Jamaica Agricultural Development Foundation technical assistance, June 20, 1987

480 Title II butter and cheese to provide medium- and long-term financing and TA to the Jamaican agriculture sector. Mid-term evaluation was based on document review, interviews with project and USAID/J personnel, and site visits. It covers the period 1984-87. After three years of operation, JADF is a properly functioning, private sector, development institution with a capable staff. It is meeting expectations in a number of areas, including helping the Government of Jamaica (GOJ) reduce reliance on imported food, supporting new entrepreneurs, and funding studies and training programs beneficial to the agriculture sector. JADF has approved 52 of 240 project proposals, of which 37 represent loans, equity investments, or a combination of the two, for a total of J$22.7 million (U.S.$4.1 million); the remainder are grants totaling J$2.2 million (U.S.$400,000). Eight new proposals are being seriously evaluated and another seven await further studies. JADF"s project appraisal and monitoring procedures are thorough and complete, but even so payment problems are being experienced for some 27% of outstanding loans. JADF also offers clients a significant level of TA during project design and implementation. Unfortunately, while JADF"s liquidity is adequate for the immediate future, its profit margin is too low. As a result, over the long-term, JADF"s financial viability is only marginal. In this regard, the following issues must be addressed. (1) JADF remains dependent on U.S. surplus dairy products to finance its portfolio. (2) Its project monitoring staff (one person) is responsible for too many high-risk projects to continue to monitor them all adequately. (3) The volume of new projects has dropped, limiting portfolio development. This may be due to the fact that JADF"s role is not well-understood in the financial and agricultural communities, nor has JADF itself fully addressed the inherent dichotomy between the desire for capital formation (and hence economic sustainability) vis-a-vis the job of meeting development needs. In addition, JADF lacks a complete management information system, its managing director spends a good deal of time on non-project duties, the level at which JADF analysis staff are allowed to make loans (without Board approval) is too low, and little use has been made of project TA funds for JADF"s institutional development. Several recommendations address these issues, including one that USAID/J clarify its own position on supporting development lending. JADF is developing a plan for implementing the evaluation recommendations.