Agricultural marketing and credit administration

PES covers the period 4/80-3/81, was conducted by the contractor the American Institute for Free Labor Development, and was reviewed by USAID/DR. Project progress has been satisfactory and steady, but not all interim targets have been achieved. The number of farmer associations grew from 73 to 123, and the number of promoters increased from 20 to 50 (including four women) to benefit 5,000 FENAC (a Dominican Republic agricultural cooperative federation) farmers and their families. Because of increased promotion of group loans, the percentage of FENAC farmers using institutional credit rose from 45% to 75%, the number of associations receiving credit from the Banco Agricola rose from l8 to 70, and the cost in time and money of obtaining loans was virtually eliminated. However, where farmers were unable to receive group credit, loan costs rose. Although down from 75%, the percentage of loans received late is still 50%. There have been recurring liquidity and occasional personnel problems at all credit offices, but the major obstacle to resolving production credit needs has been the difficulty in establishing group credit as a national policy. Bank training is on a sound footing but was slowed somewhat by elections to the Comite Ejecutivo Nacional in 12/80. All newly-elected members have now received orientation, and 38 people have had supervisory training. FENAC emphasized local copra marketing and local and international marketing of coconuts. Profit margins in marketing are low (i.e., a $4,950 profit on a $l40,000 gross) due to FENAC"s inability to branch out into other commodities and its limited working capital. Attempts to establish a working relationship with private banks failed. The condescending treatment of FENAC members by professional personnel was also a problem. The project taught that the key to marketing development is control of transportation which does not rely on traditional intermediaries and that independence from government banks and cooperation with private banks are critical to project success.