Cooperative Business International (CBI) cooperative agreement

The evaluation covered the period 1/85-12/87. CBI successfully promoted U.S.-Third World trade. Overall, CBI had 48 trading partners - 11 cooperatives, 35 private businesses, and 2 parastatals. Although CBI trade involved 13 developing countries, over 90% of the volume involved Indonesia and India. CBI"s total volume was $97.9 million, from which it earned $1.1 million in commissions. Of the trade with Indonesia and India, 82% can be considered trade diversion while 18% is categorized as trade creation. Most of the trade diversion involved the substitution of U.S. exports for those from other countries, thereby contributing to the improvement of the U.S. trade balance. Much of this success is attributed to NCBA"s long-standing positive image and established relationships in Indonesia and India. CBI"s major partners in India had exported goods to the United States prior to the project, whereas the Indonesian firms were new to the U.S. market. As a result, CBI wielded more influence over the Indonesian firms and was able to make significant improvements in terms of the economic viability of cooperatives, the sophistication and international trading capability of private businesses, and employment opportunities for women. CBI"s activities in Indonesia also created 1,800 jobs (about 625 for women) in furniture making, dairying, shrimp processing, and straw mushroom processing. The project was not able to make similar positive changes in India. CBI chose not to implement certain activities - workshops, seminars, a trade information system - which had been specified in the project design as means to increase the trade sophistication of developing country cooperatives because it felt these activities would be an ineffective use of scarce resources. It did try to develop the targeted trade show, but dropped this activity when U.S. cooperatives showed little interest. As a result of the project, a few U.S. cooperatives have overcome negative views on international trade. Both Universal Cooperatives, which imported niger seed from India, and Land O"Lakes, which sold cattle to Indonesia, are now more willing to engage in international trade. CBI has almost become self-sustaining and has solid prospects for becoming profitable. The ratio of revenues to expenses rose from 19 cents per dollar in 1985 to 63 cents in 1988 and is expected to reach $1.11 in 1989. CBI"s success is attributed to: a focus on a limited number of countries, clearly identified objectives, specialization in "niche" commodities, and an entrepreneurial spirit with a special interest in marketing.