AUDIT REPORT : USAID/COSTA RICA AGRICULTURAL SECTOR LOAN PROJECT 515-26-199-117, LOAN NO. 515-L-022

Loan 022 was to aid small farmers (SF) acquire modern agr technology through a viable, effective, agr institnal network. This in-depth managemt & policy-oriented study surveys AID docs, quarterly reports & evaluatns of the Agr Devlpmnt Program (ADP), reviews field trips to 3 CR"s agr regions, & interviews with Mission, CR Officials. Mission chose a sectoral approach to execute loan since it felt the problems of SF were interrelated & justified major effort. Under a highly motivated Secretary of Agr, excellent coordinatn among CR agencies resulted. A Food Tech Lab was built but still lacks equipment. The Nat"s Office of Community Devel assisted in organizing 300 local associatns, 600 communities & completed many projects. Lack of base-line data made it impossible to determine if proj had increased the number of SF applying modern tech. Services rendered at the 6 Regional Agr Centers, established by the Ministry of Agr (MAG), indicate that more large than SF utilized services. Direct aid had not reached SF since mission did not adequately consult the Council for Nat"l Agr (CAN) while developing proj. Policies benefiting SF have not developed since the Ministry of Finance had failed to provide input at CAN meetings, many regional meetings were canceled due to lack of attendance, & there were no farmers on the CR council determining seed & grain law policy. Evaluator feels SF would have economically benefited if banks would have made loans to coops as well as individuals, & the CR inflatn rate had not been so big that funds available for services were greatly reduced. Evaluator recommends: extensn of Loan 022; strengthening MAG"s capacity to service SF; a release of funds for General Credit activities, conformatn of Loan 022"s Coop Proj with present Nat"l Instit for Coop Devel practices; interpretatn of "sharing of US goods in services" in loan wording; establishmt of goal to aid the poorest people; inclusn of evaluatn component in loan agreemts; increased reliance on mission judgemts; & simplificatn of capital assistance guidelines.