1 Final Evaluation of ProAgro– 2006-2012: Lessons Learned from Six Years of Cooperative Agriculture Development in Angola Project Administrator: CLUSA Primary Funders: USAID and Chevron Evaluator: Emile G. Nadeau, PhD May 2012 2 Acknowledgements Teresa McGhie, Mission Director, USAID/Angola and USAID staff who participated in the review of the preliminary results of the final evaluation on May 10, 2012. Gomes Cambuta, Agriculture Sector Coordinator, Chevron - Corporate Responsibility, PGPA - Southern Africa Strategic Business Unit João Ferreira Neto, General Director, National Coffee Institute. Carlos Abrantes, Director, Provincial Department of Agriculture and Rural Development(DPADR), Benguela. William Allmart, Senior Program Manager,and Emily Varga, Associate Program Manager, NCBA￾CLUSA/US. Estevao Rodrigues, ProAgroChief of Party, and ProAgro staff, in particular Alvaro Veloso,Coordinator/Coffee Value Chain—Kwanza Sul, and Armando Romeu,Coordinator/Banana Value Chain—Benguela. Max Ochoa, coffee production training consultant, Neumann Foundation/EDE Consulting. Pascoal Miranda, chief of agriculture in Amboim. César Lisboa, President of CESACOOPA. And a special thanks to all of the producers in Kwanza Sul and Benguela who hosted me on their farms and provided valuable information for this evaluation. 3 Acronyms ADFP Agricultural Development and Finance Program ADRA Action for Rural Development & Environmental Protection BDA Development Bank of Angola BPC Savings and Credit Bank CCPF Coca-Cola Project Fund CAE Business Development Center CESACOOPA Service Center for Amboim Cooperatives CLUSA Cooperative League of the USA CNFA Citizens’ Network for Foreign Affairs ECI ECI-Africa, a subsidiary of DAI, based in South Africa EDA Station for Agrarian Development: Municipal representation of IDA FCA Faculty of Agronomy GoA Government of Angola ICCO Interchurch Organization for Development Cooperation (a Dutch NGO) IDA Institute for Agrarian Development IIA Institute for Agronomic Research IR Intermediate Result MINADERP Ministry of Agriculture, Rural Development and Fisheries NCBA National Cooperative Business Association INCA National Coffee Institute TA Technical Assistance UNACA National Confederation of Farmer Associations and Cooperatives ECA Field Schools of Agriculture DPA Provincial Director of Agriculture 4 Executive Summary “Final Evaluation of ProAgro – 2006-2012: Six Years of Cooperative Agricultural Development in Angola” presents an evaluation of the Agricultural Development and Finance Program (ADFP,also referred to as ProAgro) begun by CLUSA1 in Angola in September 2006 and scheduled to end in September 2012. The project was primarily funded by USAID and Chevron. Key partners in the implementation of the project were the National Coffee Institute (INCA), the Neumann Foundation/EDE Consulting,ICCO, and DPADR/IDA-Benguela. The report begins with a brief review of the historical and contemporary context of the project in Angola. It then presents an historical overview of ProAgro, including a presentation of the primary goals and objectives of the program. These goals and objectives are then analyzed quantitatively and qualitatively. This review is based on documentary data collected, and observations made, by the author during a three-week visit to the program in late April and early May 2012. The final two sections of the report present the reviewer's conclusions and recommendations related to the program. The emphasis in these concluding sections is on lessons learned from the six years of CLUSA's agricultural cooperative development experience that can be applied to future such projects – especially related to coffee and bananas – in Angola and also to similar agricultural cooperative development projects in other countries. Six case examples from the coffee component of the project in Kwanza Sul and the banana component in Benguela are presented in Annex 1. The major findings of the evaluation are that: ProAgro has been largely successful in carrying out a value chain project that has benefited over 6,000 farmers in Kwanza Sul, Benguela and Bengo provinces. It has set the stage for increases in production and marketing for the future through its development of 25 cooperatives, 12 co-op service centers, CESACOOPA ( a union of cooperatives in Kwanza Sul), and the proposed Cooperative Federation in Benguela. ProAgro has accomplished its objectives for: o Increasing involvement of coffee and banana producers in improved production practices; o Increasing banana production and marketing ; and o Cooperative development. It has fallen somewhat short of its objectives for: o Assisting producers to access loans; and o Increasing market linkages. 1 CLUSA stands for Cooperative League of the USA which is the international division of the National Cooperative Business Association (NCBA). 5 ProAgro’s shortcomings in these latter two areas are partly explained by: o Lenders’ resistance to providing credit to producers; o The presence of an informal market for both coffee and bananas that absorbed almost all production without the need for a formalized market; and o In the case of coffee, a crop with a 4-5 year development period prior to harvesting. Both coffee and banana production now appear to be nearing a critical mass in which coordinated marketing through CESACOOPA, the planned Cooperative Federation in Benguela, and the co-ops have the potential to play major roles in increasing producer returns and continuing production and productivity. The primary recommendation of the report is that funds be made available to pay for a technical assistance team to work with CESACOOPA and its member cooperative service centers, and a second technical assistance team to work with the Federation of Cooperatives that is under development in Benguela. The technical assistance teams would assist CESACOOPA, the Federation and their member cooperatives and farmers in the same four service activities in which ProAgro was involved – production assistance, cooperative development, assistance with loans and business plans, and marketing assistance. By the end of three years, the goal would be to have both CESACOOPA and the Federation have their own professional management and service staff and be operating as profitable businesses. 6 Table of Contents Acknowledgements 2 Acronyms 3 Executive Summary 4 A. Introduction 7 B. Country Context 8 C. An Introduction to ProAgro (ADFP) 9 D. A Review of CLUSA/ProAgro Performance – 2006-2012 11 E. Statement of Conclusions 19 F. Statement of Recommendations 23 Annexes 1. Case Examples 25 2. ProAgro Results Framework 32 3. Scope of Work 34 4. Bibliography 36 5. Consultant's Trip Journal 37 7 A. Introduction This report presents an evaluation of the Agricultural Development and Finance Program (ADFP,also referred to as ProAgro) begun by CLUSA2 in Angola in September 2006 and scheduled to end in September 2012. The project was primarily funded by USAID and Chevron. Key partners in the implementation of the project werethe Institute for Agrarian Development the National Coffee Institute (INCA), the Neumann Foundation/EDE Consulting,DPADR/IDA￾Benguela, and NGOs such as ADRA (Rural Action for Rural Development and Environmental Protection), UNACA (National Federation of Farmer Associations and Agricultural Cooperatives) and AAEA (Angolan Association for Adult Education). The report begins with a brief review of the historical and contemporary context of the project in Angola. It then presents an historical overview of ProAgro, including a presentation of the primary goals and objectives of the program. These goals and objectives are then analyzed quantitatively and qualitatively. This review is based on documentary data collected, and observations made, by the author during a three￾week visit to the program in late April and early May 2012. The final two sections of the report present the reviewer's conclusions and recommendations related to the program. The emphasis in these concluding sections is on lessons learned from the six years of CLUSA's agricultural cooperative development experience that can be applied to future such projects – especially related to coffee and bananas – in Angola and also to similar agricultural cooperative development projects in other countries. There are six annexes attached to the report: Annex 1 presents six case examples related to ProAgro's work in coffee and banana production and marketing. Annex 2 contains the detailed results framework used by ProAgro to track its performance. Annex 3 provides a description of the consultant's scope of work. Annex 4 presents a bibliography of resources used in the preparation of the report. Annex 5 contains the consultant's trip journal chronicling activities during his three weeks in Angola. 2 CLUSA stands for Cooperative League of the USA which is the international division of the National Cooperative Business Association. 8 B. Country Context Angola achieved independence from Portugal in 1975. The period from 1961 to 2002 in Angola was marked by civil strife – first by a 14 year war of independence and then by 27 years of civil war. Both of these events took a severe toll on farmers and other rural residents of the country. Most Portuguese landowners fled the country shortly after independence and many Angolans fled the countryside during the years of conflict for the comparative safety of urban areas.3 During the colonial period, the Portuguese used a system of forced labor to establish large agricultural plantations, primarily producing coffee, bananas, sugar cane, sisal, and other export products. For example, at the height of colonial production, coffee volume exceeded 225,000 metric tons per year.4 The decades of violence and the precipitous departure of the Portuguese, including plantation owners, caused agricultural production to plummet. Since 2002, the country has been gradually rebuilding its agricultural infrastructure with a focus on coffee, bananas, pineapples, potatoesand other crops. To date, almost all of these agricultural products have been consumed domestically, although the policy of the Angolan government is to increase production, especially of coffee and bananas, so that these products can again become major export items. In the immediate postwar years, the primary need was to provide emergency aid to ensure that people had enough food and other basic necessities. USAID, Chevron and many other international donors played a role in helping Angola meet these emergency needs.5 Chevron was committed to the economic recovery of Angola both for humanitarian reasons and because of its long-term involvement in the development of the country’s oil resources. In 2006, the company agreed to partner with USAID to shift from an "emergency aid" to an "agricultural development" approach in the country. Chevron donated $3 million to USAIDfor the Agricultural Development and Finance Program, which became known as ProAgro. USAID added $2.7million of its own funds to launch this program to accelerate agricultural development in Angola. A five-year contract was awarded to CLUSA in September 2006 to administer the program.6 3 “History of Angola,” Wikipedia, http://en.wikipedia.org/wiki/History_of_Angola 4 Economic Analysis of the Coffee Sub-Sector in Angola, ECI Africa, May 2008. 5 Interview with Gomes Cambuta, Chevron, April 24, 2012. 6 Total funding for the project was later expanded to $10.8 million and the project was extended to six years. 9 C. An Introduction to ProAgro (ADFP) From the beginning “the overarching goal of ADFP [was] to increase the growth of selected commodity value chains, creating greater business opportunities and capabilities of small- and medium-scale farmers, and related entrepreneurs.” 7 However, there were several major changes in emphasis along the way in carrying out this broad goal. In looking at the work plans and annual reports over the first five and one half years of ProAgro, three main phases to the program can be identified. 1. Start-up and diversified production and marketing.Much of the work during the first two years of the project was focused ontwo main activities: Conducting research and developing an action plan for the project. In particular, ECI Africa, a CLUSA partner and subgrantee, prepared economic reports on the potential for Angola's developing domestic and export markets for bananas, coffee, and potatoes. Initiating a broad array of "value chain" activities in the above threeproduct areas and in horticulture in four provinces: Bengo, Benguela, Huila and Kwanza Sul. 2. A focus on coffee and bananas. During the third year of the project in 2008, there was a major shift in emphasis to the production and marketing of bananas in Benguela Province and of coffee in the Amboim area of Kwanza Sul Province. 3. Preparation of producers and cooperatives for self-sufficiency. The final two years of the project have concentrated on implementing an exit strategy for ProAgro. In addition to ongoing ProAgro activities, this process include: Assisting cooperatives in both provinces to establish service centers; Working with the coffee cooperatives in Amboim to develop a union of cooperatives called CESACOOPA; and Helping to develop a federation of cooperatives in Benguela (currently under development). The intent of these activities has been to increase self-reliance among farmers and cooperatives in both production and marketing, and to increase the interest of relevant government agencies and financial institutions in providing production and marketing assistance. 7 CLUSA Contract with USAID, September 2006. 10 Prior to the beginning of the project, CLUSA developed a "results framework" as a means to measure ProAgro's performance related to four areas of activity: Technical assistance to producers; Development of cooperatives; Access to financing and business services; and Market linkages. As is clear from these four priority areas, ProAgro defined its overall goal as strengthening the "value chain" for agricultural producers and products. The key components of this value chain are: Improving the production practices of farmers; Developing associations and cooperatives as a means to train farmers, help them secure loans and link them to the market; Assisting farmers and cooperatives to get access to credit and other business services in order to improve production and marketing; and finally, Working with farmers and co-ops to access inputs and to improve their domestic and, eventually, export marketing. A complete list of the components of ProAgro's results framework is presented in Annex B. The next section of the report provides a review of CLUSA’s performance in carrying out its value chain objectives. 11 D. A Review of CLUSA/ProAgro Performance – 2006-2012 1. Overall ProAgro Plan Versus Performance The following table provides an overview of ProAgro's performance in comparison with its initial objectives. ProAgro Program: Plan vs. Performance is Measure Plan Performance 1. Producers 3,800 6,300 2. Associations -- 104 3. Cooperatives -- 25 4. Co-op service centers -- 12 5. Loans $9 million $4.7 million 6. Market transactions $24 million $24.8 million Several things are apparent from this table. The project is now serving far more producers that was originally intended. In fact, the original objective has been exceeded by about 2,500 producers, or two-thirds more than the target. Secondly, the project did not have specific objectives for the number of associations and cooperatives to be created. Thus, there is no benchmark point of comparison for these two indicators. The same is true for the development of cooperative service centers. Although, in both the cases of co-ops and service centers, their development has the potential to play a critical role in continuing the benefits of ProAgro after the project is completed. The project assisted farmers to access only about half the amount of credit that had originally been projected. The shortfall in attaining this objective is discussed later in the report. Finally, the project appears to have achieved its objective related to market transactions. However, this turned out to be a problematic indicator to measure primarily because of the many informal transactions that have taken place, especially in the sales of coffee, bananas and other agricultural products – for example, local market women buying products directly from producers at their farms. It is extremely difficult to track these informal transactions. 12 2. Coffee: Historical Background and Plan Versus Performance Analysis a. Historical notes The National Coffee Institute (INCA) had begun working with producers in the Amboim area of Kwanza Sul province to rehabilitate coffee farmsprior to the involvement of ProAgro. INCA entered into a $150,000 contract with CLUSA from June 2007 to May 2009 to assist in the organizing of farmers associations to facilitate training and access to credit. This initial contract was followed by a partnership agreement that will be in effect through September 2012. CLUSA contracted with the Neumann Foundation/EDE in 2010 in order to improve technical assistance to coffee growers and to provide training-for-trainers assistance to INCA. This is the context in which to compare ProAgro's plan versus performance related to coffee. Coffee: Plan vs. Performance Table Measure Plan Performance 1. Producers 4,000 5,015 2. Producers with improved practices -- 4,700 3. Improved hectares -- 4,7008 4. Associations -- 103 5. Cooperatives 15 14 6. Cooperative Service Centers 13 7 7. Loans -- $2.3 million 8. Market transactions -- $1.4 million b. Notes on coffee performance Following are a few observations related to the data presented in the above table. i. The number of assisted farmers is over 20% above the initial target. INCA's records of site visits to producers' fields indicate that a high percentage of producers participating in the program – over 90% – are in fact carrying out improved practices on their coffee plots. INCA also estimates that the average producer is cultivating one hectare of coffee. 8The data on producers with improved practices and number of hectares are from a recent report entitled“LEVANTAMENTO DOS COOPERADORES ENVOLVIDOS NA PRODUÇÃO DE CAFÉ,” prepared by CLUSA and INCA. 13 ii. CLUSA has developed 14 cooperatives, just one fewerthan its original objective of 15. In addition, it has organized CESACOOPA, which is a union comprised of these 14 cooperatives. Six of these cooperatives and CESACOOPA are in the final stages of completing the construction of service centers, all of which will be finished by June 2012.9 Because of limited funds, CLUSA made the decision to assist with the construction of only seven centers at this time. Staff chose cooperativesfor the initial round of service centersbased on their level of development as co-ops and their willingness to provide matching funds and in-kind contributions to the construction of the centers. iii. The $2.3 million in loans was provided through an agreement with INCA and BPC using funds from the Government of Angola.About 4,900 producers receivedthree-year micro-loans averaging $500 in 2007 and 2008 through this program. Thus far, there has been a low repayment rate, estimated at about 40%, on these loans. There are several reasons for this low repayment rate: the treatment of these loans by some producers as if they were grants; the provision of three-year loans on a crop that takes five years to come to maturity; and the lack of enforcement of loan repayment. Several people with whom the author of this report spoke were optimistic that the loan repayment rate would increase substantially as a result of many plots of coffee becoming ready for harvest in the 2013-2015 time period and the requirement that delinquent loans be repaid before producers could receive new loans. iv. As mentioned in regard to market transactions in the overall ProAgro table, this turned out to be a difficult indicator to measure because of all the informal activity related to inputs and sales. c. Accomplishments related to coffee i. Approximately 4,700 producers are using improved coffee production practices as a result of the partnershipamong INCA, CLUSA and the Neumann Foundation/EDE. ii. The farmerfield schools, demonstration plots and training of trainers programs appear to be working effectively.(Note that there are brief case studies presented in Annex 1 illustrating a field school and a demonstration plot.) iii. Because of the large number of producers using improved practices, INCA, 9 These service centers as well as four service centers in Benguela Province and one in Bengo Province were jointly financed by ProAgro, ICCO (a Dutch NGO), and local cooperatives. 14 ProAgro and Neumann anticipate major increase in production in 2013, 2014 and 2015. One set of recent performance levels and future projections estimated by INCA and ProAgro show the following: Coffee Production and Projected Production by Amboim Co-op Producers10 Year Tons of Coffee 2010 1300 2011 1600 2012 1000 (drought conditions) 2013 2500 2014 3500 2015 4000-5000 If the above projections are on track, they will represent more than a tripling of production between 2010 and 2015. iv. Six cooperative service centers will be completed by June 2012. v. CESACOOPA cooperative union has been registered as a secondary cooperative and its service center is already operational. It is currently in the midst of its first coffee sale; 39 tons are being sold to Kotomar, which, in turn, is exporting the coffee to South Korea. d. Areas for Improvement related to coffee i. Increase producer loans and loan repayments. Problems related to past loans include: Low repayment rates; 3-year loans for a 5-year crop; Insufficient sources of credit; and The lack of land titles by most producers, and, thus, the inability to use landas collateral. ii. Improve monitoring of producer production and productivity. This can be accomplished by having periodic site visits to all producers’ coffee plots and keeping well-organized records of these visits. iii. Improve coordination of quality control and marketing. iv. Strengthen business and management expertise of co-op and union boards of directors and managers. e. Next Steps related to coffee i. Prepare business plans for co-op and union service centers. 10 Estimates made by Pascoal Miranda in an interview conducted April 27, 2012. 15 ii. Improve tracking of producer practices and production data. iii. Conduct a careful analysis of expected net earnings per hectare from coffee production for small and medium scale producers. This should be done in June and July 2012so that producers have realistic expectations regarding their financial returns. iv. Form a technical assistance team to work with CESACOOPA and co-ops after ProAgro ends – providing production assistance, co-op development, credit and business planning, and market linkages. 3. Bananas: Plan Versus Performance Analysis a. Plan vs. performance data Bananas: Plan vs. Performance Table Measure Plan Performance 1. Producers 400 722 2. Producers with improved practices 400 222 a. Smallholders 166 b. Commercial with 5+ has 56 3. Improved hectares 400 573 4. Improved productivity (Mtons/ha) 45 45 5. Cooperatives -- 7 6. Cooperative service centers 5 4 7. Loans -- $1.9 million 8. Market transactions -- $21.2 million b. Notes on banana performance i. ProAgro is serving over 75% more producers that were projected in the original plan. However, a little less than one third of these producers are engaged in improved banana growing practices. Part of the reason for the shortfall is the loss of two cooperatives resulting from a cut-off of their irrigation. ProAgro added two new smallholder cooperatives to replace these inactive co-ops, but demonstration banana plots are just beginning in both co-ops. ii. Medium-scale farmers account for the large majority of banana production in Benguela. As the table indicates, there are 56 producers with five or more hectares. These producers account for most of the 573 improved hectares in the program. As a result of their involvement, the project has exceeded its goal for improved hectares by almost one-third. ProAgro staff in Benguela project that roughly 600 ha of bananas will be planted before the end of 2012. If this projection is accurate, it will more than double the amount of 16 bananas under cultivation. Most of this new banana production will come from medium-scale and large farmers. iii. ProAgro's goal was to increase the productivity of bananas to 45 tons per hectare. Project staff estimate that they are on target to achieve this level of productivity. In fact, estimates for the banana yields in 2012 and 2013 are expected to significantly surpass this objective. iv. There are seven cooperatives in operation in Benguela, four of which will have completed service centers by June 2012. In addition, ProAgro and the cooperative leaders are planning to form a Cooperative Federation to jointly serve the cooperatives and their members in the province. v. As with coffee, accessing loans has been difficult for banana producers and for many of the same reasons, especially reluctance of lenders to make such loans in the absence of government subsidies and/or guarantees. vi. Also as with coffee, the data on market transactions is not very useful because of the amount of bananas that are sold on the informal market and are, thus, very difficult to track. c. Accomplishments related to bananas i. The number of producers involved in co-ops are well in excess of the initial objective. ii. The initial production objective for bananas has been exceeded by over 40%. iii. There is an excellent prognosis for additional banana production in 2012 and beyond. iv. Four co-op service centers will be completed by June 2012. d. Areas for Improvement related to bananas i. Increase the number of small producers involved in commercial production.11 ii. Improve access to commercial loans for small and medium producers. iii. Repair existing irrigation systems and develop new ones. iv. Improve quality control and marketing coordination. e. Next steps related to bananas i. Form a Cooperative Federation for Benguela co-ops. ii. Prepare business plans for the Federation and co-op service centers. iii. Conduct a careful analysis of expected net earnings per hectare from banana production for small, medium scale and large producers. This should be done in June and July 2012so that producers have realistic expectations regarding their financial returns. 11 In Benguela most of the producers who are members of co-ops developed by ProAgro are smallholders. However, only a minority of them are growing bananas commercially. Thus, the stage has been set for increased smallholder commercial production. 17 iv. Form a technical assistance team to work with the Federation and co-ops after ProAgro ends – providing production assistance, co-op development, credit and business planning, and market linkages. v. Rehabilitate or develop irrigation systems, prioritizing small producer fields. 4. Horticulture: Plan Versus Performance Analysis Horticulture: Plan vs. Performance Measure Plan Performance 1. Producers -- 594 2. Cooperatives -- 4 3. Cooperative service centers 1 1 4. Loans -- $.5 million 5. Market transactions -- $.15 million a. Notes on horticultural performance i. Horticultural producers in Bengo Province have increased production and improved productivity as a result of ProAgro assistance. ii. There are 4 functioning co-ops, one of which will have a service center completed in June 2012. iii. However, with a primary focus on coffee and bananas, horticultural assistance has become a secondary part of the program beginning in 2008 and 2009. iv. The primary proposed next step is to assist the four co-ops to hire a consulting manager for the service center (which would assist all four co-ops) so that they can transition into self-sustaining businesses over a three-year period. v. ProAgro should discontinue services to the horticultural co-ops in September 2012 in order to concentrate on coffee production and marketing in Kwanza Sul and banana production and marketing in Benguela. 5. Summary Review of ProAgro Performance a. ProAgro has accomplished its objectives for: i. Increasing involvement of coffee and banana producers in improved production practices; ii. Increasing banana production and marketing ; and iii. Cooperative development. b. It has fallen somewhat short of its objectives for: i. Assisting producers to access loans; and 18 ii. Increasing market linkages. c. It is important to note that ProAgro faced challenges outside of its control in accessing credit for producers and in strengthening market linkages, including: i. Lenders’ resistance to providing credit to producers as described above; ii. The presence of an informal market for both coffee and bananas that absorbed almost all production without the need for a formalized market; and, iii. In the case of coffee, a crop with a 4-5 year development period prior to harvesting. d. Both coffee and banana production now appear to be nearing a critical mass in which coordinated marketing through CESACOOPA, the planned Cooperative Federation in Benguela, and the co-ops have the potential to play major roles in increasing producer returns and continuing production and productivity. However, as discussed in the next two sections of the report, future development could be jeopardized by a lack of continuing technical assistance related to production, marketing and business development. 19 E. Statement of Conclusions The analysis of quantitative data and qualitative observations presented in the preceding section of this reportindicates that ProAgro Angola has achieved most of its objectives. 1. Shifts in Project Emphasis As the information presented above indicates, the achievement of these objectives has not always been easy or straightforward. The project has had several shifts in emphasis over the last 5 1/2 years. Some major shifts include: ProAgro narrowed its focus to primarily coffee and bananas beginning in year three while dropping potatoes and substantially reducing the role of horticulture. The purpose of this shift was to create greater focus for the project. The project has had varying priorities regarding working with small, medium and large farmers. It appears to have been pushed and pulled by different demands: maximizing productivity by working with the best and largest farmers vs. increasing the incomes of small farmers by including them in the program. Even now, it appears that most of the project’s work in Gabela is with small coffee producers, while in Benguela it is working with a high percentage of medium farmers. ProAgro increased its role in improving coffee productivity in 2010, primarily through a subcontract with the Neumann Foundation/EDE. This shift in emphasis occurred fairly late in the project, especially considering that coffee requires a 4 to 5 year period of growth before it begins significant production. The renovation of a roadway in the Catumbela area in 2008 resulted in the closure of a major irrigation canal. The loss of this source of water effectively put the farmer-members of two cooperatives that ProAgro had developed out of business. The construction of CESACOOPA's service center and elevenother cooperative service centers did not occur until 2012. A major consequence of this is the very short time period during which ProAgro staff will be able to work with CESACOOPA and cooperative boards of directors on the development and implementation of business plans for the centers. (This issue is also discussed in the Statement of Recommendations.) 20 2. Lessons Learned Several lessons can be learned from the 5 1/2 year history of ProAgro. a. Even though the shift in emphasis was somewhat disruptive, it appears that the focus on two major crops – coffee and bananas – in two regions – Amboim and Benguela – was an effective way to concentrate resources and generate better results. b. The "value chain" design of ProAgro -- combining assistance with production, cooperative development, financing and business development, and development of market linkages -- is an excellent one.However, in Amboim ProAgro played only an indirect role in providing production-related services until 2010, at which time it contracted with Neumann Foundation/EDE Consulting to provide these services. As a result of the long development period required for coffee, this late involvement in improving productivity created a break in the value chain. Therefore, much of the increased production of coffee will not occur until 2013. c. Some of the shifts in emphasis of ProAgro may have been avoided or minimized if there had been a clear agreement among decision-makers influencing ProAgro's mission at the beginning of the project. The fact that several significant changes occurred during the course of the project may have reduced the project's overall effectiveness. d. Monitoring and evaluation indicators should be closely linked to the key outcomes a project is intended to achieve. There appear to be some gaps in the M&E model that ProAgro was asked to use by USAID in this regard. For example, if the project was intended to increase farmer revenue, there should have been an indicator that measured that. Also, if the project was intended to increase the number of farmers using improved production techniques for bananas or coffee, there should have been indicators that measured these increases. If the goal of the project was to develop cooperatives, there should have been measurable objectives related to the number and quality of cooperatives to be developed. And so on. e. A key part of ProAgro's exit strategy is the completion of CESACOOPA's and cooperative service centers. This is an important project component. However, a better strategy would have been to construct the centers earlier on in the project, so that CESACOOPA's and the co-op boards of directors would have had more training and experience in how to operate their centers in a businesslike manner before the end of the project. 21 3. Major options for the future Option One: What are the likely consequences for the producers and the cooperatives assisted by ProAgro, if no additional funding is available to assist them after September 2012? At the level of producers, the improved production skills and, in some cases, the acquisition of irrigation and other equipment will continue to benefit them after ProAgro is completed. Many of them also have ready markets for their coffee and bananas, and, therefore, their market access, at least in the short term, will also not be negatively affected. However, if they lack access to future agricultural training, to assistance in accessing loans, and, as their production increases, to a coordinated approach to commercial marketing, their future production and agricultural revenue is likely to level off or be negatively affected. At the level of the cooperatives, CESACOOPA and the proposed Cooperative Federation in Benguela, there is greater risk if development assistance is discontinued after September 2012. The reason for this is that these organizations and their boards of directors are just beginning to operate as businesses. Without careful guidance in the early years of operation, many are likely to make poor business decisions, jeopardizing their own futures as well as their ability to provide quality services to their members. Option Two:If funds are available after September 2012 to consolidate gains in coffee and banana production and marketing, what should be the priorities for the use of these funds? As mentioned in Option One, the biggest threat to future gains after September 2012 is the lack of business experience of the cooperatives, CESACOOPA and the proposed Cooperative Federation in Benguela. Thus, the preparation of good business plans for these organizations and ongoing technical assistance over the next three years should be the first priority if funds are available for continued assistance. The value chain model used by ProAgro should guide futuretechnical assistance to these organizations. Over the three-year period, they should become self-sustaining businesses; continue to improve the productivity of their producer/members; operate effectively as businesses with competent staff; become effective intermediaries in securing producer loans and in improving producer business practices; and assist farmers to secure inputs and market their products in ways that result in financial benefits to both the producers and the organizations. Option Three:if funds are available after September 2012, should they be used to adapt the ProAgro value chain model to other parts of the country and to other agricultural products. 22 The answer to this question is a qualified "yes." The qualification is that the first priority ought to be to consolidate the gains achieved in coffee production and marketing in Amboim and banana production and marketing in Benguela. Only if there are adequate funds available, should the model be expanded to other geographical areas and products. There is a danger that, if assistance is not available for the continued development of the current ProAgro producers and organizations, they may face significant problems in their business development in the future. If that happens, it could represent costly setbacks in a program that took six years and over $10 million to develop. Continued technical assistance, as described in Option Two, would play a major role in avoiding such setbacks and protecting the investment that has been made thus far. On the other hand, if adequate funds are available to both continue working with current farmers and organizations and to expand to other areas, it would be an excellent idea to do so. ProAgro's value chain model, including the lessons learned over the last 5 1/2 years, provides an excellent means to expand agricultural production and cooperative marketing in many regions of the country. 23 F. Statement of Recommendations This section of the report focuses on recommendations that relate directly to the ProAgro project. They do not include proposals related to Angola's agricultural policy, land tenure patterns, large-scale irrigation projects, and revisions to the cooperative law. There are extremely important problems that should be addressed related to all four of these issues. However, they are outside the scope of this report. Recommendation One. Provide technical assistance to help transition CESACOOPA, the proposed Cooperative Federation in Benguela, and the horticultural cooperatives in Bengo to profitable businesses. The biggest need of the cooperatives in Amboim, Benguela and Bengo during the next three years will be to make a transition from recently created organizations with virtually no business experience to successful businesses that generate a profit as organizations and for their members. This transition is more likely to occur if there are professional technical assistance providers working closely with them during a three-year transition period. Thus, the primary recommendation of this report is that funds be made available to pay for a technical assistance team to work with CESACOOPA and its member cooperative service centers, another technical assistance team to work with a Federation of cooperatives in Benguela, and a consulting business manager to work with the cooperatives in Bengo. The technical assistance teams would assist CESACOOPA, the Federation and their member cooperatives and farmers in the same four service activities in which ProAgro was involved – production assistance, cooperative development, assistance with loans and business plans, and marketing assistance. By the end of three years, the goal would be to have both CESACOOPA and the Federation have their own professional management and service staff and be operating as profitable businesses. The same goal when applied to the Bengo cooperatives being assisted by a consulting business manager. The first step in implementing this recommendationwould be to carry out detailed business plans for CESACOOPA, the Federation and the Bengo cooperatives that would provide a roadmap to profitability, including an identification of the kinds of services that would generate revenue for CESACOOPA, the Federation, the co-ops, and their members. Funding for these technical assistance teams could come from a variety of sources, including the Government of Angola through INCA and the Ministry of Economy and Planning, Chevron, UNDP, USAID, ICCO, other donors, and the members of the co-ops themselves by paying fees for technical assistance. 24 Recommendation Two. Conduct revised analyses of coffee production in Amboim and banana production in Benguela to determine the current level of production and marketing of these two products, and to develop production and marketing strategies for the future. It has been about five years since ECI Africa prepared economic analyses of coffee and bananas in Angola. It is time to update these reports and to create revised production and marketing strategies based on this updated information. In the coffee analysis, particular attention should be paid to evaluating the potential for securing Fair Trade and organic certification for coffee exported by CESACOOPA. It appears that virtually all of the coffee produced by co-op members in Amboim is organic, although not certified as such. Because there is a premium paid to farmers and co-ops for certified organic coffee in the international market, certification may be a potential marketing advantage for CESACOOPA members. Recommendation Three. CESACOOPA, the proposed Cooperative Federation, agricultural producers and other actors in the agricultural value chains in Kwanza Sul and Benguela provinces should oversee the preparation of an analysis of future agricultural production options, looking not only at bananas and coffee, but at other priority production options appropriate to each region. One way to carry out such a strategic analysis would be to select a representative group of farmers, co-op directors, other market chain representatives, and government staff to serve on an Agricultural Development Committee in each region. Each committee would oversee the preparation of an agricultural report and a set of recommendations for future agricultural development activity in their region. In summary, ProAgro has been largely successful in carrying out a value chain project that has benefited over 6,000 farmers in Kwanza Sul, Benguela and Bengo provinces and has set the stage for increases in production and marketing for the future through its development of 25 cooperatives, 12 co-op service centers, CESACOOPA, and the proposed Cooperative Federation in Benguela. But the job is not done yet. With additional technical assistance over the next three years to these organizations, the likelihood of long-term agricultural and economic benefits will be greatly enhanced. 25 Annex 1. Case Examples As part of the evaluator's site visits in Amboim and Benguela, he gathered information and took photographs of six examples of activities related to ProAgro. The following examples are presented in this Annex: 1. Small farmer coffee demonstration plot 2. Coffee field training day 3. Tour of the CESACOOPA service center 4. Visits with medium-size banana producers in Dombe Grande 5. Visit to banana small farmer demonstration plots at Palmeirinhas 6. Farming area in Catumbela that has had its water supply cut off by the closing of a canal 26 1. Small farmer coffee demonstration plot CelestinoCapingala has a demonstration coffee plot of about one hectare. Other coffee producers and visitors come to his farm to observe and learn from the advanced production practices he employs on his plot. For example, he uses inter￾cropping as a means to increase production and revenue. The photo in which he is pictured on the left shows him standing in back of a pineapple plant and in front of a banana plant and some coffee trees. Because coffee takes 4 to 5 years to begin production, these annual crops provide him with an income while his coffee trees are maturing. . Mr. Capingala's coffee trees are being grown organically. This means thathe uses non-chemical fertilizers and pesticides in the growing of his coffee. In the picture on the right, there is a water bottle with a hole in the side. In the bottle is a coffee-based solution that attracts insects that are harmful to the coffee beans. There is a solution of soapy water in the bottom of the bottle in which these insects drown. These bottles are spaced every few trees in Mr. Capingala’s coffee farm, thus protecting the entire farm from these insects. 27 2. Coffee farm field day Max Ochoa, who works for the Neumann Foundation/EDE, a CLUSA subcontractor, assisted INCA and ProAgro field agents to organizefarm field days in which coffee farmers learn about various aspects of productive, organic coffee growing. About 50 producers participated in this field day held at the end of April 2012. The participants were divided into three groups, which each visited three different stations within the coffee plot. The instructor at each station was a local coffee grower. One station focused on the preparation of organic fertilizer from locally available materials, pictured at the left. The second station showed how to mix the fertilizer with the soil at the base of the coffee plant and to create a bowl￾shaped enclosure of soil to retain moisture and the fertilized soil (photo at right). At the third station, producers learned how to thin coffee plants to maximize the production of good-sized beans and also how to maintaina tree cover above the coffee plant that allowed only about 30% of sunlight to reach the plant. 28 3. CESACOOPA Service Center CESACOOPA is the cooperative union for 14 cooperatives in Amboim representing approximately 5,000 farmers, almost all of whom are coffee growers. With financial assistance from CLUSA and ICCO, a Dutch NGO, and in-kind and cash assistance from its own members, CESACOOPA constructed its service center in the first half of 2012. The center is designed to serve as a marketing depot for coffee, a place to purchase agricultural inputs, and the office headquarters for the union. CESACOOPA has already negotiated a 39 ton sale of coffee to Kotomar, half of which has already been delivered. The coffee bags in the photo at right are part of this order. The union is also negotiating with Sirius, an input supply company, to lease space at the center and provide inputs and training to union members. 29 4. Visit to medium-size banana farms in Dombe Grande Dombe Grande, located about an hour south of the city of Benguela, is the site of a former sugarcane plantation. It is an area of rich soils and good access to irrigation. Many of the farms located in the valley have 20 or more hectares under production. One of the major crops is bananas, but there are also many hectares of mango trees, tomatoes (photo on the right), and other vegetables. With the help of CLUSA, these growers have become very productive banana producers. They use nurseries to grow uniform, high quality banana seedlings (photo at left) before transplanting them into their fields. The back of the field shown on the right is inter-cropped with watermelon. This combination of crops greatly expands the efficiency of production. 30 5. Visit to banana demonstration plots at Palmeirinhas Palmeirinhas has a cooperative with about 120 members, almost all of whom have 5 ha or less of agricultural land. The co-op has just begun a demonstration project involving five members growing bananas on one-hectare plots. The field on the left intercrops bananas and peanuts. Because peanuts are nitrogen-fixing, they are an excellent complement to bananas. The plots are irrigated with water from a nearby river. Water is conveyed to the demonstration site by a diesel pump (photo on the right). The co-op plans to have members plant additional plots of bananas, but needs greater access to irrigation before it can expand. There is an old dam located up the river not far from the village that could be rehabilitated to provide irrigation to several hundred hectares. The co-op is lobbying to have the government make the necessary repairs to the dam and the old irrigation system. 31 6. Farming area in Catumbela that has had its water supply cut off by the closing of a canal CLUSA assisted in the development of three cooperatives in Catumbela, just north of the city of Benguela, two of which are now defunct because their members lost access to an irrigation canal. Part of the canal was destroyed by flooding. Another portion was disrupted by the construction of the highway road linking the cities of Benguela, Catumbela and Lobito. There is speculation that the failure thus far to repair the canal and get over 1,000 hectares of good agricultural land back into production is due to the influenceof developers who would like to use the land for industrial, commercial and residential projects. In the photos below, the beginning of the irrigation canal is shown on the left, and the dried-up canal, a few kilometers north of this site, is shown on the right. 32 Annex 2. ProAgro Results Framework Intermediate Results and Outputs – The 4 Results Framework (RFW) components that have been used to evaluate ProAgro interventions are listed below, with corresponding activities shown under each IR. IR 1 ‐ Technical assistance expanded and improved Continued to disseminate best practices for existing clients; Provided training to small and medium producers organized into cooperatives; Technology transfer accomplished for banana micro‐sprinkler/clone as new sources of lending become effective; and Supported INCA to expand and improve demonstration plots, organize field days and disseminate best practices on coffee post‐harvest handling. IR 2 ‐ Cooperative development expanded Assisted primary cooperatives to consolidate and expand their agribusiness services to their members; Assisted in the development of inter‐cooperative relations, articulation and coordination of cooperative organizations at local, municipal and provincial levels; Continued to advocate for the approval of the new cooperative law and pertinent regulations for agricultural multipurpose service cooperatives and savings and mutual lending cooperatives; and Trained cooperative leaders and animators in basic accounting, financial management and reporting. IR 3 ‐ Access to financial and business services strengthened Continued to provide financial education to cooperatives; Consolidated linkages between cooperatives, banks and other financial institutions interested in facilitating loans to agriculture (ex. Soba Fund, Coca‐Cola Fund and BDA); Updated business plans for banana, coffee and vegetable production, processing and marketing; Facilitated financial support to agribusiness service centers to be run by primary Cooperatives; and Supported, technically, the National Coffee Institute (INCA) initiative to create a revolving loan fund for smallholder coffee cooperatives. IR 4 ‐ Market linkages improved and strengthened Market information service expanded; Strengthened linkages between input suppliers, wholesalers and producers through trade fairs and stakeholder meetings; Improved access to irrigation equipment for intensive modern production systems; and 33 Facilitated acquisition of equipment and materials needed to improve the quality and marketing of coffee products. 34 Annex 3. Scope of Work for the Evaluation CONTRACT BETWEEN CLUSA AND EG Nadeau SCOPE OF WORK Article 1. Introduction USAID/Angola would like to determine whether investments in profit oriented farmer group businesses assisted by CLUSA have had, or are having, a beneficial impact on rural households in target areas. If so, USAID/Angola would like to identify the elements of successful investments that can be replicated to improve ongoing or future investments. If investments were not achieving the intended results, USAID/Angola would like to know how to reorient that investment so that it does achieve the intended results. Finally, USAID/Angola wants to know how investments in this type of programs can be maximized for future projects. In support of Angola’s economic liberalization, USAID/Angola has initiated and supported activities that stimulate rural economic growth, promote food security and stimulate improved forms and structures for governance. As a part of this larger strategy, and under the termsofCooperativeAgreement No. 690-A-00-06-00099-00, effective August 21, 2006, between USAID and CLUSA, the Agricultural Development and Finance Program (ADFP, locally branded as ProAgro Angola), would invest donor funds and make efforts to secure these strategic purposes. In late 2010, as the program entered its fifth and final year, USAID provided an increase in the total amount of funding available to the program, raising the obligated amount from $6.3 million to $10.8 million. In September, 2011 a request for a no-cost, one-year program extension was submitted, which would set September 30, 2012 as the program’s new end-date. ADFP’s pursuit of these goals has been further facilitated by additional funding of $3 million, provided by Chevron/CABGOC under a separate agreement with USAID. During 2011, ADFP engaged two subrecipients in order to expand the pool of technical expertise and resources available to program participants. In March, 2011 the Neumann Kaffee Foundation, a globally￾recognized provider of consulting services on coffee chain development, began its work in the Gabela coffee-producing zone, with the full agreement and practical support of INCA. The second subgrant was terminated in July, 2011. Article 2. Overall Orientation of the Consultancy The consultancy will comprehensively assess the CLUSA project. However, by evaluating CLUSA 35 activities, USAID seeks lessons learned that may be applicable to group-based rural development activities aimed at increasing production and productivity, develop input and output markets, strengthen financial services and enhancecoordination among value chain actors in order to positively influence ongoing or future activities or investments. Therefore, the report should encapsulate lessons learned and describe their implications across activity objectives. To the greatest extent possible, USAID would like the evaluation to provide quantitative evidence of investment impact through ADFP on rural incomes and governance. Quantitative evidence should be presented over time to illustrate any growth or reduction in investment impact during project implementation. Where quantitative evidence is not available or relevant, qualitative descriptions of impacts and processes will be required. With regard to CLUSA, the consultancy should assess project impact and identify ways to improve implementation, if necessary. The consultancy should recommend whether USAID/Angola should consider extending, expanding or cutting short the project. Finally, the consultancy should package relevant findings so that systemic or national level impact from evaluation lessons learned might be achieved with specific reference to the Angolan context. Methodology: The consultant’s evaluation should a) identify results desired under the project and generate quantitative indicators of project impact where possible and qualitative indicators where quantitative indicators are not possible; b) identify beneficiary perceptions of project delivered services and beneficiary participation in the project; c) generate information on partner or stakeholder perceptions of the projects; d) generate lessons learned across projects in line with scope of work conditions; e) present findings in a user friendly and compelling manner; and f) make recommendations on ways forward. Personnel: The consultant should possess appropriate professional training at the Masters of Science level or above; experience in evaluating projects in agribusiness and community mobilization; experience writing technical documents based on the compilation of field visit findings; experience in presenting evaluation findings in a user friendly and compelling manner; and experience in Africa and, preferably, in Angola. 36 Annex 4. Bibliography Angola Agricultural Sector Analysis by John Mellor et al., prepared by CLUSA/JMA, Inc. for USAID/Angola, September 10, 2010. ApresentaçãoAvaliação Benguela, a powerpoint presentation prepared by Alvaro Veloso for the ProAgro Conference held in Benguela on May 7, 2012. CLUSA Contract with USAID, September 2006. Economic Analysis of the Banana Sub-Sector in Angola, Final Report, ECI Africa, January 2007. Economic Analysis of the Coffee Sub-Sector in Angola, ECI Africa, May 2008. LEVANTAMENTO DOS COOPERADORES ENVOLVIDOS NA PRODUÇÃO DE CAFÉ, (an analysis of coffee production in Amboin prepared by CLUSA and INCA in 2011). Notes from ProAgro Evaluation Workshop, Benguela, May 7, 2012 ProAgro Quarterly Reports, 2006-2012. ProAgro Plan vs. Performance spreadsheets, 2006-2012. ProAgro Annual Work Plans, 2006-2012. Relatório da Avaliação Intermedia do ProAgro, Agosto 2006 – Julho 2009 (ProAgro Midterm Evaluation), JMJ Angola, 2009. 37 Annex 5. Evaluator’s Trip Journal Trip Journal -- Agencies contacted, sites visited, and individuals interviewed Friday, April 20, 2012 Depart Madison, WI Saturday, April 21 Arrive Johannesburg, South Africa Sunday, April 22 Arrive Luanda, Angola Monday, April 23 Orientation and meetings with CLUSA staff, review of materials Tuesday, April 24 Meeting with Deputy Director Cardoso at INCA Meeting with Gomes Cambuta at Chevron Meetings with CLUSA staff and review of documents Wednesday, April 25 Drive to Gabela, initial meeting with CLUSA staff member Veloso Thursday, April 26 Visit to a model coffee field Meeting at and tour of the CESACOOPA (the cooperative union) service center Courtesy visit with the Municipal Administrator of Gabela Meeting with the CESACOOPA Board of Directors at the CLUSA office Friday, April 27 Participation in a coffee training field day Visit to and tour of the CARLAONGO cooperative service center Meeting with the manager of the BPC branch bank in Gabela to talk about INCA's microcredit program Meeting with the chief of the technical group for INCA in Amboim 38 Saturday, April 28 Travel to Assango Visit the processing and commercial center of the Assango cooperative Meeting with members of the cooperative Visit the processing and commercial center of Nzoy in Chieto Return to Gabela Review notes and work on report Sunday, April 29 Travel to Benguela Work on report Monday, April 30 Met with staff at CLUSA office in Benguela Met with Provincial Agricultural Director and ADRA staff member Visited with farmers from Cavaco and saw the Twassuka cooperative's service center Tuesday, May 1 Researched and wrote at the hotel because of the national holiday Wednesday, May 2 Visited two cooperatives of small farmers in Canjala that are in the process of carrying out banana demonstration plots – the May 1 Cooperative and the Palmeirinhas Cooperative Thursday, May 3 Met with medium-sized farmers in Dombe Grande and did a site visit at the CAPIAD Cooperative service center Met with Vino do Rosario in the evening to go over monitoring and evaluation information Friday, May 4 Drove to Catumbela, visited the areaserved by Camenhe and Eteku cooperative that has been adversely affected by the closure of a water canal Met with Fernando Marques, a medium-size farmer Reviewed information and wrote at the hotel in the afternoon 39 Saturday, May 5 Research and writing on report Sunday, May 6 Research and writing on report Monday, May 7 ProAgro conference in Benguela Tuesday, May 8 Research and writing in am Fly to Luanda in pm Wednesday, May 9 Preparation of PowerPoint for USAID, Chevron and INCA Thursday, May 10 Meeting with INCA Director USAID and Chevron meeting and PowerPoint presentation Skype call with Bill, Emily and Estêvão Friday, May 11 Work on report Fly to Johannesburg Saturday-Sunday, May 19-20 Fly from Johannesburg to Madison