Rural cooperative development

Final PES covers the period 11/74-6/81 and is based on site visits, interviews with USAID/P and co-op officials, and a survey of co-ops and their members. Despite some significant deficiencies, the project has had great success An $11.7 million revolving loan fund was disbursed to Panama"s three large co-op federations - FEDPA (credit), FECOPAN (consumer), and COAGRO (agriculture). Estimated delinquency on subloans to rural producers and co-ops is less than 3%. Over 70% of credit co-op members and 55-100% of agricultural co-op members received production credit and technical advice. Hundreds of rural households were enabled to raise their net incomes by $1,200-2,200 per ha for high value crops, $92-490 per ha for traditional crops, and 27-61% for livestock. Most project goals were achieved or surpassed. Membership in agricultural co-ops increased by 76%, in consumer co-ops by 65%, and in credit co-ops by 46%. From 1976-80, the assets of sampled co-ops rose by 119%, membership savings by 96%, and net profits by 81%. In addition the project helped to direct the Government of Panama"s agricultural policy away from state-supported farms, allowed co-ops to demonstrate their viability, made them preferred borrowers at the Agricultural Development Bank, and strengthened cooperation among co-ops, thus contributing to the creation of the Autonomous Cooperative Institute (IPACOOP), which has assumed post-project activities. Implementation problems included slow start-up, understaffing, curtailed ancillary services, late arrival of advisors, and FECOPAN"s bankruptcy. There are also continuing problems: (1) COAGRO has heavy debts which must be refinanced; (2) controls to keep project and other funds separat are inadequate; (3) a badly needed co-op marketing system has not been established; (4) IPACOOP"s impact cannot be measured, due to staffing and reporting deficiencies; (5) the co-ops" rapid growth has outstripped their social and managerial capacities; and (6) a demand for credit which exceeds the supply of funds was created. A follow-on loan from A.I.D. or another donor and/or a commitment by local lenders to provide further funds to co-ops should be considered. Finally, while the performance of co-op staff was a key factor in the project"s success, the new demands on the co-ops make further managerial training essential