Final report on the Rwanda local crop storage (LCS) project : Rwanda project no. 696-0107

The project added to the physical and financial infrastructure necessary to help diminish the effect of seasonal and regional price fluctuations, and the project"s long-term benefits to small farmers should far surpass the local investment. Currently, at least 25% of local currency investment is passed on to individual farmers through cooperative activities. Despite these achievements, the project faced numerous problems. Physical outputs were reduced by at least 33% due to administrative and staffing problems within the Government of Rwanda (GOR), causing delays in construction and additional administrative and TA costs. CLUSA"s difficulty in staffing the advisor position and A.I.D."s high turnover in the project officer position also adversely affected the project. Despite extensive training and in-field follow-up, about one- third of participating cooperatives are not yet viable. This is largely the result of management problems within the cooperatives and a lack of participation by co-op members and boards. Since the project co-ops work at the communal level, they are larger than typical grassroots co-ops, and therefore susceptible to domination by communal authorities. The co-ops were also constrained by shifting GOR grain pricing policies which made marketing decisions difficult. Because of their importance to the GOR"s grain reserve strategy, the storage units built under the project were not turned over to the co-ops, but are instead mutually owned by the co-op and the GOR. While this insured that the investment was not squandered by the co-op, it also decreased the ability of the co-ops to use the unit as collateral when borrowing and lowered their incentive to invest in repairs. A program to gradually transfer ownership to the co-ops is being set up. The lesson here is that future projects should consider financing storage units through long- term loans, where in title is transferred immediately to the co- op, but significant leverage is maintained by the lender. Ownership can play a major role is stimulating member participation in management. The following lessons were also taught. (1) Establishment of accounting, management, and marketing systems adapted to the needs of the co-ops is extremely important. Only after a co-op demonstrates its capacity to manage a storage/marketing facility should construction begin. (2) The USDA training program on credit was primarily a review of U.S. Farmers" Home Administration programs and not applicable to the Rwandan situation. Similarly, Kansas State University"s in-country grain storage training, while first-rate, was considered expensive, overly technical, and awkward to present in the local language. (3) Although the revolving credit fund operated by the project was relatively successful, project staff had the conflicting objectives of trying to recoup loans while providing TA. Lending through private sector institutions is recommended.