Project interim Evaluation¹

Background to the evaluation

The PROSALAFA project was approved by the IFAD Executive Board in April 1991. The date of effectiveness of the loan was May 1993 and the actual implementation began shortly thereafter. The programme was originally planned to last until 1999, but in that year, and subsequently in 2001, two extensions were granted which is why the project is still in progress and the current end date is June 2003. PROSALAFA was designed with a total cost of approximately USD 26.7 million of which IFAD was to finance a loan up to approximately USD 16.2 million, while the rest would be provided by the counterpart, the Government of Venezuela. The Andean Development Corporation (CAF) was designated as cooperating institution. The project executing agency is presently the Foundation for Training and Applied Research in Agrarian Reform (CIARA) which replaced the Institute of Agriculture and Livestock Credit (ICAP) in 1999, prior to the closure of the latter. Loan disbursements at the end of September 2002 stood at 76 per cent.

In March 2002, the Venezuelan Ministry of Agriculture and Land formally requested the President of IFAD on behalf of the Government to carry out an interim evaluation of PROSALAFA including in its terms of reference an analysis of the feasibility of a new operation in the region. In response to that request, IFAD decided to send an Interim Evaluation Mission, in the framework of the new IFAD evaluation process, followed by the formation of the Core Learning Partnership. The interim evaluation focuses on an analysis of the sustainability of the rural development process initiated by PROSALAFA. In particular, it was thought that cohesion and organization among the beneficiaries was essential in maintaining both the administration and operation of the water supply works constructed and the scope and coverage of technical assistance, development and consolidation of financial services. The roles of public institutions as well as private organizations should be studied in depth together with the aspects mentioned above. The possible execution of a second phase of PROSALAFA would be analysed in the light of these criteria. Indeed, it would be a matter of consolidating previous actions without impeding or curtailing the development of the self-management processes already begun in the area. The trade-off between these two aspects, i.e. additional assistance versus self-managed processes, will be crucial in defining whether a new stage in the project is appropriate and what form it should take.

Project area, concept and strategy²

PROSALAFA was prepared for the semi-arid region of Lara and Falcón States, covering a vast area of some 12 300 km² in all. Some 83 000 people, or about 15 000 families, lived in these areas, half of them below the poverty line. The extremely hard climatic, agricultural and ecological conditions have always influenced the pattern of human settlement. The limitations on agriculture and livestock are thus many and severe in most of the area. However, the use of scarce water resources, involving various methods of storage and capture, and large areas of open grazing for goats have supported a relatively stable rural population throughout the ages. Their level of association and organization was found to be virtually non-existent. The land tenure of the majority of the rural population was precarious from a legal point of view.

The main constraint identified in improving these people's living conditions and production was the availability of water. In the light of this finding, the project proposed a series of solutions to supply water for human consumption, watering places for the herds of goats and irrigation of small areas of intensive cultivation of cash crops. Together with these works, a strong technical training component was proposed to increase agricultural and livestock productivity, as well as the introduction of credit and financial services to allow adoption of the proposed investments and technologies. Organization of the beneficiaries was made a priority as a key activity in ensuring the viability and effectiveness of the project actions. In addition, albeit taking an approach based on the "women in development" ideas current at the time, the gender dimension was also included in the project activities. Experimental activities for the conservation of natural resources and studies on marketing of products were also included. The project's target group was based on the poverty line estimated at the time [Ex-ante Evaluation Report (IEA), 1990] at the equivalent of USD2 900 per family per annum. It was found that 7 500 families would fall into the eligible target group. With a set of additional criteria, 5 365 rural families (including 180 artisanal fishermen) resulted as beneficiaries. In particular, a target of 2 252 women beneficiaries was fixed.

Objectives, goals and components³

The overall project objective was stated as to "raise incomes and improve living conditions of the small producers and fishermen in the project area while promoting rational management of natural resources".

Project components: to achieve the planned objectives, the project was designed with three main components, which would include various sub-components, namely: (1) soil and water management, (2) production support activities, and (3) credit. In addition, significant resources would be allocated to a project executing unit and technical assistance (see Appendix 2 of this Report for further details on components).

(1) Soil and water management: this component was conceived to provide infrastructure for the capture and storage of water for livestock (ponds and wells) and human consumption (cisterns) in the project area. With the exception of pumping and irrigation equipment, which would be financed by credits to the beneficiaries, all the works were financed from project funds by transfers to organized groups of beneficiaries. Resources were allocated for hydrological surveys, experimental watershed management and incentives for the protection of farm ponds. (2) production support activities: this component comprised five sub-components, namely: (a) training – staff: all the project staff would receive technical training, workshops and seminars at national and international level; (b) training – farmers and fishermen: a broad programme of training in organizational and technical subjects was included covering all the project beneficiaries. Special efforts were made to assign training lines to women; (c) on-farm technology validation and transfer: to reach some 5 200 producers, 100 validation trials were programmed and over 3 000 workshops on the main crops and livestock in the area; (d) cadastral surveys and titling: it was planned to obtain title to all the land included in the irrigation and watershed management component; (e) marketing support: it was planned to involve a marketing adviser provided by FUDECO and to establish two teams, one in each State, to study marketing channels, disseminate market and pricing information and work with producers to improve the way they marketed their produce. (3) Credit: a credit programme would be implemented by establishing a trust fund in ICAP using IFAD resources. ICAP would apply its normal procedures and would receive a commission. The rate of interest would be set at the legal limit imposed under the Agrarian Reform Act. Technical assistance resources were included to promote rural cooperatives and financial services. It was expected that 2 454 producers would be beneficiaries of the component.

Organization: it was considered that participation of organized producers' groups in the project was necessary for the implementation of productive, technological and social change and to achieve the objectives of the producers and the project. To that end, two levels of organized participation of producers were envisaged: (i) at the level of management and decision-making in consultative committees, supervisory committees and the monitoring component; and (ii) as beneficiaries through groups and organizations formed around actions planned and coordinated by the project.

Gender: the appraisal report showed that 28 per cent of households were headed by women, and if it is considered that in a further 18 per cent there is temporary migration of men for four or five months a year, it means that 46 per cent of households had a woman in charge of production. There were no specific organizations for women in the zone. In order to integrate women in the project on terms comparable to men, various actions were defined which were novel to the region and the country.

Expected benefits: the execution of the project would, in the fullness of time (ten years from the start), yield a series of quantifiable economic benefits. The project design estimated an overall return of about 26.4 per cent when fully operational and income levels above the poverty line for the producers involved in the production models.

Organization of execution and arrangements with co-executors. The project executing agency, designated in the IEA and the Loan Agreement was the ICAP. ICAP was to form a project executing unit with staff dedicated exclusively to the executing of the project. The Executing Agency included: (a) an executive committee, and (b) the participation of other institutions and, of course, state and local governments. The Project Executing Unit (PEU) was planned with a very small staff. Two coordinators (one per state) would report to the PEU and ICAP would provide a credit coordinator. The PEU would sign a series of agreements with other state and/or private institutions [e.g. CIARA, the National Agriculture Institute (IAN), the Environment and Natural Resources Ministry (MARN), etc.] for the co-execution of the various components and activities planned.

Execution of PROSALAFA

Context of implementation: the project was formulated in a political, institutional and economic context with markedly different characteristics from those which actually pertained during the extended implementation period. In fact, the project was executed under five presidencies, even more ministries concerned and two executing agencies (due to the demise of the originally designated ICAP). To these factors were added long periods of budgetary constraints which forced the project to operate with resources far short of those programmed. The political and institutional changes begun in the last three years have created a climate whose characteristics are ambivalent for the project. On the one hand, the constitutional reform which explicitly includes the State's responsibility for rural development offers highly favourable factors to rural development policy, objectives and activities consistent with those of PROSALAFA. On the other hand, the political instability during the period has affected the normal functioning of the State, and this has had an adverse effect on the project.

Results⁴

Financial execution of PROSALAFA: at the end of September 2002, total actual expenditure was some 70 per cent of the total programmed cost (including physical contingencies and inflation). The credit component accounts for the bulk of financial under-performance. The political and institutional instability and various public spending adjustment programmes during the years of execution go a long way to explaining this under-funding of project activities. The PEU was always able to spend the budgetary credits allocated, both in cutback years and later years when allocations were higher, which shows that the financial under-performance did not reflect management weaknesses in implementation.

The project coverage was greater than programmed. In fact, 6 471 beneficiaries were listed in all, 21 per cent more than programmed. This is a good outcome, although it means that coverage was less than planned in some components.

Execution of PROSALAFA components

Soil and water management component, water conservation and management sub-component: activity (a) capture and collection of rainwater for human consumption shows that the project exceeded the original goals by 35 per cent in quantity and volume of water collected. The number of families benefiting was increased (more than six times that originally envisaged), thus reaching 2 700 families and 16 200 people. As regards (b), rehabilitation and construction of ponds, 130 mixed ponds were constructed against the targeted 218. It is emphasized that the area irrigable from ponds was increased by 26 per cent and the number of goats provided with drinking places by 197 per cent. To these figures should be added the repair of 42 existing but abandoned ponds. For drinking ponds, the target was exceeded (169 against 150) as was the quantify of water collected (by 19 per cent), this because the ponds were made larger than originally planned (9 591m³ instead of 6 500m³). For activities (c), water extraction, the shallow and deep wells envisaged in the IEA were not constructed. This meant a 35 per cent reduction in the envisaged irrigation works and some 490 beneficiaries. Finally, in relation to (d) community works, although these works had not been envisaged in the IEA, 360 rural latrines were built. Experimental watershed management and environmental protection sub-component. This sub-component consisted of various actions, namely: (a) at micro-watershed level: work is only in progress on two micro-watersheds with an area of 15 per cent of that envisaged; (b) micro-watersheds to feed ponds: it was originally decided that protection and micro-watershed management activities should be provided for all ponds, setting a target of 280 ponds thus protected. To date, a large part of these actions have been implemented; (c) works protection associations: it was decided that there should be 100 associations responsible for protection of their works and 98 are doing so; (d) experimental management tests: the project extension had as a goal to undertake 28 tests of this kind all of which have been completed; (e) experimental management trials: 13 of the 15 trials are being carried out; (f) market gardens: the 44 planned market gardens have been created; (g) technical assistance events: 2 906 of the 3 000 events envisaged have taken place.

With respect to the production support activities component, the results for the staff training and training for farmers and fishermen sub-components are as follows: training of technicians and professionals has strengthened the capacity of the technical staff through 73 training events covering 1 336 participants. Training for producers and other beneficiaries achieved significant results. There were 466 events aimed at producers, involving 3 489 men and 3 411 women. These results were better than programmed. As to generation, validation and transfer of technology to farms, 100 validation trials and 300 workshops on the main crops and livestock in the region were programmed to reach 5 200 producers. The results far exceeded these targets. Over 6 000 producers were reached through 329 validation trials and over 6 700 technology transfer activities. During the implementation of PROSALAFA, new methods of technology validation and transfer were developed with the technology demonstration units (UDRT), local rural research committees (CIAL) and the introduction of rural facilitators (180). Concerning support to artisanal fishermen, the results fell far short of those envisaged in the IEA. The main activity programmed, the construction and provision of 30 boats to some 180 associated families did not happen. Actually, only two boats were provided and in each case the associates were brothers and thus only four families benefited. The results for cadastral surveys and titling were also meagre. It was planned to obtain title to all the land involved, but only 160 properties out of a total of 1 100 could be regularized. As to marketing support and promotion of micro-enterprises, the results were satisfactory although they differed from those set out in the IEA. The project amply exceeded the targets for studies, training and technology transfer on market and product related topics, as well as the creation of rural micro-enterprises. In all, 1 785 events took place on these topics, attended by 9 178 participants.

On the credit component, PROSALAFA executed the component through three parallel and simultaneous lines of action. These lines were substantially different from those envisaged in the IEA which, in the view of the interim evaluation, is an appropriate adjustment, although not necessarily complete, to changes in the environment and the beneficiaries actual needs. In financial terms, implementation achieved only 18 per cent of the amount originally programmed. In reality, no credits were ever granted through ICAP (which granted high subsidies through negative real interest rates). A revolving fund for rural activities (FRAC) was funded by the project and agreements were signed with state funds with similar characteristics to ICAP (FONDAEL and FONECRA). The most novel and effective was the establishment of rural banks (similar to the Economic Development of Poor Rural Communities Project (PRODECOP) model). In all, some 1 400 producers in the two states were assisted, less than the number of 2 454 identified in the appraisal report, meaning that only 57 per cent of the envisaged population could be covered. Credits of USD 963 000 were placed in all, only 60 per cent of which came from project funds, the remainder being financed from producers' savings in the rural banks.

Organization: the establishment of grass-roots organizations, virtually non-existent at the start of the project, has been extremely successful. There are now over 900 organized groups based around water sources and some 270 organized settlements around other services. Consolidation of the more highly developed organizations (e.g. formation of a second level of organizations at municipal or regional level) is so far at an embryonic stage. Certainly, the sustainability of the actions and achievements to date will depend on establishing organizations at this level.

Gender: the results are satisfactory: (a) women's involvement is most significant in micro-enterprises and crafts, at 54 per cent, followed in descending order by rural banks and neighbourhood associations (42 per cent), cisterns (22 per cent) and finally producers' associations (17 per cent); (b) out of the total participants in training events for producers during the project life, 49.4 per cent were women; (c) PROSALAFA supported the formation through training, technical assistance and credit of 58 micro-enterprises to the benefit of 357 associates, 193 of whom (54 per cent) were women; (d) PROSALAFA provided financial support and time-saving technology such as cisterns to store rainwater and water supplied by the municipality, latrines and improved stoves for the benefit of the family as a whole and women in particular; (e) in the rural banks, women make up 42 per cent of the membership and participate actively as shareholders and applicants for credit, and hold the majority of management posts; (f) monitoring and evaluation: the PEU has developed a satisfactory model for annual operating reports, which give a breakdown of activities for men and women, allocating financial and technical resources and clearly defining the scope of each component in quantitative terms.

The performance of organizations involved shows differences. On the one hand, IFAD demonstrated a highly satisfactory continuity and monitoring capacity. On the other, the Government demonstrated several failures in fulfilling its financing obligations, which led to considerable delays; but despite the changes in institutions, it respected the management and technical autonomy of the PEU. The PEU's performance, as well as being highly efficient, despite the financial constraints, must be highly praised for its operational discipline. The cooperating institution's performance, finally, was mediocre, with few and brief supervisory visits, apart from a few exceptions where excellent results were achieved with the advice of conscientious consultants.

Impact on Rural Poverty and sustainability⁵

With the standardization of observations under the new IFAD evaluation framework, it is possible to analyse in greater detail the impact on the beneficiary population in its various aspects. In this respect, PROSALAFA has contributed significantly to: (i) increases in the physical and financial assets of the families especially in productive aspects of ponds and increased irrigated areas and access to water for human consumption through cisterns. Savings have increased due to the increased income generated by the project and other sources but, above all, they have been channelled into self-management through rural banks established by the project; (ii) increases in human assets with special emphasis on knowledge and skills and local successes in introducing fair gender approaches; (iii) increases in social capital through the establishment of organizations which did not exist when the project started; (iv) increases in agricultural and livestock productivity and production through the successful adoption of technologies proposed by the project with an undeniable impact on local food security; (v) positive if limited impact on the environment bearing in mind the complexity of the problem in this semi-arid zone and the need to extend the scope of actions; and (vi) increase in the population's capacity to relate to the rest of society and public authorities, albeit still at a preliminary stage. PROSALAFA has generated a raft of changes and impacts in the region with undeniable positive effects on the economic and social well-being of its people.

Project evaluation: conclusions, insights and recommendations

A synthetic judgement or evaluation of the project's performance is always necessary even if it does not always strictly reflect all the aspects involved. In this regard, PROSALAFA can be qualified as a project whose performance is more than satisfactory, given the contextual obstacles, but it is still unfinished in terms of consolidating its achievements and fully achieving its original objectives.

The project managed to overcome the main obstacle identified during its formulation, which was the shortage of water for human consumption, irrigation and animal drinking places. This result was largely due to the great success in motivating and establishing grass-roots organizations which had not previously existed in the area. These significantly facilitated the tasks of generating, validating and transferring technology. Despite the lack of institutional credit (which did not seriously hinder investment in farms) the project instituted a valid alternative for mobilizing resources and access to financial services through the rural banks. All these outcomes made very considerable contributions to the objective of improving beneficiaries' real incomes and led to various positive impacts on their social well-being. These are the main strengths of PROSALAFA's performance.

As against the foregoing, the project did not cover all the demand for productive water supply (especially extraction) nor did it cover all the irrigable areas programmed which meant lower individual and overall economic returns. Neither was it able to consolidate a sustainable system of rural financing. The adoption of technology and the appropriate introduction of irrigation methods is still incomplete and there are considerable shortcomings in the efficient management of natural resources, including integrated programming agencies. The considerable achievements in grass-roots organization are limited by the absence of higher level organizations which, as well as serving producers, increase their bargaining powers vis-à-vis the rest of society and the State. A combination of operational and/or conceptual weaknesses were identified in several activities, e.g. marketing, support for artisanal fishing, regularization of land tenure, gender. These weaknesses can be remedied.

The main conclusions on the implementation of PROSALAFA are set out as a series of strengths and weaknesses. However, it is important to note that in the opinion of the Interim Evaluation Mission, the overall strengths outweigh the weaknesses in terms of the project's objectives.

Conclusions

The conclusions set out here should be regarded as general. There are a considerable number of "specific conclusions" related to project components and activities which are set out in Appendix 3 to this Report.

(a) PROSALAFA's performance shows that even in the difficult circumstances in the country, the project was able to implement its main activities and components and achieve a significant number of positive results or outcomes, either in terms of the positive impact on the beneficiaries' well-being or in laying the foundations of such impacts in the future. The proper selection of PEU technical staff and respect for their experience and responsibilities seems to be the key to this result.

Despite the institutional and policy changes and the considerable delays in budgetary financing which characterized the project's execution, the PEU managed to execute the main components and set a sound basis for a dynamic process of rural development.

(b) PROSALAFA has reached almost 6 500 families in the area with various services, albeit primarily with activities to promote organization and training. These results are a remarkable achievement compared with the initial situation. It was found that PROSALAFA has been implemented with great energy and increasing efficiency and effectiveness. Over and above the observations focused on the project components and approaches, it should be noted that PROSALAFA is now well established in the region, with products and effects well disseminated and significant success in establishing the bases for achieving the initial objectives.

The beneficiary population sees the project as reason for the improvements in their well-being, incomes and, above all, their integration in society. There are clear signs that the process of emigration in several areas has been halted and even considerably reduced as a result of the activities stimulated by the project. A social fabric has been woven, albeit as yet embryonic, but with sound grass-roots organizations already able to formulate proposals and co-execute infrastructure and productive activities.

(c) After almost ten years operating in a difficult institutional and economic environment, PROSALAFA succeeded in overcoming the main obstacle identified during its formulation, namely the scarcity of water for human consumption, irrigation and animal drinking places. This outcome was achieved through efficient and effective management and great success in motivation and grass-roots organization hitherto non-existent in the zone. However, the achievements are not yet sufficient to satisfy either the initial demand or the demand generated during the years of implementation.

The experience gained in the programming and implementation of surface water sources (including cisterns for water for human consumption) is a remarkable achievement which can and must be replicated in the future in the light of the huge demand present. The adoption of efficient irrigation technologies (e.g. "artisanal" and/or modern trickle, ferti-irrigation and integrated pest control) is another major success.

Nevertheless, efforts to collect water are rendered inefficient if irrigation technologies at farm level are primitive. Irrigation by flooding in semi-arid conditions is an enormous waste of the most vital and most scarce resource. In PROSALAFA, trickle irrigation is a technological leap which must be exploited based on the use of black plastic hoses to pipe the water from source to the place of application using natural gravity or pumps.

The dearth of experience in obtaining underground water for productive purposes precludes the drawing of lessons on its future feasibility, despite the elapse of years of implementation. At pilot level, at least, the project should have undertaken some such works in selected locations.

In the case of deep wells, where considerable investment is needed in drilling, the installation of pumping equipment, and its subsequent operation and maintenance, these characteristics were considered to render this solution non viable for the project's target producers. Moreover, it should be noted that the availability of sustainable underground water is a very complex subject in the Venezuelan semi-arid areas given the great competition for extraction and the current lack of a properly applied legal regulatory framework. However, any other action to exploit underground water at lesser depths was also abandoned. The project should have undertaken a series of tests to exploit the underground water beneath the beds of streams and rivers through shallow wells and filtration chambers. Such works are very cheap and can be carried out by the producers themselves.

The possibility of developing additional irrigated areas through wells, preferably, however, also using available resources to continue with cooperatively managed surface sources using pipelines, could help to improve the distribution which up to now has almost exclusively benefited beneficiaries owning land adjoining the existing ponds.

(d) PROSALAFA demonstrates the need to introduce integrated approaches to environment management in projects to combat rural poverty in the fragile ecological conditions of tropical semi-arid areas. The objective of achieving "rational management of natural resources" was only marginally achieved by the project because of weaknesses in implementation and the approach set out in the project design.

A series of actions must be taken, before the project is concluded, to ensure that activities are undertaken with a more integrated approach to soil, water and biomass management in semi-arid areas. Calculating the production of biomass is the only way of determining the necessary adjustment of the current burden of animal grazing in the project areas and, as far as possible, by watersheds and micro-watersheds. This would allow an initial estimated zoning of the project area taking account of the fragility of the environment in terms of resource constraints, water and vegetation, in order to set priorities and focus watershed management efforts on future animal grazing. At the same time, a study needs to be done in the near future on the resilience of feed biomass, both grasslands and natural and introduced woodlands, in order to measure the potential support for livestock based on feed balances and consistent with the climatic data collected at the same place.

It is important for the project to open up a range of assistance to goat-farmers who have not adopted the currently offered intensive or semi-intensive technological package, which by its nature concerns a minority of producers. As well as a vision centred on technical-production aspects, an alternative way of managing the natural grazing of the semi-arid areas should also be provided. By no means should what has been achieved be abandoned, but at the same time, the approach to technology transfer should be redirected to this kind of livestock farming.
The successful experiments in conservation of micro-watersheds (especially in Falcón) are an achievement whose extension and replication in other project areas would make the interventions more sustainable. It is of the utmost importance to involve more social and institutional actors with the necessary awareness and capacity for action to halt and reverse the process of soil degradation.

(e) PROSALAFA has reached almost 6 500 families in the area with various services, albeit primarily with activities to promote organization and training. These targets are a remarkable achievement compared with the initial situation. The training of producers is considered to be one of the most significant achievements of the project and a key factor in the increase, not only in the population's technical capacity, but also fundamentally in its self-confidence and organization.

In particular, in addition to the excellent agreements with co-executors, the establishment of the "rural facilitators" group should also be highlighted as an additional system for training and transfer of technology in the communities.

However, PROSALAFA, like other projects, started with a very broad range of subjects generally linked to project promotion actions. This process later results in "stagnation" in institutional provision and the possibility of satisfying the beneficiaries' more structured demands at lower cost is lost.

(f) Given the competitive advantages of the region in the production of fruit and vegetables under irrigation, both irrigation and the adoption of appropriate technologies to ensure viable productivity are an essential requirement if production is to be increased. PROSALAFA has contributed successfully to providing irrigable areas and the necessary technologies to the project beneficiaries even though the coverage is so far limited.

Indeed, fruit and vegetable production under irrigation in Lara State supplies almost the entire national demand for onions, tomatoes and peppers, and large percentages of melons and watermelons. The region's production of pineapples and other crops (e.g. zabila) is also the highest in the country. Large agricultural enterprises with major investments in irrigation systems are the main producers. Of course, they are also one of the main sources of non-farm employment for the rural poor in the region. This structural situation provides and will provide a permanent "market niche" for small producers to the extent that they can overcome technological constraints and improve marketing channels.

Over 6 000 producers were reached through 329 validation trials and over 6 700 technology transfer activities. During the implementation of PROSALAFA, new methods of technology validation and transfer were developed with the technology demonstration units (UDRT), local rural research committees (CIAL) and the establishment of rural facilitators (180). The validation of intensive or semi-intensive goat-farming models is a positive achievement even though there has so far been only limited take-up by producers.

However, the percentages of adoption of agricultural technologies are adequate but not optimal. As well as the water constraints, the adoption of technologies by more producers seems to have been hampered by the shortage of time to mature transfer activities, because it is only since 1998 that more efficient and innovative instruments, e.g. rural facilitators, UDRT and CIAL, have been included.

(g) The marketing of agricultural inputs and products is still an obstacle to achieving higher agricultural incomes among the beneficiaries. While there are stable and expanding markets for most of the market garden products, the marketing channels are still imperfect and allow intermediaries to make extraordinary profits. "Non-traditional" agricultural and animal products and artisanal products still require support to develop markets and more effective marketing channels.

The wide geographical spread of the small farms, the remoteness from "market centres" and the lack of organization of small farmers generate conditions in which intermediaries who approach the farms have a disproportionate bargaining power. The project has so far done little up to now to remedy this situation. For example, a daily information service on agricultural market prices and seasonal analysis of some agricultural products and live animals was started.

The project's efforts centred on the local context and training. Through participation in local fairs and exhibitions, the work of identifying markets was begun, and at the same time it was possible to launch forms of artisanal organization and strengthen the organization of productive activities. The marketing and micro-enterprises sub-component now needs more specific attention.

(h) The results obtained in relation to artisanal fishing fell far short of those envisaged in the IEA. The main activity programmed, the construction and provision of 30 boats to some 180 associated families, did not happen. This particular group of project beneficiaries continues to display situations of extreme poverty and marginalization.

Constraints of a cultural nature and network of power relationships involving intermediaries and shipowners appear to create strong barriers to association of artisanal fishermen, especially the poorest who are piece-workers.

(i) The results for cadastral surveys and titling were meagre. The programme envisaged obtaining title to all the land covered by the irrigation and watershed management component, but less than 160 cases could be regularized out of an estimated demand of over 1 100 farms. It remains important to continue to regularize the precarious land tenure of the small farmers.
The legal uncertainty as to land property rights persists in the project area. This situation could, in other circumstances, have been a major obstacle to the construction of water infrastructure works and other permanent improvements but, in reality, this does not seem to have been the case. The "de facto" possession of the improved land is respected by the communities and no cases of disputes were recorded. The PEU, rightly, decided to proceed with works even on farms without perfect title but with duly accredited evidence of possession. Nevertheless, the absence of titles of ownership is a considerable obstacle to guaranteeing formal credit transactions.

(j) The credit and financial services component was executed in a substantially different way from the original design which contained serious weaknesses both in estimates of demand for financing and the supply and channelling of credit resources. In financial terms, implementation achieved only 18 per cent of the amount originally programmed. PROSALAFA continued to reformulate the component throughout its execution so that there are now three co-existing modalities of credit (e.g. rural banks, FRAC and agreements with state funds). Analysis of experience and careful formulation of a sustainable rural financing strategy are critical aspects for the future.

PROSALAFA executes the component through three parallel and simultaneous lines of action. These lines were substantially different from those envisaged in the IEA which, in the view of the interim evaluation, is an appropriate, although not necessarily complete, adjustment to changes in the environment and the beneficiaries actual needs. In reality, no credit was ever made through ICAP (which granted high subsidies through negative real interest rates). A revolving fund for rural activities (FRAC) was funded by the project and agreements were signed with state funds with similar characteristics to ICAP (FONDAEL and FONECRA). The most novel and effective was the establishment of rural banks (similar to the PRODECOP model).

The rural banks, in fact, have proved to be a most successful experiment in rural micro-finance in the region as a powerful instrument of association among the target population. The vulnerability of these mechanisms is a challenge to be overcome in ensuring greater benefits of these financial services to the population involved.

Nevertheless, the financial services need to be reformulated to focus on sustainable rural micro-finance with the potential for growth. Mechanisms involving "hidden subsidies" masquerading as forms of credit should be avoided. When necessary, explicit subsidies should be adopted (as in the case of existing and approved works) and never through apparent credits that conceal subsidies in the financial conditions.

(k) The establishment of grass-roots organizations, virtually non-existent at the start of the project, has been extremely successful. The consolidation of the more highly developed organizations (e.g. formation of a second level of organizations at municipal or regional level) is as yet at an embryonic stage. Certainly, the sustainability of the actions and achievements to date will depend on establishing organizations at this level.

However, there has been no progress in higher level organizational models which unite producers and grass-roots organizations in the management of specialized services, such as marketing of inputs and products and financial services. Indeed, there is a fragmentation of small producers' organizations, often under the same heading, united on the basis of individual works, mainly ponds, which limits their involvement in economic activities on a more dynamic scale.

One of the causes, probably, is that there has been no proper monitoring of the execution of activities under agreements with state institutions and the impossibility of giving effect to the ideas generated by training. Thus producers are not much involved and have little impact in official decision-making bodies at local, municipal and state level. The vulnerability of the present grass-roots organization (including the rural banks) raises doubts as to the sustainability of the rural development actions initiated by PROSALAFA. This weakness must be corrected through a process clearly geared to achieving greater institutional strength and self-management capacity.

(l) The gender approach was successfully adopted by PROSALAFA despite the persistence of some conceptual and operational shortcomings. Although the project design addressed the gender theme through the "women in development" approach current at the time when it was formulated, the project itself aligned itself with the new gender in development approach, which indicates PROSALAFA's ability to adjust to progress in this subject.

The work on the gender approach was successful from the project perspective of providing women and men with access to services and achieving greater family integration in productive activities, crafts, micro-enterprises, credit and more equitable forms of family and social relationships.

However, the project did not develop a concerted strategy with the actors clearly and specifically setting out a gender strategy, with a conceptual framework, performance indicators, methodology and other forms of operation for the application of the gender approach and a monitoring system to measure progress and make adjustments. Nor were sufficient training sessions held for technical staff and there were no such events for basic producers.

(m) The PEU's management performance was more than satisfactory. The project maintained continuity of management and the majority of professional and technical staff for almost eight years. This continuity, truly praiseworthy given the institutional instability of the period allowed lines of activity to be maintained, consistent approaches and constant actions for the benefit of the target group albeit with material resources significantly below those budgeted. The monitoring and evaluation functions were adequately performed although with some operational weaknesses.

The decentralized execution of PROSALAFA was an advantage in preserving the project from the many changes in institutional authorities and office-holders. This would not have been sufficient if the PEU technical team had not maintained a high level of professionalism and the maximum possible independence from external pressures. In this respect, the importance of the mechanisms for competitive selection and contracting of the majority of its members should be emphasized. Certainly, the change in executing agency (from ICAP to CIARA) did not have a negative impact on the performance of the project activities.

The training, selection and assignment of "rural facilitators" as assistants to project services and agents of community change is also considered to be a highly positive management policy which enhanced the positive effects of the project. Certainly, the preliminary review of the available information also shows adequate capacity in contracting of civil works at costs apparently lower than the benchmark. In addition, the project rightly developed a policy of inter-institutional agreements with various public institutions at national or state level. Unfortunately, the lack of budgetary resources curtailed most of these activities. Inter-institutional relations with municipal or state bodies were never neglected by the project, but the results reflected varying degrees of success from one area to another and, in general, a balance of still unfinished work.

The interruption of the inter-institutional agreements with the Agricultural Research National Institute (INIA), the Environment and Natural Resources Ministry (MARN) and selected municipal authorities threatens the sustainability of several of the achievements. These agreements should be quickly restored and, in the case of the municipal authorities, efforts made to strengthen the permanent support services which they could provide.

The M&E system performed adequately, including the base study and the establishment of appropriate indicators to monitor the components as well as an excellent systematic analysis of the results. However, there are some operational weaknesses in collecting gender information and carrying out full impact studies.

The reasons behind the formulation and execution of the project persist. The extended execution of PROSALAFA (until the existing resources of the IFAD loan are exhausted) is fully justified in this situation, as is consideration of a second phase of the project. Without prejudice to the foregoing, the finalization of these proposals should necessarily include proposed solutions to some of the weaknesses identified.

Insights

The implementation of PROSALAFA provides the basis for drawing a set of insights to be considered in future projects both in the country and in other places with similar characteristics and problems. Clearly, preventing rural poverty in tropical semi-arid conditions is one of the most common problems in many countries in the region and the world. The main insights can be summarized as follows:

(a) Need to introduce integrated approaches for projects to prevent rural poverty in fragile environmental conditions in tropical semi-arid areas: the existence of semi-arid ecosystems in the tropics is generally associated with the presence of populations of rural poor. The interplay between the fragility of the ecosystem and the related low agricultural productivity lies at the root of the poverty found there. It is commonly perceived that the productive practices of small producers are associated with the destruction of natural resources and desertification. Faced with such a diagnostic, typical proposals concentrate on recommendations of an agronomic nature aimed at intensifying the agricultural activities of small producers and disseminating knowledge and practice on soil and water conservation. It should be added that these proposals do not necessarily include all the elements necessary to achieve an effective balance between the ecosystem and production. PROSALAFA offers an example where this type of proposal is frankly inadequate. Firstly, it ignores the presence of other economic and social actors (e.g. medium and large-scale livestock breeders and agriculture using irrigation; woodcutters; mining, etc.) whose activities (often on a much larger scale) also threaten the stability of the ecosystem. Secondly, reversing processes of desertification which have already started requires interventions in watersheds in which, because of their size, it is beyond the capacity of small producers to undertake works on the scale required. Finally, the necessary coordination of actions between the public sector (legislation, implementation and enforcement, large-scale public works, etc.), the private enterprise sector and small producers must be conducted in smooth collaboration. Otherwise the efforts of each of the parties may prove fruitless and vain. Consequently, in designing projects of this kind, all these aspects should be taken into account, both at the diagnostic stage and in the formulation of the proposals which conform the projects and the components within them.

(b) Appropriate use of underground water: the collection of water is vital to the subsistence and production of the inhabitants of semi-arid areas. A solution put forward in many cases (including PROSALAFA) is the construction of small dams to collect rainwater. These dams are less efficient in conserving the water collected than natural underground reservoirs. PROSALAFA recommended their use but the component was not implemented. In the case of deep wells, where major investment is needed for drilling and installation of pumping equipment and its subsequent operation and maintenance, it was considered that these characteristics made the solution non viable for the project's target producers. Moreover, it should be noted that the availability of sustainable underground water is a very complex subject in the Venezuelan semi-arid areas given the great competition for its extraction and the current lack of a properly applied legal regulatory framework. However, any other action to exploit underground water at lesser depths was also abandoned. The project should have undertaken a series of tests to exploit the underground water beneath the beds of streams and rivers through shallow wells and filtration chambers. Such works are very cheap and can be carried out by the producers themselves. The lesson is to analyse all the aspects involved so as to recommend the exploitation of underground water and introduce elements and techniques suited to the small scale operations of the poor producers.

(c) Introduction of high performance irrigation technologies: efforts to collect water are rendered inefficient if the irrigation technologies at farm level are primitive. Irrigation by flooding in semi-arid conditions is an enormous waste of an extremely vital and scarce resource. In PROSALAFA, trickle irrigation is a technological leap which must be exploited, based on the use of black plastic hoses to pipe the water from source to the place of application using natural gravity or pumps. Future designs must consider including the technically and economically most efficient technologies.

(d) Training as a process of modular training by strategic subject areas: this approach will be much more effective and efficient than a series of totally unconnected events highly reliant on what is on offer from institutions. PROSALAFA and other projects start with a very broad range of subjects generally linked to project promotion actions. The problem is that this is followed by "stagnation" in institutional provision and the possibility of satisfying the beneficiaries' more structured demands at lower cost is lost.

(e) Rural facilitators: strengthening local capacities and the sustainability of many project actions involve the training of rural facilitators who must be associated with producers' organizations and public and private institutional provision. The design of future projects should seriously consider their inclusion in training, organization and technology transfer activities.

(f) Credit and financial services: the design of these components very often appears to be inconsistent with the rest of the components. In PROSALAFA, the original design proved, in the light of the realities of implementation, excessive and lacked adequate operating mechanisms. Certainly, most of the investment and capital assigned by the beneficiaries was self-financed or financed from credits for much lower amounts than originally formulated. The rural banks model which meets the needs for operating credit and is based on self-management of community savings and capital does appear to have satisfied existing demand. On the other hand, this innovation does not appear to have been accompanied by an "exit strategy". The evolution and consolidation of these mechanisms raises questions which must be answered if this excellent initiative is not to fail. The lesson learned is to design this component in more flexible terms and to identify "comprehensive models" for the development and consolidation of sustainable mechanisms of rural micro-finance.

(g) Conditions for the stability and efficiency of the PEU: PROSALAFA is an example of how despite the extreme political and institutional instability, the PEU maintained a single management with little staff turnover and performed with great efficiency. An analysis of this situation shows that two lessons can be learned: (a) that the appointment of PEU managers and professionals should be through open and fair competition; and (b) that management decisions should enjoy a wide degree of autonomy from the authorities and institutions involved.

Recommendations

The Recommendations have a dual purpose: to contribute to a better conclusion of the project (up to June or December 2003) and to assist in the design of any second phase. The Recommendations are set out under the following headings:

(a) On the soil and water management component: the following are recommended: (1) to continue works for the exploitation surface water resources in line with demands identified by producers' organizations, setting priorities for scarce financial resources; (2) tapping water, if only at pilot level, with shallow wells for small groups of producers. The possibility of irrigating additional areas managed cooperatively (with wells or ponds) and the use of hoses, could help to improve the distribution which so far has been almost exclusively confined to beneficiaries who possess land adjoining existing ponds; (3) implementing a series of actions, before the end of the project, to ensure that the activities undertaken take a more integrated approach to soil, water and biomass management in semi-arid areas; (4) commission a survey of the productive capacity of the existing natural grazing using satellite techniques which are low cost in relation to the benefits. Calculating the production of biomass is the only way of determining the necessary adjustment of the current burden on animal grazing in the project areas and, as far as possible, by watersheds and micro-watersheds; (5) undertake an initial estimated zoning of the project area taking account of the fragility of the environment in terms of resource constraints, water and vegetation, in order to set priorities and focus watershed management efforts on animal grazing in the future; (6) commission in the near future a study is needed on the resilience of feed biomass, both grasslands and natural and introduced woodlands, in order to measure the potential support for livestock based on feed balances and consistent with the climatic data collected at the same place; (7) extend the pilot surface areas by constructing larger water collection zones using rainwater harvesting techniques; (8) in the case of ponds for animal watering and mixed use, it is important to consider an effective perimeter fence, as originally planned, to restrict access by animals to drinking ponds, prolong their useful life and create an anti-parasite barrier; (9) it is suggested that the PEU and producers should undergo training in basic techniques on management of natural resources for grazing in the semi-arid areas of Falcón and Lara States. Becoming familiar with these aspects is a necessary step in being able to have a significant impact in the project area in the next few years.

(b) On the support to production component: (1) introduce the practice of "rainwater harvesting" to maximize the critical forage balance which encourages the process of desertification from which the region suffers; (2) increase the transfer of trickle irrigation technology and other water-saving practices; (3) the project should extend the range of provision to goat farmers who do not adopt the intensive or semi-intensive technological package offered up to now, which by its nature applies to only a minority of producers. From a vision centred on technical-production aspects, an alternative should be provided in the form of management of the natural semi-arid grazing. Under no circumstances should the achievements to date be abandoned, but at the same time the focus of this sub-component should be re-aligned; (4) establishment of an agreement with the normal education system with a student population of over 8 000 to introduce the environment and its protection as a core subject; (5) the identification of training provision should include demand from the regional environment and not confine itself strictly to the project areas so as to increase the competitiveness of the local labour force which, inevitably, will migrate temporarily to those destinations. It is recommended that a start be made on designing mechanisms to include these training requirements; (6) strengthen the facilitators' initiative in Falcón State in publishing the journal "El Semiárido" with logistical and training support in coordination with FUNDALECTURA, and try to create the basis of a similar experiment in Lara State, as well as selecting new case studies of experiences of producers involving rural facilitators in organizing them; (7) form a central unit concerned with marketing and micro-enterprises for the two states. Marketing will require more attention devoted to "non-traditional" products of local micro-enterprises; (9) for artisanal fishermen, a specific study is recommended on the functioning of this productive and social subsector in order to design more appropriate interventions to combat poverty and promote their economic and social development before the conclusion of the project. The results of this study should be used as inputs for the formulation of a specific component in any second phase of PROSALAFA; (10) continue the actions in progress on titling and for new ones adjust to the forms of presentation sponsored by the National Land Institute (INTI).

(c) On the credit component: (1) A moderate amount of the project credit resources should be channelled to the rural banks. These are the soundest base for proper allocation and collection of loans. This does not mean that the FRAC's operations should be curtailed but that they should be exclusively linked to the rural banks or their associates; (2) reservations are expressed concerning the channelling of credit resources through the regional funds. Until the costs and income structure of these funds have been thoroughly analysed, it would be sensible to reduce the level of these operations; (3) it is recommended that only positive real interest rates should be used; (4) to consolidate the system of rural banks, it is recommended to open a dialogue with representatives of the banks in both states, with a view to forming a second level entity (union, federation or association) which can take responsibility for aspects crucial to their development.

(d) On gender: (1) in collaboration with CIARA, consolidate the experience of work in the field on gender and focus actions on families or rural facilitators selected to apply these approaches; (2) establish regulatory measures to provide greater opportunities for new community leaderships, with emphasis on those with least experience of decision-making – women, young people – with training support; (3) the project should engage a specialist to further develop methodological mechanisms for reaching the family and an information system showing the participation of men and women separately.

(e) On organizations: (1) definition of an exit strategy and sustainability strategy involving links with municipal and state governments and institutions; (2) establish the bases for the creation and strengthening of larger organizations; (3) stimulate legalization of civil associations; (4) develop dialogue with and advice to state governments to generate mechanisms for institutional collaboration between public and private entities; (5) equip facilitators with better knowledge, qualifications and skills, promote networking between them and present them as service-providers to institutional authorities, private organizations, municipalities and state governments.

(f) On actions at governmental level: (1) the Government will have to provide budgetary credits to allow the use of still unutilized resources from the IFAD loan and the counterpart local resources to complete a series of outstanding activities, many of them listed above, within a period of not more than 12 to 14 months; (2) national institutions and those of Lara and Falcón States should form a minimum organic structure, using their own financial and human resources, to follow up on specific actions and consolidate organizational and economic processes among the population assisted by PROSALAFA; (3) it is of the utmost importance to maintain the PEU teams fully operational until the completion of the project. Strictly speaking, if a second phase of PROSALAFA materializes, the PEU teams must play an active role in the formulation work as the counterparts of the international expert teams. It is recommended that the position of the PEU technical teams should be confirmed until completion of the project and beyond, in the event of a transition to a second phase; (4) in particular, for the purposes of "closing off the project" properly or formulating a second phase, it is extremely important to have the M&E unit fully operational and carrying out several activities which are still unfinished. It is especially recommended that the M&E unit be kept fully functioning to complete the project monitoring and impact evaluation reports, and to complete the studies which will serve as inputs for the formulation of a second phase, as well as conceptual inputs for the formulation of future projects in the country.

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1. Environment Expert); Mr Hans Nusselder (Credit Expert); and Mr Héctor Ortega (Gender and Organizations Expert). Prof. Saulo Olavarrieta (National Expert in Semi-arid Hydrology) also participated in the Mission, financed with local resources. Mr Paolo Silveri, Evaluation Officer/IFAD, joined the Mission during the last week in the field.
2. For details, see the Ex ante Evaluation Report (IEA), IFAD 1991.
3. For further details, see Appendix 2 to the Main Report.
4. For details, see Appendix 3 and the Main Report.
5. See Appendix 6 to the Main Report for details of Evaluation Criteria: Orientation Framework.