Activity evaluation : Friendly Islands Marketing Cooperative support

The project achieved its overall objective. For example, due to the market power of the project-supported Friendly Island Marketing Cooperative (FIMCO), vanilla bean producers received an average of $4 more per kg for their beans in 1987; it is estimated that since 1986 they have realized an additional $2 million in income due to the increased competition for yellow tip beans generated by FIMCO"s marketing activities. Also, for the first time, in 1991, FIMCO"s fish sales in Tonga were profitable. All growth indicators for FIMCO are positive. Since 1986, FIMCO has increased its share of vanilla exports from 5% to 70%, business volume has increased over sevenfold, membership has increased from 164 to 1,880 and total member equity has nearly doubled to $605,000, member services have increased (vegetable marketing and some farm supplies have been added), management capability has improved, and FIMCO has gained acceptance by the business and government (it no longer has difficulty getting marketing loans from the Tonga Development Bank). The sustainability outlook for FIMCO is also positive. Based on a 12/31/91 financial statement, all operations except vegetables, are profitable, with net profits from 1986 to 1991 averaging $82,000 a year. Efficiency, in terms of operating cost, is satisfactory, with expenses amounting to 23.5% for the 6-year period. In surpassing the government-owned Tonga Commodities Board to become the leading exporter of vanilla beans in Tonga, FIMCO has demonstrated the advantages of private enterprises over government-operated businesses; it is also increasing its market power in vegetable exports. A brief assessment of the Tonga Cooperative Federation shows that it continues to be highly successful; it is now the largest wholesale grocer in Tonga, doing over 75% of the total business. USAID"s management of the project has been excellent, facilitating and supporting the project while allowing the Agricultural Cooperative Development International (ACDI) some flexibility in the implementation process. The project has been highly cost-effective; the $972,000 in assistance provided by USAID has produced considerable returns. The project has good replicability prospects in the South Pacific region, and possibly in Madagascar, the world"s largest vanilla producer. To protect its investment, USAID should continue to monitor FIMCO"s performance after the 4/92 PACD; it is recommended that USAID and FIMCO discuss arrangements for additional short-term TA, possibly through ACDI. Also included are recommendations for future directions for FIMCO in terms of products, training, and management.