AID cooperative agreement no. 623-0124-A-00-3115-00 to NCBA/the Cooperative League of the USA [United States of America] (CLUSA) to examine the policy environment for the development of private sector oriented rural group businesses under the Burundi rural enterprise development project

This objective will be accomplished through a gradual process of privatization of agricultural processing and marketing as farmer groupments, associations of groupments, and private businesses replace government organizations in these activities. The project will be implemented in two phases. In a pilot phase, lasting approximately 20 months, CLUSA will examine the policy environment for the development of private sector-oriented rural group businesses and test the adaptability of CLUSA"s approach for their development. If the approach is deemed feasible and the government is effectively implementing policies that facilitate development of rural private sector organizations, a second, 5-year phase will ensue. In the pilot phase, CLUSA will: sponsor a workshop to determine the feasibility of commercial bank lending to rural groups; form farmer group associations and sign contracts with them for services (providing such services as needed); and assess the policy constraints to rural enterprise development, the ability of the government to provide extension services to farmer groups, and the willingness of extension agents to work with the groups. CLUSA will also: determine the effectiveness of information services on prices, inputs" supply availability, and marketing; contact and train groups and associations; institutionalize a system offering credit at commercial rates to rural groups; and ensure that there is at least 40% participation by women associations or mixed group associations with a significant level of women participants. Assuming the continuation of the program after 18 months, the following can be expected: assistance to 2,575 farmer group associations (with membership of 43,000 farmers); most farmer group associations conducting an average of 4 economic activities annually; processing activities undertaken by 25% of the farmer group associations; 100 economically active associations created by the farmer group associations; provision of 40 loans; local training of 2 administrators, 3 professionals, and 30 assistants; and development of a Burundian NGO or local organization to carry on TA and training.