Bolivarian Republic of Venezuela: support project for small producers in the semi-arid zones of Falcon and Lara States (PROSALFA) - Extract of Agreement at Completion Point - IOE
Bolivarian Republic of Venezuela: support project for small producers in the semi-arid zones of Falcon and Lara States (PROSALFA) - Extract of Agreement at Completion Point
Interim evaluation1
A synthetic judgement or evaluation of the project's performance is always necessary even if it does not always strictly reflect all the aspects involved. In this regard, PROSALAFA can be qualified as a project whose performance is more than satisfactory, given the contextual obstacles, but it is still unfinished in terms of consolidating its achievements and fully achieving its original objectives.
The overall project objective was stated as to "raise incomes and improve living conditions of the small producers and fishermen in the project area while promoting rational management of natural resources". At this level, the project achieved its objective.
PROSALAFA's performance shows that even in the difficult circumstances in the country, the project was able to implement its main activities and components and achieve a significant number of positive results or outcomes, either in terms of the positive impact on the beneficiaries' well-being or in laying the foundations of such impacts in the future.
It was found that PROSALAFA has been implemented with great energy and increasing efficiency and effectiveness. Over and above the observations focused on the project components and approaches, it should be noted that PROSALAFA is now well established in the region, with products and effects well disseminated and significant success in establishing the bases for achieving the initial objectives.
Briefly, PROSALAFA succeeded in overcoming the main obstacle identified during its formulation, namely the scarcity of water for human consumption, irrigation and animal drinking places (achievement of physical targets from 70 to 140 per cent depending on the sub-component). This outcome was achieved through efficient and effective management and great success in motivation and grass-roots organization hitherto non-existent in the zone. These significantly facilitated the tasks of generating, validating and transferring technology. Despite the lack of institutional credit (which did not seriously hinder investment in farms) the project instituted a valid alternative for mobilizing resources and access to financial services through the rural banks. All these outcomes made very considerable contributions to the objective of improving beneficiaries' real incomes and led to various positive impacts on their social well-being.
However, the project's budget performance was only 70 per cent ten years after its start-up. The political and institutional instability and various public spending adjustment programmes during the years of execution largely explain this under-funding of project activities. The Project Executing Unit (PEU) was always able to spend the budgetary credits allocated, both in cutback years and later when allocations were higher, which shows that the financial under-performance did not reflect management weaknesses in implementation.
This indicator of under-performance can largely be explained by the lack of implementation of the credit component although it also means the failure to satisfy a number of demands related to water infrastructure works, more widespread adoption of technology, improvements in marketing and lack of consolidation of organizational groups at higher level.
The conclusion is that the project area and its beneficiaries need a further period of external support to secure the achievements made and enhance sustainability. A second phase of PROSALAFA would be a highly appropriate instrument to achieve this aim. It is therefore recommended that the feasibility of executing a second phase of the project be examined, taking into account the findings and recommendations of this interim evaluation.
9. The Government will have to provide budgetary credits in 2003 to allow the use of still unutilized resources from the IFAD loan and the counterpart local resources to complete a series of outstanding activities and allow a smoother transition to any second phase of PROSALAFA. It is recommended that the necessary measures be taken to ensure this provision during the preparation and discussion of the national budget for 2003 and that a final extension of the closing date of the loan be requested.
Performance of the project management
The PEU's management performance was more than satisfactory. The project maintained continuity of management and the majority of professional and technical staff for almost eight years. This continuity, truly praiseworthy given the institutional instability of the period allowed lines of activity to be maintained, consistent approaches and constant actions for the benefit of the target group albeit with material resources significantly below those budgeted. The monitoring and evaluation functions were adequately performed although with some operational weaknesses.
The decentralized execution of PROSALAFA was an advantage in preserving the project from the many changes in institutional authorities and office-holders. This would not have been sufficient if the PEU technical team had not maintained a high level of professionalism and the maximum possible independence from external pressures. In this respect, the importance of the mechanisms for competitive selection and contracting of the majority of its members should be emphasized. Certainly, the change in executing agency [from the Institute of Agriculture and Livestock Credit (ICAP) to the Foundation for Training and Applied Research in Agrarian Reform (CIARA)] did not have a negative impact on the performance of the project activities.
In its internal organization, the creation and operation of the technical operating units working in nine separate territorial jurisdictions can be considered one of the project's successes, as can the organization of its work through so-called "work paths" which allowed the work of the experts and various co-executing institutions to be harmonized. The training, selection and assignment of "rural facilitators" as assistants to project services and agents of community change is also considered to be a highly positive management policy which enhanced the positive effects of the project. Certainly, the preliminary review of the available information also shows adequate capacity in contracting of civil works at costs apparently lower than the benchmark.
In addition, the project rightly developed a policy of inter-institutional agreements with various public institutions at national or state level, using extra-budgetary resources allocated for the purpose (e.g. the "Sobremarcha" programme). Unfortunately, in recent months, the lack of budgetary resources interrupted many of these activities.
Inter-institutional relations with municipal or state bodies were never neglected by the project, but the results reflected varying degrees of success from one area to another and, in general, a balance of still unfinished work.
The Monitoring and Evaluation (M&E) system performed adequately, including the baseline study and the establishment of appropriate indicators to monitor the components as well as an excellent systematic analysis of the results. However, there are some operational weaknesses in collecting gender-related information and carrying out full impact studies.
Recommendation 1
It is of the utmost importance to maintain the PEU teams fully operational until the completion of the project. Strictly speaking, if a second phase of PROSALAFA materializes, the PEU teams must play an active role in the formulation work as the counterparts of the international expert teams. It is recommended that the position of the PEU technical teams be confirmed until completion of the project and beyond, in the event of a transition to a second phase.
Recommendation 2
For the purposes of "closing off the project" properly or formulating a second phase, it is extremely important to have the M&E unit fully operational and carry out several activities which are still unfinished. It is especially recommended that the M&E unit be kept fully functioning to complete the project monitoring and impact evaluation reports, and to complete the studies which will serve as inputs for the formulation of a second phase, as well as conceptual inputs for the formulation of future projects in the country. In particular, the preparation of an updated baseline study would be extremely useful for the second phase of PROSALAFA.
Exploitation and management of water resources
After almost ten years operating in a difficult institutional and economic environment, PROSALAFA succeeded in overcoming the main obstacle identified during its formulation, namely the scarcity of water for human consumption, irrigation and animal drinking places. This outcome was achieved through efficient and effective management and great success in motivation and grass-roots organization hitherto non-existent in the zone. However, the achievements are not yet sufficient to satisfy either the initial demand or the demand generated during the years of implementation.
PROSALAFA was formulated in the semi-arid region of Lara and Falcón States, covering a vast geographical area (some 12 300 km² in all). Most of the selected area consists of mountainous relief with plains and valleys separated by mountain ranges and a landscape of ridges and hills. The climate ranges from semi-arid to mixed desert and coastal desert in the areas bordering the sea. The extremely severe climatic and agro-ecological conditions have always influenced human settlement. The constraints on agricultural and livestock production are therefore numerous and severe in most of the area.
The main constraint identified in improving these people's living conditions and production was the availability of water. In the light of this finding, the project proposed a series of solutions to supply water for human consumption, watering places for the herds of goats and irrigation of small areas of intensive cultivation of cash crops. Organization of the beneficiaries was made a priority as a key activity in ensuring the viability and effectiveness of the project actions.
For capture and collection of rainwater for human consumption the project exceeded the original goals by 35 per cent in quantity and volume of water collected. The number of families benefiting was increased (more than six times that originally envisaged), thus reaching 2 700 families and 16 200 people. As regards rehabilitation and construction of ponds, 130 mixed ponds were constructed against the targeted 218. It is emphasized that the area of irrigable farm was increased by 26 per cent and the number of goats provided with drinking places by 197 per cent. To these figures should be added the repair of 42 existing but abandoned ponds. For drinking ponds, the target was exceeded (169 against 150) as was the quantity of water collected (by 19 per cent), this because the ponds were made larger than originally planned (9 591m³ instead of 6 500m³). The shallow and deep wells envisaged in the Ex-ante Evaluation Report (IEA) were not constructed. This meant a 35 per cent reduction in the envisaged irrigation works and some 490 beneficiaries. Finally, in relation to community works, 360 rural latrines were built, using funds external to the original project budget.
Recommendation 1
The experience gained in the programming and implementation of surface water sources (including cisterns for water for human consumption) is a remarkable achievement which can and must be replicated in the future in the light of the huge demand present. The adoption of efficient irrigation technologies (e.g. "artisanal" and/or modern trickle, ferti-irrigation and integrated pest control) is another major success. It is recommended that this be extended during the period remaining up to the completion of the project and in any subsequent phase, which would provide the basis for a significant increase in the beneficiaries' incomes. In the case of ponds for animal watering and mixed use, it is important to consider an effective perimeter fence, as originally planned, to restrict access by animals to drinking ponds, prolong their useful life and create an anti-parasite barrier.
Recommendation 2
Efforts to collect water are rendered inefficient if irrigation technologies at farm level are primitive. Irrigation by flooding in semi-arid conditions is an enormous waste of the most vital and most scarce resource. In PROSALAFA, trickle irrigation is a technological leap which must be exploited based on the use of black plastic hoses to pipe the water from source to the place of application using natural gravity or pumps. It is recommended that the transfer of appropriate irrigation technology be enhanced in order to benefit from investments already made and extend the irrigated areas for production.
Recommendation 3
The dearth of experience in obtaining underground water for productive purposes precludes the drawing of lessons on its future feasibility, despite the elapse of years of implementation. At pilot level, at least, the project should have undertaken some such works in selected locations.
In the case of deep wells, where considerable investment is needed in drilling, the installation of pumping equipment, and its subsequent operation and maintenance, these characteristics were considered to render this solution non viable for the project's target producers. Moreover, it should be noted that the availability of sustainable underground water is a very complex subject in the Venezuelan semi-arid areas given the great competition for extraction and the current lack of a properly applied legal regulatory framework. However, any other action to exploit underground water at lesser depths was also abandoned. The project should have undertaken a series of tests to exploit the underground water beneath the beds of streams and rivers through shallow wells and filtration chambers. Such works are very cheap and can be carried out by the producers themselves. It is recommended that such experiments, albeit on a pilot basis, are made during the remainder of the project.
Recommendation 4
The possibility of developing additional irrigated areas through wells, preferably, however, also using available resources to continue with cooperatively managed surface sources using pipelines, could help to improve the distribution which up to now has almost exclusively benefited beneficiaries owning land adjoining the existing ponds. It is recommended that trials be carried out with these. The results would be useful in complementing the work of the current project and in providing proposals for implementation in a second phase.
Natural resources and environmental management
PROSALAFA demonstrates the need to introduce integrated approaches to environment management in projects to combat rural poverty in the fragile ecological conditions of tropical semi-arid areas. The objective of achieving "rational management of natural resources" was only marginally achieved by the project because of weaknesses in implementation and the approach set out in the project design.
The existence of semi-arid ecosystems in the tropics is generally associated with the presence of populations of rural poor. The interplay between the fragility of the ecosystem and the related low agricultural productivity lies at the root of the poverty found there. It is commonly perceived that the productive practices of small producers are associated with the destruction of natural resources and desertification. Faced with such a diagnostic, typical proposals concentrate on recommendations of an agronomic nature aimed at intensifying the agricultural activities of small producers and disseminating knowledge and practice on soil and water conservation. It should be added that these proposals do not necessarily include all the elements necessary to achieve an effective balance between the ecosystem and production.
PROSALAFA offers an example where this type of proposal is frankly inadequate. Firstly, it ignores the presence of other economic and social actors (e.g. medium and large-scale livestock breeders and agriculture using irrigation; woodcutters; mining, etc.) whose activities (often on a much larger scale) also threaten the stability of the ecosystem. Secondly, reversing processes of desertification which have already started requires interventions in watersheds in which, because of their size, it is beyond the capacity of small producers to undertake works on the scale required. Finally, the necessary coordination of actions between the public sector (legislation, implementation and enforcement, large-scale public works, etc.), the private enterprise sector and small producers must be conducted in smooth collaboration. Otherwise the efforts of each of the parties may prove fruitless and vain.
Recommendation 1
A series of actions should be implemented before the end of the project to ensure that the activities undertaken take a more integrated approach to soil, water and biomass management in semi-arid areas. It is particularly recommended that a survey of the productive capacity of the existing natural grazing be undertaken using satellite techniques which are low cost in relation to the benefits. Calculating the production of biomass is the only way of determining the necessary adjustment of the current burden of animal grazing in the project areas and, as far as possible, by watersheds and micro-watersheds. This would allow an initial estimated zoning of the project area taking account of the fragility of the environment in terms of resource constraints, water and vegetation, in order to set priorities and focus watershed management efforts on future animal grazing.
Recommendation 2
Likewise, a study needs to be done in the near future on the resilience of feed biomass, both grasslands and natural and introduced woodlands, in order to measure the potential support for livestock based on feed balances and consistent with the climatic data collected at the same place.
Recommendation 3
It is important for the project to open up a range of assistance to goat-farmers who have not adopted the currently offered intensive or semi-intensive technological package, which by its nature concerns only a minority of producers. As well as a vision centred on technical-production aspects, an alternative way of managing the natural grazing of the semi-arid areas should also be provided. By no means should what has been achieved be abandoned, but at the same time, it is desirable that the approach to technology transfer be redirected to this kind of livestock farming.
Recommendation 4
The successful experiments in conservation of micro-watersheds (especially in Falcón) are an achievement whose extension and replication in other project areas would make the interventions more sustainable. It is recommended that the pilot surface areas be extended by constructing larger water collection zones using rainwater harvesting techniques.
Recommendation 5
It is of the utmost importance to involve more social and institutional actors with the necessary awareness and capacity for action to halt and reverse the process of soil degradation. It is recommended that the Environment and Natural Resources Ministry (MARN) and state and municipal authorities be involved in these actions. In particular it is recommended that (a) an agreement be concluded with the normal education system with a student population of over 8 000 to introduce the environment and its protection as a core subject for the youth of the region; (b) the PEU and producers should undergo training in basic techniques on management of natural resources for grazing in the semi-arid areas of Falcón and Lara States. Becoming familiar with these aspects is a necessary step in being able to have a significant impact in the project area in the next few years; (c) strengthen relations with and request support from the specialized international agencies in this field, in particular, the Global Mechanism to Combat Desertification, the Global Environment Facility (GEF) and the Food and Agriculture Organization of the United Nations (FAO), drawing on the actions already initiated by CIARA in this regard.
PROSALAFA has reached almost 6 500 families in the area with various services, albeit primarily with activities to promote organization and training. These results are a remarkable achievement compared with the initial situation. The training of producers is considered to be one of the most significant achievements of the project and a key factor in the increase, not only in the population's technical capacity, but also fundamentally in its self-confidence and organization.
Training for producers and other beneficiaries achieved significant results. There were 466 events aimed at producers, involving 3 489 men and 3 411 women. These results were better than programmed. Many of these activities were undertaken with other institutions under agreements with the PEU.
In particular, the establishment of the "rural facilitators" group should also be highlighted as an additional system for training and transfer of technology in the communities. Seventy people were selected and specially trained to become permanent trainers and facilitators in the communities.
However, PROSALAFA, like other projects, started with a very broad range of subjects generally linked to project promotion actions. This process later results in "stagnation" in institutional provision and the possibility of satisfying the beneficiaries' more structured demands at lower cost is lost.
Recommendation 1
It is recommended that training be re-oriented as a modular training process with strategic subject areas taking into account both the identified demand and the capacity of existing institutions to provide such training. The identification of training provision should take account of demand from the regional environment and not confine itself strictly to the project areas so as to increase the competitiveness of the local labour force which, inevitably, will migrate temporarily to those destinations. It is recommended that a start be made on designing mechanisms to include these training requirements. This approach will be much more effective and efficient than a series of totally unconnected events highly relying solely on what is on offer from institutions.
Recommendation 2
With respect to the rural facilitators' group, it is recommended that the publication of the rural facilitators' journal "El Semiárido" be strengthened in coordination with FUNDALECTURA, and a similar experiment tried in Lara State. Additional training should be also designed and implemented for rural facilitators to qualify them as capable of providing services.
Generation and transfer of technology
Given the competitive advantages of the region in the production of fruit and vegetables under irrigation, both irrigation and the adoption of appropriate technologies to ensure viable productivity are an essential requirement if production is to be increased. PROSALAFA has contributed successfully to providing irrigable areas and the necessary technologies to the project beneficiaries even though the coverage is so far limited.
Indeed, fruit and vegetable production under irrigation in Lara State supplies almost the entire national demand for onions, tomatoes and peppers, and large percentages of melons and watermelons. The region's production of pineapples and other crops (e.g. zabila) is also the highest in the country. Large agricultural enterprises with major investments in irrigation systems are the main producers. Of course, they are also one of the main sources of non-farm employment for the rural poor in the region. This structural situation provides and will provide a permanent "market niche" for small producers to the extent that they can overcome technological constraints and improve marketing channels.
As to generation, validation and transfer of technology to farms, PROSALAFA was programmed to reach 5 200 producers through 100 validation trials and 300 workshops on the main crops and livestock in the region. The results far exceeded these targets. Over 6 000 producers were reached through 329 validation trials and over 6 700 technology transfer activities. During the implementation of PROSALAFA, new methods of technology validation and transfer were developed with the technology demonstration units (UDRT), local rural research committees (CIAL) and the introduction of rural facilitators (180). The validation of intensive or semi-intensive goat-farming models is a positive achievement even though there has so far been only limited take-up by producers.
Indeed, it is estimated that only half the beneficiaries have incorporated the project suggestions and improved their farming practices. The sector of activity with the highest acceptance was conservation of water resources (74 per cent) followed by goat-farming and vegetable production (47 and 44 per cent respectively). As well as the water constraints, the adoption of technologies by more producers seems to have been hampered by the shortage of time to mature transfer activities, since it is only since 1998 that more efficient and innovative instruments, e.g. rural facilitators, UDRT and CIAL, have been included.
Recommendation 1
It is important not to leave the different methods of technology transfer without funding. It is recommended that the agreements with the Agricultural Research National Institute (INIA), the Lisandro Alvarado Midwest University (UCLA) and other organizations with successful experiences of transfers be renewed up to the end of the period of implementation of this phase of the project and sufficient resources allocated to allow the UDRT and CIAL activities to continue.
Recommendation 2
The adoption of productive technologies has been enhanced when there are sufficient water resources to meet production targets at individual farm level. In this respect, it is recommended that the transfer of trickle irrigation technology and other water-saving practices be increased.
Marketing of inputs and products
The marketing of agricultural inputs and products is still an obstacle to achieving higher agricultural incomes among the beneficiaries. While there are stable and expanding markets for most of the market garden products, the marketing channels are still imperfect and allow intermediaries to make extraordinary profits. "Non-traditional" agricultural and animal products and artisanal products still require support to develop markets and more effective marketing channels.
In general, the project far exceeded the targets for studies, training and technology transfer on market and product-related subjects as well as support for the creation of rural micro-enterprises.
The project's efforts were thus centred on the local context and training. Through participation in local fairs and exhibitions, the work of identifying markets was begun, and at the same time it was possible to launch forms of artisanal organization and strengthen the organization of productive activities.
Feasibility studies were carried out into goat products and marketing of some vegetables, sisal, cocuy brandy, zabila, milk conserves, etc. Based on the analysis of these small studies, a daily information service was launched on agricultural market prices and seasonal analysis of some agricultural products and live animals.
However, the wide geographical spread of the small farms, the remoteness from "market centres" and the lack of organization of small farmers generate conditions in which intermediaries who approach the farms have a disproportionate bargaining power.
The marketing and micro-enterprises sub-component now needs more specific attention. Up to now, training in marketing has been in fairly general terms.
Recommendation 1
Far from recommending that farmers should turn themselves into traders, the project should undertake activities to increase their bargaining power with marketing agents. In addition to current actions (e.g. information on prices of inputs and products in nearby markets), the project should extend the range of support activities. In this regard, for traditional horticultural products, it is recommended that the project should strengthen its actions to organize producers so as to increase their bargaining power, e.g. joint purchases of inputs, sale of larger quantities in strategic outlets, etc. It is hoped that, as in other similar situations, that the advantages of this type of organization will also involve intermediary agents (e.g. with lower haulage and transport costs, greater security of supply, etc.).
Recommendation 2
It is recommended that the project should provide on-going support to producers on these matters as a permanent management function. In formulating the second stage, special attention should be paid to these aspects, considering effective options, e.g. formation of a central marketing unit for the two states, Falcón and Lara, in addition to the states' responsibilities. In particular, actions should be refocused on the products of local micro-enterprises and reinforced.
The results obtained in relation to artisanal fishing fell far short of those envisaged in the IEA. The main activity programmed, the construction and provision of 30 boats to some 180 associated families, did not happen. In fact, only two boats were provided to only four families. This particular group of project beneficiaries continues to display situations of extreme poverty and marginalization.
Constraints of a cultural nature and a network of power relationships involving intermediaries and shipowners appear to create strong barriers to association of artisanal fishermen, especially the poorest who are piece-workers.
This group would be the project target-group because the failure to organize them in autonomous groups would explain the poor results. It should be noted that the arrears in credits granted to fishermen are almost four times higher than the average for Falcón State. This behaviour is also associated with the particular idiosyncrasies of these social groups in which bringing about cultural change requires more effort and appropriate and specific approaches.
Recommendation 1
For reasons of equitable distribution, it is important to not overlook this population group in the project area. It is recommend that a specific study be undertaken on the functioning of this productive and social subsector in order to design more appropriate interventions to combat poverty and promote their economic and social development before the conclusion of the project. This study should be entrusted to an institution specializing in the sector. The results of this study should be used as inputs for the formulation of more effective actions in any second phase of PROSALAFA as well as other institutions (e.g. INAPESCA) to allow them to formulate projects and/or activities specifically designed for the benefit of these groups.
The results for cadastral surveys and titling were meagre. The programme envisaged obtaining title to all the land covered by the irrigation and watershed management component, but less than 160 cases could be regularized out of an estimated demand of over 1 100 farms. It remains important to continue to regularize the precarious land tenure of the small farmers.
The legal uncertainty as to land property rights persists in the project area. This situation could, in other circumstances, have been a major obstacle to the construction of water infrastructure works and other permanent improvements but, in reality, this does not seem to have been the case. The "de facto" possession of the improved land is respected by the communities and no cases of disputes were recorded. The PEU, rightly, decided to proceed with works even on farms without perfect title but with duly accredited evidence of possession.
Nevertheless, the absence of title of ownership is a considerable obstacle to guaranteeing formal credit transactions.
The project carried out the necessary administrative actions efficiently, but unfortunately the context in which it had to operate, with constant changes in policies and strategies on this subject, prevented it from achieving its targets.
63. Given that the institution replacing the National Agriculture Institute (IAN), under the new Land Act, is the National Land Institute (INTI) which recently commenced its work, the PROSALAFA management initiated contacts with the INTI regional office in Lara State to continue the process of titles of use, enjoyment and possession.
Recommendation 1
It is recommended that titling actions in progress be continued and new ones be adapted to the forms of presentation sponsored by INTI. Indeed, the legal and regulatory changes adopted in the last two years provide favourable conditions for clearing the hold-ups in these proceedings.
The credit and financial services component was executed in a substantially different way from the original design which contained serious weaknesses both in estimates of demand for financing and the supply and channelling of credit resources. In financial terms, implementation achieved only 18 per cent of the amount originally programmed. PROSALAFA continued to reformulate the component throughout its execution so that there are now three co-existing modalities of credit [e.g. rural banks, Revolving Fund for Rural Activities (FRAC) and agreements with state funds]. Analysis of experience and careful formulation of a sustainable rural financing strategy are critical aspects for the future.
PROSALAFA executes the component through three parallel and simultaneous lines of action. These lines were substantially different from those envisaged in the IEA which, in the view of the interim evaluation, is an appropriate, although not necessarily complete, adjustment to changes in the environment and the beneficiaries' actual needs. In reality, no loans were ever made through ICAP (which granted high subsidies through negative real interest rates). A revolving fund for rural activities (FRAC) was funded by the project and agreements were signed with state funds with similar characteristics to ICAP (FONDAEL and FONECRA). The most novel and effective was the establishment of rural banks [similar to the Economic Development of Poor Rural Communities Project (PRODECOP) model].
In all, some 1 400 producers in the two states were assisted, less than the number of 2 454 identified in the appraisal report, meaning that only 57 per cent of the envisaged population could be covered. Credits of USD 963 000 were placed in all, only 60 per cent of which came from project funds, the remainder being financed from producers' savings in the rural banks.
In more specific terms, the rural banks offer a fairly considerable capacity in terms of the relevance, efficiency and sustainability of their services. The model's strength lies in various factors which deserve analysis together with the weaknesses found. The strengths include:
(a) It is a model that meets individual needs by circulating resources resulting from surpluses or deficits among households, especially those with scant resources.
(b) The rural bank is an accessible and attractive alternative to other kinds of lender which charge high (usurious) interest rates, such that the economic security of poor households is directly threatened in cases of emergency.
(c) It is a cycle in which strict conditions and social control guarantee repayment of the loans.
(d) In the local environment, there is a basis for controlling the management of the rural banks involved in the management of financial resources.
(e) The rural bank is a legally valid model which has the potential to stimulate rural savings, especially in places where access to formal intermediaries is scarce and unattractive.
(f) In the case of external funds, such as those of PROSALAFA, the rural bank is a channel with a certain potential to facilitate the implementation of the credit component.
(g) In cases where the rural bank manages to embed itself as a local financial institution, there arises the possibility of linking it to the formal financial system through banking institutions.
On a par with their potential, the weaknesses of these instruments should also be borne in mind, namely:
(a) The resources are generally managed by trustees who are hard to replace, either because of their good performance (and there is no one else) or their poor performance (and they do not want to relinquish the position). Problems of management succession often arise.
(b) As the rural bank grows, the accounts administration requires a certain degree professional expertise which in turn requires training and external advice which can only be provided through projects or external organizations.
(c) Where constant growth of the rural bank is achieved, problems often arise between the bank's management, which has created and developed it on a voluntary basis, and the technical staff who work for remuneration. Harmony between the "volunteers" and the "professionals" is not always guaranteed.
(d) The rural bank model relies on social control for the repayment of loans at local community level, which means that there are limits on the increase in the number of members. Outside the community, the social control does not have the same force.
(e) Where external support for management and accounting is withdrawn, the continuity of the rural banks is perceptibly reduced and at the same time the "mortality" rate rises. As each rural bank is regarded as a "system", there is a strong dependence on an external body.
(f) Links between the rural banks themselves are difficult to achieve, since these are created by an external body – project or NGO – whose raison d'être is not always to consolidate the rural bank system but to ensure its own operational continuity.
In short, it should be noted that great interest has been aroused among many people and organizations in the project's contribution to setting up a sustainable rural financial system, beyond the mere placement of financial resources.
Recommendation 1
It is recommended that a moderate amount of the project credit resources be concentrated in external financing of the rural banks. These are the soundest bases for proper allocation and collection of loans. This does not mean that the FRAC's operations should be curtailed but that they should be exclusively linked to the rural banks or their associates.
Recommendation 2
With respect to rates of interest collected for the use of PROSALAFA resources, it is recommended that only positive real interest rates be used. Any rate that charges less than the rate of inflation will tend to confirm the "heterodox" practices which have been implicitly allowed in the project since its formal start-up in 1993. No lender should accept the loss of the real value of the resources lent, whether inside or outside the project area.
Recommendation 3
To consolidate the system of rural banks, it is recommended to open a dialogue with representatives of the banks in both states, with a view to forming a second level entity (union, federation or association) which can take responsibility for aspects crucial to their development, such as: (a) channelling and administration of external resources, both of PROSALAFA and from other sources (possibly at national level); (b) maintenance of the accounting records of small or relatively weak rural banks which do not have the capacity to take charge of this themselves; (c) monitoring and control of rural banks, with a view to standardizing financing criteria and accounting records; (d) training of management at board and credit committee level on subjects such as evaluation of requests and financing proposals, collection, financial management (interest rates), management of savings and formulation of expansion strategies.
Recommendation 4
It is recommended to carry out immediate studies to analyse the feasibility of developing a formal financial institution in Lara and Falcón States, created and oriented on the basis of self-management and financial and institutional sustainability. This study would be a key input in the formulation of the related components of a second phase of the project.
J. Organizations and formation of social capital
The establishment of grass-roots organizations, virtually non-existent at the start of the project, has been extremely successful. There are now over 900 organized groups based around water sources and some 270 organized settlements around other services. Consolidation of the more highly developed organizations (e.g. formation of a second level of organizations at municipal or regional level) is so far at an embryonic stage. Certainly, the sustainability of the actions and achievements to date will depend on establishing organizations at this level.
It has been found that, at present, communities have organizational structures able to identify their needs, put forward their requests in the form of applications to development agencies, promote activities to solve their problems, possess a satisfactory level of appropriation of the methods and processes they promote and maintain a positive and pro-active policy in relation to the political and administrative authorities. The communities are making progress in obtaining services from state and private agencies due to their organizational capacity supported by PROSALAFA's creation of the necessary conditions, providing logistical and financial support in carrying out activities deriving from this kind of institutional relationship.
However, there has been no progress in higher level organizational models which unite producers and grass-roots organizations in the management of specialized services, such as marketing of inputs and products and financial services. Indeed, there is a fragmentation of small producers' organizations, often under the same heading, united on the basis of individual works, mainly ponds, which limits their involvement in economic activities on a more dynamic scale.
One of the causes, probably, is that there has been no proper monitoring of the execution of activities under agreements with state institutions and the impossibility of giving effect to the ideas generated by training. Thus producers are not much involved and have little impact in official decision-making bodies at local, municipal and state level.
Recommendation 1
It is recommended that an "exit strategy" and organizational sustainability strategy be devised by the PEU based on the available time and resources, in consultation with producers' organizations, involving links with municipal and state governments and institutions. This will mean allocating time and resources to the preparation of a programme of activities to be implemented before the completion of the project. This programme will need to include, as a minimum: (a) bases for establishing relations between producers' organizations and municipal, state and national institutions after the project ends in order to obtain commitments to support the population themselves or through other future initiatives; (b) encourage the legalization of civil associations which are still not registered with the municipal authorities; (c) improve mechanisms of coordination, communication and monitoring in the execution of activities carried out under institutional agreements, involving municipal and state governments in community-institutional relations.
Recommendation 2
It is recommended to establish the bases for the creation and strengthening of larger organizations for the purpose of: (i) management of specialist services such as marketing on inputs and products; and/or (ii) associations based on economic activity, at community and municipality level. These tasks should be started in the near future as a crucial input to any second phase of the project. They should include: (a) contracting of specialist staff; (b) promotion of better linkages with community bodies (neighbourhood associations), municipal and state authorities in the formulation of proposals and management of resources; (c) more dialogue and advice to state governments to generate institutional collaboration mechanisms between public and private entities in seeking to rationalize provision and channel the demands of the population.
Recommendation 3
It is recommended to continue to strengthen human resources in the existing grass-roots organizations in the light of future objectives contemplated. In this respect, the project should take immediate steps to: (a) establish legal and regulatory measures to provide greater opportunities for new community leaderships, with emphasis on those with least experience of decision-making – women, young people – with training support; and (b) equip facilitators with better knowledge, qualifications and skills, promote networking between them and present them as service-providers to institutional authorities, private organizations, municipalities and state governments.
The gender approach was successfully adopted by PROSALAFA despite the persistence of some conceptual and operational shortcomings. Although the project design addressed the gender theme through the "women in development" approach current at the time when it was formulated, the project itself aligned itself with the new gender in development approach, which indicates PROSALAFA's ability to adjust to progress in this subject.
The work on the gender approach was successful from the project perspective of providing women and men with access to services and achieving greater family integration in productive activities, crafts, micro-enterprises, credit and more equitable forms of family and social relationships.
The results were satisfactory: (a) women's involvement is most significant in micro-enterprises and crafts, at 54 per cent, followed in descending order by rural banks and neighbourhood associations (42 per cent), cisterns (22 per cent) and finally producers' associations (17 per cent); (b) out of the total participants in training events for producers during the project life, 49.4 per cent were women; (c) PROSALAFA supported the formation through training, technical assistance and credit of 58 micro-enterprises to the benefit of 357 associates, 193 of whom (54 per cent) were women; (d) PROSALAFA provided financial support and time-saving technology such as cisterns to store rainwater and water supplied by the municipality, latrines and improved stoves for the benefit of the family as a whole and women in particular; (e) in the rural banks, women make up 42 per cent of the membership and participate actively as shareholders and applicants for credit, and hold the majority of management posts; (f) monitoring and evaluation: the PEU has developed a satisfactory model for annual operating reports, which give a breakdown of activities for men and women, allocating financial and technical resources and clearly defining the scope of each component in quantitative terms.
However, the project did not develop a concerted strategy among those involved clearly and specifically setting out a gender strategy, with a conceptual framework, performance indicators, methodology and other forms of operation for the application of the gender approach and a monitoring system to measure progress and make adjustments. Nor were sufficient training sessions held for technical staff and there were no such events for grass-roots producers.
86. Shortcomings persist, among them: (a) although there has been progress, there are still problems in the information system in differentiating component activities by sex and a set of indicators for monitoring purposes is lacking; (b) there is little participation by women in the rural facilitators programme and no women heads of households are facilitators, although in practice some spouses and daughters support the facilitator's work in specific activities; (c) men and women are still little involved in municipal and state bodies, and in the case of women this is even more limited.
Recommendation 1
It is important to correct some of the existing operational weaknesses. In particular, it is recommended to have a gender specialist, expert on standardizing these aspects, in order to introduce a specific gender strategy in PROSALAFA during the second phase of execution. This expert should develop methodological mechanisms for reaching the family and an information system to show a breakdown of the participation of women and men.
Recommendation 2
It is recommended that in collaboration with CIARA the experience of work in the field on gender be consolidated, selecting a case study of complementary roles in the family or a line of action (micro-enterprises or rural banks) and from there disseminate the results among those concerned. Standardization could be an input in defining a regional gender strategy, establishing the basis for the design of these aspects in a second phase and serving as a lesson that could be valuable to other projects and countries.
Recommendation 3
It is important to use successful models of training at grass-roots level. In this respect, it is recommended that the families of rural facilitators be involved in gender training activities, as some of them do in practice. This would allow the household and the farm to be considered as an illustrative example and permit an analysis of the incentives which could benefit all members of the family.
1. The Ageement at Completion Point was signed by: Mr. Efrén Andrades Linares, Minister, Ministry of Agriculture and Land; Colonel Jairo Llanos Morales, President, National Institute for Rural Development; Mr. Leonardo A. Gil Mora, General Director, CIARA Foundation; Mr. Rafael Rangel, Director, Project PROSALAFA; Ms. Blanca Alarcón, Senior Executive of Operations in Venezuela, Andean Development Corporation; Ms. Linda Rodríguez, President, APROCA (beneficiaries' representative); Mr. Rodolfo Roa, General Director, Ministry of Environment and Natural Resources; Mr. Sixto Jérez Quesada, President, FONDAFA; Mr. Adán Chávez, President, National Land Institute; Mr. Jean Jacques Gariglio, Country Portfolio Manager, Latin America and the Caribbean Division/IFAD; Mr. Paolo Silveri, Evaluation Officer, Office of Evaluation/IFAD; Mr. Ruy de Villalobos, Mission Leader/IFAD.