zVANU3TICS PMMT OF
BK4.LL pARMWUmsE C3MVIT
p~oj=C No. 664~-0302
Tm;TUNIMI
MAY 1980 TAKlE OF CONTS PAGE i. WnODUCTioN
A.. Evaluation Team Membe s . ... ,.. B. List of Officials Intweviewed . . ,.. *.*, . 22. C. Field Trips . .. 2 D. List of Perons in ontact vith Tea 2 E. List of AbbreviatJona vith Brief Explanations 2 1I. sJIARY AND RECObW.DAMTIs.. A. Suama '
B. Rec ndationas .. 6 fli. A SIS
A. Imact of the Project 1. Ii~act on Apricutural, Productivity9 2. IMact on Production .1 3. Izpact an Incomes of Participating Farmers 12 4* Impact on Technolog Used 14 5. Diffusion of Project Methods to Non-Participants 16 B. Methods of Credit Approval and Input Supply. 1. Credit approval and Delivery System 17 2. Are there Inequities in Loan Eligibility Determination? 20 3. Aequacy of the Input Sup;'y system 20 4*. Role of Private SectQr in SupIM of Inputs to Project Farmers -... 23 5. Role of the Farm Plans 25 6. Reactions of Farmers and Exension Agents 26 C. Financial Aspects 1. Performance of the National Bank of TvniAia-BN 27 2. Reporting Services of the BIW 29 3. Delinquency in Repament of AP E lans 34 4, Capitalization Proposal for the Future of APMAVE 36 5. The Role of the SCMAs 37 6. Interest Rstes, Supervised Credit, and the Financial Environment 38 7. Loan Targets and Cost-Benefit Cm prisons 39 D. Program for the 3W13. Farmer, Other Project Asmtions. 1. Are Project Beneficiaries in the Target Grop 41 TABlE dlCtaMNTS COT'D PAGE
2. Farm sizemand theDemand for Credit 4 3. Participation of Farmers with 0-5 and 5-1 Hectares in the Project I F''."" 4. Has the Opposition of Large Farmers Affected the . .,qlmentation of the Proj e '" . . .45 5. Farmers Receptivity" "6. 6. Profitability of Controlled Producer Prices 46 7. Adequacy of the System of Comercialization 4-
E. Projection of Project APMANE'e Needs " ...
1. Staffing of Projet MAKE 147 2. Extension of the Time for I -lementation .. ,49, 3. Vehicle Requirements and the Chauffeur Situation. 51 14. Training and Personnel Development :25. 5. CIEA, its Role and Performance 53
6. USAID Technical Assistance i 1e1m~nts ' .354 7. Technical Operat Sg.a." " " .
IV. BROADiEN EVAMATIM:. PLANG ADAPT= TO - . . T PARTICULAR CDITZIONS OF ,WZI F'ARIM S . . 514.-: 59 Concluding Obaervatiois by Prof. A. Che noufi, Teem CoordLn&tor, on problems of evaluating certain social aspects of smnal farmer piograms in Tunisia. Annex A: Projet de Credit SupeiA ' A.MYA.NE. '; " Etude de Sulvi et d'Evaluation de ... Premiere Annde d'Execution, 97$/79 CEA, Janver 1980. Annex B: Projet de Credit Supervis6 AP.MA.N.E. Note Ccplementaire aur le Remboursemant .des Prbts.. CM, Mws,.1980. This evaluation was undertaken by a bi-national team, members of ,which are listed under A. Interviews made by the team are listed under B., and field trips under C. Sources of information included interviews end trips, studies by CNEA (see list of abbreviations under 2.), bank reports, governmant documents.
A. List of Evaluation Team Members Mr. A. Chebil, Chief Engineer, D.P.S.A.E. Mr. P. Avram, Consultant, AID/I, Chio State University Mr. J. Gharbi, Chief Engineer, D.A.P.M.E. Miss Kh. Baghdadi, Chief Engineer, D.P.V. Dr. G. Donald, Consultant, AID/11, National Planning Association
Coordinators Prof. A. Chennoufi, Chairman of' .. Department of Rural Economics I.N.A.T.
Mr. E. F. Gibson, Agricultural Economist USAID/Tunin
B. List of peole and officials contacted and interviewed during the assessment study.
USAID .. Mr. U1.F. Gelabert, Director, USAID, Tunis USAID . r. G. H. Zarr, Regional Legal Advise., USAID, Tunis MV/DCI .. Wr. F. Khelil, Directeur de la Cooperation Inter nationale (Director for International Cooperation) D.A.P.M.E.. W. K. Daghfous, Directeur de l'asaistance aux petites & moyenes exploitants (Director for assistance to 8mall and Medium-sized Farmers) C.R.D.A. Mr. A. El-Ghali, comissaire regional aUi d6veloppement (Beja) agricole (Regional Officer for Agricultural Development) C.R.D.A. Mr. El-Hedi, head of BNT Office in Beja (Deja) D.P.V. .. Mne. N. Jebnoun, ingdnieur subdivisionnaire' (Sub. (Grombalia). divisional Engineer) DPV, Grombalia. SOWAM .. Mr. F. Bouzaiene, Head of Technical Division C.N.E.A... Mr. A. Slam, Director, CEA Mr. Zghidi, Consultant, CNEA Wr. M. TaJaoui, Consultant, CEA O.C. .. Mr. Mlika, Head of Supply Service O.E.P. .. Mr. Balti, Head of Study Division Mr. Mhouchi, Head of 8upply Service Mr. Jaafar, Comercial Director -2-
B.N.T. . r. M. Atallch, Deputy Director of Aica:iji'al Division, Tunis 1 . . r. A. Soul&, Agriculiural Credt o cer. .c.G.C... .. ,. M.m. mahoub, Director of -'Tecical Division B..T., , K,.: (aslti, Commercial Direc or . B.N.T. .. W tM. kasem, Chief of the Zaghouan Branch.... the C. B.N.T.
C. Trips made by Evaluation Tbmn
Beja Governorate Beja delegation: Sectors: Ksar Mezouar, Amdoun.
,Noaeul Governorate: Grombalia delegation: Sectors: Djebe. Terif, Nianou
Zaghouan Governorate: Fahs delegation.:' SCRAM Regional Office.
,. D. List.of people in direct contact with the project and interviewed by the Evaluation Team
Mr. E. F. Gibson, Project Officer, USAID, nis. Mr. C. J. Fliginger, Chief of Agricultural Division, USAID, Tunis Mr. 1. Trabelsi, APMANE Pro .t Chief, DAME Mr. D. Dupras, APMAIME Techni -Advisel, .USAID Mr. R. Gregg, AM'AEconomic Adviser, USAID" " . Mr. M. Gasmi, AP14ANE Office Liaison. Chief, Beja Mr. A. Gaidi, Extension Agent : Ksar Mezouar. Mr. A. Dhaouadi, Extension Agent, Amdoun 'W M. Lehmar, Extension Aent, Grombalia and. about 40 farmers in Ksa.14ezouar, Andoun, 'Djebel Teref, Nianou.
E. List of Abbreviations 4rith brief explanation. AM=tE... Assistance au petits et1yens Agriculteird du Nord- Est. (Assistance to Si&ll and Medium-s zed-farmer of the Northeast - formal name of the AID projict unit _...(the Ministry of Agriculture) B.N.T. .. Banque Nationale du Tunisie. (Public Comercial Ban1c) C.N.E.A.... Centre Nationale d'dtudes Agricoles (A Research Organization) C.T.V. .. Cellule Territoriale de Vulgarisation. (Loc l 'Office of Extension. Agents) C.C.G.C... Coop6rative.Centrale des Grandes C&Utures (Sells some Seeds to Farmers) C.R.D.A... Commissariat 6-4iqnall.au d~veloppeient Agricole.' (Provincial Office. of Ministry of Agriculture) -3"
D.A.P.M.E. .. Direction do l'Assistance aux petits et moyens eloitants. (iinstbre do l'Agriculture, Tunisia) Division Supervising APMANE) D.P.S.A.E. .. Direction do la planification, den statistiques et des analyses 6conomiques (Ministbre do l'Agriculture Tun±ie) (Planning Office, Ministry of Agriculture) - D.C.I. .. Direction de la Cooperation Internationale (Miniutdre do lt agriculture, Tunisie) (International Affairs Office vrithin the Ministry of Agriculture) - D.P.V. .. Direction de la Production V6g6tale (Ministbre de l'Agriculture Tunisie). (Division formerly supervising APMANE) - M.O.A. .. Minist6re de 1' Agriculture (M.nistry of Agriculture) - O.C. .. Office des C6rdales. (Sells Seeds, Fertilizer; buys cereals) - O.E.P. .. Office de l'Elevage et des piturages. (Sells livestock and promotes livestock production) - I.N.A.T. .. Institut National Apronomique do Tunisia. (Principal Agricultural University) - S, C.M.A .. Socibte de caution Watuelle Agricole (Local Organizations for Farm Credit) - S.O.N.A.M. *. Socihtd National de Motoculture (Rents Tractors and Cobine Services) IL. 3'.#WARY AND RECO0,IDATIKS - A. JW4PIRY "
BACIROU4D THe Small Farmer Supervised Credit project, referred to as API(, in Tunisian terminology, is a project that seeks to: (a) use credit as a tool to increase .farm production; (b) improve the quality and increase the supply'of production inputs; (c) intensify technical services and, as a result of this combination; (d) increase the number of small and medium sized farmers employing higher levels of production technology.
The USAID contribution to this project consists of a $17,300,000 loan to establish a revolving capital fund from iftich supervised loans will be made to eligible, small and medium sized (0-50 hectares) farm operators in the five north-east gouvernorats making up the project area. Other U.S. contributions consist of grans amounting to $937,000 for purposes spelled out in the project paper, i.a., for assistance in the launching and advancement of the project. As of this date, the U.S. contribution amounts to a little more than $2,000,000 to the loan fund, and a further release of slihtly less than $4,000,000 is anticipated shortli. This will bring the U.S. contribution to $6,000,000 in 1980, in compliance with the financial schedules included in thd terms of the loan agreement. The use of U.S. gant funds d(ring the launching and the initial two year period of operations has been highe" than ihat, was previously anticipated. The Government of Tunisia's contribution to date anount to 1,550,000 diners ($3,875,O00),,and it is slightly above target I.rith its commitments. This project (API4AE), is the only program offering supervised credit to small farmers in Northern Tunisia, and its success is of wider interest to the Tunisian Government as a model for possible future expan sion nationw-ride.
Progress to date The project comienced in October 1978 and will comlete an operation covering tim crop cycles in July 1960. Initial organizational taks including the inter-agency transfer of API.MIE (from the Direbtion de Production Vegetale to the Direction de l'Assistance aux Petits et Moyen Exploitants (DAP) in summer 1979, the recruitment and training of personnel, the establishment of regional offices and the acquisition of equipment and materials -ere all satisfactorily accomplished. This crop year almost 2,000 farmers in the target group were reached .ith technical services and credit. APMi=E is now in place, and ready to intensify and expand its services. -5- The crop year 1978/79 Is a trial period, and climatic conditions in at least two gouvernorats were unfavorable. This created collection problems, and led to a delinquency rate now equal to 39% of the loans ' ranted that year. The 1979/80 crops, to be harvested this summr, are promising, and there is optimism that this crop cycle will produce better results. As of April 30th, 1980, more than 1.2 million dinars had been aproved in credit lines to farmers since the start of the project, of which 808,725 dinars is recorded as having been granted for the present crop year. Short term loans are granted exclusively for field crop and vegetable production, while the medium term lons started in February 1980, are primarily for livestock and tractors, and other farm equipment.
The project is being well received in GOT circles, and parastatal agencies involved in supplying inputs to the project are shouing positive support. Problems The project is short of vehicles for its extension agents, whose scope of work is thus curtailed. Although provision is being made to acquire 54 additional vehicles with AID funding, delivery is not expected until mid-1981. This acts as a deterrent to hiring additional extension agents, because they would be largely immobilized. However, the HDA should include in it's next budget request sufficient funding for personnel, materials, and other support to immediately utilize these vehicles as they become available.
Intensive and coordinated planning at the regional levels and below are necessary. Setting targets, coordinating with other agencies, forceasting input requirements and assuring t:eir timely availability should receive close attention. The Banque Nationale de Tunisie (BNT) plays a crucial role in the furtherance ef the project's objectives. BNT should upgrade its services for the project, even to the extent of setting up a separate department dedicated to small and medium farmerT supervised credit. The BM computer service should be providing a vider range of data on the project's activity than it is presently doing. If technical assistance is required for computer programming, this should be seriously considered and provided. The bank should offer guidance and counselling in Lhe fund's management, but as it stands now BNT offers little more than a distribution and accounting service.
The APMANE project manager shows strong capability, but rill require additional senior staff to enable him to concentrate on problems, planninG and coordination. GOT budget support to the project must be adequate and timely. -6- Marketing of the agricultural products of project farmers, does not a ear:to be.a problem at this time. Project portfolio does reflect a strong demand for livestock loans however, which is difficult to meet,. due to a shortage of livestock' in general in: the coutry'. The Centre Nationale d'Etudes A-ricolesa (CNEA) co Ieted an ewiaus-; tive evaluation of the project folling the first year of operations and their findings were Generally favorable.
Conclusion
The project got off to a slow start but is making good and steady progress. Its importance as an instrument for reaching the small and medium farmers in Tunisia (60c of the total farmers) should not be over looked. Its contribution to the rural economy in terms of increased food production, higher levels of income in the target group of farmers, end. the general uplifting of the social conditicns in rural areas are values all humanity is striving for. This project is one avenue for attainid" ' . this objective, and is worthy of a continued high level of support.
B..-, RECOMMATIONS
1. Improvement in Loan Collection, Reduction in Delinquency,
Loan repayments have lagged behind due dates in too large amounts, and these must be speeded up virith more effective collection efforts by project and bank personnel, and use of the office of' cereals. Some improvement may be foreseen, but Greater attention is needed. (See Chapter,,o 1. C., Section 3)
2. Extension of Time for Project Implemintation The project was off to a slou start the first year and still faces difficulties in expanding personnel and loans, although conuendable momentum has now been achieved.. PIessure to push out loans onto farmers faster could only result in poor farm plans and bad loans. A schedule of six years for project completion, as cotLared to the present four years, would be more realistic and result in better quality credit. (See Chapter .III. E., Sections 2 and 6). 3. Deduction from Loans for Firmers' Savinks Accounts to build Project Capital as an alternative to raising interest rates. The evaluation team is not4 recomending an increase in interest rates for the APMAIM project at this time, but as an alternative a' procedure for the mobilization df rural savings as capital for the project should be considered. The APMM' project has ao savings component and the BIUT does not aggressively promote savings in the rural areas. -7-
Compulsory deductions from farmer's loans to create savings deposits and auent project lending funds imuld accomlish both capitalization and savings objectives, and imuld achieve this result more effectively at this time than would an 'ncreased interest rate (See Chapter 1I. C., Sections 4 and 6).
4. Funds to complete Recruitme.t and equippina of Project Personnel should be provided.
The numbers and 2bility of extension agents are a key determinant of project growth potential. Recruitment of a full compleme of agents, provision of vehicles for them tith chauffeurs (as necessary), and completion of the projected staffing pattern as recommended by the GOT/ USAID credit comission on April, 1980 should begin as soon as possible. (See Chapter III, E., Sections 1, 3, 4 and 6)
5. More Complete and Timely Reports by the Bancue Nationale de Tunisie (BNT)
The BNT handles the project's money and generates the data essential for both project manaement and external monitoring. The BNT'a monthly reports lack a number of items necessary for routine management controls, and also omits major indicators of the flow and disposition of project funds. This is a matter of highest importance, and requires immediate attention. Should the BNT require technical assistance in programing its computer, such assistance should be given serious consideration. (See Chapter In. B., Setion 1 and 111. C., Sections 1 through 5)
6. Continued Periodic Evaluation by the Centre Nationale d'Etudes ricoles (CHEP)
The CNRA has produced a commendable analysis and fact collection on the project's first year. This work has been valuable for project manage ment and monitoring, and its continuation and possible expansion (through increased use of project repozting system and diminuation of CIEA services except for periodic audits) in the future years is most desirable. (See Chapter Ill. E., Section 5)
7. Strengthen In-country Training of Extension Agents. While the extension agents appear adequate in technical knowledge, they need increased skills in financial counselling, farm management, and comimication methods to obtain more productive relationshils with farmers, especially the largely illiterate small farmers. 'fTraing in these skills is at the heart of spervised credit, and requires increased action. (See Chapter III. B., Sections 5 and 6, and III. E., Section 4) -8 8. I~prove Planning and Coordination amo.n. aencies involved in Project.
operations of this project involve a large number of organizatibns and committees with interlockina fiactions. Efficiency requires a corresponding degree of forward planning, ensurina of timely co mmications with concerned parties, and troubleshooting. A conuendable start has been made at the top project level but must be continued, and much more is needed at regional and local'levels. (See.Ch&pter"III.B.$" Sections 4~ and 5) 9. USAID Replcement of Departig Senior Project Advisor; Need for Povision to Avoid Anticipated shortfafL in Grant Funds.
The Senior Project Advisor will be retiring on or about July 31, and his prompt replacement by an experienced economic advisor, preferably conversant with the French language, is of importance to the project. The anticipated shortfall in AMDN grant. funds (see Tunis 4013 of May 13) results from underestimates of nee, in. se~vral categories, adding to sorea200,000.. These purposes merit support; so also does vehicle purchase, vhich should not besacrificed to avoid this-shortfall. ,Yith the recom-. mended extension of time' or project implementation, additional correspon danG fumding for technical assistance and -support should also be considered. (See Chapter III. E., Sections 2 and 6).,
10. Deliberate well Prepared Expansion of the Small Farmer Credit System to Other Areas 6Z Tunisia. As the project-initiated credit system gains strength in the areas where it now operates, decisions-on the. 4a.Ategy of its expansion to new areas 4ill arise. It would be preferabie .to give 'more priority to satur- ation of existing operating areas, and to careful advance preparation of moves into adjacent areas vith *personnel and infrastructure in hand, rather than to ephasize geographical*.spread and a fast pace of progress. The results tll be more enduring bd productive. (See Chapter III. E., Section 1) III. AN;ALYSI S
A. Program Impact The initial year of the Small Farmer Supervised Credit project, referred.to as the APAIE project, produced tangible results in most areas of i plementation. The availability of production credit, technical advice, and cwuercial inputs made a limited, but definite impact on the target group. For the initial crop year of the project (1976/79) a total of 982 loans vere granted, of which i05# went to farmers under 5 hectares, 21% for -9 5-10 hectares, 36% for 10-20 hectares, and 33% for 20-50 hectares, (CNE_ Evaluation Report, Annex IV, Table No. 5). For the cereal crop year 1979/80, which ends June 30, 1980, the total number of loans granted increased by 80&%to 1,770 farmers, (see Table Ho. 1) with some shift in emphasis on loans to more farmers under 10 hectares, thich -roseto 34%.
The number of farms, hectareage and loans granted for the two crop years for the five gouvernorats are shotm in Table 1.
Increase in.the number of farms, hectareage and loans granted from one crop season over the other amounts to an average of 80%in the number of loans, 59% in the hectareage and 94% in the ammt of loans granted. No gouvernorats sho. declines in hectareage (Siliana) or in loan amounts (Zaghouan), but in both the number of loans increased--due to a Wester demand from the small farmer in the case of Siliana.
1. Impact on Aricultural Productivity The year 1978/79 wa very difficult for Tunisian agriculture; September and December 1978 and most of January 1979 were very dry, which greatly affected production. The CNEA study gives, in general, an estimate of yields for various crops of the farmers participating in the project, separated according to the bio-climatic zones.
If one considers yields without considering the bio-climatic zones, the CUA study indicates: a stagnation or slight decrease in yields for the main cereals during the first year of the project as compared to the year 1977/78 (without project); and a distinct increase in the yields of oats, millet, fodder and legumes (broad beans, chickpeas, vetch, fenugreek). On the other hand, if one eliminates the effect of the very dry weather, encountered in the semi-arid zones, and considers only the results obtained in the humid and sub-humid zones, one notices a distinct increase in the yields of aln3ost all crops. - 10 -
Table 1
Nwter of Fe.ers, Hectares and Loan Values in Project MANE
LOANS GRANTED 198/79 1279/80 Percentage Increase Loan i Loan 199180 over 1978/79 No. of Value No. of Value Gouvenorats Farms Hectares (Dinars) Farms Hectares (Dinars) Farms Hectares loans
Bizerte 201 5,210 147,990 367 7,519 83,356 26 44 24 Beja 219 5,596 63,594 564 9,680 234,043 158 73 268 Zahouan 180 3,547 120,.606 313 7,653 117,1415 77 116 -3
Siliana 172 2,894 35,Q04" 20c,' 2,231 52,433 22 -32 16
Nabeul 120 1,139 48,146 317 2,125" : 221, 477 164 87 354 Total 982 18,386 416,71. 1,770 29,297 --.. 725 59 94
Source: C±4RA for 1978/79, APMANE records for 1979/80 -11 " Table 2
Crop Yields, ProJect Yarms in 1ore.Humid ZonesI (in quintMla per hectare) Durum Broad Chick Fenu- Level heat BarleY Oats Millet Fodder Bean Peas Vetch Greek Letils
77/78 9.2 8.11 6.5 15 .6.8 6.c5 5.95 6.75 8 3.62 Humid 28/79 12.25 7.62 8 8.3 35.25 7.09 6.75 6.33 8.66 10 (&33%) (-6%) (.23%) (-1 %) (109%) (17o%) (6%) (-4%) (8%) (.176%)
7/ 10.45 8 - 2.66 18 7.59 4.87 7.22 - 10 Sub- Humid 7-879 11.50 8.814 9 4.5 28.3 9.145 5.58 6.50 - 2
(&10%) (P10%) - (.69%) (57.2) (o24%) (.14) (-g%)
Source: CTEAp. 53
The estimates given in the CIEA study are to a large exten u firmed by later information. As an example, figures for 1! 48/79 yields in the area of Ksar Mezouar and Boughzam in the gouvernorat of Beja, obtained by the evaluation team, indicate, when compared with those of the year preceding the project, that the impact on productivrity is distinctly positive despite all the difficulties encountered (difficulties due to the late start of the project, the climatic conditions, the uncertainty of the farmers, and the lack of both human and material means at the supervision level. '... 2. Imact on Production
The impact of the APMAME project on the production results from'the impact on productivity on the one hand, and on changes in land use on the other. Ile have seen that ar far as productivity is concerned the impact of the project has been positive, and that the results are promising for the future. As for the second, the C11EA study indicated that a sample of project farmers had decreased their percentae of land kept fallow from 7% in 1977/78 to 17% in 1978/79. Intensity of land use rose from 73% to 83%. rhe very noticeable decrease in fallow Und and the distinct 12-
Table 3 Yield Co=arison for the. Years 197778 and 1978/79 for Farmers' Participating in the API4AIE Project
. Broad Chick Vetch ...... - D'. .. Barle,. Oats. Beans' Peas Oats Dir Mzouar 1977/78 9.5 7 8.4 7.5 8 5.5 24 1978/79 12.9 9 8.4 8.3 8 5
(M35%) (28%) - (-.10) 9) (&15%) Boughzam
1977/78 10 8 8 8 8 5 1978/79 _ 10.7 9.2 9 8 7.3 5.2
(.7%) (.15%) (-12.5%) - (-8.8) (I%)
Source: APMANE documents at Beja
increase in yield make the impiit of the project on total production positive. For small farmers (0-5 ha) the rate of intensification has increased from 0.67 in 1977/78 to 0.94 in 1978/79, as fallow decreased from 33% to.6%. Therefore, the APMANE project is particularly interesting for-this category .of farmers, as most of them (71%) obtained credit for the first time.
3. Iwact on the Incomes of Particirating Farmers
The CNEA study, which interviewed a representative sample of small and medium farmers in the area of the project includes an ana3lsis of farm budgets by climatic zones and by size of farm. (See Table 4). The figures in the table are averages for the sample of 'the value of products sold in cash minus their cost of production. .The analysis shows that during the first year of the project its impact on incomes vea uneven. It is a function of climatic conditions, the importance of the various crops, and the size of the property. Incomes from farms of the hunud and sub-humid zones have registered a net increase during the 1978/79 crop year. On the other hand, farms of the -13 sei-arid medium and upper zones showed a relative deorease in income for the year 1978/79. . FOr the Year 1979/80, second year of the project, we are at the eve of te..cereal harvest, and extension agents and regional technicians have not yet stted an estimate of yield. Nevertheless, fields of cereals visited in Beja (Ksar Mezouan) and in Grombala (Djebl.Trif) by the evaluation team present a very good appearance, and yields should be very good. Incidentally, the evaluation team has several times had the opportunity to coMare grain fields belonging to farmers in the project with those belongin~to sma and medium-sized non-participating farmers: such .a comparison has al.mays been to the advantage of the project farmers.
Table 4 Average Margins Between Value of Products Sold and Costs of Production Percentage Bio-climatic Zones Size of Farm Gross Margin in Diners Chan~e ' 12U/76 1976/79....
Humid 0-10 ha 352 596,75 44.5 10-20 ha 299 363 21.5 20-50 ha 1,945 2.238 15
Sub-Humid 0-10 ha 424 513 21 10-20 ha 362 623 74 20-50 ha 742 1.47o 96 Upper Semi-arid 0-10 ha 17 58 .241, 10-20 ha 191 224 17.3 20-50 ha 744 223 -70 Medium Semi-arid*. 0-10 ha -175 -272 -55.43 10-20 ha -476 -351 -26.26 20-50 ha -139 -366 -163%
Source: CA pp. 63-74 *This zone includes the Zaghouan delegation where production was nil during the two years studied, due to drought conditions. - 14i - .
4. Lzpact:of.Project.on Technoloor Used % ..
The adaptation of vheat seeds from CIMMT in Medco to Tunisian conditions in new varieties end the devqlopapnt of Tunisian variettes not based on Mixican seeds,.-epresent the only technological novelty feeding into the APMANE project* But the adoption by farmers.-of ay practice vhich they had not previously used, whether for lack of knovy ledge or lack of economic access, can be described as an technological innovation. The CREA study indicates that 90% of those benefitting from the credit have acquired ammonium nitrate and sper phosphates,. and that 70%have acquired certified hard heat seeds. As for other i. puts, the project has not been uch solicited in general, due to.,the.. possibility of self-financing on the one hand (seeds), and knowledge of the non-availability, in certain cases and at certain periods of time, of herbicides and fodder seeds at the main supplier, the Office des Cereales, on the other.
The extent to. hich practices facilitated by project APMAM represented technological innovtoii *i6 *the"fnfter*concerned can be examined from the CNEA interviewir #th a sample of project farmers from among the 1978/79 beneficiaries. In the selection of crops and the proportions:of land occupied by each,, comparing cropping patterns
"before the project" in !97/78 anid"'vith the project", there was'a. -- distinct improvement and an intensification of the cultivation systems used. The cultivation of forages in cereal soil (in .rotation) increased by 9% during the first year of the project, and by 22% during the second year. As regards intensification, ve have seen that.access to credits has made it possible to cultivate land that had otherwise been fallow with a reduction in fallow area by 37%. Concerning specific crops, there was a limited shift away from..the dominant cereal wheat into barley; there were smaller increases in oats, forages, and legumes. All these changes were greater then those for a comparable control group of farmers in the same two years which CMA also intervieed. None of these crops were previously unknown in the area. The most striking change in land use -as that fallw area decreased from 27% in 1977/78 to 17% in 1978/79, as noted above.
in.the use of fertilizers, the change was noticeable. Overall, some 29%more amonium nitrate and 41% more super phosphate was used on cereals... The use of nitrogen and phosphate products in quintals per hectare on major crops before and ifer the project ms the following: Table . Fertilizer Use, CKEA Sampie super Pao~pate •. ..'-z.,'/ Amwnium Nitrate.198 . eits• 16 euva.)
Hard Weat 0.96 1.12 0.56 0.70 Soft I-Meat 0.72 0.82 0.57 0.19 Barley 0.29 o..61 0.24 0.76 Vetch 0.18 0.15 0.27 0.73 Forage 0.75 0.64 0.29 o.28 Source: CIRA, p. 49
Wheat and btrley received more nitrogen, barley and.vetch more phosphate. For the other crops involved, changes were minor or negative. Were there were increases, the amounts utilized were still well below those recomended in most cases, due to the late start of the project and late arrival of inputs, a few local shortages, and some farmers' shifts away from their production plans. Project participants used more fertilizer than did a comparable control group, hotrever.
The farmers were not asked by intervie ers whether they had been introduced to technological items for the first time in the project, and there is no suggestion in these figures that this i.tas the case. However, we may take a separate look at the sample of farmers with under 5 hectares, as itis here that access to inputs and ideas was most increased by the project. In this group, fallow area decreased from 33% of their land to 6%, an increase in cropping intensity from 0.67 to 0.94. About 78% of the increased cultivation went into cereals (barley and hard wheat) and the rest into forages. Their fertilizer usage, in quintaLs per hectare, was as follows:
Table 6
Fertilizer Use by Farmers Under 5 Hectares - ,'W. 2!Rle Super Phosphate Aonium Nitrate 4 (or its 16 equival.) 1917/777... 717919/79 Hard WTheat 0.33 1.20 0.28 O.0 Soft Wheat 1.0 1.0 0.33 0.75 Barley 0.1I 0.30 0.25 0.32 Forage - 0.68- . 0.60 Broad Beans - 0.25 0.65 1.0 Chiekpeas - 1.0 0.66 0.66
Source: CNEA, p.60 -16-
It is clear that the opportunities opened by the project vere especially i4ortant for this group.
Lttle can be said "about'ti "appropria;teness" of the technologies romoted by the project. They are conventional, and should be useful; .....but the weather in the one crop year for which there are yield data was such that little can be said :bonclusively ab6ut the effects of inputs on output. But there is no basis for judging them or the crops inappropriate to the areas iihere they were used, given normal rainfall,. .And preliminary indications are that 1W9/80 crop results will p Wobb3' demonstrate more clearly that the project inputs and ideas have helped the farmers in the project.
The following points emerged from interviews conducted by the evaluation team during visits to farmers in the BeJa and Nabeul gouver norats:
Before..the project, most of the farmers were .using self produced seeds. With the project, they gained access to. high-yielding seeds; but the non-availability of .the D/58-25 variety gererally limited the use of high-yielding. seeds for hard wheat.
- Before the project, most of the small and medium farmers did not weed their vheat fields, due to lack of means; --access to supervised credit has enabled some of them to use chemical weeding. Some farmers have brought up the .question of providing them with back pack sprayers for herbicides - an item which is. permitted under the terms of the program.
- Approximately 50% of participating,farmers have learned . through the project the practice of adding anonium nitrate to the seeds.
5. Diffusion of Project Methods tO Non-Participating Farmers
The question was put to the*APMANE extension agents, and also to those of the DPV whose contacts are more diversified, on several occasions during visits to the gouvernorats of Beja and Nabeul: Has there been a diffusion of the project methods and the use of production factors to farmers exploiting 50 hectares or less .but.mho are not participants in the project? The ans.rers were vague. Some of them feln: that certain small and medium-sized farmers, who either have a neighbor participating in the project or know,one of the participants, have the desire to imitate them and to seek the project in order to have access to the input. -But the question still remains premature after only 18 months of the project. -17-
The only. element of a positive and measurable natre may be found in the increase of tractor service work carried out by SOAM in relation. to the evolution of the number and size of the t-airs reached. Table?
Evolution. f 'lork carried out by SONAM and Evolution of number of farmers reached
Tractor hoirs 211,976 218,8oo 261,89o Threshing hours 2,200 18,575 16,o103. Farmers.reached 2,355 4,050 7,519. Hours per farmer 90.1 54.o 34.8
Source: SWAM Records
The important fact is that the number of farmers soliciting the services of SONAM has increased by over 200% in 1979 as compared to 1977, whereas the hours of soil labor, determined by the number of tractors,. increasc, by or1y 25%. In 1977 the number of tractor hours of soil labor per farmer was 90.1, whereas it was only 34.8 in. 1979. All this proves that, in 1979, most of SNAM's new clients are small and medium sized farmers,. .hich indicates a certain influence of the APMWJE project. As of May 1980, 93 of SOsW a 200 tractors are assiGned to APMANE mork, and this' proportion is scheduled to grow.'. (One should also note the decrease in hours of threshing perform, d in 1979 as against 1978, one of the main reasons being the decrease in the 1979 harvest as compared to that of 1978).
B. Methods of Credit Approval and Input Supply
1. Credit Approval and Delivery System
The credit approval and delivery system of the APMANE pro6ect has been structured as shoi.n in the diagram on Table 8. The farmer (A) must first go through steps B to E (described later), and then move from 1 to 12.
The risk requirement is that the farmer must become a member of a Societe de Caution M4atuel Agricole (SCMA), a local grouping of farmers vho become elegible for loans from the bank (BUT) because of a government guarantee system that works through these organizations (details below). The farmer.and the extension agent of Project 'APM ~tsE then get together and:make up a farm plan, a document ihich maps and defines the farzer'; land and its'proposed uses, and-the amounts and costs of inputs (fertiiLizer, seed, tractor, service, hand labor, etc.) he will need to buy with APIWM credit to accozplish the activities laid out in the farm plan. Once this is seed on, the loan application is submitted to the Regional (i.e., provincial, or gouvernorat level) Credit Comittee, and if it is appromed, an account ill be opened for the farmer at the bank (BUT) for the total amount specified in the farm plan.
Since this is supervised credit, most of iwhat the farmer can get from his loan will come to him in kind rather than in cash. So the farmer gets a voucher for ordering what he needs--e.g., fertilizer, tokes-" .. it to the supplier, who wirill ship hil the fertilizer and take his voucher" . ' to the BNT for payment. The.EBT pays the supplier out of the farmer's. bank account. Zy harvest the (short term) loan will fall due; the BST notifies the farmer; the farmer repays iftever sums he has drawn from... his account by vouchers.
This system is by its nature cumbersome, and its efficiency derandA on the urgency with' which the BNT acts in keeping it functioning at optimm level of performance. Farmers claim it takes 3 to 4 reeks or longer for loan approval and disbursement. This calls for foriard planning on the part of the extension agents and the farmers. Uhile a farmer is proving his eligibility (fulfillina steps A, .B, C, D, and E), he is receiving the personal assistance of the AP14ANE extension agent. The crucial institutions for putting discipline in these many steps are the BST and AIMAE, by follo.inG through with the early submission of the loan application to the Regional Crs.dit Committee (RCC), early approval or rejection by the Committee, and bacr into the hands of the APMA= regional office for action in notifying the BNT and the suppliers regarding the transaction. (RCCs, as a general rule, meet only when there are at least 10 applications pending). A1A can play its part and the BNT should monitor and follow up on the repa-yient and collection process. All of this activity is burdensome to farmers, hor.Tever, It. might work well enough vhen the number of farmers served is small. But suppose, for examle, the present regional loan Granting system were to receive loan applications from 60%of the 21,200 farmers under 50 hectares, in the Gouvernorat of Nabeul. The RCM, .Tould be required to approve 12,000 annual loan appliccetions, an averaGe of 1,000 per month, or 46 applications per day. If 10 minutes of tiac ims spent in enalyzing each loan appli cation, this irould.call for the members of the RCC tc meet coninuously on an 8-hour, 5 day ieek basis. -This is not mhat was envisaged. It is appa-eat that the system ias devised for political and perhaps social reasons, rather than those of economic efficiency. Te will not speculate on i.hether these committees provide project decisions ith a greater community support, or have political virtues. - 19 -
Table -
APMANE Short and Mediun Term Loan Circidt "
(E) WAN REVE ST |'-FA~..r:PL I; =/ ' "ADMNSTATIN(1 5) .'. .(2) (1) Creditloan Request Committee sub
(6) (9) (4+) (5) studies request. (D) PLAN .FM (3) R.c.c. passes SA."" "decision on loans. (4) APHMEpassee farmei J " ' I (dossier :BNT* establlshsto Bank and (C) APwt AGENT • farmer account. (5) Invoice to supplier Fdl (6) Farmer given copy - -'-P; of invoice. (7) Farmer picks up his (B) supplies. * (8) Signed invoice of recipt goes to (6) REGIONAL CREDIT icO T. (2).... (9) APHANE informs BN (3" " of receipt. (]O)BNT credits supplie (A) F--P I --- 'and debits farmer. (A) FA" --- (IX)Harvest time, and farmer repays loan. (12)Repqment returned to AP14MNE fund. *BhT :: Banque Nationale de Tunisie, the berk handling the •"ProJect's loans.
**SCN&: Societe de Caution Mutuelle,: Agricole. -20
2. Are there.Ineutis in- Loan Elig4bility Determination? The farm operator desiring a project loan is screened for farm size and either his o-inership or his: status an a tenant (non-ownership, or lack of a fully processed land. title, are not a barrier to eligibility). He must also join an SGMA (Societe do Caution bAtuelle Agricole) 4hich has a niniwn 5-dinar entry fee. This discriminates principally against the more remote areas mbere SCMAs have yet to be established, and to some extent against smallh,lders vho find the 5-dinarr.fee a burden. His credit wrthine.7s is then revim-ied by the BUT, Vaich looks mainly for unpaid debts. He mast also work out a farm plau agreeable to both he and the extension agont. If the farmer's ideas of iftat e wants to get with project credit seem too ambitious for his'ranaaerial or financial capabilities, the agent will ithhold approval 'til the farmer scale& down his farm plan. Finally, with all the papers in his "dossier" assem bled, his loan, must be approved by the Regional Credit Committee. These committees bring together BET agents, extension agents and other local officials of whom the wbst important is a lo. al leader inown as the Qah, who serves as a character witness for the app 'icant, who mist justify their positions to One another and decide on . Ligibility.
We have not encountered evidence of unjust decisions on questions of credit worthiness, land possession, suitability of farm plans, or admission to an SC4A. Credit vorthiness and suitability of plans involve human Judgements; so mistakes are possible, but these Judgements are necessary ones. A number of small and medium-scale farmers are entering the Tormal credit system for the first time, and moving through a relatively cepmlex process involving several different sets of people and unfimiliar rules. A number of delays and minor errors are inevitable, and this kind of thing can be found and could result in inequities of an unintended kind. The three ieeks to a month for approval of loan applica tions iould still be longer if loans needed approval from the capital, as they do not in this decentralized,system. Inexperienced small farmers will often not realize the time they must aLo.r ahead of the date of need for inputs; but this is not inequity. As to iether credit is denied female applicants on the basis of sex: there are a few female family heads who have obtained APMAN loans. oT many widow.ed owners there may be in the population and how many of them want, credit is not knowm, but at least they are not arbitrarily excluded. 3. Adequacy of.the Input Supply System
The CNEA study indicates that almost all persons interviewed (94,%) during its- investigationb had had to buy for themselves one or several inputs, due to lack of quantities supplied within the framrork of the loan when those quantities had been calculated to cover the requirements of all - 21 crops.. Self-supply was particula4.y imortant in 1978/79 for:
- Hard mheat and bro:A been seeds (68% of the beneficiarie.).. :.:.-.....:M , sees( %). - ,-. dder seeds: oats an Vetche (3%).
* -,,,. Chick.eas (28%).I. ....-. A~Anium nitrate (18). In: gnr,. the volume of self-supply has been aost importaut for. fodder and-leguminous seeds, as inaicated in the fol.lowing table: " "' ":""Table 9;"
Distribution of Inpt ba &irce of Financing of Volume)
- Seeds Fertilizers .,..ard Soft Vetch Broad Ammnium Super-Super Finmncir" Wheat Mheat Barley Vetches Oats Beans Nitrate 16 4 credit 56. .62 56 28 -5' 914 .9 .90 Self- Financing 144 38* 46 "84i 72 95 6 5* 10
Source: CNEA, 1978-79 t far aa seeds are concerned, some farmers take their ovn seeds and excha e them for iheat seed from the Office des Cereales in order to lizfLt their debts. According to the CNEA study, as far as the sufficiency in ferti lizers in 1978/79 is concerned, 60%of the beneficiaries state that the quantities received vsre equal to their requiremezits; 32% received less quantities than wre required, and 8% re than needed. Inappropriate su]plr of fertilizers results partly fro. distwbances iich prevented the strict- application of technical instructions in farm plans, such as modification of declared land uses; cultivation of lands not included iu the farm plans and thus outside the estimates for quantities of fertilizers to be supplied; lack of rain, reducing the fertilizer requIxements of amonium nitrate in particular. The sufficiency of the inputs. of--the project and. their availability hen needed by the APMAI'E farmers are often tied together..:. The pianagement of the project should present its estimated requirements to the suppliers well in advance (in June for inputs to be obtained from the :Office des Careales), and should confirm them as soon as possible in order.to ensure -22 that the participants in the project receive their full. requiremnts, especialLy for inputs uhich are not produced locally (ammonium nitrate, potassium, treatment products). To this effect, API4AE management has begun in 1980 making estimates ot the seed, fertilizer and herbicide requirements during the month of May. But the farmers do not apply for credits sufficiently in advance; and the extension agents' total estimates for each region, once assembled, do not alw-mys correspond to the real requirements of the farmers. This of course, creates praUiems of avail. ability in inputs, particularly as regards wheat seeds, due to the geat demand for the D/58-28 wheat variety (high yielding variety developed in Tunisia). As an example, project farmers in the Beja area (at Medjez el Bab and Goubllat) encountered a seed problem, where part of their requir"ents had to.be satisfied through the use of ordinary seeds (conditioned,-i.e., ceane and calibrated)-;...... As regards fertilizrs, mi1978/79 stocks of aamonium nitrate were depleted from January 20 to February 20, 1979, and trom the beginning of March to May 1, 1979 at*the STEC (Societe Tunsienne- dl'iraias. Chimiques) level; stocks were also depleted in regional centers due to other commitments on the part of the transportation network. Again as an example, stocks of super phosphates and amonium nitrate were depleted at MeaJez el Bab and Goubellat in September and October 1979. has been.It noted that ii"1978/79 there were some delays in effecting delivery which caused the farmers sometimes, fearing to miss their time of cultivation, to opt for self-financing of their inputs. However, delays in receiving inputs are not frequent, and not always imputable to the suppliers. In fact, some of the farmers,. particularly among the smaller (less literate) ones, tend to go to the extension agent to get their voucher forms filled out, and this delay has obvious repercussions on the proper use of their inputs at the right time. For farmers o!.ning 0-5 hectares, the CNEA study indicates that approximately 40% sawed the high-yielding D/58-58 wheat variety late during December, and apprQzimately .10%during the month of January. During a visit by the evaluation,team, it was noted that a former owning 5 hectares had put in the super 45% ilong with the seeding. This type of problem can be solved through closer supervision and more frequent extension agent-farmer contacts. This requires a larger number of extension agents working on the project and, of course, more vehicles for them. It is also necessary that the agents be located as close to the farmers as possible by establishment of more extension offices in the- various regons covered by the project.
In general, the experience xf the second crop year 1979/80 was considered more favorable than that of the first yeer.. Loan applications and approvals were completed iell before inputs ere needed, and advance -23
plannin became possible--at least in :oop-.ration with some of the state enterprises. In particular, the very demanding scheduling of movements for the tractors supplying SONAJ services to farmers in various locations could be programaed in advance. The initiative Zor such forward plannin came from the APMAIE side, and moat suppl)ers were cooperative. input availability is not a major limitation on progess in the project.
There is, however, a special problem with livestock. Since January 1980 the project hua authorized the granting of medium term loans to farmers for the purchase of livestock. It is in this area that a serious national shortage exists, and prices are strong. A local cross-bred pregnant heifer is valued from 250 to 300 TD ($625-$750), and good animals are not readily avea.ilable. The Office of Elevage and Pasteurage (QEP) is in the process of inporting several thousand head of pure strain breeds, which will be placed mainly with the bigger farmers and dairy producers. This will alleviate the situation someidat, by placing more of the domestic livestock for sale to the smaller farmers vho are more anxious at this time to acquire the Improved local breeds. There is a serious shortage of sheep as well, due in part to the approaefi of Ramadan; and farmers have difficulty in purchasing breeding stock even for a small flock. As the livestock inventory in the nation improves, more and more farm,.rs will sek project loans to acquire livestock and to diversify their farming operations.
4. Role of the Private Sector in the Supply of Inputs to Project Farmers
The project-supplied inputs are mainly but not exclusively provided by specialized state enterprises. Procurement from private sources is usually also covered by the conditions of the loan if the farmer can find a cheaper or more timely supplier in the private sector i.ho will accept his payment voucher and receive payment from BNT after presenting the voucher.
In some products, chiefly certified wheat seeds and fertilizers, the state enterprise has.a legal monopoly--in both these cases it is the Office of Cereals (OC). In the case of cattle and sheep, APMAIE policy requires project farmers to buy through the Office of Livestock and Pastures (OEP) because only OEP supplies reliably certified animals. (Farmers may buy local animals, but not with project loans). With the majority of seed varieties, there is a substantial state-ned supplier but also private suppliers who are acceptable to the project. The same is true with SONAI4, a state enterprise supplying tractor services for hire in-competition with private tractor.owners who vary in numbers by area. Finally, there is no state enterprise selling tractors or other machines, and these are necessarily obtained from the private sector. It does not appear that the private firms are more reliable as. suppliers than tSe state enter rises, but farmers will prefer the former ere they offer-loer'prices (SOAM claim it is its competition whid? brings dm. prices .6fprivate suppliers). From conversations held by the evaluation team vith farmerts duxine visits in the gouvernorats of Nabeu. and Beja, .it appears that farmers usually buq from the nearest er beat-. known supglier, without other types of preference, except for tractor and harvester rental. For the latter, private concerns often charge. less than SIAM, and the fazmers..go to them i.enever possible..._
The acquitition of inputs from suppliers other than those with whom the project has made an agreement is mostly subject to the geogra phical location of their agents and centers. Wherever the suppliers partibipating in the project are represented, farmers turn to them for,...., most of their input needs. As an example, information obtained from the... liaison office in Beja indicates that farmers bV almost 100 of their: .... needs in seeds, fertilizers and herbicides'from the Office des Cereales...- SCUAM has performed 85% of machine work, and the remad'ac 15% was performed by private firma..
As far as the'Grombala delegation in the gouvernorat of Nabeul. is concerned, where the SONAM is not represented, more than 9D0%. of the machine work is performed by private firms, the remainder being done by service cooperatives. The follo ing table ahAls the majority of suppliers for various inputs in sales to AMIU farmers in Grombalia.
Teble 10 .
Supliers to ProJect Farmers in Grombaelia Input SupplIer .. No. of Farmers
W1heat and barley seeds OC 53 100 Other seeds COSAG 36 100 Aoniuimnitrate 00 53 . .,.59.6 COSAG -• 36 40.4 Super 45 Fertilizer OC , 53' 59.6 COSAG 36 .1.404 2-4-D Herbicide . oc 53 59.6 COSAG 36 40.4
Tractor service COSAG 2 . 2.2 S"Private 87 97.8
Source : ''Extension Agent, Grombalia - 25 -
The. study of a,samle of vouchers taken at random in the gouvernorat of Nabeul indicates .the foL.Lowing results: Table 3. &sae of Private Sector in Su§ lies. Nabeou No. of Farmers for Each Sulier %of Private Service Cooperatives Private Concerns Potatoes 8 4 33.3% Anmium. nitrate 6 42.9% aper 4.5% 86 412.9% ftper 1% 6 41 40o.0% Potasium 8 2 20% Herbicides 8 3 27.3% taborbourn 1 9 90%
Source:. Evaluation Team sampling.
5. Role of the Farm Plans Farm plans are the heart of any system of supervised credit. In order to ensure a good use of credit by introducing agricultural production technology, by persuading the farmer to think of his farming resources as a whole, and to make him taka an interest in his medium to long term future condition, the management has established individual "dossiers" for each farmer which include: Farm Plans for the Current Cro Year. This is prepared jointly by- the extension agent and the farmer, and determines his requiresisnts in inputs and services, as well as making a forecast of income. Medium Term Farm Development Plan. It is also prepared by the extension agent and the farmer. Together they determine, following a recording of basic data relative to the farn, the goal to be reached in the medium term, and the means to be applied to achieve this goal (invest ment, etc.).
These farm plans were not used except in a cursory way during the first year of the project, partly because it started too late for cereal plan, and in any case the extension agents were not assigned solely to the project but had other duties as full time employees of the DPV. The forms used to authorize supplies in 1978/79 were little more than lists of apprved inputs. Now, however, a more elaborate document has been developed ith a map of the farmer's land, a careful specification of crops and -their needs, along with estimates of crop sales and production costs. The use of these full fledged farm plan documents started during the second year of the project and is still not yet complete. To promote the use of these farm plans, the management of the project organized two seminars for the extension agents, the first in February 1979 and the second in 1980.
.From discussions with the extension agents it appears to the evaluation teem that, in general, the farm plan is used more as a source of information for the extension agent than to educate the farmer. In fact, once this document is established, the extension agent keeps one copy, another copy goes to the liaison office at the gouvernorat head quarters, and a third copy is sent to the CRD. But the farmer does not get a copy--the fact beinG that most of them are illiterate. The Project Manager is considering the use of simple record cards for farmers, in Arabic, to induce the farmer to do his own bookkeeping (income/expenseal. In order to better assist the very sma.Ul farmers, extension agents should work out for each area a model, farm plan for exploitation for farms of 0-5"heitaret, drtW diversifled crop's. ".
A good use of seasonal farm plans and medium term development plans for the education of farmers requires a strong orgaulzation of the extension agents. To achieve this, the agents must be well etipped and trained. As regards training, the extension agent, vho is.in general a good technician, should be initia'ted into farm management methods so that he may transmit this knowledge to farmers so they can do their ow., planning. The production plan forms need to be improved to include an asset and liability statement, which would then enable both the farmer and the extension agent to determine the progress the farmer is making from year to year. The production plans must be followed through, and the actual results must be systemticalLy compared to initial plans. The farm production plan should not be used merely for compliance with lending policy, or for-the information of the extendion agent, but as an instrument to assist the farmer in his decision-making process.
6. Reactions of Farmers and Extension Agents
(a) The Farmers
DurinG visits to the gouvernorats of Beja and Nabeul, the evaluation team was able to w.itness the enthusiasm of the farmers encountered and their generally good attitude tow-+ards the project--even though some requests have not yet been satisfied (purchase of livestock, construction of stables, purchase of tractors). -
The farmers interviewed suggested that:
- the distribution of livestock be done quicker; 27"
- they be given, 'which is permissible within the framework of the medium term loan, tractors of greater horse power (this concerns mostly farmers with 4O-50 hectares of land, For this category it is the problem of mechanization which is of most interest).
- part of the seasonal loan be given in cash in order to cover labor costs (for the ma.lUer farmers, this should' enable them to work their fields rather than go to work for:their neighbors). This formula has been foreseen by the project, but -is not always put into practice. small farmers have raised the issue of the 5-dinavr .to be paid in order to adhere to an SCMA.
(b) Extension Agents
In order to be efficient, an agent should be equipped with the necessary material means, and have a reasonable number of farmers to. supervise. This number should take into consideration: J
- The degree of dispersion of the farmers;
- The fact that the agent not only acts as a technical adviser to the farmers, but spends a great deal of his time filling out application forms for credit and submitting them to the BNT and to suppliers.
In order to ensure the closeness of-farmer-extension agent relations, it is desirable that these agents be located closer to the place of action, while putting at their service the necessary means (premises, means of transportation).
The extension agents of the project believe that their duties are heavier than those of other agents; while they do not benefit from any additional advantages in compensation, such as indemnity or training abroad.
C. Finafecial Aspacts 1. Performance of the National Bank of Tunisia - BNT
The Banque Nationale de Sunisie (ENT), a largely government controlled co ercial bank, has been assigned the function of providing financial services to rural areas. It has been a consistently profitable bank, due chiefly to its urban operations* Founded in 1959, the BNT was initially intended to be a specialist in agricultural credit. But this proved to be not Very rewarding, and the government allowed the bank to build its 20-
earningpower by engaging in a range of profitable commercial lending (profits from which can help with the overhead in rural operations), Today the BNT is sparing in lending its own money in rural areas, even to the large farmers and ith titled land as collateral for short term credit. However, the government has given to BIC the tak of administering a variety of agricultural loan funds provided by the Tunisian government and foreign donors, including the World Bank. The government has set a rate of 6% for such loans (after a considerable discussion with the World Bank and other foreign representatives, most rural loan rates were increased to 6% effective 1976). The 6% loan rate for rural programs compares with an 8%rate prevalent in commercial credit.
To assist the BNT in its rural lending task, various guarantee arrangements have been made. The one pertinent to APMANE concerns the. Societes de Caution Mtuelles Agricoles (SCM), in conjunction with BNT representation on the regional credit committees which grant final loan approval. Risks of non-repayment of loans by SCMA members are allocated. as follows: The BT assumes 5%of the loss, provided it had not voted against granting the particular loan in the credit committee; the SCMA assumes 25% of the loss, provided its funds (largely from admission fees) enable it to do so; and the government provides a guarantee for the rest. This mechanism is to take effect after loans have been unpaid for two years and declared to be in default.
This arrangement effectively relieves BIT of almost all risk from default; but it leaves an appreciable risk for the SCIMAs, which therefore might be thought to have an interest in the collection process. However, the SCMAs are simply organizations devised from above rather than true community organizations. In practice they have done virtually nothing to reduce their risk by trying to persuade delinquent borrowers to pay up. Reportedly, the actual resort to guarantee payments from SCMAs has been avoided sini~e their beginning in 1976, by keeping part payments going into accounts to prevent a two-year 1001 delinquency.
Some results of this arrangement are: defaults are, in effect, nobody's business since nobody really suf ers from them locally--only the distant central government budget at some P.tture time. The method of having credits administered by voluntary committees--the SCMAs, the credit committees, and the reimbursement committees (see belm-r) - may relieve the BNT of some administrative costs. The BIT is thought to be taking out only 3%of the interest on these loans to cover administrative costs, which would be relatively low-cost for an efficient operation. But the BNT displays little interest in developing a growth-oriented or service-oriented operation, or doing ore than performing correctly the rural chores the government has given it (AP14AUE is only one of a number of accounts it handles). The risk is very little; the potential profits also appears small to the bank. The NT has no rural competition; its activities discourage others from entering rural financial markets without equal protection. Since BU offers no savings facilities and nvests only other people's money in loans tithout concern for their uses, Vt contributes less than it might to rural capital formation. There., is little mreness of the role of a financial institution in building capital.
As concerns its performance of the services it provides for Project APMANE, the evaluation team found that a negative reaction was registered by the participating agencies in the project about BNT tardiness in paying suppliers for the goods and services rec.Aered to farmers. Inter agency discussions have been held, and some steps are being taken by the EM to remedy this problem. The success of the APM project rests to a considerable extent with the BEM. Up to this point, the BET has not considered the APMM project to have any special si~nificance, makin little provision to offer it more than routine distributicn ad accounting services.
There is ample evidence to date to indicate that the APMA project does function, and that it has a potential for much wider develppment. But the project will require professional fund management and developmental direction certainly at the regional levels, ihich BNT is capable of pro viding and administering. It is stronjly felt that the EIT should give this project a higher priority, focus on its needs, and provide the technical support not only to backstop the project but to prepare to move it into a national System of Supervised Credit for the Sall and Medium-Scale Farmers on a viable basis.
Towrds this end, it is recommended that BM sectionalize its operations into a department to deal exclusively rth credit to small and medium scale farmers, and to include the "FONDS" for the APMA project (see Annex II, Article I of the MNAReport which has the text of the agreement of BNT with AMANIE). The departmentalization process can be followed through at the regional branch bank levels, ihich would facilitate and improve reporting, comunications, and overal monitoring.
2. Reporting Services of the B
BNT has computerized the operations for the project, and printouts are made available to APMANE on a monthly basis, as well as to.the BNT regional branch offices. These printouts show loans authorized for each farmer along with delinquent amounts and repayments, and totals. nd sub% totals of these items. The latest printout is dated April 30th, 1980.
The printouts lack izortant data and information required by the project for more effective monitoring. Steps have been taken by ARM - 30
and the BNT. to have additional data fed into the computer to provide information under such headin s as : the aging of delinquent accounts;.. identification of. short and medium term loans and purpose of the loans; ...... not only loans authorized but actual funds utilized by farmers; disting- uishing principal ahd interest in both delinquency and repayment amounts; number of fai'mers and loans in force- amounts deposited by the OT/USAID to the APMAME fund; the status of the APMANE fund to show disbursements, reimbursements and balance; and the BHT fee for fund administration. Mnthly printouts in accordance ith APMAVE requests, 'which include most but not all of the items just listed, are expected' soon.
As soon as possible, APMANE and the BNT would do well to coordinate joint planning for project extension in terms of capital requirements, loan projections, and other matters of concern at both national and regional.levels. Aside from such major strategic planning, a greater joint effort to foresee and locate financial needs in the coming months,.. and to make advance provision for them would speed up the BMT operations.
A statement from the BNT dated April 30, 1080, delivered as requested by the evaluation team, .reports on the status of the APMATE funds. to that date. Table 12 lists the contributions to the fuzd, and summarizes the lending operations to date.' The tim-GOT contributions.' amount to 1,550,000.000 TD, and the USAID contribution at 859, ,O0O. TD, make a total from both sources of 2,400,408.000 TD.
The project comnenced authorizing loans to farmers in October, 1978. During 1979 there %.msno deficiency in funds' for the APMANE project in relation to the total amount of loans made during""hat crop year.' The USAID contribution how;ever is now fallina behind, and action is in progress for USAID to meet the balance of its 1980 commitment at an early date by a contribution about double the first one in 198.
The BNT statement indicates that the total funds approved for -loans since the project commenced amount to 1,248,682.177 TD (both long and short term), and this amount is 389,274.177 TD higher than the USAID contribution. This indicates that the BNT is ncr rolling the funds from both the GOT and USAID into one account (the AP4AfE project), This would be a normal procedure for a bank.
The loans approved by the Credit Committees and BNT amount to i,a48,682.177 TD. The amount credited to the farmers' accounts as lines of credit is 1,24,526.977 TD. This difference indicates only that. the process of transferring medium farm loans ihich have been authorized into farmers accounts is not quite up to date. (The "sub ventions" items are reductions in the price to purchasers under JVSDA medium term loan procedures, which are subsidized by the Tunisian Government.) -31 -
The main items in the APMANE account are the following: Loans not due for payment (aechoir) 826,926.395 Loans collected (remboursements) . .25:,297.047 Loans delinquent (inpayes) 13403.535 Loans to farmers approved through April 30'.1980. p.24#526%977 If the loans not due for payment (current loans) .e subtracted from the total loans outstanding to get the amount due for repament, this amount to 4i7,600.582 TD or 33.5% of the tbtal loans allocated to the farmer's lines of credit. Loans allocated to farmer credit lines 1,214,526.977 Loans not due for repayment - 8 .926.395 Due for repayment li17.6o. 582 The delinquent amount is reported at 163,303.535 TD, or 13% of the loans allocated tQ the farmer' s line of credit. ,hea delinquent loans are subtracted from loans due for. payent, .he remaining balance of 254,296.047 TD equals the given value for loans repaid.' The delinquent loans of 163,303.535 amounts to 39% of the loans due fodr payment of 417,600.582. The figure of 17,600.582 D consists mainly of the -loans advanced for the crop year 1978/79 (Table 1). We mya assume that nearly all of the delinquency -figure of 39% represents the current value of non-repayment from that crop year. Since neither the statement (Table 12) or the monthly computer piintouts indicate any aging for the delinquent loans, the project manager isunable to determine what percentage of the delinquent loans belong to any specific crop season. The data fed into the computer should be adjusted to provide the aging breakdown to indicate loans delinquent under 90 days,' 90-180 days, 180 days to one year and,one to two years. This will reflect more accurately the repayment trends, and enable management to determine the amount of loans moving from a delinquent stage toward the default stage. Secondly, the printout data do not reveal the actual amount of the loans used by the farmer. The printout shows the individual,farmers' approved lines of credit, but does not show the draw down actually made by the farmer. It is not km=m, for example, whether the amount of 417,600.582 TD made in loans in the 1978/79 crop year is the actual amount utilized by the farmers, or if it represents only the approved line of credit to the farmers for that crop year. - 32 -
Table 12
Situation "US-AID" 30 April 1960 (Tunisian Dinars)
LOANS NOT CATEGORY APPROVED UTILIZED LOANS DUE FOR WAN SUBSIDIES WAN .. BSIDIES DEINQUENT PAYMM REPAYMTS
Short 1,191 9450.177 1,191,150.177 163,303.535 774,121.348 254,297.0.
Medith, 57,232.000 7,154.000 53,076.600 5,796.500 - 52,805.047.
TOTAL 1,2h8,682.177 7,154.000 1,24,526.977 5,797.500 163,303.535 826,926.395' 254,297.0
AHOJNTS ]RELEAS IEET EARNED
25-2-19783 859,1o.8.o00 (u.s.)4,6.9
06.02.1979 750,.00.000 (GOT) .
20.02.1980 800,000.000 (GOT) Total 2Tsa9e1Ment)
Source: DII? (A reproduction or the DII? statement) - 33 -
If the figure of 417,600.582 TD is not the actual amount dra-down by the farmers by the due.date for loans but is larger than that, then the following assumption may be made; 1. The farmer did not utilize the full amount of his approved loan, the unutilized portion reverted back an a credit-or payment arainst his approved line of credit, with no interest charged. 2. If the amount drawn down by the farmer was less than his approved line of credit,the.repayment picture looks better than it really is, due to BT credits from the farmers' unused line of credit which are treated as repayments. If so, the delinquency rete is torse than the computer data reveals, because itwould have to be related to the actual loan amounts dram down by the farmers. It is important for the caq~uter printout data to provide figures revealing the actual amount drawm down on the farmers' lines of credit. Thirdly, the item of interest income to April 30, 1980 of only 4,665.999 TD poses a question related to the interest collection policy of the BNT on these loans. Certainly for the amount of loans reimbursed to 4/30/80 of 254,296.047 TD at an annual interest rate of 6%, the interest income should be more like 15,000 TD, or 10,000 TD for 8-month loans. If the actual interest income to April 30, 1980 represents interest at 6%, then it was charged on only 31% of the total repayments on loans made to that date. This situation leads to such further questions as these. 1. Does the BUT have a lenient policy with regard to interest collection, and because of government subsidies simply write it off as a charge to the subsidy? 2. Is interest not considered as a first charge by BUT? Are payments made by the farmerc applied fully to the principal until the loan is paid off, with the interest being left as a last charge? Thus partial loan payments would not be charged interest. 3. Were the actual amount of loans disbursed to the farmers for the 1978/79 crop year very much less than the amount allocated for disburs,-ment by the BUT? Some of the information needed to give a realistic picture of the fund management policies of the BUT for this project is not included in the computer printouts. As the project increases in volume, control of the operations .illbe impossible. Much of what isbeing assumed and suggested here is stated in an endeavour to bring about an improvement in the data processing, and to furnish the kind of information to the project manager - 34 that will lead to systematic £pprfisa. of perfomance. This wogd -appear to be a matter of the highest priority, and it inincumbent upon'the BUT" and the project director to resolve this situation at this time, and before'" it multiplies in size as uidentified sums mount. 3. Delinquency in Repayment of APMA E Loans There has been an appre iable level of delinquency in repayment of loans from..the 1978/79 Crop year, the largest number of them falling due in July 1979 and another group in September. The loans for the 1979/80 crop year have not yet come due. for payment. te use the term delinquency to indicate any. lak of repayment by the due dat;e, whether it is very rec*t or longer lasting.. The term default ,ri13 be used only for uncoll ectibla debts that represent loss to -a lender! a capital. Default occurs when a creditor takes legal action -to-collect a debt, or when the debt is written off the creditors' books as a loss. Delinquency does not in itself imply default;' in agricultural..predit program where delinquency rates are relatively.high at given dates, there is usually a large fraction of rather short-delayed payments in the total. As can be seen from the preceding section, there is a problem in determining what the delinquency rate really is. There ire two kinds of figures: on the one hand, there are the BNT monthly printouts which, whatever their weaknesses, can at least Ove a consistent picture of movement through time. These figures, using the definition of delinquency rate as delinquent loan values divided by loans which have fallen due for repayment (the latter being the difference between total loans authorized and loans said by BIT to be not yet due for repayment) riere ad follows:
Table 13 Delinquency Rates Based on BNT Data (in Diners)
Due for Not Delinquency Repeyment Raid Repaid Rate November 30, 1979 406,549 209,283 197,266 48.5% December 31, 1979 W06,549 213,827 192,722 47.4% February 29, 1980 415,73.1 247,40 168,33-1 40.5% March 31, 1980 415,511 249,009 166,502 4101% April 30, 1980 417,756 254,297 163,304 39:0%
Source: BNT Printouts - 35 -
One can observe a gradual improvement in these months, ith the "not repaid" column going dovn and the "repaid" going up. Even so, the dei--ue-cy level is certainly high, and the improvement is too slow to change the situation before the next harvest season with which a vmve of new due dates will come. And the suspicion is that B1T data makes it look better, not worse than it probably is.
The other source of information is 'the exhaustive study of delinquency as of December 31, 1979 made by the CNA and analyzed by, gouvernorat, climatic zone, size of farm, etc.- These figures were obtained by going to every extension agent and copying his figures on actual use of loans by farmers as well as repayments made on the anmits, truly due for repaymento These figures are learly different from the BNT values (2REA, did not have access to BNT data other than printouts) and'the implied delinquency rate for and of the year is higher.-%%, as... compared t9 47.4% in BNT data.
Table 14 shows the-:effect of both climatic zone and size of farm .on delinquency rates, the consistent increases in the figures as one moves from the hnmid to the more -arid zones is very marked. In conjunc tion -riththe rainfall tables included by CNEA, it is pla that dry weather vas indeed a fact that related closely wcith delinquency rates,
Table 114 Delinquency Rates on December 31, 1979 by Size of Farm and Climatic Zone Climatic Zone ' 0-5 ha' 10-20 ha 20-50 ha Total
Humid 21 20 43 35 35 Semi-humid 53 44 46.5 40 45 Semi-aid, superior 84 82 75 75 76 Semi-arid, medium 100 97 95 92 93 Total 6.5 52 58 61 58
Source: CNA, Supplementary, NOTE p. 22 (adapted from data in that Table)
None of the averages for the ti.m semi-arid zones fell below 75%. The other interesting fact is that the-small farmers with less than 10 hectares have done better in paying their debts than the larger ones. Nevertheless, the fact remains that even among the smaller farmers in the least arid zones, there is no average below 20%. In general, these levels of repayment are too low for a credit program that aims to establish a - 36
revolving fund. Tunisian officials speaking on the subject refer first to the weather, and second point out that the repayment rates for project APMAIE have been better than in any other agricultural credit program. The prior record of other programs certainly constitues a problem, especially vhen the BNT fails to distinguish among programs in its administration. In the case of APMAE, two kinds of actions hale been taken that are not found in other programs. On the suggestion of the technical coordin ating committee, Committees .of Reimbursement .were organized in the gouvernorats .in July 1979i These proceeded to examine .the situationa of -individual delinquent farmers to distinguish the hardship of those vho were harmed by bad crop weather from the recalcitrance of those mho could afford to pay. They came up -withlists of farmers mho were allayed to pay onl= ' specified fractions of their debt, and to carry the rest over this year. The committees then contacted local government .officials to bring pressure on the recalcitrants. This de facto refinancing accounts for some unknown portion of the .nonw-repaid s, which is expected to be paid this year along with the 1979/80 obligations. Since the crop eather has so far been favorable, there should be some recovery of these sums.
The second action taken that could affect repayment is an agreement being worked out with the Office of Cereals, which is the sole legal purchaser of wheat and barley, to serve as a collector in kind of APMAE repayments. Some 70% of project farmers sell at least some of these two crops. The arrangement would call for the OC to deduct the amounts due to APMANE from their payments to the farmers. There has been same experience with this method here, and it provedhelpful in another rural program. If such deductions imre made compulsory, farmers could evade payment. by selling illegally; but the "parallel" market outside OC is sommhat limited and lacking in storage space. Even so, an estimated 20-50% of uheat is now sold illegally, the proportion varying by area. But in any case it appears that deductions by the OC will be voluntary. ... WIe havm.repeatedly impressed on the Project Manager and other officials the importance of debt collection for maintaining capital, and for the ability of the project to continue to serve the smaller farmers. ..1U .appears that some imprqvemert .in the .prompt collection of debts is on the way. But such an improvement must be one of our most importaar recommendations. 4. Capitalization Proposal for the Future of APMANE
-: '. The APMANE project is assumed to maintain its capital intact by generating sufficient funds to replace the original seed capital. But as the project operates at present, prospects for self-generation of capital are meager, and additional cpital ill be required. Farmers on the other hand are increasing their incomes, under normal clmatic conditions, as - 37
a result of-this project (CA,..py 62-70). It is. at this juncture that AP4AIE end BNT might consider a capitalization feature beneficial to. all concerned. It is reccmended that the project consider enrolling the farmers in a scheme for subscribing capital to. the system. This can be accoplished by deducting a percentage of the farmer's loan and placing it in savings in the BNT to the individual farmers' account. The amount to be deducted for example, can be from 2-1/2% to 3%on short term loans, and from 4 to 5%on medium term loans. These compulsory saving deductions would go into a 10 year revolving share account in the BNT, and vould earn interest anuaWl which would be added to each account. On the 11th year the fund would revolve, and the farmer would be* refunded the mount deducted for his account in the first year together with interest. This procedure would repeat itself each year thereafter. For BNT and the APMAVE project this retention of capital from each loan advanced to the farmer would mean additional capital, while on the other' liand it would encourage. the small farm families to place a portion of their capital into an "off-the-farm" investment, in an institution whose objective is to work in the best interest of the small and medium sized farmers.
Other features that could be added to encourage farm families to support this concept are:
1. The individual farmer' a contribution available in the fund, imuld be paid out in full to his family at any time upon his death.
2. The entire amount credited to the farmer's account together utth interest earned vould be paid to him upon reaching the age of 65.
5. The Role of the SCMAs There is considerable doubt about the role the SCMAI play in the APMANE project. Neither the CNEA evaluation nor other observers have cited any concrete activity that would substantiate a need for incorporating the SCMA into the project. The APMANE director in his latest report to his Director (DAPM) proposed that small farmers be eliminated from the requirement of belonging to SCMA, a proposal with wtich we agree. SCMA is a creation of the EM to be used as an instrument that would guarantee loans managed by BNT, especially those under the FOSDA account. The FOSDA loans were not inmended particularly for the farmers in the - 38 -
APMAAE target. group,, loans were contmlated to be or 3500 diners or more, and of medium term. The SM acts as the group guarantor for an individual loan that falls into default. The idea, is to bring cmnittee pressure on the defaulting member to pa his loan. Failure on the part of the SCM& to act on a defaulted loan, iuld in principle have disquai. fied the entire group from being Eganted further loans. To our knowledge, however, this collection procedure has not been applied,..as noted earlier, although the FOSDA loan delinquencies are substantialky higher than APME' s.
Whop the agreement ias signed on September 20, 1979 between the BOT and the Ministry of Finance,.the BVT insisted that the SCMA guarantee be alied to the APMANE project as mell. This is creating a financial burden on the mall farmer by compelling him to pay for a guarantee he may personally never require, or for default by another farmer mhose loan was not properly weighed by the Regional Credit CuxmLttee and BHT in the first place.. There is no evidence to indicate that the SCMA is active in the collection process; peer pressure from the group cannot be too great.
For the APMANE project, an advisory or credit committee at a village or waLU district level would be more effective, both for approval of loans and for the group pressure effect in their collections.
6. Interest Rates, Supervised Credit, and the Financial Environment
With rpxre exceptions, small farmer supervised credit programs and program continuance rely upon government subsidies to one degree or another. Spperviion raises costs; .smll farmer lending is costly. If a program-is to grow, attract capital, expand and continue, institutional revenues must compensate for this activity, and reduce the need for subsidies as program development takes place. Subsidies may still be required, but in smaller doses and more easily justified.
Institutional revenue comes from (a) interest rates charged; (b) increased loan volme handled per extension agent; (c). reduction in administrative costs; and (d) a l=r rate of loan delinquency. When the latter three are operating at high efficiency and revenues are. still inadequate, then either interest rates must be raised or subsidies accepted. This is a decision for the Tunisians to make after the A MI; project has been given some time to reach a level of performance in ihich this .area of activity can be ieighed with more precision.
The Tunisian Government has set .arate of 6% for agricultural loaLs after considerable discussion with W.orld Bank and other foreign representatives, - 39
(almost all agricultural loan rates imre increased from 3-1/2-4% to W6%, effective in 1978). The 6%loan rate for agricultural credit c res with an 8% ratq prevalent for ccnercial credit. As the situation stands now, the APMA! project relies heavily on subsidies (however defined in terms of costs to be covered). It will continue to do so for the foreseeable future, unless the project takes steps to generate capital of its own, reduces costs, and raises interest rates@ Increasing interest rates at this time for the sall farmer supervised credit loans, without a corresponding increase in interest rates for the larger farmers and the commercial sector is not a palatable reca~andation, and the government would meet with obvious political resistance (from the small farm sector) with religious overtones. Interest rates on bank loans in Tunisia are too low in all sectors considering the cost of capital acquisition in both the domestic and foreign money -markets. Added to this is the inflation rate of 8-% anmnualy, which acts as a further disincentive to savings mobilization. Ideally, the ceiling on interest rates in the nation should be raised for all sectors, which is unlikely. Against this backkwound, it is advisable to launch a compulsory rural savings and capital mobilization effort through the AP4ANE project, as described earlier and at some future point, uhen the government decides to increase the rates, the capitalization feature ui-ll continue to be in effect. This action -ould mobilize rural savings and contribute in part, that i.ich a higher interest rate iould achieve., with less farmer resis tance at this time, because such savings =4l be treated as personal savings in an "off-the-farm" investment in the BNT, thereby making the farmers and the government partners in. the project. This is not an interest rate increase, although farmers may initially reacbL to it as if it were. But it is intended to accomplish some of the things that a higher interest rate could achieve with more certainty than if BUT were merely to charge higher interest on APMANE loans withoutt : any supplementary provisions for savings deposits, or for keeping the proceeds in the rural areas. Compulsory savings could well have a demonstration effect that could stimulate savings habits further and possibly, in time, attract more financial institutions into rural areas to meet a gro:ng demand. 7. Loan Targets and Cost-Benefit Coiiarisons The APMANE project should begin to crnsider a cost/benefit comparison to measure its performance. One waiy of doing this is by establishing a loan volume target for each extension agent, and determining whether the - 441
interest income from this loan target will cover, the cost, incluing administrative overhead, for maintainin the agents on the Job. To illus-. trate this, the following assumptions are made:
Table 15
Costs: Salary and benefits for the extension agent - TD 1,500 per annum Salary and benefits for chauffeur - 1,200 "' ". Depreciation for vehicle (5 years) - 600 Gas, Oil and Repairs - 500 " Administrative costs @ Regional Level - 500 " " Administrative costs @ National. Level - 300 " " Interest on Capital (3% per annum) 000- TD 7,600
On this basis an extension agent imuld be required to administer a loan portfolio of 130,000 Dinars on:a constant basis in his area, at 6% interest, in order to earn the TD 7,600 the GOT spends to provide him with employment. This does not appear to be an impossible figure for an agent to attain as the project develops (see below), and as the average loan amount per farmer increases to reach the figure of 800 dinars or more. One iay of reducing the cost is by eliminating the chauffeurs, and permitting the agents to drive their cars. jAs of now, attempts to reach this target of having each agent balance the cost of his employment by the interest income from loans he made to farmers in his area lies in the future. For the ,present, this calculation reveals the subsidy burden for the Government of Tunisia and such subsidy can only be reduced by reducing costs and increasing the interest rate on loans to farmers as noted.
Another aspect to consider in this connection, however, -is a bonus or performance award to the extension agents. Assuming that an agent surpasses his target figure and supervises 4 loan portfolio of 150,000 dinars, the interest income on the additional 20.,000 dinars would amount to 1,200 dinars. The agent might be granted a performance award of say, 10% of the 1,200 diners. Other factors should be taken into consideration in awarding performance bonuses, such &a farm.production, loan repayments, etc., all of ,hich reflect the quality of his work. D. Program for the Small Farmers; Other Project Assuwtions
1. Are Project Beneficiaries in the Target Group?
The target group for the project is defined as small and medium scale farmers for whom institutional credit has not previously been accessible. It appears, for several reasons, that most project parti cipants fall into that group.
In general, farm operators in Tunisia are considered small when their farms are less than 10 hectares, and large when they exceed 50 hectares. The "small" farmer group has 60%of the farms and 16%of the cultivated area; the "large" farmers have 3%of the farms and 40% of the area (See Table 16). Table 16 Distribution of Farms by . Size iaTunisia (cultivated Land)" -.
Area Size o Farm No. of Farms (in 1,000 hE). Under 5 ha. 133,000 40.8 307 6.1" 5 - 10 ha 73,000 - 22.4 512.. 10.2 10 - 20 ha 64,000 19.7 888 . 17.7 20- 50 ha li4,000 12.9 1,3o4 26.0 50 -100 ha, 8,300 2.6. 562 11.2 100 -200 ha 3,00 0.9 - 427 8.5 200 -500 ha 1,500 0.5 468 9.3 Over 500 ha 600 0.2 5 11.0
Total 325,700 100.0 5,002 100.0
Source: Ministry of Agriculture.
Land in farms are not alimys an accurate guide to relative income levels, but they are more easily ascertained. Tunisian statistics on land holdings are relatively good and the facts change slowly--unlike income data. Land is not often sold. Parcels of land are frequently rented out, but not in a consistent big landlord-small tenant pattern; small owners may rent some parcels to larger ones, or may take on rented land one year and not the next, etc.
Both tenants and owners are eligible for loans from the AFMAR project provided they do not operate more than 50 hectares. Tis in itself eliminates the great majority of farmers 11ho are considered larie. The distribution of project farmer-:hldings is shovm below: Table 17 Size of Land Holdings of Project Beneficiaries: Nmbers of Farmers with Aroved Loans Size of Farm 1978/79 1979/80 Under 5 hectares 96 10 189 11 5 - 10 hectares 22 21.5 414 23 10 - 20 hectares 359 36.5 605 314 20 - 50 hectares 3 3 Z2 .3-" Total 982 1,770
Source: APbE records The percentage of project farmers with less than 10 hectares increased from 31% in 1978/79 to 34% i.979/80. As to whether project clients hqve previously been eligible for institutiodal credit: there have bee4 relatively few such credits available to smiller 'farmers in the past. The .enqua Nationale de Tunisie (BNT) is virtually the only source of credit in rural areas, aside from some cooperative or organizations serving relatively limited memberships. The BNT lends its own money only to c.mers of 40 hectares or more, and requires full land titles as security. Many lands are less than fully titled; the APMANE project accepts interim certificates of possession, or documented leases of lands occupied, as valid for loan eligibility. If a 40-50 hectare farmer were eligible to get aBENT loan, given in cash with no conditions, he would probably prefer it to an APMANE loan which would entail approval of a farm plan, complicated procedure, and loan benefits provided in kind rather than cash. The BNT also administers loans from gvernment or foreign funds on somewhat softer terms than it lends its awm funds, but none of these competes very closely with APMANE lending. The Swedish aid agency SIDA funds a credit for smaller farmers, but without supervision and in a different area further to the southwest. Several.sources have provided support for FOSDA loans; these are exclusively medium-term and require 10% down payments by borrowers, which cuts out the poorer farmers. he SCMAs were devised to allow BNT to lend more money to smaller farmers than before, but not ith less than 10 hectares. - t3 -
Finally, the CNEA study of a saMple of project clients in the first year of project lending showed that 55% of all clients--and 71% of these with less than 10 hectares--had never borroiwed frc-. any source prior to APMANE. Of the remaining 45%, 1% had had one previot's loan, 11% two loans, and 16% three or more--most of these from ENT via SCMA.
It should be noted, however, that project loans are not intended for the very poorest landless rural workers, and that the entry fee of 5 dinars (02.50)to an SCMA could discourage some very poor farm operators. It is conceivable that a regional credit committee could deny loan eligibility to small farmers on improper grounds but we have not heard evidence of this. It appears to us that, in general, the Project Manager is a consistent supporter of the Small Farmer in his active administration of APMAM.
2. Farm Size and the Demand for Credit In a rural credit market with few alternatives and these adminis tered through government institutions, effective demand can only be • inferred from borrowers! applications for loans..on the terms offered by. each government program. The number of applications for short term APMANE loans for the grain crop of 1979/80, for example, was 1,851, and the number granted was 1,319--ihich was an increase of 126% over 1978/79 (CNEA p. 31) (The 532 rejected were refused because of unpaid debts). Project loan amounts authorized are influenced by the extension agent's ideas on farm plans and the needs for financing of particular activities planned for the cultivated area concerned. Because one can do more with a larger area, the average size of loan approved increases with the size of the farm.
Table 18
Project Credits and Size of Farm: 1978/79
Loans Approved Number of Average Size of Farm (dinars) Farms loan Under 5 ha 29,981 96 312 5 - 10 ha 76,114 212 359 10 - 20 ha 134,241 359 373 20 - 50 ha 176.404 315 561 Total 416,74o 982 424
Source: CVEA Annex IV When the time comes -forthe farmers to use the credits, ,oweVer, there are many vho do not use the full amounts authorized for them, for a variety of reasons, and a few who take none at all. Table 19
Size of Fam and Use1970/79 of Authorized Credit:
loans Used %,f Sum Number of Average Size of Farm (dinars) Authorized Borrcwers loan Under 5 ha 14,692 (49) 90 (93) 163 5 -lo ha 43,001 (57) 211 (99) 204 10- 20 ha 80,502 (60) 358 (98) 228 20- 50 ha I111i-523 (631 310. A98).. 38
Total 249,718 96 259
Source: CMEA Annex V. These are the only data available so far on actual uses by farmers of their authorized credit.
It is clear that the actual demand for credit by farmers fell short of that authorized in larger proportions among the small farmers. In the first year of the project, loan amounts were authorized from simple formula; in the next year the farm plans itere made up 'irth more individual discrimi nation, and should be closer to actual demand. A3so, the lateness of loan approvals in.1978/79 made them irrelevant to farmers' needs in some cases.
3. Participation of Farmers with 0-5 and 5-10 Hectares in the Project.
Farmers with less than 10 hectares constitute about one third of total participants, and their share rose from 31% the first year to 34% this year. They represent over half of the farm population, but the great majority have never had access to credit before. They are more in need of attention from the extension agents than are larger farmers, having less experience in handling cash fl .mand debts and in considering the more complex choices in the farm management. ..The key to expansion of the small farmer component of the project participants lies in the build-up of extension agents' activities. The need for vehicles and for training agents in financial counselling, and the - 145 importance of agents' treating farm production plans as a means of educating farmers to their potential rather than as a formal requirement of credit procedure, have been described. All these have a special bearing on facilitating participation by the smallest fa-mes. Another facilitating mova could be a reduction in the 5-dinar admission fee to a SCMA,.
The main reason that farmers irvth les than 10 hectares have been excluded by credit institutions in the past has been the notion that they were uncreditiorthy, i.e., unlikely to repay loans. But in the first year of project APMANE the record of repayment by smal farmes is better than that of larger ones.' (See Table 15),
If one takes out the mall farmers in the gouvernorats Zaghouan and Silian., the southern-most areas mtere drought had the morst impact on small-holders, the farmers under 10 hectares in the other regions quite clearly out-perform "the larger' farmers.
It is also worth remembering that it was the smallest farmers with less than 5 hectares who displayed,the largest changes in tech nology and intensification in the 1978/79 M smule. If project purposes are to raise production and intensify land use, it il1 be required to focus more attention on the m31 operators, rather than neglect then on grounds 9f their incapability of adbptina modern methods.,
4. Has the opposition of large farmers affected the implementation of the project?
According to extension agents contacted the attitude of large-scale farmers towards the APMAW project is frequently hostile, and this hos tility may be explained by the fact that access to credit by small and mediuzi~zized farmers through the project can deprive then of part of the land i-ihich they rented. The cners of small plots irL. be better able to develop their own lands, rather than having to rent them out to large farmers for lack of their on, resources. Thus, large farmers have reasons to.be dissatisfied; but we lack precise information, and cannot prove that this dissatisfaction slms in one way or another the good operation of the project.
Large-sized .iarmers could prevent or hinder the adherence of mll farmers to the project through:
- The ONDA, a local official and traditional village notable who may give information on the farmers concerning their soleidy and creditiothiness, especially when one considers that the ONDA is 'very often a big farmer himself. - The SCMA, which often droups a good number of mewbers 6wning 50-100 hectares who could be interested in Land for' rent.
There is also the fact that the majority of those benefiting fr?= the credit belong to the 20-50 hectares category (CHEA study). This has changed in 1979/80, somewhat to the advantage of the mall farmers. In any case, the reasons for weak participation of sma.l farmers in the project are numerous, since they are not accustomed to borrowing and have a traditional distrust of banks, and one cannot distinguish the effect of the dissatisfaction of large-sized farmers.
5. Farmer receptivity. Statements on this subject can only be based on imressions. Given the number of extension agents and the limitations under idwich they have worked, it would appear that 'farmers have been generally responsive when they were contacted and learned of the program. The Project Manager states that a number of farmers remain varV of borrowing and getting in debt, but he expects that many of these Will become participants after they have had enough time to see what it can accomplish for their neighbors. Comnents by farmers we visited in the field, a tiny sample selected by the local agents, were (Aotsurprisingly) enthusiastic in their expressions, and pointed to eze ples of good looking crops in project-financed fields. Indirect impressions suggest that this year "the message" is beginning to get out in rural area, so that receptivity, is likely to grow. 6. Profitability of Controlled Producer Prices. The prices of wheat and barley are the only administered prices for the farm products fostered by the project; others are market prices. (If APMANE farmers were to se32 zi2lk, controlled prices could become an issue there too). A special inter-departmental commission sets these grain prices each year--a politically sensitive decision. The OC (Office of Cereals) is legally the sole buyer of wheat; illegal "parallel" markets exist, but they are diminishing in relative importance overtime. Official grain prices of recent years, in dinars per quintal wiere:
Table 20
Official Grain Prices
Hard heat 7.1 Soft wheat 5.5 6.0 6.0 6.5 7.0 .7.0 7.7 Barley 4.o 4.5 4.5 5.1 5.5 5.5 6.0
Source: OfzAce of Cereals --47
The recet one-dinarincrease for bard mheit is change for farimes, reater' then. in preceding years. G nera .speakin these prices have not kept pace with Inflation (nor running at about L0%)o The present wheat price,. lwmer. -than world prices,. is an imovement but" is still a subject of conlaint by farmers; and to sbme extent this dissatisfaction is echoed by ruia, officials, who .l1I'not'takea stand against policy but who privately say that more wheat could: be produced if farm gate prices were higher. - Nevertheless, it would seem that the:':." behavior of project APMAN farmers, given the opportunity to increase -. ; the area planted and the fertilizer invested in various crops, does not support a negative view of the effect of gra n -prices. Rather, farmers have boosted the fertilizer devoted to wheat and barley more than that to other crops (See lII. A. 1), and increased the acreage of lands planted in the three price-controlled grains from 8,727 to 10,046 hectares in 1978/79 as compared to 1977/78. Since the price increase in 1980 is greater than in 1979, still further relative expansion could be expected in 1979/80. So it does not .appeor that go.rnment set prices presently are a major limitation on the farmers'.villinpiess to produce, for they iuld not do so if it .ere unprofitable,,
7. Adequacy of the syscem of Comercialization.
Tunisia has relatively good roads throughout the area of project e .. APMANE, and is well enough. supplied with transport-vehicles. Telophon conunication to .provincial and sub-pcovincial tomns is established. The centers of marketing are not "so far from most farms that commercial sales are discouraged; sales to OC are facilitated by dispersion of its ma branches. The BNT can provide commercial banking services in rural areas. Thus, the infrastructure of comercialization seems adequate at present. It is possible that atlarge future expansion of agricultural output in Northern Tunisia would require a corresponding expansion in infrastructure, but there is -%o particular reason to doubt that it could be provided -hen needed.
If the system of cqierciallzation is taken to include the consuim markets for farm produts, .this'too seeom adequate for some time to ame., .U'hnit' the staple food, and is imported in large enough amounts to assure a domestic market for some years ahead. M1rkets for vegetables are strong, and rising with urban living standards and the growth of tourism, and this applies to livestock products as well. The market for fodder when surplus for the farmer's needs is also Likely to grow.
E. ProJection of ProJect APMAE Needs
1. Staffing of Project APMANE
The project is going to need increased budget sat-ort from the Tunisian Government for personnel req%;Lred in its operations. A recent meeting of the Joint AD-unisian poliqy-review Credit Comittee in Aptil, 1980- coipleted an ana.1ysis of the requirements for moving supervised credit operations into additional "delegations" within. the five 'iouvernorats" (i.e., into more sub-districts within the five pro-. vinces specified as the project area), and concluded that previous plans had underestimated the staffing requirements. A group of ner staff positions *iich had been requested by ARWE were approved by the Credit Counittee (Sea TAble of Organization, Table 21) (Itshould be noted that this approval came after the 1980 Tunisian budget for the Ministry of Agriculture had been enacted). Table 21 Table of ornaniation. Project APM
Ministry of Agrculture
Dire'cjor of DAP14E APMANE Pr0 ect Manager. OffTice "'I . Secretarin._
Headquarters . Assistant Chauffeurs LChie .1)itat 'Accountant Assistant* Manager Manager (Coordination, Assistant (Finance Statistics and Reports).. Accountant Personnel)
----- ss----ss ssssss------M------
Regional Level Regional Regsional- Regional Accountant&' Office "-, Coordiators*
Office chauffeur- Ass t Secretaries* Extension Agents
* New positions requested; approved April 1980. -4o9 -
The Dvaluation Team finds APMANE currently understaffed, both at head quarters and in regional offices, for i.htt it is already doing. The Project Manager ±i highly capable, .but he is over-burdened and needs to. delegate some of his routine tasks. For any further expansion.of its activities wit- he personnel and equipment in hand prior to *entering new areas, as recommended by the Credit Committee, additional staff are certainly needed.e
The present employees of the project in all categories total 43, of vihom 28 are. extension agents. The Evaluation Team believes'.'the , • staffing targets shmn in Table 22 are needed. For 1980, the need Is.. to fill the approved positions i headquarters and regional offices, and to start immediately on the process of recruiting and training the extension agents that will be needed to meet thproject targets. In 1981, 54 U.S. vehicles are due to arrive.
Budgetary allocation has betome a constraint to .personnel recruit ment, acquisition of material, and employment.. APMANE management requires time to select, train and position people in their respective places within the project. Targeted goals will not be met without strong. a4ynce actions, and both the project and the farmers will suffer, Table 22
Staffing Targets for ProJect APMANE Staff May Recruitment Needs Target' 19c l13 Total Headquarters Staff 4 5- - 9 Regional Offices 4 16' - 20 Extension Agents 28 17. 28 83 Regional Chauffeurs; 7 19 3 57 107 207.
2. Extension of the Time for IMlementation The APMANE project i.l soon complete its second year of providing technical support and credit under a supervised effort to Tunisia's small farmers. Considering the problems of organization - its transfer from the Direction de Production VEetale to the Direction de L'Assistance aux Petits et Moyens Explitants, the recruitment and training of personnel, the establishment of regional offices and mobilization of equipment and materials - its ability t*,serve almost 2000 small farmers wirth loans during 1979/80 crop year is no small achievement. Many problem. had to be overcome and procedures established during this period to mov AP14E from its project concept into a small farmer credit system. The system should eventually spread from the five gouvemnorats it no encomasses to the nation as a whole. The foundation is laid and, while .roject adjustments and changes will e required, the fact remains that the project has created a new aireness in the GOT circles of the potential of APMANE to reach out and bring the mall Tunisian farmer into the comercial processes of the economy, and to increase his production and living standard.
The potential nuuber of farmers that rensd .to be serviced in the five gouvernorats alone is quite staggering, however. The number reached during the first two years has only scratched the surface, as this table indicates. Table 23 APMANE Participants as a Percentage of target aoups in the area
Total Sall Total Average No. of Farms Granted Farms Granted Farms under Hecta- size of Loans Loans in re- Gouvernat 50 HA rage Farm 1978/79 1979/80 lation to total (000) (000) (HA) Percentage 78/79 79180 Bizerte 13.8 101.5 7.0 291 367 2.1 2.7 Beja 13.3 102.2 8.3 219 564 1.6 4.2 Zaghouan 9.7 88.3 9.1 180 318 1.9 3.3 Siliana 12.9 102.2 7.9 172 209 1.3 1.6 Nabeul 21.2 87.9 4.1 120 317 0.5 . 5
Total 70.9 482.1 9.6 982 1,770 1.4 2.5
Source: APMA=E -
As was noted in Table"!, a total of 808,725 T were made in loans during the current crop year to 1770 farmers for .an average of '4157 TD per farmer. This average loan value per farmer will rise as the medium term loans for livestock and small farm equipment including tractors wich ias introduced on january lst, 1980, takes hold. It is estimated to reach an average of 800 TD or more per farmer within the next t years. In spite of the slow start and draw down on USA committed funds, the project ill find itself short of funds for loans, well before it reaches the participant farmer target of 11,665 contained in the project areement. It is strongly felt, houeiver, that' quality should not be sacrificed for quantity in the panting of loans, that the effects of a pressure to push loans onto farmers can only be deleterious to the quality of advice and selection of borrowers. ..The time frame for the'relee of funds for the project should be extisided to allow for orderly'development. The staffing problems just discussed are the heart of the mtter. The present time table called for USID budget appropriation wich have not. materialized, and the folloing time schedule for the ielease of funds to the project is suggested.
Table 2~4 Proposed Phasing of US Funds to ProJect APMPJIE 1978 IF 181 982 983 TOTAL (000) (000) (00o) (000) (oo) (0cc).(000) Budgeted. 6,000 6,00 5,300 17,300 Amount Released 2,000 Suggested future releases 4,000 24,000 5,000 2,300 17,300
It is anticipated that as the loan funds are collected and revolved the average .loaq per farmer will increase, and as the project absorbs more nDe farmers the release of USAID fund.s as suggested above can be digested by the project in an orderly fashion, The project ii geared up now to move forward, and a timely release of these funds, will enable APMAHE to fulfil its objectives based on an extension of time. 3. Vehicle Requirements and the Chauffer Situation
The APRANE pro4.et presently counts 19 vehicles distributed to the five regional branch offices. 54 ore'are being purchased under AID funding, and are expected to arrive on the scene n mid-1961. Some 12-15 more will be needed by 1982 to accord with staffing targets. These will be purchased through the regular MA vehicle purchase/replacement budget.
Government regulations require that all official motor vehicles be driven by a chauffeur. The extension agent is not permitted to operate his own vehicle. This nearly doubles the cost of maintaining an extension agent, and tends to reduce his efficiency. First, every vehicle must have a chauffeur. If there are 10 vehicles for 10 Agents and only 6 chauffeurs, then 40%of the vehicles and agents remain idle. Vacations out be planned simultaneously for the chauffeur and extensionist or, again, the vehicle can be idle for as much as two months annually. Additional chauffeurs are needed to take care of sickness; and on the whole it adds to the cost without improving the efficiency and mobility of the extension agent.
APMANE needs to assist its extension agents to plan and execute their work more systematically at the local and regional levels. The original Project Paper visualized 83 agents to serve 11,665 farmers, on the assumption that one agent would serve 100 farmers. But the agents would have to surpass this number of farmers by nearly half again as much if the target is to be reached.
In an interview with the agent at Grombalia, he stated that he could visit 7 to 8 farmers daily if he had sole access to a vehicle. This appears reasonable, since the farms in his area are small and in close proximity. On the basis of a 5-day work week., and allowing for a 30-day vacation period, there are roughly 225 work days left for field work plus reporting, coordinating and participation in training. Assuming that 50 days is consumed in report writing, coordination work and training, 175 days can be expected for field work. This number of days multiplied by six visits per farm adds up to 1050 annual farm visits. There is every reason to assme that an agent could handle from 150 to 175 farmers in this area per crop season, bearing in mind that only about 50%of the farmers will require intensive suervision. On this basis, the target figure of.:11,665 farmers with 83 extension agents can be reached. This will call for a study of each area served by the agents examining the farmsteads and the nature of production by each farmer, so that the agent can schedule his work in order to use his time as productively as possible.
!4. Training and Personnel Development
The APMAM project must place more importance on the trainin of its personnel, with emphasis on the extension agent. Candidates selected for the position of agent are graduatea from the country's agricultural colleges and have the academic preparation, but this does not necessarily mean that they are skilled in the technology of extension (i.e. comnunication,) and of transferring their skill and knowledge to the farmers.
Since the inception of the APMANE project, the following actions were taken for training and orientation:
1. February 1979 - Contract with CM to conduct four seminars of 2 days' duration each in the regional offices of APMANE. - 53
2. April 1980 - APMA conducted a series of five one day seminars of one day duration each. . 3; on-the-job supervision and training ..s offered by the- AMaE Director and the USATD Agricultural/Credit Advisor on a continuing basis. W s effort must be intensified as the system adds more extension agents, AMd " it grows. There ili be a turnover in staff for various reasons primarily because of the lower real wages in APKIE, private firms will pirate people with skills; and some wi-.ll no doubt see the opportunity to make ore money farming on their own, then working for APHA . It .s sugested that APMARE establish a personnel and training section, and develop a curriculum to meet its cim training needs. The' curriculum content would consist of the following, and more:
1. Small farm management 2. Fa n production plans and financial counselling 3. Production diversification 4. Planning at the level of"the delegation 5. Utilization of time, and time values 6. Coordination with other agencies 7. Case studies of hard core collection problems 8. Public relations 9. ionitoring and reporting 10. Publicity, informntion .and me.tings
The whole area of training is vitally important, if the extension agents are to become "agents of change". They are the vital link.. between the APANE project and the farmer.
To assist the agents to keep abreast of progress, changes, and new concepts, APMANE should also.-con sider the publication of a mnthly bulletin for distribution to the field staff.
5,. CNEA. Its Role and Se.formance
Reference is made here to the CNEA Evaluation study of the APMASE Project after the first year of operation (Annexes A and B). This is a thorough and highly professional job, mhich has been ot considerable value to the Evaluation Team. The study was premature in measuring farm production-before the harvest and then coparing production "before and after" the project; but the hypothetical approaches used are establishet! formulas for estimating uture crops. Information on the status of project funds, their revolvement, loan collections, interest income, etc., and trends should be obtained from the BUT, examined and detailed in future studies. The bulk of this data (financial, technical, and - 514
admnistrative, should gradually be obtainable through the project. reporting system with CEA carrying out future evaluations. Their services should continue to be sought by the OT on a consultative basis and for periodic audits.
6. USAID Technical Assistance Re&uirements
The aunching of the APMANE project called for more intensive expenditures of ARDN grant funds on the part of USAID (part of which was caused by rising costs due to inflation) than originally forecast in the project paper. A recent mission review of budget requirements reveals, that in order to meet the planned comitments through fiscal year 1981, the budget vill be short same $200,000. With the extended period of time recomended, an additional corresponding increase in grant funds for USAID technical assistance should also be taken into consideration.
The critical nature of the Mission services being provided to this project at this time, and the vholesome development of the project itself, make it imperative to urge that. this additional grant funding be provided.
7. Technical Operatina Manual
An operating manual embracng extension techniques, lending policies, technical information, etc., for the GOT project personnel has been in preparation. The senior USAID Credit Advisor, and the Director of the APM1AE project have this matter in hand, and expect to have the manual in print by the end of July, 1980, and distributed to all project personnel concerned.
IV. BROADENING EVALUATION: PLANNING ADAPTED TO THE PARTICULAR COITONS OF A. FARRS ..
1. The APMANE project, like many other projects with similar target groups, makes it possible, at the end of its implementation period, to at lert answer numerous fundamental questions raised by those who are responsible for agricultural development. Is the small and medium-sized agricultural farm capable of developing on its own? To mhat extent can it contribute towards the country's 'overall socio-economic'development? Uhat measifes could be taken by the administration 'th reference to these farma?
2. The present state of knowledge on the development of the small and medium-sized farm doesn't make it "possible to answer these questions. It is thus 'easy to understand Tunisia's agricultural administration has had to resort to wrking hypotheses in order to prepare its support action. 3. t lithin thLs.hypotheses, e can point out two trends. The first trend contributed to a large extent to orient the public authorities' intervention 'towards the cooperative system in the 19.60.. All the research work which i.as undertaken during that period stressed the fact that those mho designed the system believed that the small peasant class was unable to think in terms of changa. The second and more recent trend, in contrast vith the previous trend, aims to rehabilitate the s*3 V farm. That is why 'anumber of test-programs have been designed to improve the approach' to.this type of farm. 4. The APMAKE project is a typical example of a test-progriam which should be-ully assessed so as to extract. as much information as poqsible. This inforation could- then be used in the design and support of future programs for sm&. and medium-sized farms. This is the reason.why the extended assessment study of the APIMM project is of prime importance and should be carried out at the end of its implementation period if it is to retain its value as a test program.
5. The document entitled "Broadened Evaluation Method" constitutes a valuable working paper to be given attention not on1y by the project offictirs, but by all those involved: in the project, including farmers themselves so as to create a. sense of awareness in all project parti cipants.
6. It should be pointed out here that the study should be undertaken by knorledgeable and trained people who are not almys easy to find. It is also necessary and urgent to draft a contract for an assessment team which will be responsible for the axtended list of tasks to be undertaken. The assessment model followed by the CNEA, even though it helps to shed light on certain questions, doesn't deal irith such impor tant problems as:
- the farmers' real income -. and analysis of the gaps between the results achieved by the farmers and the objectives as planned. - Recomendations to improve on projections. - Effect of project on the attitude of para-State organisations towards the small and medium-sized farms in general. Theset are just a fLr out of the many questions to be raised in the "Broadened Evaluation" document.
7. The list of items to be analysed in the paper is not enough to better -define an assistance poiiy ic"the small rural peasantry, but the following questions could serve as a useful guide for the strategists as far as the development of small and medium-sized farms -are concerned. -56
- How far do social normas and values constitute a barrier for the propagation, acceptance, and success of the technico economic model of the so-called "rational" and "~modern" farm?
- How far is the model proposed by the technicians adapted to the farmers' socio-economic conditions?
- How far are the technicians/supervisors and project officers able to look objectively at the technico-economic model and not treat tt as a reference model?
To what extent do the technicians judge and made a compaison between the existing technology and a "reference technology" without appraising the present technology on the basis of its present degree of efficiency and inrovment possibilities?
- To what extent would it not be more appropriate to treat the smallest farms, not as mere production units, but as complex production/consuwmption units?
8. This list of questions has by no means exhausted the preoccupations i&h.ch accompeny the elaboration of a suitable strategy that is likely to effectively help the small farmer. These questions help to better understand the problems raised when planning and then implementing a project for the benefit of this category of farmers.
9. Several research studies undertaken by INAT's department of rural economics and human sciences have already come up ith some data of a general nature which should be checked in those areas where the APME program is being implemented. Some of the data is as follo s:
10. a. When an integrated approach is used in analysing the agricultural farm, i.e., bearing in mind all the factors likely to explain the farmers' behaviour from the economic, financial and administrative point of view., one is often struck by the rationality .ich characterises these farmers.
b. The category of small and medium-sized farms is by no means a homogenous one in vilr of their socio-economic aims and there existing conditions, which in turn gave rise to different management methods and numerous forms of rationality. c. Any planning or intervention by the public authorities, if it is to have any chances of success, must be based on a prior knowledge of these rational practices.vh.ch are readily identifiable by means of a survey before any objectives are elaborated. -57
d. Any projections, even though based an a real and practical knowledge of the productio4 systems and their rationality before the project, should aim to acliev 'different objectives.depending .onthe various situations and thes.e objectives can then be programed by adopting,a sequential approach.
11. The APMASE project, even though it it still in its first phase, has already yielded some data ,hich seems td support these hypotheses.
During the first year the credit consumption rate was around 30% whereas 80% of the farmers .were covered; which shows that 'the farmers' tendency to incur debts was overestimated. Had a sequential approach been adopted to achieve certain objectives, it would perhaps have been possible to reckon with a lower credit consumption rate and thus cover a greater number of farmers.
The CIEA analysis of the socio-economic profile of the 0-5 ha type of farmer shoW that these farmers'don't aim-to sell their produce on the market but rather aim at auto-consumption. In line with this aim, the farmers have a strategy to cater for all their.other needs. Part of the family labour force is allocated to farm work and the other members seek a source of income from outside t)e farm. 'This balanced situation should not->be doerlookodr when planning intervention and during project implementation. In such a case, and when a ccuparson is made between the technology as practised and the technology as advocated by the technicins/supervisors, the conclusion is that the farmers have not followed,the advice given. This type of conclusion shcs once more that the farmers' realism has on=y been partially appraised because this appraisal doesn't try to explin the gap betveen the advice given and the methods prapticed by an overkl.U assessment of the farmers' situation. If this is how the situation looks, then it could be admitted perhaps th# the advice given is not appropriate to such cases and that this advice should be.aapted tO the different situations one meets.
12. The above considerations should be given due attention eapecialY. as the target-goup seem to constitute quite a stable unit cotpared with rest of the farms as can be seen from the following rvuo tables: -58-
Surface area, No, of Total surface In ha, farmers Cumulated area, Cumulated , 0 -5 133.000 40,8 30790006. - 10 73,000 63,2 512.000 16.3 10 20. 614.000 82.9 888.000 34 20 - 50 42.000 95.8 1,304.0o0 60 50 - 100 3.000 48.4 563.000 71.3 100 - 200 3.000 99.3 427.000 79.7 20 -500 1. 500,, 39.8 468.000 89 500 and over 600l 100 554.000 100
Source: 1962 survey on aricultural structures. (1) Ths figure does not incl.ude some of the large state lands run by the Office des Terres Damniales (Office of State Lands).
Surface area No. of Total surface in ha farmers Cumulated % area Cumulated o - 5 133.170 Wo.9 3o5.100 5.6 5-0 m.75.920 6.2 588..80 16,. 10 - 20 64.640 8 872.200 32.4 20 - 0 37,100 95.4 1,142.000 53.4 50 - i00 8.670 98.1 654.4 65.14 100 - 200 3.920 99.3 491.Z70 74.4 200 - 500 1.160 99.6 495.010 83.5 500 and over 1.o42 100 889.160 100
Source: Bsic agricultural survey, Direction du Plan, des analyses dconmiques et do 1' valuation des projets, Octobre 1976, (Dept. of Plan, economic analyses and proect assessment, October 1976). Co~aring these two tables, it ahows that the mall and medium-sized farm hm been remarkably resistant for a lengtby period of time of about 15 years. The data can be divided into two groups, 0 - 50 ha and 50 ba. plus, - 59 - Farmers i Surface area
0 - 50 312.000 310.830 25.8 95.4 3.011.000 2.907.780 60 50 50 plus 8.100 15.170 4.2 4.6 2.01.1.000 2.529.840 10 146
It is possible to project that for a long time to come yet, wm shall have to reckon with the small and medium-sized farm. This situation should not lead one to believe that there are no dynamics involved in the agrarian structures. Several hypotheses may be put forward to explain the apparent stability of the iihole unit. The efforts deployed by the Tunisian government concerning agrarian reform and the constitution of irrigated perimeters resulted in a consider able increase in small farmers. One would have expected a general and sizeable increase in the 0-50 ha group but as this is not the case one is lead to the conclusion that there is a reduction in the number of farmers in this category due to the classical mechanism of the concentration of lands. Small farmers seem to resist the trend to disappear, and the following hypotheses should be checked in this connection: - Indirect cultivation of the land through various formulas such as leasing, khemassat, various associations; and by providing the land, .%.abour or the capital. All these possible solutions have been preferred rather than the sale of the farm or plot of land to a big landowner. - The farm is retained in order to produce basic foodstuffs to complement an inadequate financial income which does not encourage the small farmer to leave his farm. - The farm is retained as a safety precaution and as an eventual haven of refuge if the job outside the farm is quite unstable, as in the case of all the farms where a family member is an emigrant. - The tenacity of the small and medium-sized farm can also be explained by the fact that numerous projects have been launched which offer possibilities of consolidating the farm and improving its revenue perspectives. As this is a credit project, the planner's task is to establish a methodology to identify the type of small and medium-sized farms for whom assistance in the form of credit is appropriate.