SMALL FARMER SUPERVISED CREDIT

This special evaluation by a joint U.S./Tunisian team covers the period 10/78-5/80 and is based on a review of project documents, interviews, and field trips. The project has generally progressed well. Project administration was moved from the Direction of Vegitative Production (DPV) office to the ministerial Office for Assistance to Small and Medium Scale Farmers because the DPV was overburdened with other projects. Project personnel have been recruited and trained, regional offices have been established, and equipment and materials have been acquired -- the project is now in place and ready to expand its services. More than 1.2 million dinars have been approved in credit since the project's start and nearly 2,000 farmers in the target group were reached with technical services and credit during the past crop year. Short-term loans are granted solely for field crops and vegetable production, while medium-term loans are for livestock and tractors. More fertilizer is being used; production, especially of wheat, barley, and vetch, has increased; and fallow land has decreased. Problems include a shortage of vehicles for extension agents; a lack of coordinated planning at regional levels and below; a need for the National Bank of Tunisia to upgrade its services and for the project manager to receive senior staff support. The following actions are recommended: (1) improvement in loan collection and reduction in delinquent accounts; (2) extension of the project for two years; (3) deductions from farmers' savings accounts to improve working capital as an alternative to increasing interest rates; (4) provision of funding for personnel recruitment and equipment; (5) strengthening of in-country training of extension agents; (6) extension of the small farmer credit system to other parts of Tunisia; (7) continued project evaluation by the National Center for Agricultural Studies; and (8) provision for anticipated shortfall of grant funds. Evaluation is attached to PES (PD-AAG-130-B1).