Agricultural Credit and Storage

IN AN ATTEMPT TO LIMIT THE LOANS TO SMALL PRODUCERS, CEILINGS WERE PLACED ON THE SIZE OF THE LOANS. THE MINISTRY OF NATURAL RESOURCES AGREED TO PROVIDE TECHNICAL ASSISTANCE TO BORROWERS. HOWEVER, THERE IS NO INDICATION THAT THIS DESIRED WORKING RELATIONSHIP MATERIALIZED. ESTIMATES OF INCREASES IN BASIC GRAINS OR LIVESTOCK PRODUCTION DUE TO THE LOAN WERE NOT MADE. IT IS DOUBTFUL THAT ANY GAINS WOULD HAVE BEEN SIGNIFICANT. THIS IS DUE IN PART TO THE DROUGHT THAT AFFECTED HONDURAS IN 1971-73. THE PORTION OF AGRICULTURAL CREDIT ADMINISTERED BY FACACH (A FEDERATION OF CREDIT UNIONS), WAS LIMITED TO BASIC GRAIN PRODUCTION BY FECOAGROH MEMBERS (A FEDERATION OF SMALL FARMER COOPERATIVES). REPAYMENTS BY INDIVIDUAL COOPERATIVES WERE POOR. THIS WAS DUE IN PART TO THE DROUGHT, BUT ALSO TO POOR MANAGEMENT. CONSEQUENTLY, FACACH INSISTED ON CONDITIONS THAT WERE IMPOSSIBLE FOR INDIVIDUAL CO-OPS TO MEET AND NO FURTHER SUB-LOANS WERE GRANTED. AT THAT TIME, USAID GRANT SUPPORT TO FECOAGROH WAS CANCELLED. THE FACACH/FECOAGROH FUNDS FOR STORAGE AND MARKETING WERE NOT DISBURSED. IN THE BNF GRAIN STORAGE PROGRAM, INDENTICAL SILOS WERE BUILT IN TEGUCIGALPA AND SAN PEDRO SULA. THE CEREALS DIVISION OF THE BNF HAS EXPERIENCED SERIOUS PROBLEMS IN MANAGING THE OPERATIONS OF THE STORAGE FACILITIES. THESE PROBLEMS HAVE LED TO MAJOR LOSSES OF STORED GRAIN AND HAVE SERIOUSLY HINDERED THE REALIZATION OF THE FULL POTENTIAL OF THE FACILITIES TO CONTRIBUTE TO STABILIZATION OF BASIC GRAIN PRICES. THE FUND FOR AGRO-INDUSTRIAL ACTIVITIES PRESENTED DIFFICULTIES FROM THE START DUE TO A LACK OF FEASIBLE PROJECTS. 3 PROJECTS WERE FINANCED: AN EXTRACTION PLANT FOR AFRICAN PALM OIL AND A WOOD DRYING OPERATION ARE FUNCTIONING REASONABLY WELL; A HATCHERY OPERATION FAILED.