USAID CBJ FY 2002: Bolivia

Summary: This Special Objective fully supports a key U.S. policy interest in Bolivia: halting the illicit production of coca and the export of coca-cocaine products. The Objective closely mirrors the Government of Bolivia's (GOB's) Dignity Plan to remove Bolivia from the coca/cocaine circuit by the end of 2002. The U.S. Government Counternarcotics strategy is a multi-faceted strategy including interdiction, eradication, public affairs, and alternative development activities in the Chapare. In 2001, a comprehensive development initiative with Plan Colombia funds will be launched to encourage the reduction of illegal and excess coca in the Yungas region. The current USAID/GOB alternative development program is directed to developing sustainable farm-level production and market linkages in the Chapare, increasing licit net household income in the Yungas, and preventing a resurgence of coca production in the Chapare. The alternative development program includes a Cash Transfer to fund alternative development activities through the conversion of grant resources into local currency. The ultimate customers are farmers in the Chapare and Yungas regions of Bolivia.

Key Results: USAID directly contributed to the annual net coca reduction of 6,900 hectares by "conditioning" assistance to only those farm families complying with the GOB's coca-free policy. Additional agricultural extension agents were contracted to keep up with the increased eradication and direct technical assistance to 7,482 Chapare farm families through USAID's Counter-Narcotics Consolidation of Alternative Development Efforts (CONCADE) activity. The wholesale value of licit produce leaving the Chapare exceeded $49.3 million, and the number of agribusinesses purchasing Chapare agricultural products and/or supplying agro-inputs on a regular basis increased from 64 in 1999 to 67 in 2000.

Performance and Prospects: : During CY2000, remarkable progress towards a coca-free economy in the Chapare was made in spite of the national and regional economic crisis and six weeks of road blockades inside and outside the Chapare. These events hindered the marketing of Chapare licit produce and activity implementation. With an annual net reduction of 6,900 hectares, Bolivia exceeded expectations and reduced net coca cultivation in the Chapare to less than 600 hectares. Over 39,279 square meters of seedbeds were destroyed, and 6,119 hectares of new coca plantings eliminated. In contrast, the area under licit production increased 5% from 108,504 hectares in 1999 to 113,984 hectares in 2000.

With virtually all coca eliminated from the Chapare by November 2000, a larger number of Chapare farm communities became eligible for alternative development assistance. USAID rapidly responded by increasing agricultural extension, providing technology transfer services, delivering planting material, and increasing the number of grants provided to Chapare farmer associations and private businesses. From June to December 2000, CONCADE approved grants totaling $2.2 million and assessed the needs of more than 79 producer associations and private businesses requiring additional support for production, processing, and export operations. However, no significant contributions from other international donors became available in 2000, thus affecting planned results. Non-U.S. Government donors had been expected to contribute heavily to the GOB's Dignity Plan. CONCADE remains the single, largest donor activity in the Chapare.

USAID provided assistance to 7,482 Chapare farm families residing in certified coca-free areas, more than double the annual target of 3,000 families. The USAID-funded agro-forestry activity implemented by the United Nations provided assistance to 150 of these families. A USAID-funded dairy activity assisted 606 families.

With supplemental resources provided under the Plan Colombia legislation, USAID expects to provide alternative development assistance to approximately 8,000 Chapare families per year including food crop assistance, co-financing of planting material, productive infrastructure, and fertilizer demonstrations. In addition, supplemental resources will be used to broaden and deepen road maintenance and improvement, agro-forestry, electrification, export promotion, and related marketing activities. Without additional U.S. Government funding and/or other donor contributions, however, it is unclear whether the majority of Chapare farmers will remain coca-free.

More than 67 agribusinesses were operating in the Chapare by the end of CY 2000. The CONCADE emergency plan was essential to preventing businesses from becoming bankrupt and/or leaving the Chapare following several road blockades. By the end of CY 2000, total estimated private sector investment amounted to $33.4 million. This included: 24 producer and agro-processing businesses ($13.1 million); 12 service providers ($0.75 million); 16 producer associations ($14.3 million); and 12 hotel and tourism operations ($5.2 million).

The wholesale value of licit produce leaving the Chapare ($49 million) fell short of the expected target ($64 million). This was primarily due to CY 2000 civil strife and road blockades. Chapare fruits, roots, vegetables, and other crops rotted in the field as production processing and export operations were seriously affected. Processor/exporter delivery agreements and contracts were interrupted by protests. Buyers in the national and international markets terminated contracts with Chapare suppliers. Banks and other credit institutions cancelled previously approved loans and decided not to provide financial services in the Chapare. Estimated losses in volume of alternative development products exceeded 30,000 metric tons with a farmgate value of $1 million. To mitigate the impact of road blockades, USAID launched an emergency plan to reactivate agricultural production, restore and enhance producer market linkages, and provide emergency financial assistance to agribusinesses. Considerable progress was made towards the end of 2000 as more than $1 million in CONCADE emergency grants were approved for farmers and businesses severely affected by the road blockades.

During FY 2001 and FY 2002, USAID will broaden and deepen ongoing efforts to provide support for the GOB's efforts to consolidate the Chapare's agriculture and infrastructure network ($56,000,000 of INC in FY 2001 and $25,000,000 of INC in FY 2002). USAID expects to provide direct assistance to approximately 8,000 Chapare families per year including food crop assistance, co-financing of planting material, productive infrastructure and fertilizer demonstrations. In addition, funds will be used to broaden and deepen road maintenance and improvement, agro-forestry, electrification, export promotion, and related marketing activities. USAID will also fund the Yungas Development Initiative that seeks to increase licit net household income in the area ($28,000,000 of INC in FY 2001 and $15,000,000 of INC in FY 2002).

Possible Adjustments to Plans: USAID and the GOB jointly developed an initiative for the Yungas region using resources provided under Plan Colombia legislation. The Yungas Development Initiative will implement integrated development activities to help obtain a significant reduction of excess and illegal coca in the Yungas. This initiative consists of four main components, three of which are extensions of current USAID programs in health, democracy and economic opportunities. The fourth component is the establishment of a Community Development Fund that will provide grants and co-financing for productive infrastructure development, road maintenance and other investments identified by participating communities that will enhance the quality of life in the Yungas. In 2001, USAID will finalize its selection of initial grants for the Yungas and select an implementer for the Yungas Community Development Fund.

Other Donor Programs: Alternative development resources are provided by the United Nations Drug Control Program, European Union (EU), Spain and Italy. The EU is scheduled to finance land registry, credit, infrastructure and environmental activities. Spain plans to expand two of its former alternative development activities (a palm heart industrial facility in the Chapare and an irrigation project in the highland valleys) to mitigate migration into the Chapare. Spain also plans to initiate rural roads and tourism activities in the Yungas. The Italian government has agreed to provide a $6 million loan to build a road that will link the Yungas with the Chapare through the city of Trinidad.

Principal Contractors, Grantees, or Agencies: Development Alternatives Inc. is the primary U.S. organization involved in the implementation of this objective and oversees the implementation of CONCADE activities by the GOB implementing entities (including the Bolivian Institute of Agricultural Technology, the Rural Roads Authority and the Regional Alternative Development Program). USAID funded a significant portion of the agro-forestry, training and environmental monitoring activities implemented by the United Nations.

Bolivia 511-005

U.S. Financing

(In thousands of dollars)

	Obligations		Expenditures		Unliquidated
Through September 30, 1999	0	DA	0	DA	0	DA
	0	CSD	0	CSD	0	CSD
	16,643	INC	1,428	INC	15,215	INC
	0	SEED	0	SEED	0	SEED
	0	FSA	0	FSA	0	FSA
	0	DFA	0	DFA	0	DFA
Fiscal Year 2000	0	DA	0	DA
	0	CSD	0	CSD
	14,000	INC	16,301	INC
	0	SEED	0	SEED
	0	FSA	0	FSA
	0	DFA	0	DFA
Through September 30, 2000	0	DA	0	DA	0	DA
	0	CSD	0	CSD	0	CSD
	30,643	INC	17,729	INC	12,914	INC
	0	SEED	0	SEED	0	SEED
	0	FSA	0	FSA	0	FSA
	0	DFA	0	DFA	0	DFA
Prior Year Unobligated Funds*	0	DA
	0	CSD
	69,000	INC (P.C.)
	0	SEED
	0	FSA
	0	DFA
Planned Fiscal Year 2001 NOA	0	DA
	0	CSD
	15,000	INC
	0	SEED
	0	FSA
	0	DFA
Total Planned Fiscal Year 2001	0	DA
	0	CSD
	84,000	INC
	0	SEED
	0	FSA
	0	DFA
			Future Obligations		Est. Total Cost
Proposed Fiscal Year 2002 NOA	0	DA	0	DA	0	DA
	0	CSD	0	CSD	0	CSD
	40,000	INC	80,000	INC	234,643	INC
	0	SEED	0	SEED	0	SEED
	0	FSA	0	FSA	0	FSA
	0	DFA	0	DFA	0	DFA

BOLIVIA

Activity Data Sheet

Bolivia 511-005

U.S. Financing