EVALUATION OF SELECTED SUPERVISED AGRICULTURAL CREDIT PROGRAMS IN PERU

The credit programs are designed to increase agricultural production and farm income for small and medium-sized farmers. The report is based on interviews with a sampling of farmers and with personnel from implementing agencies, as well as loan census data and production data. The majority of loan funds are channeled through the "Plan Costa", the supervised credit program for coastal farmers administered by the National Agricultural Research and Extension Service (SIPA). The Plan Costa increased the level of living of the farmers, if not over the long-run, at least during the time of the loan. No production data are available for Plan Costa borrowers before they participated in the credit program; therefore, production impact of the program is difficult to judge. Success varied greatly between agencies (i.e., districts). Based on interviews with 279 farmers in 5 of SIPA's 54 agencies, crop yields among borrowers were found to be below the coastal average. This is partly due to the lack of water in certain agencies. In the future, SIPA should channel credit to the more productive agencies. The more unstable agencies need aid directed at the basic problems of water supply and soil structure before supervised agricultural credit is warranted. The mere existence of people in an area is not a sufficient basis for provision of supervised credit. At present, all loans are made solely on the basis of general crop budgets for the area. Since each farmer presents a special case, a farm plan should be prepared for the individual farmer or at least for each group of farmers that use similar inputs and have the same levels of skill. The farm plan would include the farmers's present status, where he plans to be in one or two years, and how he plans to get there. Loans thus budgeted on an individual basis will decrease the number of defaults. Report also evaluates the credit programs supervised by Nat Off of Agrarian Reforms & the Nat Forestry Serv. Several recommendations also made re improving prog admn by Agr Dev Bank.