPON EXISTING LAWS AND POLICIES, CREATE A NATIONAL COOLING ACTION PLAN (NCAP) FOR GUATEMALA............................................................................................ 33 2. FOSTER ASSOCIATIVITY AMONG SMALL AND MEDIUM FARMERS............................................. 37 3. DEVELOP CLEAN ENERGY INFRASTRUCTURE PUBLIC-PRIVATE ALLIANCES (PPAs) UNDER EXISTING REGULATIONS....................................................................................................... 39 4. SUPPORT THE ENABLING ENVIRONMENT FOR LONG-TERM FINANCING OF CLIMATE-SMART AGRICULTURE AND COLD CHAIN INVESTMENT.................................................. 41 5. EXPLORE ENERGY-EFFICIENCY CARBON OFFSET AS INNOVATIVE SOURCES OF FINANCE......................................................................................................................................... 43 IV. CONCLUDING REMARKS.................................................................................................................... 45 BIBLIOGRAPHY........................................................................................................................................... 47 LIST OF TABLES Table ES1. Policy recommendations............................................................................................................ 9 Table 1. Departments with collection centers and processing plants......................................................... 16 Table 2. Location of production and distribution centers across Guatemala............................................. 20 Table 3. Summary of recommendations..................................................................................................... 46 1 Food Cold Chain Enhancements in Guatemala LIST OF FIGURES Figure ES1. Deep dives in selected agrifood value chains analyzed in this note......................................... 7 Figure 1. Main milk production locations in Guatemala.............................................................................. 15 Figure 2. Milk and dairy supply chain in Guatemala for informal and formal producers............................ 17 Figure 3. Milk and dairy cold chain in Guatemala ...................................................................................... 18 Figure 4. Market share of poultry products in Guatemala (2019)............................................................... 19 Figure 5. Poultry production in Guatemala................................................................................................. 20 Figure 6. Poultry supply chain in Guatemala for formal producers ........................................................... 21 Figure 7. Poultry cold chain in Guatemala.................................................................................................. 22 Figure 8. Total exports of peas and green beans, Guatemala 2000-2021.................................................. 23 Figure 9. Peas and green beans supply chain in Guatemala in local markets and for exporters............... 24 Figure 10. Peas and green beans production in Guatemala....................................................................... 25 Figure 11. Tomato supply chain in Guatemala in local markets and for exporters..................................... 26 Figure 12. Tomato production in Guatemala............................................................................................... 26 Figure 13. Papaya supply chain in Guatemala for exporters...................................................................... 27 Figure 14. Papaya production in Guatemala.............................................................................................. 28 Figure 15. Peas and green beans cold chain in Guatemala (exports)........................................................ 30 Figure 16. Tomato cold chain in Guatemala............................................................................................... 30 Figure 17. Papaya cold chain in Guatemala............................................................................................... 31 Figure 18. NCAP preparation process........................................................................................................ 35 Figure 19. Electricity Coverage Index (2021).............................................................................................. 40 LIST OF BOXES Box 1. International case study: India’s Cooling Action Plan (ICAP)........................................................... 36 Box 2. International case study: Costa Rica’s INFOCOOP and Dos Pinos................................................. 38 Box 3. International case study: Honduras’ Rural Competitiveness Program (COMRURAL) .................... 40 Box 4. International case study: Honduras’ Rural Competitiveness Program (COMRURAL) – continued.42 Box 5. Indonesia crediting mechanism ...................................................................................................... 44 2 Food Cold Chain Enhancements in Guatemala ACRONYMS AGEXPORT Guatemala Exporters Association ANADIE National Agency of Alliances for the Development of Infrastructure BAU Business-as-Usual BANRURAL Rural Development Bank of Guatemala CIG Industry Chamber of Guatemala COMRURAL Honduras’ Rural Competitiveness Program DICORER Rural Extension Directorate. MAGA (Guatemala) ESMAP Energy Sector Management Assistance Program EU European Union FAO Food and Agriculture Organization of the United Nations FCPF Forest Carbon Partnership FLW Food Loss and Waste FONAGRO National Fund for the Reactivation and Modernization of Agricultural Activity FONCC National Climate Change Fund GDP Gross domestic product GHG Greenhouse gas GWP Global Warming Potential HFC Hydrofluorocarbons ICAP India’s Cooling Plan IFC International Finance Corporation INACOP National Institute of Cooperatives INFOCOOP National Institute for Cooperative Development (Costa Rica) ISO International Organization for Standardization MAGA Ministry of Agriculture and Livestock MARN Ministry of Environment and Natural Resources MEM Ministry of Energy and Mining MINECO Ministry of Economy MINFIN Ministry of Finance MFis Microfinance Institution MOSCAMED Mediterranean Fruit Fly Program. MRV Monitoring, Reporting and Verification MSMEs Micro, Small and Medium Enterprises Mt Metric Ton NCP National Competitiveness Policy NDC Nationally Determined Contribution NDP National Development Policy K’atun NPEE National Policy on Energy Efficiency NPRE National Policy on Rural Electrification 3 Food Cold Chain Enhancements in Guatemala PPA Public-Private Alliances PRONACOM National Competitiveness Program PV Photovoltaic (Solar) R&D Research and Development RPO Rural Producer Organizations SMF Small and Medium Farmer SACCO Savings and Credit Cooperative Organizations SDG Sustainable Development Goals SEforAll Sustainable Energy for All SNER National Rural Extension System SOP Standard operating procedure TWh Terawatt hours USD United States of America Dollar UNEP United Nations Environmental Programme US United States of America UVG Universidad del Valle, Guatemala WUR Wageningen University & Research 4 Food Cold Chain Enhancements in Guatemala ACKNOWLEDGMENTS The note summarizes a broad assessment of cold chain challenges and opportunities in Guatemala’s agrifood sector, which was generously financed by a grant from the Energy Sector Management Assistance Program (ESMAP). The note was prepared by a World Bank team including Viviana Maria Eugenia Perego (Task Team Leader, Senior Agriculture Economist), Felipe Lizana Sánchez (Consultant), Maria Florencia Millán (Consultant). Original background analysis and inputs were provided by a team of Wageningen Food and Biobased Research (WUR) including Jan Broeze, Josianne Cloutier, Frank van de Geijn, Bas Hetterscheid, Esther Hogeveen, René Oostewechel, and Cor Wattel; as well as a team of Universidad del Valle de Guatemala (UVG) including Ana Silvia Colmenares Samayoa, Juan Fernando Díaz Lara, Catalina Galdámez, Luis Ernesto Núñez González, Ana Alicia Paz Pierri, and Igor Alfonso Trujillo Mayol. The team is grateful for the inputs, brainstorming, and feedback received from Diego Arias (Practice Manager, World Bank), Hans Jansen (Senior Agriculture Economist, World Bank), Tomás Rosada (Senior Agriculture Economist, World Bank), Katie Freeman (Program Leader, World Bank), Maria Victoria Traverso (Agriculture Analyst, World Bank), Douglas Randall (Senior Financial Sector Specialist, World Bank), David Vilar (Program Leader, World Bank), Laura Wendell Berman (Senior Energy Specialist, World Bank), Jenny Maria Hasselsten (Senior Energy Specialist, World Bank), Clemencia Torres de Mastle (Senior Energy Economist, World Bank), Leo Joseph Blyth (Consultant, World Bank), Siddika Bhuiyan Mishu (Consultant, World Bank), Peter Johansen, Juan Carlos Cardenas, David Parada. The authors would like to acknowledge the invaluable support received from stakeholders and key informants within the agrifood sector of Guatemala, who graciously offered the insights and observations that were necessary to produce this note. These include a number of farmers and agrifood producers who participated in focus groups and validation workshops, as well as: Álvaro Ramos and Antonio Ferrate (Ministry of Agriculture, Livestock, and Food); the Ministry of Economy; Ronald Reyes and Andres Bickford (AGEXPORT); Carlos de León (Technical Training Institute); Eduardo Solares and César Mishaan (Polartika); Jorge Gomez (Combex IM); Alvaro Figueredo (Experimenta); Gerardo Mendez (Unisuper); Esteban Morales (Ilgua); Ramiro Pérez (ASODEL); Leonel Corado (Agroindustria de lácteos de Guatemala); Astrid Garcia Salas (Cámara productora de leches); Wilfredo Fernandez (Gremial de lácteos); Orlando Perez (Popoyan); Luis Fernando Palomo (CMI); Braulio Toc (Pea Cooperative); Mario Carrera, Luis Saavedra, and Marielena Mérida (Fresh Del Monte); Andrea Hidalgo (Walmart); Julio Suárez (Banrural); Evelyn Juárez (Industrial Bank); Valesca Zeseña (Agricultural Mercantile Bank); Karla Staling (BAC); Daniel Amézquita (Oikocredit); Vitali Foods; Agrotokes; ASPIRE UVG and Center for Agricultural and Food Studies (Universidad del Valle). The World Bank Country Office in Guatemala was instrumental in proposing and coordinating interviews, as well as in supporting in-country dissemination of this work. The team is especially grateful to Marco Scuriatti (Country Manager, World Bank) and Fernando Paredes (Senior Operations Officer, World Bank). The team expresses its gratitude for logistical and administrative support from Sofia Neiva (Team Assistant, World Bank) and Jairi Hernández (Team Assistant, World Bank). 5 EXECUTIVE SUMMARY 1. Guatemala’s agrifood sector plays a market as well as export revenues and integration significant role in Guatemala’s economy, but into global value chains. In addition, bringing faces a series of challenges that impact its energy efficiency into the equation, establishing performance. The agriculture sector accounts for a framework that prioritizes actions to reduce 10.2% of Guatemala’s economic activities, with energy needs, can promote the sustainability of a significant multiplier when accounting for the the cold chain.1 This policy note, which is based full backward and forward linkages, employing on the findings of a comprehensive background 32% of Guatemala’s active population. However, assessment of Guatemala’s agricultural cold the sector presents a highly dualistic structure chain sector (focusing on the dairy, poultry, and where a minority of larger players integrated in fruits and vegetables sectors),2 provides a set of global value chains coexist with a high number recommendations to unlock the potential of cold of producers facing severe, multi-faceted chains to address challenges such as energy challenges. Small agri-business and farmers lack efficiency, food security and safety, and food loss access to finance, markets and connection to and waste. The specific value chains included in national and global value chains. Smallholders the study were selected based on a prioritization have also seen steadily declining or stagnating strategy that involved several factors pertaining productivity over the last decade, partly because to socio-economic relevance, expected reliance of climate change and low access to agricultural on cold chain infrastructure, potential to promote good practices. Furthermore, Guatemala also sustainable and climate-smart approaches, contends with widespread food insecurity, which relevance for nutrition and healthy diets, and is particularly prevalent among Indigenous prioritization within the public agenda. communities and families in the lowest income quintile. 4. When compared to its neighbors, Guatemala’s cold chain infrastructure 2. Compounding the several challenges appears to be lagging behind. The current affecting Guatemala’s agrifood sector, the use of energy inefficient equipment and limited country’s investment in infrastructure is among access to electricity further complicate cold the lowest in Latin America and the Caribbean. chain development. The country’s capacity of Despite recent increases in public and private refrigerated warehouses stands at around 0.014 investments, the figures are not yet sufficient m3 per urban resident, 11.5 times lower than to reverse the negative effects of the limited Mexico’s 0.138 m3 per urban resident or Chile’s infrastructure coverage in the sector, which ranks 0.133 m3 per urban resident. Access to cooling lower than other countries of the region such facilities for storage and transportation is currently us Mexico and Honduras. This low investment limited in all the value chains under study, and is reflected in low levels of infrastructure leads to product loss or lower product quality, competitiveness: Guatemala ranks 97th out of 140 barriers to accessing local and foreign markets, economies when it comes to the competitiveness and food safety hazards. In addition to the cost of of its infrastructure, and 134th out of 141 countries establishing temperature-controlled infrastructure, in terms of road connectivity. the lack of reliable electricity supply (rural areas suffered 35% percent more interruption in service 3. Key agrifood value chains in Guatemala lack adequate cold chain investments. A 1  The current global energy demand for cooling is approximately 3,900 well-functioning cold chain would contribute TWh and could double by 2050 without proactive measures. To reduce future energy demand within agricultural value chains, energy should to reducing substantial post-harvest losses, be used for refrigeration only when the quantity of food preserved (or significantly higher market value) justifies the energy resources expended. improving food quality and safety, and enhancing 2  Specific fruits and vegetables analyzed include papaya, tomato, peas, food availability and affordability in the domestic and green beans. 6 than urban areas) acts as a major barrier to the chain. Some energy-efficient technologies that development of cold chain storage capacity could be adopted in the fruit value chain include across the country. Other challenges common evaporative cooling chambers, refrigeration to all the value chains considered in this study systems, precooling produce with cold water, and include an incomplete knowledge and training for improving insulation. small-medium farmers on the benefits of adopting energy-efficient cold chains, as well as limited 6. An adequate policy framework can support access to finance to implement energy-efficient the development of energy-efficient cold cold chain solutions. chains in Guatemala. Guatemala’s National Policy on Energy Efficiency 2023-2050 (NPEE) 5. The potential for cold chain implementation articulates the country’s energy efficiency goals, in Guatemala is promising in agrifood value including the establishment of guidelines for chains. Although the economic feasibility of efficient energy use and management, the cold chain investments varies based on factors adoption of energy-efficient technologies, and such as scale, location, and integration with the expansion of research and development other production enhancements, such solutions (R&D) in energy efficiency projects. Energy are especially promising in established export efficiency is also a key element of other policy markets for peas/green beans and papayas. By documents, such as the National Development focusing on implementing cold chain investments, Plan: K’atun, Our Guatemala 2032 (NDP) and the country can increase output value, improve the National Plan on Rural Electrification (NPRE). the quality of its food products, and expand its Policy recommendations within this framework, reach in higher-quality markets. Notably, the summarized in Table ES1, are listed below, and use of solar energy production systems could are articulated around a range of instruments support the development of energy-efficient including: (i) policy incentives to improve the cooling facilities. In all the studied value chains, coordination between small and medium farmers the adoption of photovoltaic (PV) powered through associativity and Public-Private Alliances technology systems for cooling processes (PPAs); (ii) strengthening the enforcement of presents a significant opportunity to both lower existing laws and regulations; and (iii) providing the costs of its electrification and address the incentives to encourage investments in electricity access challenge, while contributing sustainable practices related to cold chains. to the environmental sustainability of the value Figure ES1. Deep dives in selected agrifood value chains analyzed in this note. Fresh fruits Dairy Poultry and Vegetables 7 » Building upon existing laws and policies, limited supply, and at the same time it would create a National Cooling Action Plan contribute to the achievement of several policy (NCAP) for Guatemala. To date, Guatemala objectives outlined in the NDP and the NPRE, is missing a NCAP3. This plan, considered a such as increasing the renewable energy global policy best practice, should summarize share in the energy matrix and enhancing rural and provide harmonization of the goals of development through improved productive different policies currently scattered, setting and service infrastructure. clear guidelines to achieve sustainable cooling, including specific strategies and goals » Support the enabling environment for for energy-efficient cold chains in agriculture. long-term financing of climate-smart A special focus should be placed on rural agriculture and cold chain investment. development and rural electrification, including To support access to longer-term credit by creating demand for cooling by farmers. To agrifood cooperatives and micro, small, and ensure practical application, the NCAP must medium enterprises (MSMEs) for investment incorporate agricultural business model in climate-smart agriculture (including cold strategies that enable small-scale producers to chains), existing public programs in support access sustainable technology. to agriculture investment could be expanded in scope to crowd in private sector finance. » Foster associativity among small and The institutional and operational set-up of medium farmers. Building on Guatemala’s the MSME Guarantee Fund, which offers long-standing tradition with associative partial credit guarantees to the MSME structures, promote coordinated action segment, could be strengthened and aligned through DICORER to foster cooperatives or with international best practice. Expanding famers associations dedicated to cold chain the scope of the National Fund for the management, where groups of producers Reactivation and Modernization of Agricultural collaborate to manage and generate demand Activity (FONAGRO), and the National for cold chain infrastructure and services. Development Fund (FONADES) can incentivize Also, including energy-efficient cold- private credit by substantially reducing the risk chains considerations into the technical faced by financial institutions. Additionally, assistance provided by the National Institute strengthening GUATEINVIERTE’s role as of Cooperatives (INACOP). By pooling provider of guarantees would de-risk private existing resources, cooperatives or farmers investment and increase confidence of associations will enable their members to private financial institutions. These measures acquire and maintain energy-efficient cold should be accompanied by broad efforts in chain equipment that may otherwise be too streamlining operational and governance expensive for individual farmers or small models of guarantee schemes. businesses. » Explore energy-efficiency carbon credit » Develop clean energy infrastructure offsets as innovative sources of finance. through Public-Private Alliances (PPAs) Following the guidance provided by the under existing regulations. PPAs should NDP and the Framework Law on Climate focus on access to technology and innovation, Change (Decree N°7-2013), there could better access to markets and value chains, be an opportunity to develop programs knowledge transfer and training regarding cold that generate carbon credits based on chains, and risk sharing. This approach would the emissions reductions achieved by improve energy distribution in areas with agricultural cooperatives and small and medium enterprises engaged in climate- 3  Currently, around twenty countries globally have NCAPs in place, including Chile, Costa Rica, Cuba, Mexico, and Panama in Latin America. smart agriculture, including the adoption of 8 cold chain technologies and practices. To measurable, so the feasibility of any such qualify for participation in carbon markets, scheme would be subject to the development the emission reductions produced should of robust and transparent Monitoring, be unique, real, additional, permanent, and Reporting and Verification (MRV) mechanisms. Table ES1. Policy recommendations. Priority Time Main institutional Relevant regulatory Recommendation level horizon actors framework Building upon existing NDP laws and policies, create MAGA NPEE Medium a National Cooling Medium MEM NPRE term Action Plan (NCAP) for MARN Decree 7-2010 Guatemala Decree 52-2003 Foster associativity NDP Short INACOP among small and medium High NPRE term MAGA-DICORER farmers Decree 82-78 NDP Develop clean energy NCP MINECO- infrastructure through Short PRONACOM NPEE Public-Private Alliances High term MAGA NPRE (PPAs) under existing MEM Decree 16-2010 regulations Decree 52-2003 MINFIN MAGA Support the enabling (FONAGRO, environment for long-term FONADES, NDP Medium financing of climate-smart Medium GUATEINVIERTE) NPEE term agriculture and cold chain MINECO (MSME investment Guarantee Fund) MINECO- PRONACOM Explore energy-efficiency MARN NDP carbon offsets as Medium Medium MAGA Decree 7-2010 innovative sources of term MINFIN finance Note: Priority level refers to how time-sensitive each recommendation is (recommendations that address immediate issues are given higher priority). Time horizon refers to the practicality of implementing each recommendation. 9 Food Cold Chain Enhancements in Guatemala 1 Introduction 10 Food Cold Chain Enhancements in Guatemala I. INTRODUCTION 1. The agricultural sector is a cornerstone of the economy in Guatemala, but faces significant challenges. The agriculture sector contributes 10.2% to the nation’s economic activities (World Bank, 2021a; Banguat, 2021), with a significant multiplier when accounting for the full backward and forward linkages in the agri-food system (from farm inputs to food retail) and employs 32% of the economically active population (Zavala et al., 2019). Agricultural exports (valued at approximately US$4.1 billion in 2021) comprise 36% of Guatemala’s total exports (Bank of Guatemala, 2022), and the country Guatemala has become a leading exporter globally of agricultural products such as sugar and cardamom. However, challenges persist, particularly in rural areas where 46% of the population resides (INE, 2022). In particular, small agri-businesses and producers lack access to finance4, markets, and connection to national value chains. Smallholders have also seen steadily declining or stagnating productivity over the last decade (IADB, 2020)5, partly because of climate change and low access to agricultural good practices. Guatemala also contends with widespread food insecurity (59% of the population was moderately or severely food insecure between 2020 and 2022 - FAO, IFAD, UNICEF, WFP and WHO, 2022) and chronic malnutrition, which affects about 50% of children under the age of five (GCNN, 2022) and is particularly prevalent among Indigenous communities and families in the lowest income quintile. 2. Alongside other key issues related to improving agriculture productivity, food and nutrition security, and climate change adaptation and mitigation,6 a big challenge for Guatemala’s agrifood sector is reducing substantial post-harvest food losses. According to a recent diagnostic by the World Bank (2020), 38% of Guatemala’s total food production is lost each year, more than twice the global average of 14% (World Bank, 2024), due to insufficient investment in storage and preservation facilities, limited market information, and lack of uptake of post-harvest practices. The same study concludes that, in Guatemala, investments in cold chains and storage systems at the farm or cooperative levels could greatly reduce losses and generate more sales7 for poor subsistence farmers, making a dent on rural poverty and hunger and contributing to more sustainable production and post-harvest practices. 3. Guatemala’s investment in infrastructure is among the lowest in Latin America and the Caribbean. Despite an increase in public8 and private investments in cold chain and storage during the last few years, the figures are not yet sufficient to reverse the negative effects of the lack of infrastructure in the sector. Guatemala’s Refrigerated Warehouse Capacity went from 0.035 million m3 in 2014 to 0.125 million m3 in 2018, with 0.005 m3 per urban resident in 2014 to 0.014 in 2018. 4  Their rate of access to finance is 13.9 percent lower than the national average. 5  IADB (2020) “Análisis de Políticas Agropecuarias en Guatemala”. Available at: https://publications.iadb.org/publications/spanish/document/Analisis- de-politicas-agropecuarias-en-Guatemala.pdf 6  The World Bank has addressed several of these challenges in various reports focusing on Guatemala. Cf. for instance: (i) Nutrition-Smart Agriculture in Guatemala; (ii) Guatemala: Food-Smart Country Diagnostic; (iii) DIGITAGRO: Investing in digital technology to increase market access for women agripreneurs in Guatemala; (iv) Agrifood Systems in Northern Central America: Agrologistics for Modern Family Farms; (v) International prices and food security: An analysis of food and fertilizer price transmission in Central America;(vi) Central America Digital Economy: Digital economy enabling environment assessment; (vii) Guatemala: Policies for business recovery, jobs and economic transformation. 7  Several examples of privately funded cold chain suppliers indicate the success of cold chains in reducing food loss and waste. A local, small vegetable farmer from the highlands of Guatemala, using a food-safe certified InspiraFarms cold chain processing plant, reduced losses by 25%, grew his staff by 60%, and doubled his monthly production to over 100 tonnes. Likewise, a facility run by smallholder farmers, using InspiraFarms’ cold storage packhouses, grew from being a raw produce supplier to now offering food-safe aggregation to export markets (World Bank, 2023). 8  As part of its infrastructure development strategy, the Ministry of Agriculture, Livestock and Food (MAGA) is focusing on establishing collection centers for perishables with cold rooms in key communities, in collaboration with local governments. At the time of writing, one center is being developed in El Progreso, Jutiapa, which will benefit tomato, onion, and sweet pepper producers. This center is managed by a local producer association consisting of 35 farmers and includes two individual storage modules, each with a capacity for 7,000 quintals of product, two cold rooms, and a loading and unloading area with the potential for expansion based on the needs of the farmers, associative growth, and market demand. 11 Food Cold Chain Enhancements in Guatemala This is markedly lower than Mexico’s 0.138 m3 per urban resident or Chile’s 0.133 m3 per urban resident, a difference of 11.5 times (Salin, 2020). Public investment in infrastructure is a mere 1.5% of GDP (Fundesa, 2020), one of the lowest in the region and among emerging countries (World Bank 2020). The public investment on infrastructure and maintenance in Guatemala reached USD 9.84 million (2018). This investment ranks below that of countries such as Honduras, which invested USD 33.37 million, and Panama, with USD 41.58 million. However, it exceeds the investments made by El Salvador and Nicaragua, which were USD 7.10 million and USD 6.92 million, respectively (World Bank Group, 2022). This low investment is reflected in low levels of infrastructure competitiveness: according to the World Economic Forum (2018), Guatemala ranks 97th out of 140 economies when it comes to the competitiveness of its infrastructure, and the ranking drops to 134th out of 141 countries in terms of road connectivity (WEF, 2019). 4. Key agrifood value chains in Guatemala lack adequate cold chain investments. In the dairy sector, only 30% of fresh milk and dairy products are part of a cold chain (in the European Union and the United States the percentage reaches almost 100%, including processing, transport, and retail), while the rest is exposed to substantial risk of spoilage and consequent food safety hazards and product losses. In the poultry industry, while 75% of storage is managed within cold chambers (in the EU and US the percentage is almost 100%), the remaining 25% is subject to unregulated temperatures, causing significant losses at points of sale. While export-oriented vegetables value chains such as peas and green beans are characterized by sophisticated cold chain systems from the packing house onwards, the initial post-harvest stages managed by agricultural producers often lack refrigeration, which can lead to quality degradation. Similarly, export-oriented tomato producers have established cooling systems to meet stringent international quality standards, but the traditional tomato sector struggles with disorganization and fragmentation, as well as underinvestment in post-harvest management, including in the cold chain. Despite its role as a major regional exporter, Guatemala’s papaya sector also lacks a robust cold chain system that can ensure the preservation of fruit quality and freshness during transportation and storage until it reaches the market. 5. The insufficient development of cold chain infrastructure is exacerbated by high energy costs and inadequate electricity coverage. Unreliable electricity supply constitutes a significant impediment to expanding cold chain storage capabilities throughout the country. In Guatemala, 16% of the rural population lacks access to electricity, compared to 4% in urban areas (World Bank, 2021c), and in 17 municipalities of the departments of Petén and Alta Verapaz, which jointly account for almost a third of the total national agricultural area, the electricity coverage rate is only between 20% and 50% (Zavala et al., 2019). To improve Guatemala’s cold chain performance, it will be crucial to explore opportunities for energy efficiency.9 Beyond the cooling system itself, this will also entail exploring ways to reduce energy requirements in the value chain (Peters and Sayin, 2022): for instance, the consolidation of energy needs (e.g. by collaborating in cooperatives or using collection centers) is an effective method for reducing energy demand per unit of agricultural produce, while simultaneously being financially advantageous for stakeholders. 6. This note aims to identify opportunities for cold chain development in Guatemala’s agrifood sector. The rest of the note is organized as follows: Chapter II provides an overview of the current state of cold chains in the dairy, poultry, and fruits and vegetables sectors; Chapter III provides policy recommendations, based on the findings of the value chain analysis; and Chapter IV discusses and concludes. 9  Efficiency in cooling for agriculture is both a global and a domestic challenge. Globally, the total energy demand for cooling is currently around 3,900 TWh and could potentially double by 2050 if no proactive measures are taken, exceeding the International Energy Agency’s “energy budget” for cooling in a 2°C scenario (University of Birmingham, 2018). To ensure that future energy supply aligns with consumption, it is critical to establish a framework that prioritizes actions to reduce energy needs and, consequently, demand. The most sustainable approach is to minimize cooling demand wherever feasible. Within the agricultural value chain, this implies refrigerating products only when the prevention of food losses justifies the energy used. In other words, energy should be utilized for refrigeration when the quantity of food saved warrants the expenditure of resources, in this instance, energy. 12 Food Cold Chain Enhancements in Guatemala 2 Deep Dives In Selected Agrifood Value Chains 13 Food Cold Chain Enhancements in Guatemala II. DEEP DIVES IN SELECTED AGRIFOOD VALUE CHAINS 1. This chapter reports findings from deep dives into the cold chain opportunities and challenges faced by selected value chains of Guatemala’s agrifood sector. The analysis focuses on identifying the main characteristics of, and challenges facing, cold chain systems from the production to retail stages in the dairy, poultry,10 and fresh fruits and vegetables value chains (including green beans, peas, tomatoes, and papayas). The specific value chains included in the study were selected based on a prioritization strategy that involved several factors pertaining to socio-economic relevance, expected reliance on cold chain infrastructure, potential to promote sustainable and climate-smart approaches, relevance for nutrition and healthy diets, and prioritization within the public agenda. The aim of this chapter is to outline structural bottlenecks and missing links along the value chain, in order to identify policy options and investment opportunities for cold chain solutions. The deep dives draw on data collected through interviews with key informants as well as from secondary sources. Interviews were conducted with several representative producers, aggregators, processors, traders, industry representatives, academia, and government officials to collect, update, and validate information on all elements of the deep dives. Secondary data on agricultural production and trade were obtained from international and country-level databases. The findings from the analysis have been validated through a series of interviews and workshops with a wide array of stakeholders. 2. The deep dives follow the selected value chains from farmgate to final sale. The analysis systematically develops a profile of the selected value chains, describing production, market structure, and main actors. This is followed by an assessment of the cold chain status quo, as well as the identification of main challenges and opportunities including for energy efficiency. 1. THE DAIRY VALUE CHAIN Description of the value chain 3. Guatemala is a net importer of milk and dairy products, but dairy consumption is still one of the lowest in Latin America. Dairy production takes place in 14,000 milk-producing units throughout the country and is a significant contributor to employment, providing an estimated 10 thousand direct and 40 thousand indirect jobs, mainly in the rural sector. According to FAOSTAT, milk production in Guatemala during 2022 reached 525,446 tons. This output is lower than that of neighboring countries such as Honduras, which produced 691,734 tons; Nicaragua, with 1,436,683 tons; and Costa Rica, at 1,202,891 tons. However, it was higher than the production in El Salvador, which was 364,596 tons; Panama, at 179,469 tons; and Belize, with 6,558 tons. Production is seasonal, decreasing during the summer (November to April) due to limited grazing options for cattle and increasing by up to 40% during the winter (May to October) when grazing is more abundant. The commercial sale of fluid milk predominantly takes the form of UHT (Ultra High Temperature) milk in aseptic packaging, while the market for refrigerated pasteurized milk is nearly non-existent. The primary dairy products consumed are milk, yogurt, and especially cheese. Domestic production is however not sufficient to match demand, and the country displays a significant trade deficit. In 2022, the trade deficit was estimated US$ 232 million, with the major contributing to the deficit being the imports of cheese from whole milk (US$ 105 million against exports of US$ 0,99 million).11 In the same year, Guatemala’s imports (which 10  Poultry and dairy products are estimated to be the commodities most requiring cold storage, with reported usage ranging from 40 to 55% of the available pallet positions in existent cold storage facilities in the country. 11  Authors’ calculations using FAOSTAT data, including the following items: Butter of cow milk, cheese from whole cow milk, raw milk of cattle, skim milk and whey powder, and evaporated skim milk. 14 Food Cold Chain Enhancements in Guatemala are both consumed directly and as an input in the production of various dairy products) included 29,000 tons of fluid milk and 16,700 tons of powdered milk and whey. Despite the relatively high import influx, Guatemala’s annual consumption of milk and dairy products only averages 60 liters per capita, which is less than 40% of the World Health Organization’s recommended minimum of 160 liters per capita per year and one of the lowest levels in Latin America (Perspectiva, 2022). Beyond consumers’ dietary patterns, the high cost of liquid milk on the domestic market, along with quality and safety challenges, is an important factor behind low consumption, and it also prompts the dairy processing industry to use powdered milk as a raw material for their products. 4. Milk production takes place in most of the country, with heterogeneity across departments. Although milk is produced throughout the country, 11 out of Guatemala’s 22 departments account for almost 80% of production (Figure 1). In the central and coastal zones of the country, producers have relatively small cattle populations of around 8 cattle heads (MAGA, 2018) and are dedicated to specialized milk production, despite challenges in terms of frequent droughts and low technology adoption. In the Eastern zone, characterized by arid conditions for most of the year, producers commonly raise dual-purpose cattle that is suitable for both meat and milk production.12 Figure 1. Main milk production locations in Guatemala. Source: Own elaboration. 5. Collection centers and processing plants are concentrated in a handful of departments (Table 1), and several milk-producing regions have low access to processing infrastructure. Only approximately 60 collection centers are operational in Guatemala, enabling around 800 small producers to supply their milk to industrial buyers. In addition, the country’s most important dairy processing centers (highlighted as green dots in Figure 1) are all located in Guatemala’s central zone. Departments such as Petén and Izabal, where milk production is high, are geographically very distant from these zones, and transporting milk from remote farms over such long distances increases costs and undermines the competitiveness of locally produced milk, other than potentially increasing food safety hazards. 12  At the national level, the cattle inventory rounds 2.9 million heads, of which 49% are used for dual-purpose (meat and milk), 35% are for meat, and 16% are dedicated to specialized milk production. 15 Food Cold Chain Enhancements in Guatemala Table 1. Departments with collection centers and processing plants Collection centers Processing plants Jutiapa Chimaltenango Escuintla Guatemala Petén Escuintla Alta Verapaz Sololá Quetzaltenango Sacatepéquez Izabal Source: Own elaboration. 6. The dairy sector in Guatemala is characterized by widespread informality. Of the approximately 14,000 milk-producing units in the country, only 800 (5.7% of the total) supply to formal industrial plants. The rest often resort to selling their milk to local informal processors or producing dairy products themselves. Overall, 80% of milk producers are estimated to operate within the informal sector, which connects low-productivity, small- scale producers to local or regional markets. Within the informal value chain, there is little to no enforcement of good livestock, milking, or manufacturing practices, milk is transported non-refrigerated to local markets, and dairy processing does not follow legally-established food safety standards. This lack of control leads to several issues, ranging from public health risks associated with the sale of potentially unsafe products to low market prices that create low incentives for formal producers. 7. The formal value chain involves larger, organized producers and processors, but still faces quality challenges and loss of produce. In the formal value chain, milk and dairy produce flow from medium-to-large farms to collection centers and then on to larger processing facilities, before distribution to the market. Milk is rapidly cooled after milking and is transported in refrigerated trucks. Collection vehicles are usually larger, and emit fewer GHG per unit of product compared to the smaller vehicles used in informal chains. Despite its relatively higher sophistication, however, the formal dairy sector also suffers from inadequate milking and milk handling practices at the initial stages of the value chain, which result in issues with milk quality and safety, such as antibiotic residues and the use of hydrogen peroxide and additives for microbial control. In addition, important product losses of up to 20% (Pérez, 2022) occur at the consumer market level, due to product perishability and inadequate refrigeration. 16 Food Cold Chain Enhancements in Guatemala Figure 2. Milk and dairy supply chain in Guatemala for informal and formal producers Panel A: Informal producers Informal farmer/producer Dairy products distribution (local markets) Local transport Dairy products distribution (local markets) Panel B: Formal producers Formal farmer/producer Collection facility Processing facility Transport company Collection and transport company Dairy product distribution (national and export markets) Source: Own elaboration. Cold chain assessment and opportunities 8. The adoption of cold chain infrastructure within the milk and dairy sector is limited, and mirrors the divide between formal and informal producers (Figure 2). In Guatemala, national regulations do not mandate the cooling of milk. While formal producers are more likely to have established cooling systems and typically integrate these systems throughout their supply chains, the vast majority (70%) of informal producers lack cold chain systems (Pérez, 2022). Medium and large producers who sell to formal companies typically begin cooling immediately after milking. Formal dairy processing companies maintain the cold chain throughout the subsequent stages of processing, storage, and distribution, employing a variety of cooling methods. On the other hand, for small producers in Guatemala, the high upfront investment and operating costs of refrigeration facilities (both equipment and energy), coupled with unreliable electricity supply, are significant barriers to the adoption of cooling systems, especially in the face of low milk prices in local markets. Small, informal producers who sell to marketers often initiate the cooling process only at collection centers, using tanks powered by electricity or gas. Milk is then transported in non-refrigerated tanks (sometimes insulated, but mostly without protection from the sun), and its temperature is checked upon delivery to processing companies. Cooling, if implemented at all, is usually limited to the final storage and marketing stages, and is typically achieved using household refrigerators or ice chests. The insufficient adoption of cooling practices (at farms, in milking processing plants, during transport and distribution) leads to significant product losses. Without proper cooling systems, it is estimated that informal producers face product losses of up to 20% of dairy products during the commercialization phase, due to shortened shelf lives (Pérez, 2022). 17 Food Cold Chain Enhancements in Guatemala Figure 3. Milk and dairy cold chain in Guatemala (Collection, Distribution, Packaging, Refrigeration, Transportation and Storage) Small producers (80% of milk production) Storage 5-12 Cold chain starts at 496 loss in processing Transport to local average 70 km days (in case of collection center and storage markets refrigerator Not refrigerated Milk is packaged in Milk is collected in plastic bags, cheese plastic containers of small truck small truck Loss up to 20% is packaged in 30, 40 or 55 liters banana leaves Medium and large producers (20% of milk production) Small trucks to 1.62-3.43 kWh/l in the Storage 5-12 days Cold chain starts after transport from farms cooling of milk in Dairy products are 100 km (for refrigerated milking to collection centers collection centers stored in refrigeration products) for periods ranging Fluid milk is sold in from max. 15 Collected in tetrapack packaging. days to 3 months Insulated tank truck (cream, cheese,..) 40- or 55-liter plastic Other dairy products Refrigerated trucks Loss up to 20% (10,000 a 15,000lt) container are packed in various packages Source: Own elaboration. 9. Enhancing the spatial distribution of dairy processing plants and collection centers is a crucial first step to improve the efficiency of the dairy value chain in Guatemala. The establishment, near remote milk production areas (such as in the Petén department), of dairy processing and milk pasteurization centers, as well as collection centers with milk cooling systems, is essential for reducing transportation times and costs and for improving the quality of dairy products. Setting up small collection centers (catering to around 10-15 producers) with cooling systems could also boosting milk productivity and quality among small producers in the Eastern region of Guatemala. Such collection centers could be run by farmer cooperatives, whose associativity and organization would need to be strengthened to also improve commercialization and access to markets.13 These measures, which currently are not being implemented due to insufficient access to financing, would not only benefit the dairy industry, but also contribute to regional economic development by creating jobs and fostering local entrepreneurship. 10. On farm, cold chain investments with energy-efficient refrigeration technology would allow for increased production, better milk prices, and lower product losses and rejection rates. The use of cooling tanks and refrigerated transport, as well as the development of efficient distribution routes and the prioritization of temperature control measures, will go a long way in improving product quality and safety. Considering the high cost and the unreliability of energy supply, small-scale renewable energy technologies, such as windmills and solar panels, could represent a cost-saving, green opportunity for energy production. For instance, implementing a solar-powered cooling system that maintains milk at 4°C would enable producers to milk in the morning and sell or use the milk on the same day, and then again in the afternoon, storing the milk hygienically for sale or use the following morning.14 By allowing for two milkings per day, this cooling method could also boost milk production by 30%. 13  To achieve greater environmental sustainability, these interventions should be coupled with improved livestock practices to minimize carbon emissions. 14  The current practice of combining milk from two milkings for sale or use is inadequate, as storing milk for several hours, even when refrigerated, diminishes its hygienic quality. 18 Food Cold Chain Enhancements in Guatemala 2. POULTRY Description of the value chain 11. The poultry industry is on the rise in Guatemala. The Central American poultry industry is witnessing substantial growth, and currently contributes 4.2% to total meat production in Latin America and the Caribbean (Instituto Latinoamericano del Pollo, 2022). Guatemala’s Ministry of Economy (MINECO, 2019) estimates national demand for poultry at US$ 1.7 billion, split between US$ 1.1 billion for whole chicken and US$ 0.6 billion for eggs. Of this demand, the country imports between 25% and 35% annually (depending on international market prices), with more than 90% of imports originating from the United States (MINECO, 2019).15 Meat is imported frozen through the ports of Santo Tomás de Castilla and Puerto Barrios on the Atlantic coast, and is later thawed and distributed in a refrigerated state. On the other hand, locally-produced poultry is either slaughtered and sold at consumer markets or slaughtered and processed in dedicated facilities and later distributed refrigerated or frozen. Meat sales are predominantly conducted at small independent stores (such as butcher shops), and to a smaller extent at supermarkets, discount stores, and specialized food stores; hypermarkets represent a smaller share of the market (MINECO, 2019) Figure 4. Market share of poultry products in Guatemala (2019) 15% Local Crafted Chicken 30% Small producers Other products from Chicken Meat Local Industrial 30% Production Imported Chicken 25% Source: Own elaboration 12. Almost two-thirds of local industrial poultry production is concentrated in the departments of Guatemala and Escuintla (Figure 5). The main logistical operations for poultry take place at companies located in Guatemala City and Escuintla, although some of them extend their operations to other parts of the country. In addition, smaller facilities in Quetzaltenango, Retalhuleu, Alta Verapaz, Petén, and Zacapa, serve as retailer or minor distribution centers for the poultry industry, while the rest of the departments host very small distribution centers, characterized by storage units with a capacity of less than 300m3 (Table 2). 15  Estimated annual consumption is around 374 thousand metric tons of meat (Mt), vis-à-vis an estimated annual domestic production of 259 Mt. 19 Food Cold Chain Enhancements in Guatemala Figure 5. Poultry production in Guatemala Source: Own elaboration. Table 2. Location of production and distribution centers across Guatemala. Industrialized Non-industrial or smaller-scale Main + secondary distribution production productions centers Escuintla Petén Escuintla Guatemala Huehuetenango Guatemala Quiché Zacapa Alta Verapaz Quetzaltenango (Medium) Quetzaltenango Petén (Medium) San Marcos All other departmental capitals (Small) Suchitepéquez El Progreso Jalapa Chiquimula Santa Rosa Source: Authors’ elaboration 13. Informal poultry production lacks access to cooling and relies on the sale of “warm chicken”. Poultry is typically transported from farms directly to markets or trading centers, where it is slaughtered using traditional methods. The meat is then sold at small local markets, which lack proper refrigeration or freezing methods and rely instead on minimal cooling solutions that are applied sporadically: based on interviews with local actors, it is estimated that 25% of annual production is not refrigerated at all (in the EU and US, their regulation assures that 100% of the industry applies chilling or freezing), and is sold at ambient temperature. The poultry sold this way is commonly referred to as “warm chicken”. While it is commonly believed that “warm chicken” remains fresh and safe for consumption for up to 12 hours, it poses significant health hazards, which are exacerbated by the lack of stringent controls and the minimal enforcement of sanitary measures at local markets. 20 Food Cold Chain Enhancements in Guatemala 14. Industrialized poultry production often sources poultry from informal producers, but overall displays a functional vertically-integrated value chain. Local farms selling poultry to industrial companies can be either formal or informal. While formal producers utilize industrialized tools and maintain developed, controlled processes throughout the animal development stages, informal farms adopt more traditional methods with limited control points. The subsequent step of the value chain involves gathering the birds at a central facility before transporting them to a production center. Here, the animals are slaughtered and processed, and the meat and other poultry products are then distributed refrigerated and frozen. The processed products are packaged, dispatched to a distribution center, and further transported to smaller distribution hubs, retailers, or local markets. Each brand and company within the industrialized sector maintain its own distribution network, which includes cold chain services to ensure product quality and safety. Throughout the formal production and distribution chain, the cold chain is meticulously managed and is considered a critical component of the overall business model. Figure 6. Poultry supply chain in Guatemala for formal producers Formal Collection and Chicken products farmer/producer transport company distribution Center Collection facility Processing facility Chicken products Small Retailers & distribution Center distribution centers local markets Transport to small Transport to small distribution centers Retailers & Markets Source: Own elaboration. Cold chain assessment and opportunities 15. Large formal producers operate facilities equipped with refrigeration technology. Registered slaughterhouse, as well as processing and packaging facilities, are equipped with cooling technology to avoid produce loss and ensure food safety. The technology employed includes processing plants that operate under controlled temperature conditions, utilizing cooling devices fueled by electricity or gas systems. 21 Food Cold Chain Enhancements in Guatemala 16. In addition to the facilities operated by large industrial companies, a limited number of cold storage facilities is available for local producers. The local availability of cold storage services is estimated to be between 17,000 and 20,000 m3, which is equivalent to the capacity of about 8 medium-sized warehouses in the entire country.16 Most of these warehouses are situated in Guatemala City and Escuintla, and there is one facility located at each port (Santo Tomás de Castilla and Puerto Barrios). Cold-chain equipment such as cold rooms and refrigerated transportation at these facilities are obsolete and need upgrading. The vast majority17 of cold storage, however, is estimated to take place at warehouses serving the poultry industry specifically. Figure 7. Poultry cold chain in Guatemala (Production, processing, transportation, storage, selling point) Imported chicken products (largely from USA) Max. 8 days Storage 3 - 4 Cold chain starts at Container Import: 320km refrigerated or days collection center (water loss 3%) 1 year frozen Loss 1% Medium size suppliers 20% loss (incl disposals) Medium size truck Max. 8 days Cold chain starts at Domestic production 105 - 160 kWh/t, 200 - 250km refrigerated or collection center 0.5 to 0.8 kg plastic /t (water loss 3%) 1 year frozen Small-size processed poultry farms 20% loss (incl disposals) Small size truck Max. 8 days Cold chain starts at Domestic production 105 - 160 kWh/t, 50-100km refrigerated collection center 0.5 to 0.8 kg plastic /t (water loss 3%) Whole chicken "Peeled by hand" Small size truck 50 - 100 Chicken is slaughtered on the market 40% loss Domestic production km Losses 10%? (incl disposals) Source: Own elaboration. 17. One of the main cold-chain challenges for Guatemala’s poultry is to connect informal poultry farmers with slaughtering facilities and cold storage. A first step in this direction would be to enhance the availability of small-scale slaughterhouses and cold storage facilities across the territory, as well as promoting strategic partnerships between small producers and larger slaughtering and processing plants. Not only would this enhance the efficiency of the value chain and reduce product losses, but it could lead to increased specialization and professionalization as well as GHG emissions reduction through economies of scale and improved process efficiency. Another fundamental implication of improving the accessibility of small-scale cold chain facilities would be the possibility to contribute to improved food safety by curtailing the “warm poultry” market, which would need to be complemented by stricter government regulation, enhanced enforcement of food quality and safety standards, and communication campaigns to shift consumers’ preferences towards cooled chicken. 16  Medium size cold storage facilities have capacities ranging from 1,500 to 6,000 pallet positions (which correspond to volumes of approximately 2,000 to 12,000 m3), while smaller facilities have capacities from 300 to 1,500 pallet positions (600 to 3,000 m3). 17  Interviews with key informants estimate this share to be around 75%, equal to a capacity of around 176,000 m3. 22 Food Cold Chain Enhancements in Guatemala 3. FRESH FRUITS AND VEGETABLES Description of the value chain 18. Peas and green beans, tomatoes, and papaya are key staples in the local diet, and are increasingly valuable on export markets. In 2021, export revenues for peas and French green beans amounted to US$76 and 77 million respectively, while for tomatoes they were US$29.7 million (García, 2022). Papaya exports, on the other hand, have grown dramatically from US$3.6 million in 2010 to US$24.8 million in 2021 (FAO, 2022). Peas and green beans 19. The peas and green beans value chain expanded rapidly in recent years. Between 2003 and 2020, the area dedicated to cultivating short-cycle vegetables in Guatemala expanded three- fold, from 51,442 hectares (0.47% of the national area) to 161,763 hectares (1.49%). Approximately 60,000 families across 200 communities throughout the country are involved in the production of these vegetables (AGEXPORT, 2021). The three main segments of the value chain are agricultural production, processing or packaging, and marketing, with a strong role of intermediaries at all stages and particularly for price determination. Production occurs year-round, although the peak is observed from January to April. However, on average, post-harvest losses for green beans and peas are about 25%, which can surge to as much as 45% during the rainy season. 20. Peas and green beans are important and growing export products, but production often does not meet export standards. Total exports of peas and green beans increased rapidly over the course of 20 years (Figure 8). In 2021, Guatemala exported 34,470 Mt of peas and 34,926 Mt of green beans. Green beans are predominantly sent to the United States, which receives almost 97% of total exports, with the remainder being distributed to the United Kingdom and El Salvador. Peas are exported mainly to the United States (79% approx.), the United Kingdom and The Netherlands. Exports are primarily conducted via maritime transport (the principal export port is Santo Tomas de Castilla), although air transport is also used. Vegetables are shipped in a variety of fresh and frozen forms, packaged in different ways to meet diverse market demands. The export supply chain typically involves a network of local farmers, agricultural cooperatives, and exporters, with packing plants usually responsible for the selection and rejection processes of the produce. The rejection rate at packing plants is notably high, ranging from 30% to 45%: this translates into an estimated 27.3 to 36.4 million kilograms per year of peas and green beans that do not meet the standards required for export, resulting in foregone income for producers. Figure 8. Total exports of peas and green beans, Guatemala 2000-2021 90 80 70 60 50 Millions of 40 French US dollar green beans 30 20 Peas 10 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 Years Source: Trade Map (2022). 23 Food Cold Chain Enhancements in Guatemala Figure 9. Peas and green beans supply chain in Guatemala in local markets and for exporters Panel A: Local markets Formal and informal farmer/ producer Collection and transport Package Local market Panel B: Exporters Collection and transport Formal producer company in cold chain International markets Collection, packing and Maritimal transport cold storage facility with cold chain Source: Own elaboration. 21. 70% of the production of peas and green beans is concentrated in the Central Altiplano region, which includes the departments of Chimaltenango, Sacatepéquez, and Sololá (Turcios, 2020; Cordero, 2014). The rest of the production is spread across several other departments, including Guatemala, Huehuetenango, Quetzaltenango, Quiché, San Marcos, Totonicapán, and selected areas within Jalapa, Alta Verapaz, and Baja Verapaz (Figure 10). According to MAGA estimates (2014), the country counts with 68,572 hectares suitable for peas and 90,685 hectares for green beans (primarily located in the departments of Guatemala, Chimaltenango, Jalapa, and Quiché), but this potential appears to still remain largely untapped in Jalapa and Quiché. Packing plants are predominantly located in Sacatepéquez, which hosts 46% of the country’s facilities, Chimaltenango (26% of total plants), and Guatemala (4%). The distribution of these plants plays a crucial role in the efficiency and quality control of the production process. 24 Food Cold Chain Enhancements in Guatemala Figure 10. Peas and green beans production in Guatemala Source: Own elaboration. Tomatoes 22. Tomatoes produced in Guatemala are sold both globally and in local markets. Tomato cultivation in Guatemala involves both small-scale and large-scale farmers, with the harvest season primarily occurring in the months of July, August, and September. The country produces fresh tomatoes for high-quality export, tomatoes for local consumption, and tomatoes destined for industrial processing. In 2022, Guatemala’s tomato exports were valued at US$ 32.5 million (steadily increasing from US$ 29.4 million in 2020). The leading destinations of Guatemala’s tomatoes (2019) were the United States (68,1% of export value), El Salvador (25,1%), Canada (4,07%), with minor percentages sold in Honduras and Nicaragua (WITS, World Bank). 23. For the local market, tomatoes are produced by various farmers, mainly small and medium- sized and unorganized among themselves. The lack of organization among tomato producers hampers the sector’s ability to engage in strategic planning for sowing dates, which results in market oversaturation. Oversaturation, in turn, leads to low prices on local markets, which drives farmers to leave considerable quantities of produce unsold and lost, or else export them at lower profits to Honduras and El Salvador (which both have less stringent sanitary and phytosanitary standards compared to Guatemala). Local tomato producers grapple with issues such as volatile market prices, pest and disease control, limited access to financing for small-scale operations, and concerns regarding sustainability and environmental impact. Product losses can be substantial, up to 50% of total production in certain seasons. These losses can be attributed to a variety of factors, including environmental conditions (rain, cold, heat), mechanical damage, pest infestations, malformations, and market oversaturation making producers decide to leave produce in the field (Carranza, 2022). 25 Food Cold Chain Enhancements in Guatemala Figure 11. Tomato supply chain in Guatemala in local markets and for exporters Panel A: Local markets Informal farmer/producer Local transport Packaging Tomatoe distribution (local markets) Panel B: Exporters Collection and transport Formal producer company in cold chain International markets Collection, packing and Maritimal transport cold storage facility with cold chain Source: Own elaboration. 24. National tomato production in Guatemala is distributed among several regions, with more than 90 of total production concentrated in East Guatemala (Figure 12). The departments of Jutiapa and Baja Verapaz each contribute 20% to the total. Other important production areas are Chiquimula (11% of total production), Guatemala (8%), Zacapa (7%), El Progreso and Alta Verapaz (6% each), and Jalapa (5%). Figure 12. Tomato production in Guatemala. Source: Own elaboration. 26 Food Cold Chain Enhancements in Guatemala Papaya 25. The cultivation of papaya in Guatemala has grown dramatically over recent years, and is mostly destined to the export market. Between 2003 and 2022, the area cultivated with papaya has expanded by a factor of more than 20, from 614 hectares to 13,079 hectares. In the same period, Guatemala’s papaya exports have increased from US$ 0.47 million in 2003 to US$ 24.86 million in 2022 (FAOSTAT). Currently, only about a third of total papaya production is reserved for the domestic market, while the rest is exported mainly to the United States and El Salvador, which respectively account for 86.4% and 13.8% of total papaya exports (FAO, 2021). Papaya is cultivated and harvested throughout the year. 26. Papaya is cultivated and harvested throughout the year, but is vulnerable to pests and post- harvest losses. Papaya post-harvest losses range between 10 and 15% (Donis, 2022) and are mainly due to accidental hitting of the fruit in the packing or storing process (which affects appearance and provokes rejection in domestic and foreign markets) as well as diseases such as anthracnose. Plagues are another critical threat for Guatemalan papayas. Guatemala has been declared a pest-free zone for the Medfly18 through the Mediterranean Fruit Fly Program (MOSCAMED). However, Guatemalan papayas are still highly vulnerable to the Brazilian virus of Maleira, which affects the semblance of the fruit with a “glue and sticking” sensation that makes the fruit hard and rough. Producers affected by the Maleira virus tend to quit the cultivation process, which causes product shortages in the domestic market and for exports. Figure 13. Papaya supply chain in Guatemala for exporters Formal Collection and transport farmer/producer company in cold chain International markets Collection, packing and Maritimal transport cold storage facility with cold chain Source: Own elaboration. 27. Papaya is virtually only grown in the Petén department. With 12,987 hectares cultivated with this fruit, the department thus hosts 99% of Guatemalan papaya production area (Figure 14). Another 92 hectares of papaya-producing land can be found in Escuintla (MAGA, 2020). The concentration of production in Petén is due to its favorable climatic conditions: the best quality and continuity of papaya production is obtained below 600m above sea level, in warm climates with frequent and moderate rains, and high exposures to the sun. 18  The Mediterranean fruit fly (Ceratitis capitata W.), known as the Medfly, is considered one of the most damaging agricultural pests in the world. The damage makes crops inedible and unmarketable. The Medfly can infest a wide range of fruits, nuts, and vegetables, and papaya is among the crops most vulnerable to this pest. 27 Food Cold Chain Enhancements in Guatemala Figure 14. Papaya production in Guatemala. Source: Own elaboration. Cold chain assessment and opportunities 28. The adoption of cold chain in the fresh fruits and vegetables sector is characterized by a high duality between export-oriented production and production for the domestic market. On one hand, producers that are well integrated into global value chains are very scrupulous in ensuring that food quality and safety standards are maintained throughout the journey of their produce from the farm to the end consumer in the destination market, and adopt adequate cold chain technology at virtually every step of the value chain. On the other hand, resource constraints compounded by limited access to finance, knowledge gaps and low access to training and technical assistance, and insufficient producer organization and incentives constrain the reach of cold chain among small and medium producers selling on local markets. 29. The use of cold chains for peas and green beans is limited to export operations, with minimal to no cooling facilities for produce sold in the local market. Cold chain logistics, including cold rooms and forced air cooling equipment, is a critical component of the organized, export-oriented supply chain for peas and green beans. Cooling is applied from the moment the produce is received at the collection center and is maintained during transport and shipment. In contrast, the domestic market rarely utilizes cold chains, which poses a logistical challenge due to the temperature sensitivity of these vegetables. Occasionally, products destined for local markets are transported in trucks equipped with cooling systems. More commonly, however, they are transported in non-refrigerated trucks during the cooler hours of dawn or night to leverage lower ambient temperatures. This method, while somewhat effective, does not preserve the quality of the produce as reliably as a dedicated cold service would. 30. Similarly, cold chain systems are widespread among tomato exporters, but are not employed in the domestic market for tomatoes. Neither tomatoes intended for local consumption nor those for industrial processing are subject to cold chain transport and storage. Refrigeration is not applied at any stage of the local tomato supply chain, exacerbating product losses. For industrial processing, tomatoes must be quickly transformed into processed goods soon after harvest, which 28 Food Cold Chain Enhancements in Guatemala reduces the need for cold storage. Tomatoes are sold ripe and at room temperature in local markets, which significantly reduces shelf-life and contributes to considerable product loss. Lack of access to cold-chain technology is compounded by a low awareness on the part of local producers of the benefits of cold chain: interviewed tomato producers reported to believe that cold chain, like other investments in post-harvest management, is an unnecessary cost, which would not produce a guaranteed increase in their revenues. Exporters of fresh tomatoes, on the other hand, employ cooling systems from the moment the product is received at the collection center, maintaining cold temperatures during transportation and shipment. Facilities often have cold rooms operating at standard temperatures, and sometimes forced-air precooling is utilized. Tomatoes exported to the United States and Canada are specifically produced to meet the legal and quality standards of those markets. After the initial sorting and cleaning, tomatoes are graded and packaged into boxes or suitable containers for transport, and cold chain is utilized throughout transportation and distribution. The entire shipment to the United States is kept under cold conditions, within a temperature range of 10-13°C, and transported in containers, with transit times ranging from 40 to 96 hours from the port of Santo Tomas de Castilla to the United States. 31. Papaya’s cold chain adoption reflects the same dichotomy between export-oriented and local value chains. In the local market, the cold chain is absent upon reaching retail stores, where papayas are stored and displayed at room temperature. Transport from the production field to collection centers is done at ambient temperatures, leading to quality issues further along the value chain. Small papaya producers have limited access to cold-chain technology (whose benefit they are broadly unaware of) and face relatively high maintenance costs that are not justified if their products do not reach a high-end market. For papayas intended for export, instead, the cold chain is maintained until retail. Immediately after harvest, the fruit is transported in refrigerated containers to the packing facility, where they are quickly cleaned, labeled, and packed in a cooling room with temperature control. Following packaging, the product is palletized on wooden pallets and stored in a cold room, and then are promptly transferred to the container, which is cooled and loaded at the optimal temperature.19 The exported product is then in transit to the United States for 3 to 4 days, with the temperature regulated between 9 and 12°C. Nevertheless, papaya exporters in the Petén Department encounter problems in maintain well-functioning refrigeration services, due to limited access to the electrical grid and poor consistency of electrical energy supply for powering cold storages. Diesel-powered generators are usually employed to address these challenges. 32. Despite high costs, acquiring and maintaining cold chain technology can be economically viable for groups of small and medium peas and green beans producers. The high costs associated with acquiring and maintaining cold chain technology pose a significant barrier to adoption for small and medium producers. This is exacerbated by low financial inclusion which hinders investments. The construction of a small-capacity collection center with cold storage capacity of 250 kg and a rotation every two days would require a cost of US$45,000, plus annual operating costs of US$50,000; powering the unit with solar energy would also entail an additional investment of around US$70,000 in solar panels and a generator. While non-negligible, this investment can be economically viable for groups of small and medium producers: a minimum of 52 growers would make such an investment economically feasible,20 if coupled with training and technical assistance to fill knowledge and training gaps regarding the importance, benefits, and implementation modalities of cold chains. 19  Containers typically take between 15 and 20 hours to reach the target storage temperature. 20  Expected revenues of the intervention include savings on losses and price increases due to access to export markets. 29 Food Cold Chain Enhancements in Guatemala 33. In a similar way, cold chain technology could benefit small and medium tomato producers. The main advantage of cold chain systems for tomatoes would be the extension of shelf life: tomatoes typically last up to 14 days at ambient temperature, but, under refrigerated conditions, this can increase to about 24-28 days. In addition, implementing a standard operating procedure for harvesting and storing less mature tomatoes could open new markets and contribute to avoiding the issue of market oversaturation, stabilizing prices year-round (Carranza, 2022). As for the peas and green beans value chain, such investments would need to be accompanied by targeted training and technical assistance, to counter the current apparent lack of interest by small producers in post- harvest management enhancements as a worthwhile profitable opportunity. 34. Implementing cold chain solutions at packing and storage locations would improve the quality and safety of Guatemalan papayas. Producers in the papaya sector could benefit from packing locations with faster cooling equipment and hot water treatment. In addition, storage at 13°C could extend the shelf life of papaya to 2-4 weeks (depending on the cultivar and the maturity stage at harvest), twice to four times the 7-day shelf life attainable at room temperature; shelf life would increase even further, to around 3-5 weeks, under controlled atmosphere conditions (Zou, et al., 2014). As access to finance is limited for small and medium producers for the local market, such investments could be financed by establishing cooperatives for cold rooms in areas with high concentrations of small-scale producers. Figure 15. Peas and green beans cold chain in Guatemala (exports). (Collection, Distribution, Sorting, Packaging, Refrigeration, Transportation, Shipping and Storage) Export chain Average 50 340 km Assume 1000 Year-round ± 60% Plastic boxes ± 5000 km km. 2 days, with Refrigerated km. Loss 20 - Peak approved for covered with Refrigerated Medium size refrigeration (often Loss in 25% January-April export plastic film containers truck sub-optimal) transport 1% Rejects from export chain: 5 to 8 days, Of these rejects 40% is traded on local food Small trucks without market, and 40% for animal feed. and vans refrigeration The price (per kg) of locally traded food product is about 50% the price for product approved for export Source: Own elaboration. Figure 16. Tomato cold chain in Guatemala. (Collection, Distribution, Sorting, Packaging, Refrigeration, Transportation, Shipping and Storage) Export chain Assume 1000 Average 160 46% 310 km ± 5000 km 2-4 days, with km. Loss in km. approved for Wood boxes Large truck Refrigerated Loss ?% refrigeration transport Small truck export refrigerated containers 0.5% Rejects from export chain No Small trucks 54% of rejects go to local market Wood boxes refrigeration and vans Domestic chain No Wood boxes refrigeration Source: Own elaboration. 30 Food Cold Chain Enhancements in Guatemala Figure 17. Papaya cold chain in Guatemala. (Collection, Distribution, Sorting, Packaging, Refrigeration, Transportation, Shipping and Storage) Export chain (33% is exported, mainly to USA) Paper Average 400 ±80% 0.5kg/ton, ± 5000 km Cooling down ± 2 days, with 280 km Assume 1000 km. approved for carton boxes Refrigerated Loss ?% ± 1 day for export refrigeration Large truck km Small truck export containers 7-10kg/ton Rejects from export chain Without Small trucks 30% of rejects go to local market refrigeration and vans Domestic chain Either to supermarkets (cold storage) 456 Km 10 - 15% loss Or directly to markets (no cold chain, fast maturation Source: Own elaboration. 31 Food Cold Chain Enhancements in Guatemala 3 Policy Recommendations For Cold Chain Development In Guatemala’s Agrifood Sector 32 Food Cold Chain Enhancements in Guatemala III. POLICY RECOMMENDATIONS FOR COLD CHAIN DEVELOPMENT IN GUATEMALA’S AGRIFOOD SECTOR 35. This note has highlighted important cold chain bottlenecks at all links of select agrifood value chains in Guatemala. Widespread gaps at the post-harvest, storage, processing, transport, and distribution stages stifle productivity, create food safety hazards, hamper food availability in local markets, and leave small producers vulnerable to climatic and economic shocks, while keeping them excluded from high-value markets and income generation opportunities. 36. To address the challenges identified, the following sections of this chapter present a set of policy recommendations aimed at enhancing energy efficiency within Guatemala’s agricultural cold chain. The recommendations encompass a comprehensive toolkit for the public sector, which includes legislative and administrative instruments, as well as market-based interventions. Recommendations were validated with a broad range of stakeholders through interviews and workshops. Interviews were conducted with representatives from the government and financial sectors, while collaborative workshops engaged value chain representatives. 37. The policy recommendations, to be described in the rest of this chapter, are as follows: (I). Building upon existing laws and policies, create a National Cooling Action Plan (NCAP) for Guatemala; (II). Foster associativity among small and medium farmers; (III). Develop clean energy infrastructure through Public-Private Alliances (PPAs) under existing regulations; (IV). Support the enabling environment for long-term financing of climate-smart agriculture (CSA) and cold chain investment; (V). Explore energy-efficiency carbon offsets as innovative sources of finance. Each of the following sections outlines the proposed policy measures, their rationale and expected impacts, as well as the main actors involved. 1. BUILDING UPON EXISTING LAWS AND POLICIES, CREATE A NATIONAL COOLING ACTION PLAN (NCAP) FOR GUATEMALA 38. Guatemala’s policy framework includes key policies that support energy efficiency, rural development, and agriculture growth. The National Development Plan: K’atun, Our Guatemala 2032 (NDP) is a pivotal long-term policy that underpins the country’s holistic development, with specific provisions for which seeks to increase the competitiveness of rural areas by improving connectivity between rural areas and markets and production areas, including infrastructure and information systems; promoting productive projects that increase food security levels; increasing producers’ competitiveness and developing agri-businesses with lower production costs, especially regarding transport and logistics; and improving post-harvest management processes to reduce production costs. It aims to stimulate economic growth and productive transformation by fostering investments 33 Food Cold Chain Enhancements in Guatemala in sustainable industries focused on energy efficiency and resource conservation. The NDP also supports climate change mitigation and adaptation by promoting energy-efficient practices in industry. Furthermore, the National Energy Efficiency Plan 2019-2032 and National Plan on Energy Efficiency 2019-2050 (NPEE) delineate key areas for energy efficiency, including advocating for energy savings in the industrial and commercial sectors and enhancing research and development (R&D) for energy-efficient project initiatives. The NPEE promotes renewable energy equipment imports and the exemption of certain taxes for new projects that include the implementation and use of renewable energy system. Additionally, the National Policy on Rural Electrification 2020-205021 (NPRE) is designed to sustainably increase electrical coverage over time. It focuses on integrating new supply technologies and prioritizing electrification projects that boost local productivity and expand access to electricity. 39. Furthermore, several laws and regulations include provisions that can support low-carbon and energy-efficient development in the agriculture sector. These include among others: » Decree 7-2013 (Framework Law to regulate the reduction of vulnerability, mandatory adaptation to the effects of climate change and the mitigation of greenhouse gases)22 sets out a comprehensive legal framework for climate resilience, adaptation and mitigation. It is particularly significant for its mandatory application to government actions, especially regarding carbon emissions from the transport sector. The decree also requires the creation of regulations to limit emissions and address climate change effects. » Decree 52-2003 (Law on Incentives for the Development of Renewable Energy Projects)23 and its Regulation (Government Agreement N° 211-2005)24 offer fiscal incentives to promote climate- resilient investments, potentially encompassing energy-efficient cold chain projects. Specifically, Decree 52-2003 provides tax incentives for renewable energy projects, including exemptions from import duties and taxes for required equipment and materials. The decree also establishes a fund to financially support these projects and permits the integration of surplus energy generated into the national grid. In the Regulation, the productive use of renewable energy is promoted by offering tax exemptions and credits to businesses that incorporate renewable sources, with emphasis on the development of renewable energy projects in rural areas. The Regulation also advocates for reforms to introduce additional incentives, thereby providing stronger support for renewable energy initiatives. 40. To date, Guatemala is however missing a National Cooling Action Plan (NCAP). NCAPs are an important tool to assist countries beginning to develop long-term policy strategies achieving sustainable energy and climate change goals (UNDP, 2023). They are considered a global policy best practice25 (see e.g. SEforALL, 2022) to identify comprehensive pathways to reduce energy- related emissions from cooling, and can be used as a long-term strategy to achieve targets from the Sustainable Development Goals (SDGs), Nationally Determined Contributions (NDCs) and Kigali Amendment.26 NCAPs identify potential energy demand reduction and energy efficiency interventions and propose a framework for the implementation of these actions in an integrated national cooling 21  https://mem.gob.gt/wp-content/uploads/2020/09/Politica-de-Electrificacion-Rural-2020-2050.pdf 22  https://faolex.fao.org/docs/pdf/gua140260.pdf 23  https://mem.gob.gt/wp-content/uploads/2015/06/Decreto-y-Acuerdo-Gubernativo.pdf 24  https://www.cnee.gob.gt/pdf/marco-legal/ReglamentoLeydeIncentivosEnerg%C3%ADaRenovable2014.pdf 25  Currently, around twenty countries globally have NCAPs in place, including Chile, Costa Rica, Cuba, Mexico, and Panama in Latin America. 26  The Kigali Amendment to the Montreal Protocol is an international agreement to gradually reduce the consumption and production of hydrofluorocarbons (HFCs). This amendment adds HFCs to the list of chemicals that countries commit to phase down to reduce climate change. As of 2024, 157 states and the European Union have ratified the Kigali Amendment. 34 Food Cold Chain Enhancements in Guatemala plan, including specific strategies and targets for the agricultural sector. Among other avenues for action, NCAPs address the potential of developing sustainable cooling infrastructure coupled with renewable energy, particularly in the cold chain sector, supporting also the demand for cooling within the sector. Currently, over 30 NCAPs globally are at various stages of development, including for Costa Rica and Panama in Central America, but Guatemala still lacks one. 41. Recommendation. Building upon existing laws and policies, a National Cooling Action Plan (NCAP) for Guatemala could summarize and provide harmonization of the goals of different policies currently scattered among several instruments, setting clear guidelines to achieve sustainable cooling and including specific goals for energy-efficient cold chains in agriculture. A validated NCAP Methodology has been developed by the Cool Coalition of the United Nations Environment Programme (UNEP) and several partner institutions, based on the Needs Assessment from the Sustainable Energy for All (SEforALL)27 platform. The Methodology (see UNEP, 2021), while customizable to a country’s specific needs, rests on three sequential stages (see Figure 18): (i) contextual assessment and planning; (ii) cooling demand assessment; and (iii) synthesis and NCAP creation. In Guatemala, a special focus should be placed on rural development, rural electrification, and its linkages to climate commitments with the aim of attracting climate finance for its implementation. To ensure operationalizability, the NCAP should also incorporate business model strategies that enable small-scale producers to access sustainable technology. Figure 18. NCAP preparation process Source: Cool Coalition, AEEE, UNEP et al. (2021). 42. Main actors. The development of a NCAP is a multi-stakeholder process involving government, private sector, and academia. In Guatemala, for the development of cold chain solutions in agriculture specifically, it would be crucial to ensure participation of the Ministries mentioned in existing policies regarding rural development, energy-efficient cold chains, and sustainable cooling, including at a minimum the Ministries of Agriculture, Livestock and Food (MAGA), Energy and Mines (MEM), and Environment and Natural Resources (MARN). 27  Sustainable Energy for All (SEforALL) is an international organization that works in partnership with the United Nations towards the achievement of Sustainable Development Goal 7 (access to affordable, reliable, sustainable and modern energy for all by 2030) in line with the Paris Agreement on climate. 35 Food Cold Chain Enhancements in Guatemala 43. Expected impacts. A coordinated action plan for the application and monitoring of laws and policies related to energy-efficient cold chains will provide the private sector with a clear framework and enabling environment guiding investment decisions. NCAPs also provide the opportunity to prioritize investments and programs within each sector, rationalizing resource use based on criteria of anticipated level of effort, expected impact, and estimated cost. Based on such synthesis of existing policies and resource prioritization, it would also be possible to streamline the design of incentive programs and technical assistance targeted at agrifood sector actors involved in cold chain development and operation. Improved knowledge of and access to fiscal incentives and other support mechanisms will be particularly beneficial for small-scale, energy-efficient operations, while also producing co-benefits in rural development and enhancing farmers’ productivity. Additionally, a clearly summarized and uniformed set of policies related to cooling, and its integration into climate commitments, could also drive climate finance to fund sustainable cooling efforts. Box 1. International case study: India’s Cooling Action Plan (ICAP) The Indian Cooling Action Plan (ICAP)28 was launched in March 2019 by the Ministry of Environment, Forests and Climate Change, building upon previous policies (as the Agricultural Produce and Livestock Market Act). The ICAP offers a 20-year perspective outlining necessary actions to ensure access to sustainable cooling, and includes a chapter specifically devoted to cooling and refrigeration. Its overarching goal is to provide sustainable cooling and thermal comfort for all while securing environmental and socio-economic benefits for the society. To this end, it sets forth a series of short, medium, and long-term recommendations aimed at positioning India as a leader in sustainable and smart cooling strategies, and encourages collaboration among stakeholders in the government, private sector, non-profit organizations, and research institutions within the country. The Plan focuses on potential improvements in energy efficiency for infrastructure and cooling equipment, the adoption of low global warming potential refrigerants, and best practices for refrigerant servicing. Specific output from the various interventions outlined in the plan include: » Recognition of “cooling and related areas” as areas of research under national science and technology programs to support the development of technological solutions and encourage innovation challenges. » Reduction of cooling demand across sectors by 20% to 25 % by the year 2037-38. » Reduction of refrigerant demand by 25% to 30% by the year 2037-38. » Reduction of cooling energy requirements by 25% to 40% by the year 2037-38. According to India’s National Center for Cold-Chain Development29, in 2015 there was a 99% gap in pack- houses, 85% in reefer vehicles, and 91% in ripening chambers. To address these issues, the Governments of Haryana and Bihar -with the support of UNEP’s Cold-Chain Support Programme, aims to accelerate sustainable, market-linked, and integrated horticulture cold-chain development. This collaboration will include: » Assessment of existing cold-chain facilities, food loss, barriers, and cold-chain infrastructure gap and development of detailed recommendations. » Evaluation of benefits of cold-chain expansion for rural development and climate change mitigation and adaptation. » Development of renewable packhouse demonstration projects and investment plans. » Supporting the state governments to accelerate renewable energy in cold chains. » Provide dedicated training to a wide variety of local stakeholders on cold chain including project development, financing and renewables. Source: IEA, 2021. https://www.iea.org/policies/7455-india-cooling-action-plan-icap UNEP, 2022. https://coolcoalition.org/pilot-projects/india/ 28  https://ozonecell.nic.in/wp-content/uploads/2019/03/INDIA-COOLING-ACTION-PLAN-e-circulation-version080319.pdf 29  https://nccd.gov.in/PDF/CCSG_Final%20Report_Web.pdf 36 Food Cold Chain Enhancements in Guatemala 2. FOSTER ASSOCIATIVITY AMONG SMALL AND MEDIUM FARMERS 44. Guatemala has a long-standing tradition with associative structures. Decree 82-78 (General law of cooperatives)30 establishes the principles and rules that cooperatives must comply with. Among the types of cooperatives contemplated are specialized cooperatives, which are those that deal with a single economic, social, or cultural activity, including agricultural and livestock activities. This law outlines the process for forming cooperatives and introduces tax incentives and financial support, facilitated by Guatemala’s Central Bank (Banco de Guatemala), to encourage cooperative initiatives. The National Institute of Cooperatives (INACOP) is charged with the law’s oversight and implementation. In 2024, the INACOP website31 listed 1181 active and registered cooperatives, including independent, federate (second-level), and confederate (third-level) cooperatives. 45. Associativity among small and medium farmers can contribute to overcoming barriers to adoption of cold chain technology. Chapter II identified substantial systematic barriers that small and medium farmers face in accessing cold chain technologies within the value chains studied, especially as regards resource constraints and limited access to finance, on the one hand, and knowledge and training gaps, on the other. Associativity can be a powerful tool for enabling farmers to aggregate their demand for cooling and electricity, even when these services are provided by a third party. As discussed in Chapter II, several small cold chain investments would however be economically viable for groups of small farmers. In addition, cooperatives can access dedicated training and technical assistance from INACOP, both on technical issues and for the strengthening of organization/administration capacities to own cold rooms or provide solar electricity to the grid. 46. Recommendation. Cooperatives or farmer associations dedicated to cold chain management, where groups of producers (or other value-chain actors) collaborate to manage and utilize cold chain infrastructure and services, should be actively encouraged and promoted. In a setting where informality is high and levels of institutional trust are low, actively promoting associativity (to enable farmers to take advantage of the cooperative structures available under Decree 82-78) would entail an effort on the part of INACOP towards clearer communication on the benefits from formalization (in terms of market access, access to financial products such as credit and insurance, eligibility for government programs, among others), as well as towards strengthened institutional field presence. In its Strategic Plan 2022-2029, INACOP has committed to providing technical assistance to pre- cooperative groups during the creation and incorporation of a cooperative, enhancing cooperative capacities, and promoting productive chains. Cold chain considerations could be integrated into this technical assistance. Similarly, training and technical assistance provided to existing cooperatives/ producers’ groups – both by INACOP and the National Rural Extension System (SNER) organized through the Rural Extension Directorate of the MAGA (DICORER) – should be complemented with specific information on the benefits of cold chain best practices, as well as equipment operation and maintenance. Cooperatives that are not yet robust enough to independently invest in energy-efficient agrologistics could be involved in a partnership with larger value chain companies with privately- owned cold chain infrastructure, to avoid reliance on collection centers or processing plants situated at a high distance from their farms. 47. Main actors. Fostering associativity for cold chain adoption would require coordinated action by the INACOP and MAGA, in particular through the extension services provided by the DICORER, with the support of MEM. 30  https://ingecop.gob.gt/wp-content/uploads/2020/02/Ley-General-Cooperativas_compressed.pdf 31  https://www.inacop.gob.gt/cooperativas-activas-y-registradas/ 37 Food Cold Chain Enhancements in Guatemala 48. Expected impacts. By pooling resources, cooperatives enable their members to acquire and maintain cold chain equipment that may otherwise be too expensive for individual farmers or small businesses. Access to cold chain technologies would enable cooperative members to reduce product loss and spoilage and enhance food quality, which in turn would improve market access into new, higher-value outlets allowing for price premia. In addition, cooperative members would gain from shared training and knowledge exchange, enhancing their abilities and expertise in managing cold chains. Eventually, cooperatives could also share the costs of acquiring energy-efficient certifications such as ISO 500001:201832 (energy management systems) and AmFori BSCI’s Environmental Due Diligence.33 Box 2. International case study: Costa Rica’s INFOCOOP and Dos Pinos. One noteworthy success story is the National Institute for Cooperative Development (INFOCOOP) in Costa Rica. This institute is crucial in disseminating, promoting, strengthening, financing, and supervising cooperative associations. INFOCOOP’s success in advancing cooperatives in Costa Rica is largely due to its ability to provide essential financial support. By utilizing its own funds or by tapping into economic resources from other financial institutions, INFOCOOP ensures that cooperatives receive the necessary financing for their projects and growth. This financial assistance has been a key factor in the development and success of cooperative initiatives in the country. (IICA, 2010). Dos Pinos, supported by INFOOCOP, is a large cooperative dairy company, founded in 1947 by 25 dairy farmers. Today, it boasts annual sales exceeding US$1 billion. The company sources milk from 1,400 farmers and has broadened its operations beyond Costa Rica to countries such as Panama, Nicaragua, and Guatemala, diversifying its product range to include animal feeds, juice beverages, and candies. Dos Pinos operates two processing plants: one in San José, which produces a full range of dairy products, and another in San Carlos (Ciudad Quesada), specializing in milk powder. Over the years, the cooperative has consistently raised its quality standards for producers, including milking practices and animal health. The cold chain logistics of Dos Pinos developed through three historical phases: » In the first stage, dairy farmers collected milk in jars and transported it to a Dos Pinos collection point. The cooperative then moved the milk to the factories in unrefrigerated trucks, resulting in high product losses. » The second stage saw Dos Pinos introduce refrigerated trucks to transport milk from the collection points to the factory, reducing losses. » In the third stage, farmers began using small, refrigerated tanks on their farms, powered by grid electricity or generators, to cool the milk quickly. This innovation led to the disappearance of collection centers, first in the Central Valley during the mid to late 1960s, and later in the Northern Zone by the late 1970s. Milk is now transported directly from the farms to the processing factories. Source: WUR and UVG Background Report (2023). 32  https://www.iso.org/obp/ui#iso:std:iso:50001:ed-2:v1:es 33  https://www.amfori.org/en/solutions/environment/environmental-due-diligence 38 Food Cold Chain Enhancements in Guatemala 3. DEVELOP CLEAN ENERGY INFRASTRUCTURE PUBLIC-PRIVATE ALLIANCES (PPAs) UNDER EXISTING REGULATIONS 49. Guatemala’s regulatory framework include provisions for the development of Public- Private Alliances (PPAs). Public-private alliances are a tool that help governments leverage the expertise and efficiency of the private sector, raise capital, and spur development. In Guatemala, the National Competitiveness Policy 2018-203234 (NCP) provides a framework for formalizing public- private alliances (PPAs) collaborations within 11 prioritized sectors, which among others include fruits and vegetables, processed food, and transport and logistics. Under the NCP, the National Competitive Program of Guatemala (PRONACOM) of the Ministry of Economy (MINECO) is tasked with fostering alliances across public, private, and civil society sectors to promote policy actions that enhance productive investment and support the creation of competitive clusters (Spillan and Campbell Lopez, 2021). Contrary to Decree 16-2010, the NCP framework does not require major formalities for the development of PPAs. 50. Recommendation. PPAs could be availed within the NCP framework, to develop storage and other cold chain facilities and equipment in the fruits and vegetables, processed food, and cold-chain logistics sectors. This approach could be particularly promising for developing solar-powered “home systems” where isolated cold chains prevent investments in grid extension. With PRONACOM support, these alliances should focus on improved infrastructure, access to technology and innovation, better access to markets and value chains, knowledge transfer and training, and risk sharing. A particular example of PPA model is the productive alliances approach (World Bank, 2016), which broadly consists of an agreement between organizations of smallholder producers, buyers, the private sector, which revolves around the implementation of a business plan proposed by producers. Productive investments, technical assistance, and business development services are sourced by producers from the market and financed through public grants (cf. Recommendation 4 below), which are matched by producers’ contributions (which could be in-kind); the model also involves partnerships with private- sector buyers as well as with private financial institutions for the provision of loans to producers. 51. Main actors. Key players for the development of PPAs under the existing regulatory framework would be MINECO-PRONACOM, MAGA, MEM, and private investors from various sectors (e.g., the Agriculture Chamber of Guatemala and the Guatemala Exporters Association – AGEXPORT). 52. Expected impacts. In light of low overall levels of public support to agriculture,35 systematically encouraging public-private partnerships can compensate for constraints in public expenditure capacity, by crowding in the resources, expertise, and strengths of the private sector. Key expected impacts of PPAs for cold chain development in Guatemala could include improved infrastructure in isolated sectors, risk sharing, enhanced research and development (R&D) capacity, access to technology, markets, and finance. Rural electrification and power generation PPAs, for instance, would contribute to energy efficiency and might be especially helpful in Petén and Alta Verapaz, the two departments with the lowest coverage and stability of the electric grid (Figure 19), where Chapter II of this note also documented severe challenges for papaya and dairy producers. PPAs could draw lessons from the productive alliance model, which has been used across Latin America and the Caribbean and globally, has resulted in promoted improved adoption among 34  https://ecursos.segeplan.gob.gt/CAPP/documentos/82/Pol%C3%ADtica_Nacional_de_Competitividad_2018_2032.pdf 35  Looking at Agrimonitor and FAOStat data, in 2017, total public support to the agricultural sector represented 0.18% of Guatemala’s GDP, the lowest percentage among Central American countries and well below the figures of the European Union and United States (0.63% and 0.45%, respectively). In the same year, public expenditure in public goods and services for agriculture was only 0.48% of Guatemala’s agriculture Gross Production Value, again the lowest in Central America and less than four to six times the corresponding value for the European Union and United States (2.24% and 3.04% respectively). 39 Food Cold Chain Enhancements in Guatemala farmers of processing practices such the use of cold chain for livestock and cold storage rooms and vehicles to transport vegetable and fruit produce, which reduced post-harvest losses and led to increased productivity. Figure 19. Electricity Coverage Index (2021) 99.62% 99.45% 97.44% 97.48% 96.51% 96.01% 95.50% 94.06% 93.89% 93.04% 91.79% 92.18% 90.57% 89.20% 87.54% 82.69% 81.73% 81.47% 80.46% 78.34% 100.00% 74.70% 90.00% 80.00% 50.89% 70.00% >95% Electricity 60.00% Coverage 50.00% 90-95% 40.00% Index (%) 80-90% 30.00% 20.00% <80% 10.00% 0.00% at ez Ch Es ala Qu alte ntla o o Su toni olá pé n z Pr leu nt eso J sa M a Za s eh Ja a a iq go a Ba Qu l Ve hé z Ve n z ba Re que pa pa co p p ue lap ul á ta eté za ang ng Gu qu Ro ch cap ic Sa utia ca Ch nan em El lhu m l Iza To So r ar ra ra im cui na og P pé ui n a ta lte te te ite n ja Sa ca Al et Sa Hu Source: CNEE, 2022. Box 3. International case study: Honduras’ Rural Competitiveness Program (COMRURAL) The Rural Competitiveness program (COMRURAL) is a flagship initiative of the Government of Honduras (with support from the World Bank) for enhancing rural competitiveness and livelihoods and promoting agricultural resilience to climate change. Between 2010 and 2021, the first phase of COMRURAL supported 163 Rural Producer Organizations (RPOs), achieving substantial gains in productivity and adoption of climate- smart agriculture. Investments enabled RPOs to implement improved manufacturing and production practices, which resulted into an average improvement in land productivity of nearly 24 percent. 90 percent of participating RPOs (almost 11,600 individual producers) started to adopt good environmental technologies and practices such as use of organic fertilizers, drought- and disease-resistant seed varieties, drip irrigation techniques and micro greenhouses, solar-powered dryers, cold storage. These results were made possible by a comprehensive model based on the provision of matching grants, technical assistance, and the creation of productive alliances with buyers and financial institutions. Throughout sub-project investments in business plans, the program mainstreamed climate-smart technologies and practices, natural resource management, and techniques to reduce food loss and waste. Source: World Bank (2022). 40 Food Cold Chain Enhancements in Guatemala 4. SUPPORT THE ENABLING ENVIRONMENT FOR LONG-TERM FINANCING OF CLIMATE-SMART AGRICULTURE AND COLD CHAIN INVESTMENT 53. Farmers, cooperatives, and agrifood micro, small, and medium enterprises (MSMEs) in Guatemala are more often financed by informal and semi-formal lenders than by formal financial institutions. Financing mostly comes through the value chain (suppliers and off-takers), family and friends, and shark lenders (Benni, 2020). This capital is often expensive (annual interest rates of up to 200%) and very short-term (Fundea, 2017). Savings and Credit Cooperative Organizations (SACCOs) and microfinance institutions (MFIs) are the second most important source of finance, and charge interest rates of around 10-14%, in the case of SACCOs, and between 36-80% (with lower rates for larger loan amounts), in the case of MFIs. Private banks tend to charge interest rates between 6-18% for loans above US$ 4000, although rates grow substantially for lower amounts (banks can charge up to 80-120% for a loan amount of US$ 680). In general, widespread informality, as well as the lack of credit instruments adapted to the dynamics of the agricultural sector (mainly in terms of timing and flexible rates), stifle demand for formal credit. 54. Financial products offered by private banks are focused on short-term financing for inputs, working capital and operations. Only some products are offered for the medium term (up to 3-5 years), while the supply of longer-term loans seem to be largely limited to development banks. Investments in cold chains, however, often need longer-term loans, as they usually involve machinery and equipment or in vehicles, which in Guatemala are depreciated over 10 and 5 years, respectively. As a rule of thumb, a financing period of roughly two thirds of the depreciation period can be considered reasonable (it gives the borrower sufficient time to repay the investment, and the financier sufficient security that the asset does not lose its value before the loan is repaid). Given the inherent risk of lending to the agricultural sector, however, access to longer-term loans is only granted to formalized clients with a robust financial track record, longer client history and hard collateral, who can provide the necessary security to the financiers that they can live up to their obligations throughout the long-term period of the investment. 55. Recommendation. To support access to longer-term credit by agrifood cooperatives and MSMEs, existing public programs in support to agriculture investment could be expanded in scope to crowd in private sector finance. Overall, MINECO supports access to financing through its MSME Guarantee Fund, which can be accessed by banks, financial companies, cooperatives, and industry associations to provide services to the MSME segment. Moreover, the Government specifically supports credit for agricultural development through three trust funds. These are FONAGRO (National Fund for the Reactivation and Modernization of Agricultural Activity), FONADES (National Development Fund), and the Guarantee Fund GUATEINVIERTE. While there is no explicit restriction to any specific value chain, these funds are in practice oriented to coffee and to traditional subsistence agriculture crops such as beans and corn, and are in general more aimed at improving food security than at strengthening agrifood business opportunities. Expanding the scope of these programs would incentivize private credit by substantially reducing the risk faced by financial institutions when dealing with small rural producers, through enhanced viability and solidity of the financed business plans. In addition, strengthening GUATEINVIERTE’s role as a provider of credit guarantees to facilitate the partial recovery of loans granted to eligible clients would de-risk private investment and increase confidence of private financial institutions. These measures should be accompanied by an effort to strengthen the institutional set-up, governance, design, and scale of credit guarantee schemes in the country, with 41 Food Cold Chain Enhancements in Guatemala operational and governance models in line with international good practice. International experience shows that autonomous administration, sound corporate governance, and technical capacity at the management and staff level are key success factors for public credit guarantee funds. A World Bank report (2021d) offers clear operationalization principles in this sense. 56. Main actors. MINECO would be responsible for improving the operating model of the MSME Guarantee Fund, while MAGA would have a leading role in revamping the scope of activities supported by FONAGRO, FONADES, and GUATEINVIERTE. Institutional arrangements and resource allocation should be discussed with MINFIN. Potential partners in the identification of investment opportunities involve PRONACOM, BanRural, AGEXPORT, the Agriculture Chamber of Guatemala. Private financial institutions should be consulted to identify opportunities for improvement of the guarantee scheme. 57. Expected impact. A package of measures taken together to increase the confidence of private banks would lead to increased resources for cold chain investment and durable financing relationships with agrifood cooperatives and MSMEs. On the one hand, technical assistance and (matching) grants to improve the technical and financial viability of proposed investments would improve the creditworthiness of clients previously deemed unbankable, especially if coupled with an effort to improve their financial literacy. On the other hand, government-backed credit guarantees would offer assurance to investors and mitigate financial risk. As a result, investments in cold chain systems and infrastructure development with potential for impact could have access to more accessible credit options, with longer loan durations and lower interest rates. This, in turn, would enhance financial inclusion in the agrifood sector and in rural areas. Box 4. International case study: Honduras’ Rural Competitiveness Program (COMRURAL) – continued The project-supported RPOs were required to: secure counterpart funds from private financial institutions (at least 30%) and RPO members (at least 10%) to leverage subgrants financed by the Project. Apart from facilitating contact between RPOs and financial institutions, the Project included several mechanisms to incentivize credit by substantially reducing the risk faced by financial institutions. In particular, the Project offered technical assistance to RPOs which strengthened the viability and sustainability of the subprojects. In addition, the Government of Honduras instituted a credit guarantee fund (FONGAC-COMRURAL) to protect the investment of financial institutions. The FONGAC committed to insure 50% of the financing provided by financial institutions to the RPOs. While this fund was never activated (because repayment by RPOs continued smoothly) it was an important factor in encouraging the involvement of private sector finance. As a result, every dollar of Project financing leveraged another US$1.35 of private financing. A brief survey conducted at project closing suggests that 85 percent of RPOs continued to have access to finance from the same or an alternative PFI after project closing, reflecting positively on the sustainability of the model. Source: World Bank (2022). 42 Food Cold Chain Enhancements in Guatemala 5. EXPLORE ENERGY-EFFICIENCY CARBON OFFSET AS INNOVATIVE SOURCES OF FINANCE 58. Carbon offset credits are a market-based mechanism that allows governments, companies, organizations, or even individuals to offset their greenhouse gas emissions by investing in projects that either reduce emissions or remove carbon from the atmosphere. Specifically, a carbon offset credit is a transferrable instrument certified by governments or independent certification bodies to represent an emission reduction of one metric ton of CO2, or an equivalent amount of other GHGs. The purchaser of an offset credit can claim the underlying reduction towards their own GHG reduction goals. By offering incentives for the adoption of sustainable practices and technologies that lower emissions, carbon credits are instrumental in climate change mitigation. Carbon offset credits can be produced by a variety of activities that reduce GHG emissions or increase carbon sequestration. These activities can be undertaken as discrete projects or as programs of activities aggregating many similar small projects or coordinated efforts. Examples of carbon offset activities include, among others, renewable energy development, the capture and destruction of high-potency GHGs, or avoided deforestation (Broekhof et al., 2019). 59. Guatemala has experience with carbon offsetting programs. Since 2021, the country participates in an Emission Reductions Payment Agreement (ERPA). The agreement, subscribed with the World Bank’s Forest Carbon Partnership Facility (FCPF), will unlock up to US$52.5 million for reducing 10.5 million tons of carbon emissions from deforestation and forest degradation and increasing carbon sequestration (efforts collectively known as REDD+)36 by 2025 (World Bank, 2021b). Emission reduction activities include strengthening the management of national protected areas and reinforcing forest policy instruments, expanding incentives to increase carbon stocks, and promoting sustainable forest management, as well as enhancing the management of agroforestry systems and forest plantations. The program includes an inclusive benefit sharing plan, which describes the various beneficiaries of the emission reduction program (including landowners, producers, associations, farmers, government, communities, and Indigenous Peoples), their eligibility, roles and responsibilities, as well as the scale and modalities for benefit distribution. 60. Recommendation. Within the legal framework provided by the Framework Law on climate change (Decree N° 7-2013), and provided other recommendations of this note are followed, there could be an opportunity to develop programs that generate carbon credits based on the emissions reductions achieved by agricultural cooperatives and MSMEs engaged in climate-smart agriculture, including the adoption cold chain technologies and practices. Investments in cold storage facilities, energy-efficient cooling processes, or refrigerated transport could be eligible to earn carbon credits by demonstrating a decrease in their carbon footprint compared to a baseline level of emissions. To qualify for participation in carbon markets, the emission reductions produced should be unique, real, additional, permanent, and measurable, so the feasibility of any such scheme would be subject to the development of robust and transparent Monitoring, Reporting and Verification (MRV) mechanisms. Following certification by an accredited organization, these credits could then be sold on voluntary carbon markets to actors such as businesses, organizations, or individuals to offset their own greenhouse gas emissions.37 61. Main actors. The development of a carbon offset program would need to be designed in collaboration between MARN, MAGA, and MINFIN as project developers. The program 36  ‘REDD’ stands for ‘Reducing emissions from deforestation and forest degradation in developing countries’. The ‘+’ stands for additional forest- related activities that protect the climate, namely sustainable management of forests and the conservation and enhancement of forest carbon stocks. 37  A guide to carbon offsets can be found in Broekhof et al., 2019. 43 Food Cold Chain Enhancements in Guatemala would then need to be validated and registered with a carbon offset program by the relevant accredited organization. 62. Expected impacts. The implementation of a carbon offset program would encourage the adoption of cold chain equipment and practices, contributing to climate mitigation and adaptation, food availability on local markets, and enhanced market access and better prices for local producers. At the same time, carbon offset payments would also open an additional, independent revenue stream for participating cooperatives and MSMEs, contributing to profits and rural livelihoods. Box 5. Indonesia crediting mechanism Under the umbrella of the 2021 presidential framework regulation on carbon pricing, Indonesia’s Ministry of Environment and Forests adopted a ministerial regulation on domestic carbon trading on October 20, 2022. The regulation covers approaches and criteria for allowance-based emissions trading, carbon credit trading, and performance-based mitigation payments. In relation to domestic carbon crediting, the regulation outlines general rules and modalities for the validation and registration of eligible mitigation project activities and for verification, certification, and trading of achieved mitigation outcomes (“carbon credit”). The ministerial regulation states that carbon credit generation and trading would be eligible in the energy, waste, industrial processes, agriculture, and forestry sectors, as well as other sectors where there is sufficient knowledge and technology to carry out projects. Indonesian government ministries must develop plans for each subsector they are responsible for on how the subsector will meet its share of Indonesia’s nationally determined contribution (NDC) targets. The proposal requires a subsector plan to be in place before credits can be traded. The regulations set out that a proportion of issued credits will be withheld by the government to help ensure Indonesia meets its NDC. The regulation also includes provisions for (i) mutual recognition of reputable international carbon standards and (ii) corresponding adjustments, including implementation arrangements. Source: World Bank (2023). 44 Food Cold Chain Enhancements in Guatemala IV. CONCLUDING REMARKS 63. This note has analyzed challenges and opportunities for cold chain development in Guatemala’s agrifood sector. In light of the duality of Guatemala’s agrifood system, where highly sophisticated large exporters coexist with a more vulnerable yet potentially dynamic family farming sector, the analysis has focused on the extent to which the adoption of cold chain technology and practices among smaller producers could be enhanced. The note has highlighted important bottlenecks at all links of agrologistics value chains, and their impacts on product losses, food quality and safety, and market access and prices for small producers. These challenges are compounded by policy gaps, low levels of public investment, and insufficient intersectoral coordination, despite efforts to streamline agriculture and logistics policy frameworks. 64. The public sector can play a critical role in overcoming these barriers by strengthening the agribusiness and innovation enabling environment. Policy recommendations for promoting adoption and investments in cold chains in Guatemala’s agrifood sector are summarized in Table 4, and involve a mix of activities in terms of reform of policy regimes and regulatory processes, technical assistance, matching grants programs, and actions to promote financial inclusion in rural areas. 65. Active collaboration with a broad range of stakeholders will be essential to drive these processes. Engaging with small and medium farmers and cooperatives will be crucial to tailor solutions to their specific needs and challenges. Coordination with retailers, service providers, installers, and exporters will foster knowledge and expertise transfer, effective adoption of energy- efficient technologies across the supply chain, and resource leveraging. The involvement of financial institutions will crowd in private capital and support the long-term sustainability of investment projects. Academia and the research community will support the identification of technologies and practices adapted to the specific Guatemalan context. 45 Food Cold Chain Enhancements in Guatemala Table 3. Summary of recommendations. Main Relevant Priority Time Recommendation institutional regulatory level horizon actors framework Building upon existing laws Medium Medium MAGA NDP and policies, create a National term MEM NPEE Cooling Action Plan (NCAP) MARN NPRE for Guatemala Decree 7-2010 Decree 52-2003 Foster associativity among High Short term INACOP NDP small and medium farmers MAGA-DICORER NPRE Decree 82-78 Develop clean energy High Short term MINECO- NDP infrastructure through Public- PRONACOM NCP Private Alliances (PPAs) under MAGA NPEE existing regulations MEM NPRE Decree 16-2010 Decree 52-2003 Support the enabling Medium Medium MINFIN NDP environment for long-term term MAGA NPEE financing of climate-smart (FONAGRO, agriculture and cold chain FONADES, investment GUATEINVIERTE) MINECO (MSME Guarantee Fund) MINECO- PRONACOM Explore energy-efficiency Medium Medium MARN NDP carbon offsets as innovative term MAGA Decree 7-2010 sources of finance MINFIN Note: Priority level refers to how time-sensitive each recommendation is (recommendations that address immediate issues are given higher priority). 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