Agricultural crop diversification/export promotion cross-cutting evaluation : final evaluation report

Evaluation focuses on project impact and cross-cutting issues and covers the period 1982-88. While the program has helped create positive private and public sector attitudes towards CD/NTAE, the $103 million in credit and equity funds allocated so far has not generally been made available for CD/NTAE projects due to bureaucratic complications, poorly defined loan approval and disbursement responsibilities, lack of requisite skills among bankers, and the high risk of CD/NTAE loans. Much of the progress in CD/NTAE that has occurred in the countries studied -- e.g., in terms of increased investment and exports, technology transfer, etc. -- is occurring independently of A.I.D.'s efforts. A major concern is the capability of, and the kind of A.I.D. support for, the host country financial institutions that are implementing the projects. To date, A.I.D. has authorized $30 million in institutional support for these institutions. This extensive support has tempted the organizations to focus on their own internal development rather than on CD/NTAE needs. To compound the problem, long-term TA to these organizations has been less than planned and has sometimes been used for administrative support rather than for basic production and marketing development. (ROCAP's NTAE Support Project is an exception here.) Further, the provision of short-term, "quick fix" TA is questionable as a development mode for less developed countries. Training authorizations also seem low and do not include significant amounts for the long-term training of horticulturalists. Also, some of the training, especially for bankers, has either not been carried out or has been ineffective. On the positive side, A.I.D. has mounted a policy reform program that could have a large multiplier effect given adequate production and marketing strategies. In sum, A.I.D.'s substantial inputs will not generate commensurate returns unless host country implementing agencies focus more on specific, attainable objectives as opposed to institutional growth for its own sake and unless A.I.D. provides comprehensive long-term production and marketing TA packages. CD/NTAE experience in Chile and Mexico provides the A.I.D. program several valuable lessons. (1) At least 10 years are required to develop CD/NTAE programs. (2) Program growth in the two countries was a direct function of macroeconomic policy and government non-intervention in the free market. (3) In both countries, strong organizations represented producer and exporter interests in seizing opportunities and solving problems. (4) The most effective assistance in export marketing comes from the market itself -- brokers, importers, distributors, etc.