Síntesis 68 

The dairy value chain that SC/Bolivia helped develop was only a small component of its overall program, and its geographical impact was much smaller than the LOL program in Zambia. Still SC’s experience illustrates some of the factors that can be important to the success of a dairy value chain: current demand was strong and the market was growing; the price producers received for their milk was attractive and they could produce and sell milk year round; the dairies bought their milk on contract, which helped mitigate price risks to farmers; and the dairies also provided the producers with TA and access to improved feed. SC’s contributions to this chain, which were numerous and varied, also provide a good illustration of how the value chain approach helped SC better integrate its activities. SC helped build the road that made it possible for the milk producers to get their milk to market during the rainy as well as the dry season. SC’s marketing specialists helped make the initial contacts with the dairies and facilitated the development of the forward contracts. Once the links were made to the market, a number of other activities that SC had initiated earlier in its program began to have more value to the milk producers. This included SC’s agricultural technicians that provided TA in forage production and animal nutrition; the paravets SC trained, who became available to provide veterinarian services; and the atajados (stock tanks) and family stables that were constructed with SC assistance, which contributed to increased milk production—the atajados by increasing animals’ access to water year round and the stables by providing them protection from the cold.

limited the number of animals these women could handle at any one time, but the basics of rearing these animals were known to them and markets existed, particularly at the time of the Muslim holiday of Eid. On the other hand, if an animal—or other asset—was/is provided within the context of a value chain, as was the case with the LOL dairy program described previously, it was likely to have more value.

The problems seemed to arise when the interventions got more complicated. Awardees established a pass-on system in an attempt to expand the number of people reached by the asset transfers. Awardees added a nutrition objective to their program, trying to get mothers to feed goat milk to their young children, in the absence of a tradition of doing so. They tried to improve the breeding stock by using new breeds in their distribution programs and/ or implementing artificial insemination programs, and/or they tried to introduce new management practices, encouraging clients to pen the animals and to adopt a cut and feed system instead of their traditional system of letting the animals free range. These more complex small animal interventions can require significant amounts of Awardee staff time to be successful. But, since these activities tended to be add-ons, the level of support needed was often not programmed or available. On the other hand, it is also not clear that more resources should have been devoted to these activities, since diverting more staff time to what were considered to be more marginal activities could have had significant opportunity costs in terms of less progress on other higher- priority activities.

Outcomes. The few evaluations that included any discussion of these programs tended to cite the problems involved in making them work and to suggest that the pass-on system was not likely to continue to function beyond the first or second cycle and certainly not beyond the life of the project. FH’s experience with goats in Kenya seems to be somewhat typical of many of these programs. The introduction of dairy goats was intended to provide community groups with an asset that would provide additional income and augment the family food supply, through increased milk production,

and improve children’s nutritional status. The groups had numerous problems, however: goat care was very labor intensive, particularly with the introduction of the cut and feed management practice; the goats introduced were susceptible to disease; milk yields were mixed; and slow breeding was a problem. The conclusion of the final evaluation was that the component had a very low probability of sustainability because the groups were still too dependent on FH for inputs, breeding and production results were low with respect to targets, and owners found the special care that the goats needed was a drain on their resources (Robins et al., 2008, pp. 42–43). The goat distribution programs in Guatemala also seemed to be beset with many of these same problems, based on what was seen during the FAFSA-2 team visit.

4.3.2.7 Rural and Agricultural Finance

Two of the Title II development programs included in the FAFSA-2 universe had a separate SO focused on improving their clients’ access to finance (CARE in Kenya and ACDI/VOCA in Cape Verde). At least 20 other programs included some rural and/or agricultural finance activities in their programs, 9 as separate IRs under their agricultural SO (Africare in Chad/Mali; TNS in Ghana; ACDI/VOCA in Uganda; CRS in Malawi; ADRA, FH, and SC in Bolivia; CARE and SHARE in Guatemala; and ADRA and CRS in Nicaragua).

These programs varied considerably in terms of their focus and approaches—whether the Awardees were focused on:

• The poor—helping develop microfinance institutions (MFIs) (e.g., ACDI/VOCA in Cape Verde and WV in Mauritania).

• The rural poor—helping organize and develop community-based savings and loan groups (e.g., CARE in Kenya, CRS in Burkina Faso, the CRS consortium in Malawi, and ACDI/VOCA in its FY 2007–FY 2011 program in Uganda). • Small resource-poor farmers—experimenting

with alternative ways to supply agricultural credit to the clients of their agricultural programs, either

4-38 Agriculture, Natural Resource Management, Livelihoods, Income Generation

directly and/or by linking them with other credit- providing institutions, including rural-based MFIs and commercial banks (e.g., FH and SC in Bolivia; ADRA, CRS, and PCI in Nicaragua; CRS and SHARE in Guatemala; and ACDI/VOCA in Rwanda).

The Title II development programs used their resources to help organize and train community savings and loan groups and to support the development of MFIs, cooperatives, and

associations, providing them with TA and training and, in the case of some MFIs and cooperatives, seed capital.

Microfinance

The MFI component in ACDI/VOCA’s FY 2003– FY 2009 program in Cape Verde was probably the most significant MFI program undertaken during the FAFSA-2 time period in terms of resources and impact.102 _{The final evaluation of the program in late}

2005 credited ACDI/VOCA with the development of the entire microfinance sector in Cape Verde, including stimulating interest on the part of the Bank of Cape Verde in establishing a legal framework for the sector. The ACDI/VOCA program worked on a number of the islands over the years with a variety of different credit organizations, including banks, women’s organizations, and microfinance associations, providing them with technical support, training, and, in some cases, seed capital. These programs were urban-based, however, with most of the credit being used to finance non-farm business and trading opportunities. ACDI/VOCA’s ventures into agricultural credit—the creation of a fund at a local bank that farmers could use to invest in drip irrigation, for example—were much less successful. Drip irrigation had been a key intervention in both of ACDI/VOCA’s Title II development programs, but the lack of a viable long-term mechanism for providing capital for investment in drip irrigation remained an issue at the time of the final evaluation (Langworthy et al., 2005, p. 5).

102 _{This program was a follow-on to the MFI component}

in ACDI’s previous Title II development program and to a USAID-supported Micro Enterprise and Training Program that it had managed from 1997 through 2001.

Providing support to the development of MFIs was more popular during the time period covered by the 2002 FAFSA than during the FAFSA-2 period. The problem with focusing too heavily on MFIs, which the Title II Awardees learned over time, along with the rest of the development community (see Box 4.15), is that they are not well suited to serve farmers’ needs for agricultural credit, including the needs of the small, resource-poor farmers, who are the majority of the Title II clients. The MFI approach originated in more urbanized areas to serve poor micro-entrepreneurs and petty traders whose major credit needs were for short-term credit to replace their inventories. Most MFIs still do not lend to farmers, unless the household has other sources of income to accommodate their frequent repayment

Box 4.15. Microfinance Has Not