COOPERATIVE DEVELOPMENT

1.APPROXIMATELY 83% OF USAID LOAN FUNDS WILL PROVIDE CAPITAL FOR A COOPERATIVE REVOLVING FUND (CRF), TO BE BE ESTABLISHED WITHIN THE AGRICULTURAL DEVELOPMENT BANK (BDA); BDA WILL PROVIDE LESS THAN 5% OF CRF CAPITAL. THESE FUNDS WILL BE LOANED TO THE THREE COOPERATIVE FEDERATIONS ACTIVE IN RURAL PANAMA (FECOPAN, COAGRO, AND FEDPA), THEIR AFFILIATED COOPERATIVES, AND TO INDIVIDUAL COOPERATIVE MEMBERS. CRF WILL PROVIDE 90% OF COSTS FOR APPROVED SUBPROJECTS IN AREAS OF AGRICULTURAL PRODUCTION CREDIT, EQUIPMENT AND INFRASTRUCTURE, AND WORKING CAPITAL; COOPERATIVES WILL PROVIDE REMAINING 10%. BDA WILL PROVIDE SERVICES FOR THE ADMINISTRATION OF THE CRD, AND WILL REPLENISH THE FUND FOR LOSSES RESULTING FROM DEFAULT TO PREVENT ITS DECAPITALIZATION. THE SECOND MAJOR COOPERATIVE DEVELOPMENT ACTIVITY WILL ENTAIL THE INSTITUTIONAL DEVELOPMENT OF THE BDA, THE THREE COOPERATIVE FEDERATIONS, AND THE DEPARTMENT OF COOPERATIVES OF THE MINISTRY OF AGRICULTURE (MIDA). LOAN FUNDS WILL BE MADE AVAILABLE TO MIDA TO PAY FOR EXPATRIATE TECHNICAL SERVICES; TRAINING AND SALARY COSTS FOR COOP MANAGERS; AND EQUIPMENT AND VEHICLES. LOAN WILL ALSO SUPPORT THE CREATION OF AN AUDITING SECTION WITHIN MIDA AND THE US SHARE OF COSTS ASSOCIATED WITH JOINT GOP/AID DATA GATHERING AND EVALUATION ACTIVITIES. CRF LOANS TO COAGRO WILL FINANCE SMALL CROP/LIVESTOCK PRODUCTION PROJECTS BY COOPS OR INDIVIDUAL MEMBERS, INFRASTRUCTURE AND FIXED ASSETS (EQUIPMENT, REFRIGERATION, ETC), AND WORKING CAPITAL FOR COAGRO ADMINISTRATION. TO COMPLEMENT THESE ACTIVITIES, MIDA WILL CONTRIBUTE FUNDS FROM OTHER SOURCES TO FINANCE TECHNICAL ASSISTANCE TO THE PRIMARY COOPERATIVES FOR AGRICULTURAL PRODUCTION SERVICES (60 FIELD AGENTS); TRAINING AND EDUCATIONAL PROGRAMS FOR ITS OWN STAFF AND COOPS" STAFF; AND SUPPORT COSTS RELATED TO AID-FINANCED TECHNICAL ASSISTANCE.