Mid-term evaluation

Project area

St. Vincent and the Grenadines (SVG) comprises an archipelago of islands in the Eastern Caribbean. The Smallholder Crop Improvement and Marketing Project (SCIMP) covers all the island of St.Vincent. The Grenadines is not included as a specific part of the project, except for the livestock component, given that there are only an estimated 590 farming households in the Grenadines and that tourism in many of these areas provides the population with alternative income means. All of SVG has a total land area of 389 square km or 39 000 ha, of which only 26% is arable, due to mountains.

Project design and objectives

Target group

The Project aims to assist families having less than five (5) acres of land and living close to or below the poverty line estimated at ECD 11 160 (USD 4 430) per annum. For persons without land, their total income would need to be in the order of ECD 14 000 (USD 5 185). For households with land, the family would have to fall within at least one of the following: (i) female headed household; and (ii) one member of the household working full-time on the farm, at a minimum. For those without land, beneficiaries would fall into at least one of the following: (i) unemployed youths; (ii) single mothers and (iii) women-headed households.

It is expected that under the project about 2 000 of the poorest households from within the target group of 5 745 would benefit from the project. Women-headed households would form a specific sub-sector of the target group for the project. Fixed income earners or Government employees would be excluded from the target group.

Objectives and components

The main objective of the SCIMP is to provide an environment in which small farmers and the rural poor have increased flexibility to respond to changes in market demand and thereby the means to increase their incomes and improve standards of living. In practical terms this means that small farmers were to (i) diversify their agricultural production out of and around bananas and (ii) increase the efficiency of existing banana production.

The project had four components:

• (i) agricultural production;
• (ii) agricultural marketing;
• (iii) credit, and
• (iv) project coordination and monitoring & evaluation.

Expected effects and assumptions

The expected effects of the project included: (i) working with smallholders in improving their farms' productive capacity, including encouraging the implementation of soil conservation measures; (ii) increase the efficiency of banana production; (iii) strengthening institutions providing support to farmers; (iv) develop infrastructure that would enhance the national export capability and an overall market system capable of responding to local, regional and extra-regional market conditions; (v) providing a line of credit for smallholders and small agriculture-related enterprises, including agro-processors; and (vi) strengthening the Credit Unions and supporting their saving-generating capacity.

The project objectives and expected effects are based on the following critical assumptions: (i) EC prices for bananas would continue to decline thus producing incentives for small farmers to diversify; (ii) hurricanes and tropical storms would not severely disrupt production; (iii) support from the Project Marketing and Management Unit (PAMU) would be adequate to boost export levels; (iv) DEVCO would be able to improve its repayment record; (vi) mechanisms would be adequate or could be developed to get credit to the small farmers; and (vii) the capacity of NGOs would be adequate to gain the participation of small farmers in project activities.

Evaluation

The MTE mission was in St. Vincent from May 2-17, 1996. The mission's itinerary included visits in the Kingstown area, site visits to E.T. Joshua airport, the Tannia Demo Farm (Orange Hill), Layou Pasture Nursery, Belmont Livestock Center, and meetings with the Lauders/Greggs Community Groups, traffickers, and loan recipients on the Windward side of the island. The mission conducted interviews with collaborating institutions and beneficiaries and it reviewed a number of project documents, reports and surveys.

Implementation context

The project rationale to support small farmers to "respond to changes in market demand and thereby the means to increase incomes and standards of living" remains valid. The policy context for the project is increasingly favorable as the GSVG shows added political commitment to the overall diversification program and works to establish a viable program framework. However, there has been little incentive for small farmers to diversify since bananas still remain the most attractive crop because of preferential treatment by the EU, and for a variety of other reasons described in Chapters II and III. Indeed, during the project period agricultural production has become more concentrated in bananas rather than less so. Because the EU mechanism is increasingly uncertain over the next several years the SCIMP is likely to have correctly anticipated farmers' desire to diversify and ultimately it may be successful. At the current moment however, given the existing EU mechanism and current risks and market constraints, this desire on the part of small farmers is marginal or it does not exist.

Project achievements

Since project effectiveness in July 1993, significant progress has been made in laying the foundation to accomplish the main project objectives to benefit small farmers through diversification around bananas. Serious delays in implementation, due in large part to marketing constraints, institutional weaknesses and roadblocks, and lack of communication between PAMU and the MAL, show positive signs of easing during the remaining period of implementation.

In the production component some progress has been made but more is expected. Institutional strengthening has taken place; 40 extension officers have been trained and they have provided training to 50 farmers in Districts 1 and 8; several demonstration plots have been established; the Communications Unit has been producing project promotional materials and the livestock program is well underway.

The SCIMP has made much progress on the marketing side especially in terms of strengthening exporters, however, it has been severely disadvantaged by not having the full time Marketing Officer specified in the loan agreement. Progress that has been delayed at the airport cold storage site appears to be back on track with estimated completion date for the facility being July 1996.

The credit component of the project has experienced the most severe implementation problems and delays. Eighty four (84) DEVCO subloans totaling ECD 75 600 have been approved to date, reflecting roughly 10% Annual Work Plan targets. The involvement of the Cooperative Credit Union League (CCUL), which was supposed to have played a major role in credit has not occurred because of an impasse with DEVCO in reaching acceptable terms for a sub-loan.

On the management and coordination side the Project Management and Marketing Unit (PAMU) has been established as has the project Steering Committee. The PAMU and MAL have experienced serious communication and management problems which currently show signs of easing. Steering Committee members expressed positive views on the new leadership and the improved balance between public and private sector interests. On the coordination side there have been substantial lost opportunities to coordinate with the World Bank financed Agricultural Rehabilitation and Diversification Project.

Effects assessment and sustainability

Currently, there are few benefits from the SCIMP that may be considered to be sustainable. And for those few benefits that do exist their ultimate sustainability depends on the degree of support in the wider Agricultural Diversification Program. This observation should not be taken to undermine the fact that the SCIMP has laid an important foundation on which diversification efforts can continue to be built.

First, with regard to diversification, the project has had only a very marginal impact in terms of assisting small farmers to diversify around bananas. The uptake of new crops and practices by small farmers participating in the demos is not clear due to inadequate reporting by the MAL.

Second, with regard to exports and creation of new markets the project has enjoyed a better record and has assisted exporters to access new markets in the U.S. and Europe which though small seem to be reliable. On the export side, with the collaboration of TROPRO, the project has both helped to create and strengthen APEAN. This seems to be the most important benefit with good potential for sustainability. The importance of this benefit can not be underestimated.

Third, with regard to the physical infrastructure created or renovated by the project there seems to be solid indications of its use for intended purposes and adequate upkeep. This holds true for the Belmont Livestock Center and for the packhouse equipment secured for traffickers. The animal revolving scheme, just now getting off the ground, also shows positive early signs of sustainability.

Fourth, a good deal of effort has been focused on strengthening the MAL and its extension work. For these activities to be effective in the long run will require continued institutional strengthening and restructuring of MAL, including more rational management structures, an increase in the number of qualified extension agents, and strengthening of the Agricultural Planning Unit.

Effectiveness of the M&E System

The M&E system was setup in PAMU with a little delay when the necessary TA was provided in PY1. The final report of the M&E specialist was submitted in November 1994. The report, which contains the design of the M&E system, is well conceived and provides for a good reference manual for the M&E Officer. The M&E system makes use of the indicators suggested in the annexes on M&E in the appraisal document. Generally speaking, a good system has been established, which allows for information to be captured systematically and stored in electronic format. To be most effective the system will require additional focus on monitoring the uptake of demonstration activities by small farmers and a more participatory approach generally so that the project can become more responsive to small farmer interests and needs.

Main issues and recommendations

Main issues

On the production side additional progress is needed to better coordinate market and production activities; to advance adaptive research, to improve the infrastructure at Rabacca Station and to continue to actively promote the project through the Communications Unit and extension. General strengthening of extension and reform of MAL management structures should also help to support production.

Because the project is market driven, efforts to strengthen exporters (APEAN) and to train small farmers in an export orientation must be a continued priority. The immediate appointment of a full-time Marketing Officer is a key to further success in this component. Poor access to competitively priced extra regional transport continues to be one of the key market contraints. The creation of domestic and intra- regional marketing opportunities for agricultural produce will also continue to be a major challenge.

The underlying causes of the poor credit performance on the demand side are the small farmer's avoidance of debt, uncertainty of markets and prices for nonbanana production and lack of extension support. On the supply side DEVCO is hesitant to make additional loans because of problems with bad loans and loan repayment; farmers' misperceptions of loans as a sort of "grant;" DEVCO's loss of money on the IFAD line of credit and the generally high cost associated with small agricultural loans. Given these factors the credit component needs substantial reworking and possible reappraisal.

The drawn out pattern of poor relations between the PAMU and MAL with its serious deleterious impact on the SCIMP should have been addressed by CDB, IFAD and GSVG at a much earlier stage in order to control damage. In the future these kinds of problems should be addressed promptly and in a direct way with adequate support and follow-up from the collaborating institutions and the host government. The major challenge for the new Project Manager will be to build solid coordination and cooperation amongst the current and new institutional players with a clear focus on the intended project impact. Better relations with the MAL and other branches of government will greatly increase the likelyhood that the project will gain the resources that it needs in order to succeed.

Participation of small farmers in the project has been disappointing, especially in the credit aspect, although this is not surprising given the major constraints. To date roughly 453 households, or less than 25% of total targeted beneficiaries have benefited from the project through credit, training, extension, export support and the livestock program. At this stage there is little evidence of incremental diversification by small farmers due to the project.

Behind this there are a variety of interrelated causal factors, chief of which are: lack of knowledge about the project, marketing bottlenecks, risk adversity and avoidance of debt on the part of the small farmers, weak project and credit outreach, lack of institutional coordination and the lack of involvement of key nongovernmental institutions that have a comparative advantage in reaching the poor. In short, these problems pose the major challenges to the project and outline the key areas in need of immediate improvement.

Recommendations

Small farmer participation

The second Rural Development Officer (RDO) should be assigned to project by GSVG by June 30, 1996. The RDO should be female. One RDO would cover the Leeward and the other would cover the Windward side of the island.

Two small farmers (preferably female) should be selected immediately by GSVG to the project Steering Committee.

A Letter of Agreement should be signed between PAMU and NFU to increase the participation of farmer groups in project activities. NFU should take a proactive role in identifying projects for subloans, training, etc.

Production

Regular meetings between MAL and APEAN should be scheduled to coordinate marketing and production strategy and activities within the GSVG's diversification program.

CARDI should be formally involved in the project through a letter of agreement between SCIMP/MAL/ CARDI to assist in adaptive research and if needed in execution of management of livestock programs including Drug Revolving Scheme.

Improve infrastructure at Rabacca Station, in a fashion similar to Belmont Center, by August 1996. Funded by SCIMP project resources.

Video equipment for the Communications Unit should be purchased immediately through SCIMP resources to enable more effective and efficient project promotion.

Training

Implement the SCIMP 1996 Training Plan with UWI/CEPAT and IICA. Training in agribusiness for small farmers is especially important.

Marketing

The Marketing Officer should be assigned to SCIMP by GSVG by June 30, 1996.

A Working Capital Guarantee Program financed by SCIMP loan resources should be implemented to strengthen APEAN and exporters.

Complete Phase II of technical assistance for Agro-processors improving the technical and marketing capability of 15 local agro-processors. This should be as planned on week of June 24, 1996.

Complete civil works at E.T. Joshua Airport for outbound fresh produce shipments. APEAN should complete management system (fees, electricity, security, staffing, etc.). The facility should be operational by July 31, 1996. SCIMP should be involved in Management Committee of air cargo facility.

Airfreight contracts should be signed between APEAN/SCIMP and carrier, with assistance of GSVG, to fly 50,000 lb/week breadfruit, mangoes, peppers, soursop, etc. to Barbados for interline connection to Toronto, Montreal, London and NYC. SCIMP to guarantee 30,000 lbs/week during February through November. Rate not to exceed 9.5 cents US/lb.

A Fruit Ripening Facility should be co-financed by SCIMP and BGA with participation by NFU and CARIPEDA to expand local markets. SVBGA should take up membership in APEAN and begin the process if its product market diversification around bananas, taking a lead role with SVMC and other exporters.

Credit

The Ad-hoc Credit Survey should be completed by PAMU according to TOR by July 1, 1996. The Survey results should be used to further inform the selection of most effective mechanisms for credit delivery.

Draft and execute subsidiary loan agreements between GSVG to NCB and NDF by August 1, 1996 in order to expand credit. The credit should be provided to NDF, NCB and at 4%. The credit institutions should be free to on-lend at competitive rates below 12% with specific on-lending terms to be informed by results of the Credit Survey. Institutions should successfully complete a management audit in order to activate the subsidiary loan agreement.

Provide institutional strengthening in agricultural loan management to NCB, NDF, CCUL and credit unions beginning August 15, 1996. Training and attachments should be provided by CCCU Barbados and ACB Jamaica through project resources.

Expand credit outreach by DEVCO to include: a) minimum once weekly "office" hours in rural areas using low-cost outreach facilities; b) speeding approval process for loans; c) DEVCO's authority to on-lend directly to member credit unions.

Increase the percentage of project loan expenditures for credit from 65% to 80% in order to reduce risk to credit institutions and to increase scope of credit. Implement by September 1, 1996.

Implement Insurance Fund for Delinquent Loans of up to 10% of outstanding loans to eligible project beneficiaries in order to reduce risk to credit institutions and to increase credit scope. The guarantee should be funded by project resources and may only be invoked for delinquency after loans are over 180 days past due and the institution has exhausted all avenues of collection on a project-by-project basis.

Project Management, coordination and evaluation

PAMU should build and maintain close coordination and collaboration with MAL, DEVCO, specified credit institutions, and other groups and institutions involved in project implementation.

PAMU and the Steering Committee should build closer coordination with Agricultural Diversification Program and Phase III of the Agricultural Rehabilitation and Diversification Project.

An Annual Review and Planning Meeting with participating institutions and small farmers should be coordinated by PAMU in September 1996 and annually until end of project.

The terms of reference for the Project Steering Committee should be signed by GSVG by June 15, 1996.

CDB and IFAD should closely monitor SCIMP during the next year in joint missions to ensure that project performance gets back on track.

The M&E Unit should remain positioned in PAMU in order to enable most efficient and effective M&E activities and in particular participatory M&E of beneficiary uptake of new practices. The M&E position should play a more central and active role in advising Project Manager for management decision-making.

Project promotion

Project promotion activities should be planned and implemented in close collaboration with the Communications Unit and participating institutions:

1. TV documentary (½-1 hour) emphasizing benefits to farmer and team-approach of participating agencies produced and aired 3x per month for several months beginning November 1996. Funded by project resources.
2. Daily 2 minute radio spots aired at a prime time (say between news and obituaries) beginning July 1996.
3. PAMU to aggressively seek creation of opportunities to promote the project through news media, comic strips, trade fairs, etc.