Final evaluation of the small farmer livestock improvement project

External evaluation covers the period 9/83-1/91. The project made numerous achievements, and there is evidence that participants, which include between 800 and 900 livestock- producing families, have increased incomes and adopted new technologies. Fondo's financial status experienced a marked turnaround in 1988 and appears to be gaining considerable strength. The livestock-on-deposit and infrastructure credit operations are functioning well. Returns to the various enterprise options under the livestock-on-deposit program are as follows: dual purpose, 5%-7%; breeding, 3%-6%; growing, 15%-20%; and fattening, 15%-25%. The Fondo farm supply outlets rapidly increased sales and earnings after a slow start. The number of outlets grew from one to three, and a fourth is planned. A mineralized salt mixture produced by the Fondo continues to gain excellent market acceptance, generating increasing profits. In response to various market and inflationary considerations, the in-kind credit program for cattle loans was recently suspended. Fondo also sought to improve its financial stability by modifying pricing practices and inventory management and by tightening the criteria for project participation, in effect redirecting beneficiary selection criteria towards larger producers. While this latter move was justified at the time, a return to the project's initial focus is now in order. All in all, Fondo management has established control of the company and is managing it on a for-profit basis, a situation that could be improved by increased stock sales (various options for which are discussed). On a negative note, despite the adoption of improved animal husbandry practices, low calving rates continue to preclude the returns to investment that are needed to make cattle breeding an attractive enterprise choice and to achieve reasonable growth in the national herd. Three lessons were learned. (1) A for-profit private corporation can only be expected to actively support social benefit goals when it is in a relatively secure economic position. (2) If an enterprise is expected to become a self-sustainable and profit- oriented business, it should not be given long-term donor support. (3) Baseline data are needed for adequate measurement of project achievements and impact.