- - IFP PTI: II T IRESTRICTED WlTO.t' DE$IT TV ln^v%Report No. TO-52:3a WITHIN I 1~~~~~vur n 1vv ONE WEEK | JUiLL CVPY r h,;- .prt was prepcire-d for use wit'hin th-e Bonk ond its affiliated organizations. They do not accept responsibility for its accuracy or completeness. The report may not be publishted nor may it be quoted as re-presenring rtheir views. . INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION LIVESTOCK DEVELOPMENT PROJECT COLOMBIA April L, 1966 Projects Department C UR1R ENC Y EQUI'VALEN TS 1 US dollar = 9 Col. Pesos 1 Col. Peso = 0. II US dollar 1, 000, 000 Col. Pesos = I 1 1, 000 US dollar C 0 L 0 M B I A LIVESTOCK DEVELOPMENE PROJECT mIJi OFL UVV4OF T Page No. SUMY i- ii I. INTRODUCTION 1 II. BACKGIROUND 1 III. THE PROJECT 5 A. General iDescription 5 B. Detailed Features 6 C. Cost Est:umates 8 D. Proposed Financing 10 E. Disbursement 11 F. Operating Results 12 IV. ORGANIZATION AND MANAGEMENT 12 V. BENEFITS AND JUSTIFICATION 14 VI. CONCLUSIONS AND RECOMMENDATIONS 17 ANNWEXES 1. Caja de Credito Agrario Industrial Y Minero 2. Investment Costs of the La Costa Beef Project 3. Investment Cost of the Los Llanos Beef Project 4. Investment Cost of the Narino Dairy Project 5. Investment Costs at the Barranqidlla Dairy Project 6. Investment Costs of the Sheep Project 7. Project Cash Flow Statement 8. Organization Chart 9. Development of a LiOO Cow "La Costa" Beef Cattle Farm 10. Development of a 4OO Cow "Los hlanos" Beef Cattle Farm 1l. DeveJ-ooment cf a 30 Cow "Narino" Dairv Farm L2. Development of a 100 Cow "Barraniquil-la"' Dairy Farm 13. Develonment cof a Pilot SheeD Farm 14. Cash Flow of Incremental Costs aind Benefits MAPS (2) COLOMBIA LIVESTOCK DEVELOPMENT PROJECT ,'Tnn/r~fA T3V i. The Government of Colombia has requested a Bank loan of US$ 16.7 million to help finance the Iirst stage of its livestock development program which aims at the improvement of the beef cattle, dairy cattle and sheep industry. The Colombian agriculture has great potentiais, both in productivity and in developing hitherto unused lands for the production of beef, milk and wool. There is at the same time a pressing need for the increasie of livestock production to cover growing domestic and exporlt demands. ii. Because there is little experience in Colombia of public financing of long-term livestock development, a pilot type of approach would be used at this stage, confining the project to specific regions. These regions have been selected for the highest land potential, and the availability of suitable markets. iii. The project is directed mainly at on-farm improvements such as land clearance, fencing, water supplies, stock handling facilities and the improvement of pastures and breeding stock. These improvements would raise both output and efficiency of production. iv. It is expected that about 900 beef cattle ranches, 250 dairy farms and 3', sheep farms would participate in the project. In all cases long-term development credit to farmers of up to twelve years is envisaged. Investment in each sector would be spread over three years. v. The organization and administration of the project would be carried out by the Caia de Gredito Agrario Tndustrial v Minero (Caia). A special livestook devolopmant department headed by a Technical Director with a small staff of exnerts would be set un for this nurpose within the Cala This department would be responsible for assisting farmers in preparing individual develonment nlans; for recommending these to the Caja for lending and for supervising the execution of plans for which loans are macle Financially and administratively the raa would pro cess these loans in the normal way through its regional offices which are well equipped to do so vi The project is estimated to cost a total of about US$ 28 million of which US$ 25 million or about 90 per cent would be for farm development. Costs for contractors machnery, cooperative dairy equipment and technical services count for the balance of US$ 3 million or about 10 per cent. The Bank loan would cover 6O per cent of the total project cost. The balanc,e would be provided by the Caja (22 per cent), participnting £armers - da.iry coopeLa ties (L8 per centl. - ii - -rii.. Thue project .ls tcl;aly soL.d ndU econor,,icJly Justified. The, administrative arrangements would be satisfactory. Estimated benefits to both par-ticipatnlg farime,rs and the national economi are substantial. The project is suitable for a Bank loan of US$ 16.7 miiiionn repayable over an l8-year 1erm, includ±xzg a U-.year graue period. The borrower would be the Government of Colombia and the Caja wou.d administer the loan. COLOMBIA LIVESTOCK DEVELOPMENT PROJECT I. I1'RODUCTION 1. The Government of Colombia has applied for a Bank loan of US$ 16.7 million to help finance the first stage of its livestock deve:Lop- ment program which aims at the improvement of the Colombian beef cattle, dairy cattle and sheep industry. A joint Bank/FAO mission which visited Colombia in March/Anril 1965 accordingly nrepared a three-year develop. ment project. This appraisal report is based on the findings of a mission which visited (olimbin in 0Otobhr/Nnvember 196q The mission was comDosed of Messrs. W. Schaefer-Kehnert, A. Favilla, R. Henderson (Bank) and P.. Rrimhv (FAO)- II. BACKGROUND r2.1 .-a wri, aI nari n rvf' 1.1 rn-i I ir ,11are klilm±er is the fourth largest country in Latin America. It is predominantly an -4 couir --4- nd4 14,el y to rwmair so in the foreeable f About 50 per cent of its present population of about 15.h million is rura-l, and a substantial pa-4- -'- o i engaged,n *n servicing the agricultural industry. Of the G.D.P. about 32 per cent .L~tAJ1U..LLIhI~U J.Y CLr, LLLUUL.U± . J.VOLbJ'I UJJI L-;;.V0U1JU WIAV ULI Ji0sL LogiLbuLJAt;d bag-utre. Lvestokotu ereet n-hr of agricultural production. 3. Althouglh falling wholly within the tropics Colombia has great v-ari.tUU1s in cl-Uiate. Tihree ranges of uue Aidues runlnr±n ap xU.&aUt:l.Ly south-north, with related differences in soils, cause a veritable mosaic pattern of ecological zones. These comprise mainly cool, hIILm,d t-undras, temperate humid grasslands, savannahs, and tropical rain forests. 4. Thanks to these conditions, Colombia produces a wide variety of crops as well as livestock products. The duminUant crop 8i coffee which accounts for one fourth of agricultural production and almost 70 per cent os total exports. In view OI the world coffee situation, there is a great need for further diversification in Colombian agricultural production. 5. Vast areas suited to grazing are being used partly, or at low levels of intensity, while there is a pressing need for the increase of production of beef, milk and wool to cover growing domestic and export demands. 6. Population growth, estimated at about 3.2 per cent per annum and increasing per capita incomes are likely to raise local demand for livestock products. Current consumption is low at 23 kg of beef and 72 liters of milk per capita per annum. Eight thousand tons of fine wool have to be imported per annum. This situation, along with an export potential for beef, focuses attention upon the need to increase the production of the livestock industry. 7. Over the past years the greater portion of foreian capital has been invested in infra-structure and industry rather than agriculture. Of US$ 390 million Bank loans onlv UJS$ 10 million have been for short- term financing of imported agricultural machinery. Internally generated finance from the cattlp owners and othor nrivate canital is directed to the short-term financing of cattle purchases for fattening or finishing on 9 to 12 mnonth ters Anart from a TTS ATI 102n of TTUS 4i million devoted to beef cattle development for small or medium-sized farms, 1nna_g,-rem nra2ti+ ha-rtily Yrt Rccf flntt+lea 8. Although statistical data are insufficien.t t4+ 4l likrlyr +.ha+. Colombia supports about 17.5 million head of cattle. Of these about 15c -lo arkeetP mals;- about 7 r;'ior ar are n th J.L." GI.L... .JLA . W L G6AA.L1ILQ.L_LJ OJLUV (~ L.JJ~~. ~ ' * ~~ La Costa Zone (Departments of Atlantico, Bolivar, Cordoba and Magdalena); abo-4t 2 r,,llon in Tos Tlanos fD---r.4v---4-- o-f BM--z VM-e A +'n- h Intendencia of Arauca) and 6 million in the rest of the country especially Lt- U1par,ents 0o An±oq-uda, CalUas and Cauca (see 'Jj 1). It is estimated that beef cattle numbers have increased by about 3.5 per cent per annum over the past five years. 9. According to of~ficial data sorae 2 million head of cattle were slaughtered in 196h. To this must be added about 120 thousand head for on-farm consumption and 220 tnousand head for export of slaughter cattle to Venezuela and Ecuador. These figures indicate an annual take-off of about 13 per cent. This low take-off figure is a direct measure of the potential of increased efficiency as developed beef cattle industries have take-off figures of 25 per cent or better. 10. The main factors for increased efficiency and production in the beef industry are clear cut and can be expressed in the terms of better general anirmal husbandry with emphasis on pasture improvement and management, fencing, calf rearing and parasite control. Progress will be expressed in higher calving rates, higher take-off percentages and carcas yields. A rise in cattle numbers will help to stock the areas awaiting exploitation. 11. A regional approach is indicated by Colombia's topography which has led to regional administration and marketing organizations. La Costa with nearly half the total beef animals is the key producing area. In adJ:t.ion, it hasL 1L..ore than1 2 Ir,ltXonL hectares ofCL lan 1JL_CUpresent4Vl.y uncleared which are capable of being converted to pastures while the eJidstg 1.7 i...iLlUo- heCtar Of vi riaive pa -,ure cou'd b1e consider-ably improved. Because of its location it is also the logical export center. 12. Los LlELnos is a huge area of natural grassland which is only carrying 2 million head on about 20 million hectares at present. Stocklng rates on existing farms are well beLow capacity. As La Costa moves into production for export the contribution of Los Llanos as a supplier to the Bogot;a and other local markets must increase. The development of Los Llanos is aln;o logical to permit other departments as Antioquia, Caldas anid Valle., more suited to high value cash crop production, to move out of beef production without harm to the national meat supply. _iry Cattle 13. Dairy cattle statistics also involve an element of estimation. About 3.5 million head (including many beef cows) are likely to contribute to milk production, which is estimated at some 2.0 million tons of milk annaually, indicating a relatively low yield per cow of about 600 kilo's per year. About 35 per cent of total consumption is in the form of cheese, and 15 per cent is butter. lUlk for direct consumption is concentrated nea:r the main areas of consumption at Bogota and other large towns. 14. There are no technical barriers to considerable increases in milk production. Alternative use of land for high value cash crops is decreasing da:lrying areas to some extent, but undeveloped areas can more than compensate for this. Rather, development is retarded by inadequate management, mainly calf rearing, fencing, pasture management and supplemental feeding, coupled with the lack of long-term development credit. 15. In view of the growing comnetition for land for other uses near the principal centers of demand, there is a growing need for the development of a low cost dairy industry in one of the temperate zone areas capable of supplying the major centers with dairy products from longer distances. One such area is located in the departments of Narino and southern Cauea, where some 30,000 hectares are especially suitable for dairr oroduction. 16. The need for morn milk, powdered m;ilk and other dairv products should also encourage development in La Costa, where sound dairy manu*- facturing is alrimadv e-stabliheiqhd And nnnhl nf ranid PYncnniion- and where a definite demand exists. Sheep 17. The sheep population is estimated at about 1.1 million and co;,rs wool pr ductior at, abo-ut - t- metri t n of - --re pe'r annum. Half of th IIwo VJ.s aUIJ .L bya J th lclaucri per annum. Half of the wool is absorbed by the local manufacturing incLustry and the remainder used in cottage industries. Eight thousand tons of fine wools are imnorted annually. mainly from UJruiuav and Argentina. 18.. The ma,jority of Colombian sheep are Criollo (native), with a coarse fleece and a low I ield.r They are kept hy peasant farmers in small flocks of about 20 head at a primitive level with little or no u1-e of norma-l practices such as castration, docking, drenching, and controlled breeding. There is a high mortality among the lambs, in v.44 l, n nn-,.- pesar.t~ indu , wh1~Lch sO -,.po-tar. ecoorallt a large number of small farmers, could be improved by education in U UUIZ ±11..z.. _Ut.u;.u_ OLIeejP DU1CGE1 l 4U 61 E cti LUAC1-Ed:LE'L1 HiUUL%,V.Lj1 of coarse wool. On the other hand, there are about 2 million hectares of land c,urr-entl,y under-used, which could be exploited for the larg,e- scale, large flock production of commercial fine wool on modern lines to replace woo'l iJmporUs. A start, a-Llthough a small one, h,as been ml,ade by some farmers with large-scale, direct importations of Corridale sheep. Thes'e flOcks, although relatively neaw and variable in quantiVy, are sufficiently successful to point the way to the establishment of a fine wool indu1stry. Governmernt Policies and Agricultura:l Services 20. The Government of Colombia recognizes the need for developing the livestock industry of the zountry. It has drawn up a long-term live- stock development program which was the working basis for the joint mnk/ FAC) project preparation mission and the appraisal mission. These missions have modified the technical details of the program in agreement with the Planning Department and other government agencies concerned and have formulated the first three year stage of the program as a project suitable for foreign financing. Although cost estimates for a nine year investment program (three stages of three years each) have already been made by the Planning Department, totaling US$ 66 million, details for the future staigcs have not yet been worked out and will certainly require further planning work when more experience has been gained during the first st.age of the program. 21. Governmient plans in connection with the livestock development program include the strengthening of animal health services. Although the animELl health situation is better than in most other Latin American countries improvement of the services will be required when the program gets underway. An animal health plan including the establishment of an animal health institute is being prepared for this purpose. - ) - 22. The overall situation of agricultural services in Colombia i.s rther 1i nFtisfnar±tnrV nrc-21e of the largp nimhmr of agepncies invn1Pved More than 10 diff'erent institutions provide extension services to the farwm.e-4r *ncluingcriat baksn- and 17,n".ersa assciations.n- Thism leadsm to an overlapping of' efforts in some fields and a complete lack of available siclering a major reorganization of the agricultural institutional set-up for -;c1-clas lAA ,wok .-4- -. a 01 ,- nn + + T- + 1 v w . M, X41~ R ss *..Z 0v Q l WW1is XW V U B A V> -P V,,C I ,lL- -1. u,-LW--V *L* *A livestock sector where only fragmentary advisory services are available at present, a special technical assistance group is being set up in connecticon with the livestock development program. Farmers' Demand f'or Livestock Development 23. Most of' the commercial farmers are aware of the opportunities of livestock development, partic-l acly Ln view of the relatUively- favor-able price situation f'or livestock products in Colombia. To assist the Govern- ment in the preparation and implementation of the livestock development program a National Federation of Livestock Producers has recently been formed in which regional farmers associations, cooperatives and industrial organizations with interests in the livestock field are represented. This federation as well as other organizations have repeatedly indicated the farmers' interest in livestock deve:Lopment and the pressing need for long- term development credit. III. THE PRIOJECT A. General Description 24. The project is the first stage of a long-term livestock deve- lopment program. It proposes investments in the three main sectors ol' the livestock inclustry: beef cattle, dairy cattle and sheep. Because there is little experience in Colombia of public financing of this type of development, a pilot type of approach would be used at this stage, confining the project to specific regions. These regions have been selected for the highest land potential and the availability of suitable markets, 25., The project is directed mainly at improvements of existing farms to raise both output and efficiency of production. In addition, limited development of new lands of high potential is planned, while i.n special circumstances provision is made for the financing of livestock where these are vital to development (para 28). In all cases long-term development credit to farmers for up to twelve years is envisaged. Inrestmenit in each sector would be spread over three years. -6 - 2o. Loans to individual farmers wzould be made through the Caja de Credito Agrario, Industrial y Minero (the "Caja", as described in Anniex 1) for approved farm development plans, designed and prepared by qualified1 extension workers headed by a Technical Director with a small staff of experts., Since improved, or even new methods of production would be involved, the execution of individual farm development plans would require close technical supervision. To meet these requirements the project would provide funds for strengthening the technical super- visory services of the Caja. B. Detailed Features Beef Cattle 27. Investrments in the beef sector would be confined mainly to the Departments of Atlantico, Bolivar, Cordoba and Magdalena on the At:Lantic coast (La Costa); and the Departments of Boyaca (part), Meta, and the Intendencia Arauca in the zone of Los Llanos (see M4ap 1). The Departments of La Costa would absorb about 80 per cent of the propose(d investment, and those of Los Llanos the remainder. The Project would cover about 800 farms in La Costa, and 90 in Los Llanos and would be directed toward commercial farms. Suclh farms would inevitably tend to be medium to large but small farms would not be excluded if they are handled on a comnercial basis. Small and medium-sized farms of a les:3 commercial character have already available to them development funds provided by e US AID loan (para 7). 28. Provision would be made in La Costa for the financing of fencing. waterinp and handling' fari1ities; farm buildings, farm machinerv for the establishment and management of pastures, land clearance and drainage, for imported pure bred males, females and sp-men anrd for Inmollv bred bulls. In Los Llanos, land clearance would not be justified but nprnv.-ision urmIA hb made for- finnctingr +he nipurchn as of nmrwmcmninl f a1arnte ' breeding cattle from other areas of Colombia. The project would also finance eqnipmen:t forv inte.nsified health cnntrol meaunrPe in the herds of participating farmers. 29. Heavy machinery for the building of dams and boring of wells an~m 'qmna 1 ep rT wQ,1.+ e_ r T.-Io1l A Ib ', r- iT Vr -1 Io1g 1 ^_ +n c on trn+I1v. ~~~v M-%~ vYW ..JV 9 s ws Vs v"e .dS vA "" -v servicing these farms. The larger ranches may be provided with individual eqnm~r en tb+ -11 t in , such cases a. 1ioIle b e ",A- c,- n + these n tocarr out limited contracting on behalf of adjacent smaller properties. 30. The caobined effect of the proposed investments is expected to be reflected in an increased bee!f output of up to 100 per cent over the twelve years necessary for full development for the participants. This~ level. of incrase woLU Ube r-achieIu Uy all JLLprUveulltu1 o2L per cet. 2 in the calving rate, a reduction from 3 to 2 per cent in the mortality rate, and a reduction in the age at which steers are ready for market from four years to three. These factors combining together would give an increase in "take-off" percentage from the present 12-14 per cent to 16-20 per cent. In addition total cattle stocks in the farms corcerned would imncrease by 4 to 5 per cent per year. Dairy Cattle 31. Investrment in dairy production would be limited to pilot onnra.tionns i-n the Department of' Narino (including souithern part: nf Cauca) and the area round Barranquilla in La Costa (see Map 1). These ilV mtP+n1n.1q wmoi1ld rnmrar oC-faT.-y r1a-t drmI.-neome+. e costs on !nhr%ii+. ltfl frn,m.c in Narino and on about 100 farms in the Barranquilla area. They wouldi provide for fenc:i.ng, water ar.d handling faiiis svimple .milking sheds and farm buildings; grassland machinery, fertilizers and seeds; establish- ment and mn-inn- "-+ nn "m.nra+ r ..-1 ar v, Is +1, An4 mr A onA *.S^Ia..... * j.5 .s.j. -- v- ± lucc..-s va- VA- t a ,.LW V.uJ 4 -* female stock of improved breeds and semen. At this pilot stage, invest- factories, which would be needed later when the expected production garsJ I ir.milk yield are otned . Ait LJCrar-WLL-l where eVI t ing processing capac:ities are insufficient, loans to dairy cooperatives AJ'JUL LJu jJr U aL }EUL>lde Ud- ,f iIs±,I 4U±uIL^lUlIu LuJ1- I.Le production of bottled and powidered milk. At Narino, the emphasis wouLd be on pasture iImprov-emlent and breed improvemenerts by artiicifal insemi^a- tion with imported semen. 32. Production gains per farm are estimated at about 400 per cent in INarino and 450 per cent in Barranquiiia. Tne increase in production would be absorbed by the existing unsatisfied liquid milk demand in both areas, and by the manufacture of powdered milk, butter and cheese. Sheep 33. Investments in sheep would include on-farm development costs for fencing, sheep sheds and yards, watering points, pasture improve- ment up to 150 hectares per farm, and the imortation of sheep flocks averaging 500 breeding ewes and 15 rams per farm. Such sheep are expected to be available in sufficient numbers and quality from several countries. The program would extend over all suitable areas of the highlands which are found in selected parts of the Departments of Santander, Boyaca, Cundinamarca, Narino, Cauca, Valle, auila, Tolima, Caldas, and Antioquia (see Map 2). 34. The project is essentially a pilot one and would involve only 35 farms over a three-year period. These farms would average at least 1,000 hectares in size, and eventually carry up to 1,500 breeding ewes plus followers. After full development of twelve years, armual production would be 12,000 kilograms of high quality wool per farm. In addition, rams and surplus ewes of about 20,000 head would thereafter become available annuaLLy from the project for disposal to other farms. - 8- * L~~~Ilit t~ U-JI1cLUtZ,U jLAJ Vt: WUIIiJ t, UU U 0J. UIIU ~JJI UJU~ U -L) ~ L.juLvO.LuI u UL US$ 28 million and is summarized in the following table: Beef Dairy Sheep Total Foreign Cattle Cattle Exchange Componen t uoip -uuu equlvaient Farm Development Land clearance 1,780 280 - 2,060 210 Pasture improvements 1/ 4,600 2,580 340 7,520 750 Fencing 2,280 560 210 3,050 7c0 Water supplies 2,g70 500 60 3,530 1,760 Farrn machinery 1,310 1,110 20 2,440 2,440 Farrn buildings and equipmen-t 2/ 820 lt4o 4o 1,300 130 Breeding stock 3/ 3,330 930 8ho 5,100 1,350 Total Farm Development 17,090 6,400 1,510 25,000 7,400 Contractors' Machinery 1,000 - - 1,000 1,000 Dairy Cooperatives ld - 660 - 660 320 Techn:ical Services 750 300 290 1,340 380 Total Project Cost 18,840 7,360 1,800 28,000 9,100 Per cent distribution 67 0 26 7 100l 33 5 1/ Including fodder crops, silage trenches iand -,miscel1cnecus. 2/ Including stock yards and artificial insemination equipment. 3/ Including semen. 4/ Expansion of dairy plants and investment costs of artificial insemination services. - 9 - 36. The foreign exhhange cost totaling US$ 9.1 million or 33 per cent of the total investment cost has been calculated in US dollars. Local cost have been estimated in Colombian pesos and expressed in US do:llars at the rnte of 9 to 1 as this rate still was reflected in the price situation of the agricultural. sector at the time of appraisal. The recent devaluation of the neso to 13.5 to 1 of course. has the effect of reducing the domestic component of cost and, therefore, of reducing the total investment cost exnressed in US doll-ars. This wil:l take place to the degree in which local costs would not adjust to the ne:w exchange rte. The mTninr factor in local costs iS the agricultural wage rate which was 9 pesos per man day, equivalent to US$ 1 at the time of appraisal. Under the neow. exchange rate the dollar eirvalent of the wage rate would be reduced to 0.67 if its peso cost would remain unchanged. Howrever, ages in other sectors were increased in he year pror to the devaluation and it is to be expected that agricultural wages will be adjusted Jn Adu course to Ar.tain their p pot.-e. T t-his into account, together with an allowance for contingencies it seems -aer to assume th-1-at- 4te,a- cost -4. -------A T7J Ad11-ar --;Il .3. ± U 0v ~ k ULICL U VLIa .L.LV4;;O L3LLV11L'L. J0 U, Q V_&JJ.I. ZL .-L4 Uk L 4'. L~~ not be reduced. 37. Farm development costs aggregate US$ 25 million or about 90 per centLu of -I-h1-e est-JU1kt-ed total pc,ec cos's. Cos's 'or cor.traclors! machinery, cooperative dairy equipment and technical services count for the balance of' US$ 3 mTillio. or abo-ut 10 per cent. Ail costs, except for technical services are capital costs. 38. Estimates for farm development costs are based on representative farm development plans for each of the project areas: beef cattle in La Costa and Los LlTnos, dairy cattle in Narino and Barranquilla and sheep in the temperate highlands. Details are given in Annexes 2 - 6. The basic assumption is that the following number of farm development plans could be prepared and approved over a three-year period: Project Area Ifumber of farm plans BOeef rnttl al T n t('nct.n 800 Beef cattle LosE Llanos 90 Dairy cattle Narino 150 Dairy cattle Barranquilla 100 Sheep General 35 Total -i - 39. Cost est1imates for contractors' machinery (US$ 1 million) are based on the estinated requirements for land clearing, dam building and welL boring. Provrision has also been made for the cost of expanding two cooperative dairy plants (US$ 600,000) in the Barranquilla area which would process the milk produced under this section of the project. In addition, US$ 60,000 would be required for setting up an artificial insemination service in this area. 40. The costs of technical services (US$ 1.34 million) to be provided by the Caja have been calculated for a three-year full employ"- ment period. They cover the local currency costs (US$ 960,000) and foreign exchange requirements (US$ 380,000) of salaries, vehicles and staff transport costs. Details are given in Annexes 2 - 6. D. Proposed Financing 41. The investment cost of the project, US$ 28 million equivalent, would be financed as follows: Bank Caia's Farmers and Total Loan Contribution Cooperatives (US$ '000 Equivalent) Farn development. 15;00Q 5ooo 5;° 25000 Contractors' machinery 1,000 - - 1,000 Dairy cooperatives 320 140 200 660 Technical services 380 960 - 1,340 Total 16,700 6,100 5,200 28,000 Per cent distribution 60% 22% 18% 100% 42. For farm development the owner would provide in cash, labor or materials 20 per cent of the estimated costs. The other 80 per cent of the cost would be advanced to the farmer as a loan from the Caja at 12 per cent interest and with a term of about 10 vears including a grace period of 4 years for beef and dairy farmers. For the sheep farmers the term would be extended to 12 vears with a grane period of 6 years to allow for the slower return from this type of development. The Caja would obtain 75 per cent nf its releva-nt fu-nds (60 npr cent of the total farm development cost) from the proposed Bank loan and would onntribute thbal ahTnce nf 25 per cent (2n per cent nf the total cost) from its own financial resources. ',hort-term credits required for complementina develop7men.t loans wouTld be pro-i ded by the Caja if such credits would not be available from other sources. 43. For the import of heavy machinery loans would be made to contractors at a shorter term of about 3 vears at 12 ner cent interest;. All funds required for this purpose (US$ 1 million) would be provided bv the RBnk lonn.. The tvn. nf maceh:ineryr renqired is nnt mTnnifactured in Colombia. 44., For the cost of expanding cooperative dairy plants and the ARtnh1ib.m..nt of an ar.ificial i nsem nation servinc- the riairv coopera1fivPe in the Barranquilla area would obtain loans from the Caja at 12 per cent interest at a te.rm Of 7 to 10 years totaling UST 1460,000. The foreign exchange component of these loans (US$ 320,000) would be provided by the proposed Bank loWn The costq oE land .dA const,.i,ct ion (TTS 20 r,)) would be contribuited by the cooperatives from their own resources. 45. For the cost of technical services the foreign exchange portion V(US L 80JVo_ ) O N Ot'd bDe provi dUeU byt L1e Ba- loan. Thi.LO FVJ VLL pLot .LLAude salaries and passages of 4 foreign Livestock experts to be employed ncler the projecti (para 52) plus the purchase of vehicles. 4u6 TIe DaIM loani VI UO$ 1.7L m iLI±±.Ol WoU±U be irnaue ut thUe UGoveir- merit of' Colombia which would carry -the exchange risk. Proceeds of the Loan f'or expendiitures in pesos woulid then be made available to tihe Caja by the Governmenti. The Caja will make the repayment to the Government in pesos and tne Government in turn wili service the debt tro the Bank in foreign currency. To cover a part of the exchange risk the Govern- merit will charge 2 per cent per annum on the loan anount outstanding in addition to the Bank's interest rate. 47., Suggested terms of the Bank loan to the Government take account of the repayments by the project farmers to the Caja. Assuming prompti repayment by farmers, loans disbursed in the last year of the four-year disbursement period would be fully repaid in the fifteenth year of the Bank loan,. However, in order to provide a margin for setbacks or delays, it is proposed that repayment terms of the Bank loan should be 18 yea] s including 6 years) of grace. E. Disbursements 48. Disbursements of the Bank loan for farm development would be for 75 per cent of loans made by the Caja for this purpose (para 42). For the cost of contractors' machinery, dairy manufacturing equipment and technical services disbursements would be made against appropriate documentation of the foreign exchange cost. The total disbursement period of the project would extend over about four years. Within this framework each individual farm development loan would normally be dis- bursed in two annual installments. The Caja would establish and maintain separate accounts for the livestock development project. These accounts would be audited semi-annually by an accountant acceptable to the Banlc. - 12 - F. Operating Resu-ls 49. Tne ep)ected financial implications for the Caja resulting from the livestock development project are set forth in Annex 7. According to this projection the project could De financially self- liquidating over a period of 15 years. The proceeds from loan repay- ments on principal and interest by farmers would cover ali obDigation; for the Bank loan debt service. The Caja would also recover with interest its own contribution of $ 6.1 million over the suggested repayment period of the Bank loan. Cash surpluses accruing during an intermediate period would be relent to farmers at long and medium terns fo;r the purpose of the livestock development program. IV. ORGANIZATION AND MANAGEZENT' General 50. The organization and administration of the program of financial and technical assistance to livestock producers iwould be carried out by the Caja. As indlicated in Annex 1, the Caja is an experienced agri- cuLtural credit institution. Currently it provides nearly 60 per cent; of all agricultural lending in Colombia. Operating since 1931 it has a good r,ecord of performance in respect to both the volume and variety of farm lending. The Government is the largest shareholder and provides continuing capital support. The Caja has successfully utilized two previous IBRD loans for agricultural machinery. Of a total loan port.- folio in 1964 of nearly Col. Pesos 2 billion, 90 per cent was for agriculture of which 52 per cent was for the livestock sector. Thirty Der cent of all agricultural loans were for terms longer than 5 years, the majortiy of the remainder were for 1 year. The proposed Bank loan and the Canins rontrihnMtion to the projiett wonild inirease the loan portfolio by approximately 15 per cent. 51. The Caja is well organized for handling agricultural lending onerations. Althnough the hul k Of its loans hs'ue heen short term it has some experience in longer term development financing for medium-sized farms as 2SXmplifiPfi ehy i_tS resfrl dA,irry devlopmen.t program at Narino. The continuance of this program would be incorporated with interested in extending its experience and its technical staff via the Bankv loan in thiJ type of operation. Tec.hnicnl Sev4ices and Lon Processing 5T'nnhr, .ic - t,-vnA nn -411 be pro-ided I- se+t ng up a special livestock development department within the Caja staffed by a technical .Al4 rA t hree 4S . chntt _4 -E,LSJ- .-- - - -- 4..L AN. -- - i. - - . _ ;~~~~1 V&A4- v;U LIs vLAss6s.LC 4 *U ,cL A .%U VVVctj, av iswc =-s scsuvwvv C&Qt ) 1' the regrouping of existing personnel under an administrative director ofsi' +he C,aja. The or -5- ion chart of the porje_ and the -tmechni staff required are showm in Annex 8. The Caja would appoint a technical A4-l A_c4o _An 4- --- h_ e-P 4- ch, , - -__1f-t C+ot^ th 'n nI -> -1n or t ~LA . V ". d LI LIIU L,±W 1.1 " ii .CA J 0 Jj 0 CL U J.L CA V'. J US JAV% - th,e effective date of the loan. 53. This livestock development department would be responsible for l. isv;g famiiers - ir prear, indv-u developme.t plans 'o.- recommending the-se to the Caja for lending and for supervising the execution of planS for which loansl are Imade. The k.iaJu WUUiU rfe dere- lopment loans under the project only with the approval of the technical department referred to. Financially and administratively the Caja would process these lo,ans in the normal way through its regional offices which are well equipped to do so. 54. Loans to machinery contractors (para 29) and dairy cooperatives (para 31) would be based on the number and capacity of machinery and technical installations required fc,r the project and would be made only with the approval of the livestock development department of the Caja. These different categories of loans would have varying terms and con- ditions within the specified general terms (paras 42, 43 and 44), de,pending on the composition of individual investment plans. Procurement 55. Goods required for farm development would be procured through existing commercial channels. There is a great number of foreign firms represented in Colombia competing in the local market. The Caja assists these firms in procuring and financing their import requirements espe- cially the import of agricultural machinery. The Caja also has its cwn stores, through which it supplies mainly small farmers with their small scale input needs on a non-profit basis. In addition, the Caja operates a special seed production unit which would be able to supply the tropical pastures legumes vital to the pasture improvement sections of the project. Importation and distribution of fertilizers, livestock and semen are also all normal activities of the Caja which will easily be applied to the project. All purchases of livestock required for the project woild be subject to the approval of the livestock development department with respect to the quality and origin of such stock. narre -Lng 56. T lhe cOmIodu"l(.Lese produacedU by thie project wo-lu bLe mar1ketedl through existing conmercial channels including dairy manufacturing cooperatives. These might not be considered to be efficienit whien compared with more developed countries but are probably sufficient for Colombia at the present time. The Government maintainis a consumer price control system for beef and milk but only in the larger towns and organized markets. in practice this control tends to follow market tendencies and does not have a restrictive influence. 57. Most of the beef is slaughtered in small abattoirs with the cattle being killed at night for delivery next day to the market as raw meat. A few modern slaughter houses exist with freezing chambers from which the small export trade is supplied. When an increase in export is experienced as a result of the project, expansion of these facilities will be required, but not before the later stages of the program. 58. The marketing of dairy products is either in the hands of small middlemen or dairy manufacturing companies and cooperatives. The latter produce the best qualities of liquid milk, butter and cheese and all of the powdered milk. There is general shortage of all products in the larger population centers which is reflected in good prices to the producer and a relatively high price for powdered milk as compared with the liquid form. The increase of production resulting from the project will easily be absorbed by this demand. 59. The production of fine wool resulting from the project will be readily absorbed by the textile manufacturing industry which at present imports all its fine wool requirements (para 17). V. BENEFPTT ANT) JT1JSTIFICAT TON 60. The benefits to narticiDatinp farmers from investments to be made under the project are analyzed in Annexes 9 - 13. The estimates are based- on typical farms for the areas and tvnes of proincts concerred. Expected results per farm at various stages of development can be n1emrmrized as follows: - 15 - Before After WThen Per cent Development 5 years of development21 increase DeveloDment is completed 3/ Beef ca+tle. La Costa (Investment cost: Pesos -58,000 per farm) Total. stock, No. ,1u0 1,60 1,0UU 52 Sales per year, No. 168 230 339 102 Net income, Pesos '000 per year 166 205 361 117 Beef catble, Los Llanos (Investment cost: Pes .30,0 pe Il ~n -r fa- r.m I Tota:L stock, No. 1,110 1,90 1,850 66 Sales per year, No. 152 248 285 88 Nev Incrme, ]'so '000_ per year 133 164 264 99 Da:ry ca-ttle, Narino (Investment cost: Pesos 202,650 per farm) Number of cowfs 30 55 60 100 Ililk sales, tons per year 36 146 180 400 Net :income. Pesos '000 per year 25 49 126 404 Da:iry cattle, Ba:rranquilla (Investment cost: Pesos 271,400 per farm) Number of cows 100 161 200 100 Milk sales, -tons per year 90 290 500 456 Net income, P?esos '000 per year 99 245 638 540 Sheep (I.r-v estlmuent cost: Pesos .387,000 per farm) Tota:l stock, No. - 2,500 4,640 TATSl ol aes lr, kg - pr yea = 17 12 ,O = Net income, Pesos '000 per year -l 3 .~~~~~I' _/KTet4c- m f:gures at +his; st-g -r ater deb+ servi^e. ~I .II U .L%,115..kLV LCUJ, V VAAJ..h. Q W G.J. - ~.LtU' . -t J~. 2/ After 12 years on beef cattle and dairy farms and 14 years on sheep f __ , __, -- , - _ - A W L ... ...! __ L±.. farms kiarm development loans woulu have Ueenii pdu Uac aL. i1u±s s1..agej. 3/ When development is completed as compared with figures before development. - 16, - 61. As these projections show, the net income per beef cattle and uaJ.Lr-y fa,r,, wo 'ud increase uy LU L0U t )o&' P Lo-5i. Uve WLe 12-year UdveLop- ment period of an individual farm plan. At the same time stock numbers WoUld incres by 50 to) V pLUJ P er Ci,'. Tihe sheuep el, sutja-t- iLng firo zero would also show a considerable net income and a large increase of produc- tivity from hitherto almost unused land. 62. The increase of annual production derived from the completed project (after 14 years of development) would amount to about 58,o0o tons of beef (liveweight); 63,000 tons of milk or its equivalent in milK products and 400 tons of fine wool. The gross value of this production would total about US$ 32 million per year at prices paid to producers. Assuming that 50 per cent of the increase of beef production would be exported and that all fine wool procluced would be an import substitution the project's contribution to the foreign exchange earnings of Colombia would be substantial. Deducting the foreign exchange component of the production costs and debt service the net increase of foreign exchange earnings would average about US$ 10 million per annum after completion of the development period. 63. The cash flows of the estimated incremental costs, including: the US$ 28 millicon investment cost cnd of the estimated revenues from incremental sales are summarized in Annex l1. For these calculations, it has been assumed that the lifetime of individual farm development plans wotId average 20 years and that all investments other than live- stc'ck would have no residual value at the end of this period. Costs and prices used in the first part of these calculations are those pre- vailing at the time of appraisal when the exchange rate was 9 to 1 (Assumption A). As an alternative it has been assumed that the foreign exchange componerLt of the investment cost, expressed in Colombian pesos, would increase by 50 Der cent accor(ding to the new exchange rate of 1,.5 to 1 and that domestic costs and product prices (in pesos) would remain unchanged (Assumption B). Under these two different assumptions the three sections of the project would yield the following average annual net, returns to the economv of Colombia: 1/ Assumiption A Assumption B Beef cattle t10 % 36 % Dairy cattle 35 % 32 % Sheep 23 % 20 % 64. These calculations do not take into consideration other more intangible benefits to the livestock industry as a whole. In particular the project would provide an important source of high producing beef ancd dairr breeding stock and would introduce modern production techniques such as the use of tropical and subtropical pasture legumes. The project's technical service will assist in develonine standards in a wider sphere than the project alone, particularly for the future expansion of the inclustrv.. Pinall=v the shepn see-tion wniild estahlish the basis for a lnpw livestock industr,y complementary to the present peasant sheep product-Lon anl with great. Avospeoitsnfn - l 1/ Based on the discounted cost flow method. - 17 - VTe CONCLTUSITONS AND RECOMG4MMATIOITS 65. The nrcoiptt wshinch is the first stage of a loong-ter,m livestock development program is technically and economically sound. The Caja with the staf1' additions reco nd-d -i b-e capable to administer the project It has sufficienti financial resources to provide the necessary funds. The dimnnd for such developm.ent is grea- U anld faLr.Lers are highly ±interestec in participating. 66. The project is suitable for a Bank loan of US$ 16.7 million. The borrower would be the Governmentl, of Colombia and the Caja would achdinister the loan. An appropriate terr would be 18 years, including a grace period of 6 years. The Bank loan would be equivalent to about 60 per cent of the total project cost. 674, During negotiations, assurances were obtained that: a) the Government of Colombia in making the Bank loan available to the Caja would not charge more than two per cent as coverage for the foreign exchange risk. This, when added to the Bankis interest rate would be the only amount charged to the Caja for the proceeds of of the Bank loan (para 46). b) The Caja would: Oi) make available for 'Lending to farmers promptly as necessary local currency funds equaling 25 per cent of approved farm development loans (para 42). (ii.) provide funds for short-term credit if such financing would be required for complementing development loans (para 42). (iii) use the proceeds of payments which it receives on account of loans granted under the project and which are not currently required to service the Bank loan for the purpose of the livestock development program (para 49). (iv) appoint a technical director and three chief technicians satisfactory to the Bank prior to the effective date of the loan (para 52). (v) follow the terms and conditions of the different categories of loans to be made to farmers, machinery contractors and dairy cooperatives, as agreed to with the Bank (para 54). (vi) make all purchases of livestock required for the project subiect to the approval of the livestock development department with respect to the quality and origin of such stock. (para 55) AiNEX 1 CAJA DE CREDITO AGRARIO INDUSTRIAL Y NIIIERO A. Introduction 1. The Caja was created by law in 1931 as a joint stock company. Itu is a se>,-ofici entL- ty;--UV problaD.y or,e of theA l1arge0st- cr ed+it si tutionsin Latin America. It is essexntially engaged in lending to agri- cL-ui,ure, bUt i '-.so poVV.Lue;s cre' ui U LtLLuo Cdsty ad smalUIL 1I- LiLr Abcut 57 per cent of total agricultural lending in Colombia is financed by the Caja.; 90 per cent of its loans are for agrLculture (52 per cent for li-e- stock). Without any doubt, over its many years of operations, the Caja h.1as served the far-mer giviing him preiferential consideratiLon Jun an endeavor to raise his standard of living. B. Organizat:ion and Management 2. The Caja's governing boody is a Board of D2rectors; it is made up of the Ministers of Finance and Agriculture, a representative of the President of the Republic and one de-legate from each of the National Coffee Growers Federation and of the Nlational Farmers' Association. Next in ]ine is the General M4anager, who :Ls assisted by five committees, on coordination, fincnce and commerce, credit, development and administra- tion. The General. Manager and the Committee members are appointed by the Board., These committees are stafEfed with specialists in each field. 3. The central office enforces its policy through regional offices. TheIe are 600 regional offices (branches and agencies) covering the most remote areas of the country. The branches are located in the capital of each "Departamento"l (administrative provincial sub-division). They have a manager who is responsible for the credit operations within his area and who has authority to grant loans for up to a specific amount, determined on the basis of the importance of the locality. The branches have a consultation Board, formed by members appointed by the Board of Directors., from a list of candidates submitted byr a local Farmers? Association of each "Departamento". These Boards pass on credits in amounts exceeding the limit set forth under the regulations applicable to each manager. 4. In addition to the branches, there are credit agencies located in every rmunicipa1ity. These agencies range in size and volume of opera- tions, depending on the area they cover. Each agency has specific credit authority. commensurate to its tvpe. and has a manager. The agencies also have an Advisory Board, formed in the same way as the Branch Boards. These Boards in the same way as applicable to the branches, assist the agency manager in his credit policies and have authority to grant loans for specific amounts depnending on the tvne of agency. 5. The unper limit of loans -Unbich can be approved at the branch.-. agency level varies from Col. $ 15,000 to 300,000 and is largely deterxined, as it was mentioned, by thre- ncyn"r. ANNEX 1 C. Pwsources of t.Ie Cjqj 6.iulU TheCaj.za has aLnI- authorized. sLfL,r c,p4tal of C 6 r i (60D,000 shares with a par value of Col.$ 10,000 each), with Col$ 478 rillio0 paid in as of' Julne 30, 1965, owned as follo-ws: 000/, OCLId Lt1lJn.LL rr.~ ~ ~ ~ ~~ ~~o. ''--OOu Perenag 0 o,.ost l v.ational Government 030,0)0 80.1 Coffee Growers Fed. 61,935 13.0 Agricultural rIortgage Bank 21,003 4.4 Stabilization Fund 6,876 1.4 Private Sector 21 ei. Total 478,465 100l 0 In addition, the Caja had about Col.$ 40 million in legal reserves and 1-to..L. no01. t.) 0n IiL1±411 ±1 -.ULI--- £-Vr4JO ±OL Ii ±.' 3'J-0 _-4J.t J dividends but reinvests most of its profits which were Col.$ 15 million £11 1YU4. 7. The Caja enjoys exceptional rediscount iacil±ities wit'n tue Central Bank. Its rediscount quota. was increased from Col.$ 750 million to Col.$ 845 mi-lion in June 1965. This is equivalent to 172 per cent of its paid-in capital and legal reserves versus 45 per cent authorized to commercial banks. Seventy per cent of the Caja's rediscount quota are for short and medium-term credit (up to five years), and 30 per cent for long-term credi.t. The rediscount rate paid by the Caja to the Central Bank is two per cent compared to four per cent charged to commercial banks for loans of developmental nature. 8. Demand deposits amounted on June 30, 1965, to Col.$ 388 million. Of these funds, 60 per cent can be used by the Caja; the rest (40 per cent) are earmarked for reserve requirements and for purchas6sof securi- ties of the Central Mortgage Bank. 9. The Caja Colombiana de Ahcrros (Colombian Saving Bank) was consolidated wit:h the Caja in 1955. On June 30, 1965 there were savings deposits totaling Col.$ 675 million, representing 60 per cent of all savings deposits in the country. The interest paid in these deposits is from four to five per cent. The use of 80 per cent of these funds is regulated by law; they must be invested into government and other official bond issues, rural housing and purchases of land for resettlement. 10. At present, the Caja has issued bonds amounting to Col.$ 329 million, Col.$ 219 million are held by the Central Bank, Col.$ 107 million by the commercial banks and Col.$ 3 million by other private institutions. The interest paid on these bonds is from two to four per cent and subscription by commercial banks is imposed either as a liquidity measure (five per cent of their demand deposits) or as a penalty in case they have not complied with Law 26, which prescribes that they must invest 15 per cent of their deposits in agriculture. ANNEX 1 page 3 EL. The Caja has received six external loans including two from the IBRD (fully repaid) since its creation. Only one recently granted US$ 2.5 million from the Exim Bank for agricultural machinery is out- standing. In addition, it is the administrator of Pi 480 counterpart funds. The Caja hias benefited from four U.S. loans of counterpart funds for a total of about Col. $ 187 million. Of this total Col. $ 181 million have been relent bDy the Caja, generally to small farmers. In 1963 the Government of Colombia decided to assume the repayment of the Col.$ 18:i instead of the Caja thus increasing its capital subscription by that much. D. Activities and Lending Operations 12. The Caja not only provides credit to agriculture, but it assists farmers in obtaining agricultural machinery and sells a wide variety of products needed by them. Its total portfolio increased from Col.$ 811 million in December 1960 to Col.$ 1,944 million in December 1964, an average annual increase of 34 per cent. In June 1965 the portfolio amolnted to on3ly Col.$ 1,945 reflecting current credit restrictions. Almost 52 per cent of the Caja credit as of December 1964 was for live.- stock; 39 per cent for cattle and the rest for pastures, farm improve- ments and purchase of farms. 13. As of December 31, 1964 (last available data with detailed ana:Lysis) there weare about 00,000 loans outstanding, which for a total amoumt of Col.$ 1.9 billion give an average size of loan of about Col.$ X,6oo. This is perhaDs the essential feature of the Caia: it make3 many small loans. The average of cattle loans was somewhat bigger, ab,iut Col.$ 8,700. The size of the Caja loan depends unon the Durnose and the duration of the loan. In livestock, for instance, the loan is limited to Colt 150;000 (Goi $ 2oOnn for fttpning eycepnt in Los T,Llnos where the limit is Col.$ 50,000). However, these regulations will not apply to -the IBRnraia projnect. 14. The rnai SeGnres a11 its lnnns either bhv first mortgage on land and improvements or by a chattel mortgage on cattle or machinery. The lonns carnnrn+. exceed 60 per cent of the value of the lande or 50 per cent of the value of the cattle or 75 per cent of the value of the agricultural 1 ~ T,a +anc rv' 4+o1^-on n"- -b,4~-aA +In-~ h -^^r%nni, r nIn -s +la .,. ~ ~ ~ ~ ~ ~ -- X .., -- w~ ..r wh expenditure financed. In livestock, for instance, fattening loans are r.aded for no ., orer thann..L MOLbJV*UUSQ -A -O±--S aII- year +1,f, 4 . - .L.veT J ;S4ors in corrals, fences, pastures, watering places, agricultural machinery, breer-tns a two'as, e gtrce can g et cre up tao inVed ya. F r tI 1. operations a two year grace period can be obtained. ANNEX 1 page 4 16. There are variations in the rates of interest charged by the Caja but the general rule is the following: Caja Interest Rates Up to 1 year 1 to 5 years Over 5 years Up to Col.$ 5,000 8 % 10 % 12 ,o Over Col.$ 5,000 9 % 11 % 12 %, In addition, borrowers are required to contract a life insurance polic;y with the Caja at an annual cost of one per cent of the outstanding amount of the loan. 17. The Caja's collection reccrd is good. From 1961 to 1964, the proportion of losses due to irrecuperable loans has been Col.$ 1 for 10,000 lent. Delinquent loans during the same period have averaged 15 per cent of the total amount lent. The following table shows the trend in (Col.$ '000,000) Year Total Loans Delinquent Loans Percentage 1960 887 147 15.8 1961 1,068 182 15.9 1962 1,278 247 15.2 1963 1.71h 392 14.h 1964 1,913 13 114.6 The essential reason for the good collection record is that the Caja, for the mnioritv of the qm1ll famer6j iq the only sourpe of rel2wtAve cheap credit to which they have access. Should they destroy their credit with the aja, they wnould fall into the hands of money lender. E. Financial Situation 18. The ratio of net income to equity capital, on the return has St,mAily 1* prr d over thI past five yrsn fror fl . 7 p - c7-ent ianf 19 60f to 3.1 per cent in 1964. However, for the 6 months ended June 30, 1965 Lhe ennt InnrS.e ha fP1 n -h"lymd1ur A to s-easonl sa ifle ar.d to n= tractionary credit regulations. It must be remembered that the primary TI;^+ rn -fP +h1- e -;_ rn _^W4_O bje__- L J W&UO.ljlj ~ O U4V .LJ4~ LJUidJvJ~I~j.U c1ah h econkarep reserves, degrwed as on scodp table rloan PuI te cash, have kept pace with the growth on deposits, thus reducing the c hances_ ..t lea-rj w` wi3 -----nwn . - 4fhnt. -,.lil. h n 4.- . ni n AN.TEK 1 20. The rati.o of total debt to paid-in capital and reserves has been t>he ILollo-w Ig over the past years: IyOU Lyfo.l 1963 1964 80i'. 81j/9 83/17 78/22 80/20 Sunmarized balance sheets and income statements are presented in the following tables. ANNEX 1 Table 1 CAJA DE CREDITO AGRARIO INDUSTRIAL Y lCNERO Summarized Balance Sheets December 31, 1960-1964 and June 30, 1965 (lin, -,uuo of Cl4.') June 1960 1961 1962 1963 1964 1965 ASSETS C- sh 26,1.-20 Lo LAO At , lo 65,501 i 5,9 i Li RL8 Il Mnoy Various debt.ors 66,992 84,809 82,584 90,595 82,113 99,901 LOAN PORTFOLIO: a) discounted or guaranteed 514,957 598,604 691,068 834,888 1,032,409 1,122,707 b) Mi.ountsbl.e 288.7Lh 350.788 385,657 519,680 624,146 482,176 c) not discountable 78,190 110,655 190,396 344,709 264,093 310,021 d) other 5,418 8,311 10,973 14,883 23,203 30,331) Total Loan Portfolio 887,309 1,068,358 1,278,094 1,714,160 1,943,851 1,945,234i Mandatory Investments li 200,579 204,593 194,422 240,548 259,428 321,49.5 Inventory 2/ 133,246 92,233 81,501 168,491 175,944 184,646 Works in progress 2' 30,676 26,095 26,493 35,901 38,0 39,5e Crop promotion. campaigns 11,562 14,654 16,360 14,957 20,992 14,059 Buildings and land 57,756 66,009 71,886 83,047 95,518 103,074 Other assets 214,430 283,621 309,216 182,486 225,664 245,959 Total Assets 1,628,989 1,882,861 2,126,057 2,581,481 2,983,412 3,098,111 . ......... ........ ......... ........ann=.= LIABILITIES Demand Deposits 164,162 194,521 224,513 294,884 384,612 387,989 Savings Deposits 375L494 401,843 481,697 628,984 693,122 675,21,1 Interest received in advsrne 23,732 29,972 35,982 60,596 66,782 70,672 Deferred Liabilities 34,754 34,344 35,336 38,602 55,856 64,921 Payable by insurance department - 7,836 8,961 10,247 13,017 16,953 Publ4ic fnds ea., -arked 20,58 3 ,9 3 4l7A L 17-1 5-,2 'AR 34,8731 P.L. 480 funds 118,503 154,909 1.83,870 17,368 16,363 14,870 Discounts with Central Bank 317,870 383,592 476,405 595,655 760,700 836,ooo Bonds Issued 209,634 232,063 240,993 276,233 312,749 329,507 Long-term foreign loans 15,519 12,070 8,622 5,173 - 1,070 Ot;her rAAb:flitiA. 17,430 28,650 1835Ao2 26;856 66;390 Totai hi14+ioe 1,297,687 1 ,503,1 3 1 7t7 3 l 0A0t 130 2,381,325 t 4oR 25A ,. .= .. _ .= ....... n=.w _.",= _0 ... . ._ . . .,0 . .. .. . . ........1. Capital Account: Paid-in Capital 258,588 283,764 291,567 464,435 476,615 478,463 Legal Reserves 31.459 32,156 32.931 33.917 38,406 39.1515 Other Provisions 4 39,070 39,837 39,357 62,900 71,981 80,SO4 Profits 2,185 3,911 4,837 10,914 15,085 1,481 Total Capital Account 331,302 359,668 368,692 572,166 602,087 599,614 Total LLiabilities and Capital Account 1,628,9891 1,802,861 2,12b,057 2,581,401 2,983,412 3,098,117 ..s 0 fG... ......... .... ...C..OI Genera:l Note: The total figures for 1960 through 1963 are smaller than those produced by the Caia by the amount of unpaid oapittl in order to nOmnly with the 1964 presentation. 1/ See paragraph 8 and S'. 2/ MaiLnly agricultural nachinery and supplies of the Caja's stores. 31' Irrigation, land settlements and other civil wforks. 14 Theise are mainly reserves not elsewt'ere provided for, i.e. insuranceq foreign exchange losses and other contingencies. ANNEX 1 CAJA DE CREDIT O AG- n >10 IN s-LJU)t-l I V.TLIMRk Summarized income and Expenditure Statements December 31, 1960 - 1964* and June 30, i965 b / (in ; 000 of Co1 . $) June INCOME 1960 1961 1962 1963 1964 1965 Interest 70,290 82,234 101,911 131,781 186,929 101,072 Commissions, fees and other service charges 7,676 8,891 9,516 11,324 15,482 6,432 Income from savings invested 14,683 24,813 28,088 32,266 36,988 27,561 Other income 14,140 13,378 16,735 24,011 22,340 8,152 106,i 789n -1 29,16 15625 -I199,382-In An1) 67 - 0- 143,2 )1 7 (U,U7 J 47 , )±U ±_?J, C)' .L7.7,)Ue- LJ.'L ,I J/ .L4j,C-L I Salaries and travel 37,136 hO,3.2 h7,803 59,957 73,789 38,265 Social charges 4,586 7,647 6,665 7,4X30 141,816 22,657 Interests and other charges 13,737 23,909 28,359 36,138 141,238 31,251 Interests paid on savings deposi.ts 21,337 23,712 28,493 32,295 38,049 21,317 Reserves. and provisions 14,316 15,597 23,764 34,654 28,806 13,626 Other 13,492 14,198 16,329 17,994 22,956 14,612 104,60o :L25,4o5 151,413 188,L68 246,654 141,728 Net income 2,185 3,911 4,837 10,914 15,085 1,489 1/ The Caja's accounting period is 6 months. Yearly figures have been obtained by aclding the six-monthly figures provided to the Central Bank which is the Caja's audi-tor. ANNEX 2 INVE3-,TMENT COSTS OF THE LA COSTA BEEF PROJECT TPhe La Costa Bef Projiec a 8nn farms averagingV nlnl GOJT in herds of approximately 1,000 head using 500 ha of land. On-Farm Investnent<; Per Farm Total Pesos Pesos_ ('000) TUS$c ('000) 35 k3ins of .fencing at 4 pesos per ,n -I 1*,'000 1,205 r)L0 1 V.-ater point, pipes, troughs, PWUrlps, etJ,),UU L,U. 1/3 Stock yard at 21,000 7,000 5,600 620 _ * 1 . o * 4 -. _ -n n^ -^^ n Z ^on -I '7 Or Clearing land 2) hia at uuu cu2uu0 iuuuu -I0U0 Improved bulls at 8,000 24,000 19,200 2,13() Pastuire improvement 50 ha at 1,000 50,000 4o,oo L4,450) Machinery (farm) 13,000 10,400 1,160 Total 158,000 126,4oo 14,05( Heavy Machinery for Contractors for Dam-bu:ilding, clearing, well-boring 8,100 90( Technical Services a) Staff Number Salary in Pesos per annum 1/ Teclnical Director 1/4 62,000 Administr. Director /li 29.50o Chief Technician 3/ 159,000 Veterinarians 3 26.o0oo Techlicians 11 968,000 Administration 2/ L 152,000 1, 6 c:n 3 Year Total 4,90o 543 b) Purchase of Veh:icles (16 at 31,500) 504 60 Tota:l Technical Services 5,4o8 600 Total La Costa Beef Project 139,908 15,550 1/ Including Transport Costs 2/ Including Secretaries and minor staff iiA-TITh ) ivES1'rFL;1' UU01 OFV ilI LJO .L'UOS B-AF rnRUdi,I 11. Los LLanos The Los lianos beef project has 90 farms averaging 400 cows in a herd of aporoxirnately 1,000 head on 500 ha of land. On-Farm Investment.s Per Farm Total Plesos Pesos ('C0O7) US$ ':' 00) 20 km of fencing a-t 5.2 pesos per meter 104,000 9,360 1,040 1 1/2 wate:r points at 20,000 30,000 2,700 1300 1 stock yard at 20,000 20,000 1,800 200 3 improved Colombian bulls at 6,500 19,500 1,755 200 Farm Machinery 15,000 1,350 150 Seeds and 'Fertilizer 15,000 1,350 150 Purchase of 100 hei.fers at 1,000 100,000 9,000 1,000 Total o:n-farm investments 303.500 27,315 3,o4o Heavy Contractor Machinery 900 100 Technical Services a.) Staff Number Salary in Pesos per annum I/ Technical Director 1/L 62.000 Admiinistr. Director 1/4 29,500 Chief Technician - - V'eterinarians 1 88,ooo Teehnirians 1 88,ooo Administration 2/ 4 152,000 Total 419,500 3 Year Total of Staff Costs 1,259 i1ho b) Vehicles (2 at 31,500) 63 10 Total Technical Services 1,322 150 Total Los Llanos project 29.537 3.290 1/ Including Transport costs 2/ Including Secretaries and Minor Staff ANImEX h INVESTMENT COST OF THE NARINO DAIRY PROJECT The Nlarino Dairy Project has 150 farms averaging 30 milking cows on approximately 56 hectares. On-Farm Investments Per Farm Total Pe!sos Pesns ('000) I Ss ('000) )n ha imnrnvpd naRtAirp at, nlon ),), nnn 6nn 73n 8 ha alfalfa at 1,020 8,160 1,224 140 A ha fodaer opts Pt 530 ,2J,o 70 2,800 m. fencing at 5 1.4,000 2,100 230 1 elec.trir fencing unit 2,000 300 30 2 water supply points at 1,100 22,000 3,300 370 2 oVw shed 1 dairy 12,000 1,800 200 1 tractor + farm machinery 38,250 5,737 64o 22 dairy heifers at 2,000 4),000 6,600 730 1 dairy boiler and milk cooler 4,000 600 70 Miscellaneous 10,000 1,v500 1 70) Total on-farm investments 202,650 30.397 3,380 Technical Services a) Staff Number Salary in Pesos Der annum 1/ Technical Director 1uS 31.000 Administr. Director 1/8 14,750 Chie,f Technician 1/2 106jOO Veterinarians 1 88,000 Technicilans 2 176,000 Administration 2/ 2 76,000 Total b91,750 3 Year Total of Staff Costs 1,476 160 b) Purchase of vehicles L 126 10 I'ota'l Tecnhnicn al Seirvlcs 1,602 170 Tota'l tNarino Dairy Project 31,999 3,550 1 / TIncludin t~~franspr+tcost 2/ Including Secr~etaries and Mior Staff AMThTTMV 1 TlTr7'c'r. T"!m rs -\'rncMC fM ;mTITT D A nl A A.TaTTn T T A n A TOV noDC TLr'OM iH9 VI. l: A iDaE l t'.,a)L f t. i I ilL. .AIvAu'L.t. l'U1JJLa-i JJAAItI I r iLJJ.nAJ The Barrcnquilla Dairy Project has one hundred properties each with 100 dairy cowSon 250 ha. On-Farm Investments Per Farm Total Pesos Pesos ('000) US7 (1000) Land clearing 50 ha at 500 25,ooo 2,500 280 Pasture establishment 120 ha at 660 79,200 7,920 880 Pasture improvement 120 ha at 260 31,200 3,120 350 Silage Trench 6,o00 600 70 Fencing 5,000 m. at 5 per m. 25,000 2,500 280 Electric fencing unit 2,000 200 20 Water supply one unit 12,000 1,200 130 Farm Machinery 36,000 3,600 400 Milk.ing shed 15,000 1,500 170 Milk-ing shed equiprnent 4,000 400 40 A.I. Flask 3,000 300 30 180 ampules semen at 100 :L8,000 1,500 200 Miscellaneous 1L5,000 1,500 170 Total. on-farm investments 271,400 27,1440 3,020 Dairy Cooperatives Equipment Dairy Plan-t (Local costs 2,900 pesos) 5,y3v b0O A.I. Services (Local costs 100,000 pesos) 540 60 Technical Services a) Staff Mumber Salary in Pesos per annum 1/ Technical Director 1/8 31,000 Administr. Director 1/8 114,750 Chief Technician 1/4 53,000 Veterinarians 1 88,000 Technicians 1 88,000 Administrators 2/ 2 76,000 .5>UJ (")U 3 Year Total 1,052 120 b) Vehicles (3) at 31,500 95 10 Total Technical Services 1,147 130 Total Barranauilla Dairv Proiect 3L.220 3.810 2/ Including Transport Costs 2/ 1neutding Se retaripq and Minor S-taff ANNEX 6 INVESTMEITT COSTS OF THE SHEEP PROJECT Sheep The sheep project has 35 farms with at least 300 ha of land suiable 'or artificial pastlures an' "I i,.ported sh-eep per farmn. su111 U2Ij.L Ijt UAII JL L rUu L £dL FI I IL) d Orln -Fa r... Tn-vestment;; ..... er Parmi Mot4.all Pesos Pesos ('000) US$ ('000) 150 ha of :improved pasture at 500 75,000 2,625 290 500 breedin-g ewes at 400 200,000 7,000 780 15 rams at 1,000 15,000 525 60 11 ,i,s. fencing at 5,000 55,000 1,925 2i1 Water supply unit 15,000 525 60 Corrals, yard 6,000 210 20 Shearing machine 4,000 i4o 20 rertilizing pasture k(10 na) at ok0 12,UUU hU2 5U 1 Wool shed 5,000 175 20 Total on-farm investments 387,000 13,545 1,510 Technical Services a) Staff Numbers Salary in pesos Narino General per annum 1/ Tech. Director 1/8 1/8 62,000 Admiriistr. Director 1/8 1/8 29,500 Chief Techlicians 1/2 1 318,000 Veterinarians - 1 88,000 Technici1ans 1 1 176,000 Administrative 2 2 152,000 Total 825,500 1- Vt 'CT s n + 7-X t Li) Veiclesd 2 T = auL_).± 35 1 2L0 Total Technical Servicpe 2,')I 290n Total Sheep Project 16,179 1,800 1/ Including transport 2/ Including Secretaries and Minor Staff CAJA LEi 'R7`71T A ;ARIIiIANDCS3RIAL Y C NR Project Cash F.ow Statemot (,ONy of 0;. 1OQacs) Year 1 ~ ~ ~ ~ ~~~ ~ ~ ~~~~2 7 8 9 10 11 12 13 1k. 15 16 17 18 1. CAll) 1NTL0W IBRD Funds: i. Lomm to Farvmers 2,500 5,000 5,000 2,1500 - - - - -- - - ---- ii. Loan to Contractors 1,000 - - * - - -- - - - - ---- - i1i. Loon to Cooper.tives 0,320 - - -. - - - -- - iv. Technical Services 0,095 0,127 0,127 0,031 - - - - - - - - --- - a)Total ISRO Fuods 3,915 5,127 5,127 2,1531 - - - - - - - - ---- C&a&I Contributicn: i. Loan to Fwrmers 0,830 1,670 1, 670' 0, 630 - - - - - - - - -- --- Li. Loan to Cooperativss 0,150 - - . ii1. Technical Services 0,2L0 0,320 0,320 0,8 - - - - - - -- b) Total CaJaL's Contributioa 1,210 1,990 1,9900 0,910 - - - - - - - - - --- - c) Repayment of Loan by ReciLpients - 0,506 o,506 o,U,6 Cr,589 1,615 2,686 3,204 3,290 31,334 2,822 1,795 0,725 0,129 'o,03 - - - d) Interest paid by Recipients (12%) 0,378 0,927 1,67,8 2,528 2,357 2,163 1,851 1,457 1,262 0,662 0,323 0,108 0,020 0,011 0,005 - - - a) Total (c c d) 0,378 1,333 2,085 2,655" 2,956 3,778 5,527 5,661 5,352 31,996 3,155 1,903 0,745 0,140 03,05 - - - f) Total Receiipts (a * b o e) 5,503 8,550 9,201 6,285 2,95h6 3,778 5,527 4,661 5,352 31,996 3,155 1,903 0,71,5 0,140 0,058 - - - 2. CASH OUTFLOW Loans: i. To Panrmar 3,330 6,670 6,670 3,;30 - - - - - - - - --- - ii. To Contractors 1,00 - - -- -- - -- ---- iii. To Cooperatives 0,460 - . - - -- - - - - ---- - g) Total Loans 4,790 6,670 6,670o 3,330 - - - - - - - - ----- I) A1.ainatrativs Cost (2%) ~/0,048 0,162 0,291 0,.392 o,517 0,500 0,366 0, 312 0,256 0,178 0,210 0,05k. 0,020 0,020 0,020 - - - i) Technical kAssistance 0,335 0,457 0,557 O,111 i, 100 0,100 0,100 0,100 0,100 0),100 0,100 0,1OC' 0,100 0,100 0,100 - - - J) Foreign b:change Risk (2%9) 1' 0,03-9 0,19 0,2312 0,335 0, 335 0,335 0,325 0,3o)6 0,285 0,265 0, 251 0,217 0,190 0,163 2,135 0,105 0,071. 0,036 k) Suib~-total (g * h e i * J) 5,212 7,508 7, 610 4,1L67 c0,851 0,835 0,791 0, 718 0,631 0,542 0,451 0,371 0,3,10 0,283 0,255 0,105 0,071L 0,C36 1) Repaymnt,; of IfRO Lean - - - - - 0,560 0,955 1, 015 1,075 1L,1155 1,23.5 1,290 1,370 l,550 1,535 1,630 1,730 1,830 a) Interest laymnta (6%) 0,125 0,292 o,45;9 0,626 0,793 0,960 0,960 0,901 0,850 0,775 0,705 0,631, 0,552 0,469 0,381 0,287 0,1813 0,083 n) Co,metnent Charge (3/8%) 0,0o6 0,005 O0,(12 0,001 - - - - - - - - - - - - - -. o) Tota Papsents to IBED 0,131 0,296 0,561 0, 627 0,793 1,520 1,915 1, 916 1,915 I, 920 1,919 1,921. 1,922 11,919 1,916 1,917 1,9163 1,5913 p) Total Paye.nts (k + o) 5,343 7,705 8,101 5,795 1, 65 2,255 2,706 2,635 2,546 2?,462 2,370 2,29-2 2,Z32 2,202 2,170 2,021 1,9819 1,959 q) Balance before Ca)asa Reno~ery (f- p) 0,160 0,756 1,100 1.,591 1,302 1,525 1,821 2,027 1,806 1,5314 0,775 (0,3850) (1,587) (2,062) (2,122) (2,0O21) (1,9819) (1,9519) r) iaj&-a e aooery of Prio.clpal - - - *- 0,600 0,700 0,700 0,700 0,700 0,700 0,700 0,700 0,600 - - - a) Interest (21) 0,013 0,043 0,079q 0,122 0,122 0,110 0,096 0,0132 0,072 0,058 0,055 0,030 0,01.5 - - - - t) Balance Remaining (q - r -e 0,157 0,703 1,021l 1,369 11,580 0,715 1,025 1.24,5 1,035 0,776 0,031 (1,3119) (2,101) (2,,062) (2,122) (2,021) (1,989) (1,9509) u) Iwlereet E~Rnd son Cash Rerpluma / - 0,015 0, 086 0,1L97 o,354. 0,557 0,563 0,722 0,919 1L,i5 1,307 1,329 1,251 1,170 1,075 0,980 0,860 0,773 a) BalLance (t a a) 0.157 0,718 1,107 1,1566 0,934 1,1I61 1,588 1,9657 1,953 :1,924 1,338 0,210 (0,850) (0,892) (1,057) (1,O41), (1,109) (1,176) y) kccu-1ated 0,157 0,865 1,972 3,538 5,572 5,633 7,221 9,195 11,157 1,3,071 15,409 15,619 13,769 12,877 11,830 10,789 9,680 8,550 Mote,, I/ 1 Aaortizatlor. scnedfle was established so th. follo,wing bajis: co.ntractors, one Yea or gr-ace, three year.-s repay-t; cooperatives, one year of grace, six years repayment; diairy ard beer fara-, four year, of grace, si-x yearn repay,ot; saheep farmers, six yewar of grace, six years repayment. 2/ C.ajals stmate-td cost, ILppJAed to outotLanding balances or, loans to farmers. 3/ :[nterest paid to the"6anco de .a hepoblical on outstanding foreign exchange balances. SI It was assumed that ca,- s3rplos acconlatod! in predio.,s y-ear w,Il be used for- add4ttonal. loans to livestock farmers at a nat I,nterest rate of 10 per cent. - Tegroas rate ,dould be abhoot 12 per cent, allowing 2 per coont for ,adsimistratlva cost. Drgar;K.zati_or. 2hart, -f' _he Lives tfck Development, Project F-- -- - General Manager- of the Caja Iffices of the Assistant Gen- eral Manager for Developrient t _ Project Cotuidtte 2 Directors cf thr Ciila Livestock Developmnent 1 Asst. Gen. ManaLger for Developnent Department 1 Technical Director, Project Delpt. 1 Tmchnical, Dir-ectcw 1 Aduinistr. Directmr, Project Dept. 1 Administrative Director I LA Llanoe Orientalea Iarno Coata S [parAnora I -…- ~~~~I I aCst (directly supervised I | 1 Chief Technician :L Chief Technician 1 Chief Technician bYr Technical Directcr) L K _ B ief Cattle Beef Camttle She stu (510 FLrs) (830 Far) (10 Farms) (25 Farms) I 1 VetArinarian 3 Veterinarians _ 1 Veterinirian I Technician 11 Technic:lans 'L Technician 1 Technician of Techlic a. Staff' 1 Da:Ictl tle Cz, I DaiI r Technical Director 1 (1X00 Farms) (150 Farm) Chief Techrniciaw 3 V te niriari' n 7 1 leterinarian 2 Veterinarican Teehriciai 17 1 Technacian e2 TerchLicians Total 28 … … _ DEVELOPMEIT OF A itoo CCW 'IA COSTA" BEEF CATTIE FARM A. STOCK AND SALES PROJECTION (NUMBER OF HEA]DS) Before ~- _eve1o me_ l 1 2 3 4 5 6 _ 7 8 9 10 11 12_ 1. Li.vmkto Pk Com 400 400 410 420 429 436 442 457 491 50) 500 500 500 &A 1 20 20 21 22 22 22 22 23 ;24 25 25 25 25 Calms Braded 200 220 246 294 322 327 332 343 368 37!5 375 375 375 one Tsar Old Mlxms1 194 194 214 239 285 313 317 322 333 357 364 364 3164 Tvo Year Md lxe&la 188 190 190 210 235 280 307 311 316 327 350 357 3.57 Three Year Qid HIt i J/ 9.1 93 94 94 104 116 139 152 154 156 162 173 177 Tbree Year Old Steerl 91 4 L77 T otal _1.1&L 1L210 1 222 12 79 1-X7 1,L9L 1559 I-6008 _ 16B6 1,7L) 1.776 -79L 1L74 2. S5lje Tbree Tear old Ste1r; * CcAl.$ 1,600 - - 47 94 104 116 139 152 154 155 16.2 173 177 Fomr 1leer oI S9ters t Gol.$ 1,600 88 90 92 46 - - - _ - - - - - Cu11C own @C ol. 1 020 7;2 72 74 76 78 78 79 82 88 90 90 90 90 _ tball Ie l O tkl..00 8 1 - _ _ 10 12 13 _ 44 53 45 _ 61 hfufre for Cow Eplataes)t4 81D 80 82 84 86 87 88 91 98 100 100 100 100 Heifers for lHrd Incrae - 10 10 9 7 6 15 34 9 - - - - Cull Hleifers for ile. - - - - 10 12 13 .4 53 SS 61 Total Nw r of lorr 81 __ 90 492 _93 9 = 103 115 138 51 15 = 1S5 _ 61 I Z fawMal_N>t Hortality rate before development haai been estimated aLt 3 per oexrt from calve barnuded to foiw year old steers. j/ Mortality rate 3 per cent. M/ Hortality rate 2 per cent M/ Mortality rate 1 per cent @/ To replace cull cows and deed cow (mortality raLte of cow.: 2 per oent) ,iVi':1)F.ir. |F N 400 C.4 'LA COJTA" ;L-EF_ChAi F P.71 rINsC.NZAT FR;O-'E;CTION' 'IN PETS^S Be fore Year Development 1 2 3 6 5 6 1 8 9 10 11 12 1. SaLes 222,240 217,440 297,880 301,520) 245,920 275,120 314,980 339,860 380,160 394,400 606,000 429,600 447,000 2. Operating Costs: (a) Wages iO,400 10,400 11,000 11,200 11,440 11,600 11,300 12,200 13,080 1.3,320 13,320 13,320 13,320 (b) Sanitation 15,984 16,335 16,697 17,266 18,859 20,169 21,046 21,708 22,761 2.3,490 23,976 24,219 24,273 (c) Purchase of BulLs I1,600 3,6o0 3,600 2,000 2,000 2,000 4,000 4,o0o 4,000 2,000 2,0010 2,000 (d) Repair and Ylaintenance 15,986 115,335 16,697 17,266 18,859 20,169 21,066 21,708 22,7S1 23,690 23,976 24,219 2L,273 (e) Taxes ) of Sales) 2,222 ;2,174 2,979 3,015 2,459 2,751 3,150 3,398 3,'02 3,944 4,D60J 4,296 6,470 (f) Other D% 11,860 1:2,100 12,220 13,120 13,970 14,940 15,590 16,080 16,860 17,400 17,760 17,916D 17,980 Total 56,250 63,966 62,79, 65,6l67 67,587 71,629 74,632 79,096 83,266 86,66 85,092 85,994 86,316 3. Income Before Debt Service 165,990 153,696 235,087 236,05 3 178,333 203,491 26t0,348 260,746 296.896 308.7,6 320,90o 3143;,66 36C),684 6. Farmer's Contribution2/ - 15,800 15,800 - - _ _ ..- - - - - 5. Intsrest (12%) .7,585 15,:L69 15,169 15,169 15,169 13,905 11,377 8,849 6,320 3,792 1,266 - 6. Loan Repayment - - - - - 10,535 21,066 21,066 21,066 21,066 21,066 10,535 - 7. BaLance after Debt Service 16w,990 135,111 204,118 220,83n 163,166 177,787 205,377 228,,303 266,981 281.370 296,050 331.307 360.684 8. Arunual Difference (30,379) 38,:L28 54,896 (2,826) 11,797 39,387 62,313 100,991 115,380 130,060 165,817 196,694 9. Acc,--mulated (30,879) 7,269 62,163 59,317 71,116 I:LO,501 172,,814 273,805 389,186 519,266 685,063 879,757 10. VaLue of Increa3ed Stock 4/ .-13,600 4,dO0 111,200 191,700 267,600 324,600 367,,500 636,30)0 676,000 502,600 619,200 523,200 Notes: (1) Includ:Lng ccntingencies (2) Farmer is con,tribution accounts for 20 per cent of a total investment of Col.$ 158,0)0. (3) As conq?ared with b:alance before development. (4) Value of increasedi stock as compared with value before development. ,O DEVEI.OPM4ENT OF A, IOO (COW "LOS LLANOS' BEEF CATTLF FARM A. STOCK AND SALES PROJECTION (NUMBER OF HEAl)S) Betfore Year Deveilopmeint 1 2 3 4 6 8 912 1. Livealto&k Invontorv Purchasei young cow; or heifera - 50 5C) Cow. 400 400 +452 506 510 51i4 518 520 545 565 582 597 610 Bul1s 21 ;22 23- 24 25 25 26 26 27 28 29 30 30 Calves Branded / 180 225 276 303 306 308 310 312 327 339 350 358 366 One, Ye Old Hlxedid 175 175 218 268 294 297 259 301 303 318 329 340 348 Two. Year Old Iixed2 170 172 172 214 263 288 2511 293 295 297 312 323 333 Three Year Old Heifer/ 83 135 85 85 106 130 143 144 145 146 147 155 160 Three Year Old Steera 83 135 5 27 * - -- __ - Total ..L12 1. LL 1.33 L27 15 SO 162 I 7 1.5 1.642 1 693 'L 9 1.803 2. S Three YeaLr Old Steer @ Col.3 1L,500 - - 2' 58 106 1.30 143 144 145 146 147 155 160 Four Year Old Steern @ Col. 1,500 80 &82 84 58 27 - - - - * - - - Cull Cowls @ Col.$ 940 72 '72 72 73 73 93 53 94 98 102 1.04 107 110 Cull }ieirere i_Rolj 920 _ - - - - , 13 _ LL _ 15 Heifero Jfor Cow ReplacementW/ 80 80 80 81 81 1.02 103 104 109 113 116 151 122 Heifers for Hord Incirese - 2 4. 4 4 4 14 25 20 17 15 13 17 Cull. Heifers for Saile - - - - _ - 15 Total NIaiber of Heii'er _ ( Q ) 80 _ 82 8. 85 _ 85 3,06 L>9 21434Ih i 1A CaaLving l'ercentage _ LS 'jO 5f5 60 60 _ 60 c0 6C! 60 60 -60 6C) 60 General Note; Mortality rate before development has baen estimated at 3 per cent from calves brandsd to four year old steers. / Miortality rate 3 per cent. M/ Mortality ratte 2 per cent. ]/ Mortality rate 1 per cent. CD j / To replace cull cow. anrd dead cow. (mortality rate of cows.s 2 per cent). H F DVEVLOPMB.NT OF A 40) Ct1d "LOS LLANOS" BEEF CATTLE FARM B. FINUlCIAL PROJECTION (IN P]SS) Before eair DAvlopen i 2 3 4 5 6 7 8 9 10 11 12 1. Salels 187,680 190,680 234,180 242,620 268,120 28 2,420 312,960 :316,320 322,500 328,260 331,140 3145,960 357,200 2. Operating Costas: (a) Wages 11,,700 13,500 14,985 114,985 15,300 15,1435 15,525 15,570 16,335 16,920 17,1460 17,900 18,270 (b) Sanitation 15,012 16,389 18,009 19,264 20,3014 21,087 21,424 21,51s6 22,167 22,855 23,611 24,340 24,934 (c) Purchael of EBlls -- 4,000 4,,500 o 4,5oo 4,50() 2,500 4,500 2,500 4,500 4,500 5,000 5,0C0 3,000 (d) Repair and Maintenance 15,012 16,389 18,009 19,264 20,3014 21,087 21,424 21,546 22,167 22,855 23,611 24,340 24,934 (e) Taxes of sales) 1,877 1,907 2,342 2,426 2,68:1 2,824 3,130 3,163 3,225 3,283 3,311 3,460 3,572 (f) Other / 11,120 12,1L40 13,340 124,270 15,014 1;,620 15,870 15, 960 16,420 16,930 17,1490 18,030 18,470 TotaL 54,721 64,325 71,185 74,709 78,129 78,553 81,873 80,285 84, W, 87,343 90,1483 93,070 93,176 3. Incoim Before Debt Servicea 132,959 126,355 162,995 167,911 189,991 203,1867 231,087 236,o35 217,686, 2440,917 240, 657 252,850 264,024 4. Farnmerse contribution 2/ 30,350 30,350 - - - - - - - - - - 5. Interest (12%) -- 14,569 29,138 29,138 29,138 29,138 26,710 21,8514 16,998 12,141 7,285 2,429 - 6. Loan Repantt * - - - 20,235 40,466 40,1466 40o,466 40,1466 40,1466 20,235 - 7. Balance After Iebt Service 132,959 81,436 103,507 138,773 160,853 1514,1494 163,911 173, 715 180,222! 188,310 192,906 30,22!6 264,024 8. AnnuWLl Difference 3/ (51,523) (29,1452) 5,814 27,89]4 21,535 30,952 40,756 It7,263 55,351 59,9147 97,267 131,065 9. Accumulated (51,523) (80,975) (75,161) (47,267) (25,,732) 5,220 45,976 93,235 148,590 208,537 305,&804 436,869 10. Valuw of Increased Stock v/ .. 81,950 157,820 203,660 335,670 3814,4o 406,390 412,340 451,440 490,580 533,300 569,560 6015,870 Note 13 Moe:(1) Including contingencies. (2) Famerts contribution accounts for 20 per cent of a tot-al investment of Col,$ 303,500. (31 An compared with balance before deivelopment. (4) Value of increased stock aS compared with value bef'ore development. DEVELoPLMNTT OF A 30 COW "l#ARINO" DADIY FARM (48 Flectares) A. STOCK AND SALES PROJECTI0N (NUKBER CF READS) flifore plo nk : 1, 2 3 4 5 6 7 B 9 10 11 12 1. LO=zto I/rv DiLry Covws No-, 30 26 37 46 46 50 5:5 60 60 60 60 60 60 Heifer (2 ye7Ir) No., 6 173/ 17i/ 9 15 18 1j9 20 22 24 24 24 24 EeJLrare (I yIr) No,, 7 7 9 15 18 19 2D 22 24 24 .24 Z2 24 HeJLfrer Olvw No.l a 8 10 16 19 20 ZL 23 25_ _25 25 25 5 Total LD, 51 60 79 89 99 lOB 11 727 131 133 133 133 1Uwq ftrfozmame % 55 75 85 85 85 85 8.5 85 85 85 185 85 85 2. SajL Cull Cow@0 Col.$ 1 000 mo. 5 9 .5 7 8 9 .10 LL 12 12 12 12 12 Cull Iefer a Col.: 1,500 MD. - - 1 2 2 7 9 11 IL IL Calves N Col.j 100 NO. 8 10 16 19 20 21 ;23 2'5 25 25 25 25 25 Y4iik 6CoD1.$ 0.90 Kg. 36,000 421,600 66,600 92,000 101,200 120,000 143,100 168,000 180,000 180,000 180,000 180,000 180,000 liDtaB: Unit cf AoUoimt. j/ Provion to IeAd far the powhame of 10 two year old hbif r in the first and the isecond year. DEVELOPMENT OF A 30 (OW "NARINO" DAIRY FARM B. FINA±CIiL PROjE.CTI0N (IN FhES0S) Before Year Development 1 2 3 4 5 6 7 8 9 10 11 12 1, Sales: (a) M4ilk 32,400 37,440 59,940 82,80D 91.,080 108,000 128,790 151,200 162,000 162,000 162,000 162,00o 162,000 (b) Livestock 5,800 10,ooo 6,600 8,900 10,000 12,600 15,300 16,500 25,0DO 28,000 31,000 31,000 31,000 Total 38,200 47,440 66,540 91,700 10],080 120,600 i114,o9o 167,700 187,000 190,000 193,000 193,000 193,000 2. Operating Costs: (a) Wages 12,000 12,000 16,000 20,000 20,000 24,000 24,000 28,000 2,00o 132,000 32,C00 32,000 32,000 (b) Fertilizer - - - 1,120 3,840 3,8140 3,840 3,840 3,8140 3,840 3,840 3,8o40 3,840 (c) Tractor Operating Costis - 2000 3y000 4,000 6,000 6,0oo 6,0oo 6,ooo 6,0o0 6,ooo 6,,ooo 6,00o 6,000 (d) iLrtificial Insemination - 2,60o 2,700 3,600 14,500 14,800 5,10C) 5,400 5,7DO 6,000 6,000 6,000 6,000 (e) Veterinary Costs 688 810 1,066 1,201 1,336 1,L!58 1,579 1,7114 1,768 1,796 1,796 1,796 1,796 (f) Repair and Maintenance 357 810 2,370 2,670 2,970 3,240 3,5( 3,81LG 3,930,, 3,999 31,999, 3,999, 3,999c (g) Other - 510 600 790 890 990 3.&805/ 6.67(5/ 10.270 13310 3301 1333Q' 13;31Q7 ]3;30:'- Total 13,555 18,820 25,926 33,481 39,636 46,918 50,699 59,034 62,548 66,965 66,965 66,965 66,965 3. Income Before Debt Service 24,645 28,620 40,6114 58,219 6].,444 73,682 93,391 108,666 124,452 123,035 126,035 126,035 126,035 4, Farmer's Contribut:Lon 2/ _ 20,265 20,265 - - - - - - - - 5. Interest (12C ) - 9,728 19,457 19,457 19,1457 19,1,57 17,835 14,591 11,349 8,106 4,864 1,621 - 6. Loan Repayment - - - - - 13,5,10 27,020 27,020 27,020 27,020 27,020 13,510 - 7. Balance After Debt Service 24,645 (1,373) 892 38,762 141,987 140,715 48,536 67,055 86,083 87,909 94,151 110,9014 126,035 8, Annual D)ifference 3/ - (26,018) (23,753) 14,117 17,342 16,070 23,89;L 42,41C 61,438 63,264 69,,506 86,2!59 101,390 9. Accumulated - (26,018) (49,771) (35,654) (18,312) (2,2142) 21,649 64,059 125,497 188,761 258,267 344,526 445,916 10. Value of Increased Stock / - 8,900 34,100 46,700 58,900 72,600 85,500) 99,400 104,400 1(7,400 107,1400 107,400 107,400 Notes: 1/ Includes taxes and contLngencies t 2/ FaLrmer's contribution accounts for 20 per cent of a total investment of Col.$ 202,650 a 3/ As compared with balance before development ' lY Vialue of increased stock as compared with value before development t/ Allowance is made for concentrates DEVE0OPMOT OF A 103 COW _09'61 i-A2ThW' DAIRY FARM A. STOCN AND 5ALES FROJEMON(NIMDE OF Before _ _ Year Dwron+ 3 _ A _ _5 6 7 - 8 TL) Criollo--ZeWl Cove lb/. 100 lOt 106 112 90 65 37 5 (b' j Criollo-ZebL-Holit0in and Upa do Covw No. - - - 3 7_76 12, 175 200 200 200 200 2C0 Total Cow No. 3.00 100 106 112 125 143L 161 180 200 200 200 200 20c a yeV Hefer lNo. 26 26 28 35 -1 .48 51 58 66 72 8i 81 EC ((If WLoh Oriollo-Zebu) lb. (26) (26) (28) - - - - - - - - - I Year Heifers NO. 27 29 36 44 49 52 5'9 67 74 83 83 83 613 (of Waioh triLollc-Zeba) No. (27) (29) - - - - - - - - - - - tcLJLvso I;eiSsfe No* 30 37 45 47 53 60 68 76 85 85 85 85 85 (Of Which OriLollo-Zeba) Mo. 0)_ - -- - - - - - - - - Total 1338 268 30 --u2 38N U25 L0 4/9 WeaLing Prforxno'a % 60 75 85 85 85 85 85 85 85 85 85 85 E85 2. SalL Cull Cove@CoI.$ 1,20c lNb. 16 18 18 20 20 23 25 29 32 36 36, 36 36 Cull Beif.mL lNo. 6 - - - - - -, - 2 26 32 41 la CaIVe @ ol,,$100 NO. 30 37' 45 47 53 60 68 76 85 85 85 85 185 MLlk 0 Ool.$ 130 Kg. 9%000 IC-0,000 116,00 ]33>4- l S5OOO 22 .600 2,0) 0 A. ),000 JZOO 5)0, 500 MO Milkc Per C-'w Pwr Annum Kg. 9C0 1 ,COO 1,100 1,203 1,4t00 1,600 1,800 2,000 2,200 2!,400 2,500 2,500C 2,500 Genrl Iotes Milking head repl¢ imoluaiu. Aeaethi 20) per cent. 1' Unit of Aeeouit. i/ tull HdfUerm eaJl priac before dovelop,out (.1.J. 1,200 each and Gol.$ 2,000 therseLfter. DsVEOPrENT OF A 500 CCM "BARRANQJILLA' DAIRY FALRM B. FINANCILL PROJECTION (IN PESOS) Before rear Deve'lopment 1 2 3 4 5 6 7 8 9 10 11 12 I. Sales (a) Milk 11.7,000 130,000 151,580 174,720 227,500 293,800 J76,740 468,ooo 572,000 62h,00() 650,ooo 650,0o0 6c;0,ooo (b) Live slock 29, 400 25,300 26,,100 28,700 29,300 33,600 36,800 42,400 50,5900 103,700 115,700 133,700 133,700 Total 1146,400 155,30C 177,680 203,1420 256,800 327,400 413,540 510,400 622,900 727,700 765,700 783,7Do 783,700 2. Operating Costs: (a) Wages 40,000 40,000 L4O,OOO 44,000 148,ooo 56,000 64,000 72,000 80,000 80,0oo) 80,000 80,000 8lO,OOO (b) SElage Crop, I/ 1,000 2,700 2,,700 2,700 2,700 2,700 2,700 2,700 2,700 2,700 2,700 2,700 2,700 (c) Tractor Operating Costs 2,000 4,000 4,000 6,o0o 8,000 8,000 8,000 8,000-- 8,0oo 8,000 8,ooo 8,ooo 8,000 (d) Artif:icial InseLnation - LO,ooc 10,60o 11,200 12,500 14,100 16,000 18,000 20,000 20,000 20,000 20,000 2,O00 (C) VeterInary Costs ;2,470 2,592 2,902 3,213 3,618 4, 063 4,576 5;,143 5,737 5,940 6,061 6,061 6,061 (f) Repair ad Maintenance :1,281 2,592 6,4150 7,11IO 8,040 9,030 10,170 11,430 12,750 13,2006 13,4706 13,470 13,4706/ (g) Other 2/ 1,083 1,920 2,150 2,380 2,680 3,010 3,390 3,810 4,250 7,9140- 15,h50-' 15 45CI 15;I,506 Total 47r,834 63,804 68,802 76,633 85,538 96,903 108,936 121,083 133,437 137,780 145,681 1145,681 1145,681 3. Income Before Debt Service 98,566 91,496t 108,878 126,787 171,262 230,497 304,604 389,317 489,463 589,920 620,019 638,019 639,019 4. FaLrmr sa Contribution 3' - 27,140 27,1140 - _ - - - - - - - - 5. Interest (12S) - 13,029 26,057 26,o057 26,057 26,057 23,885 19,542 15,200 10,857 6,513 2,171 - 6. Loan Repayment - - * - - 18,095 36,186 36,186 36,186 36,186 36,186 18,095 - 7. Bialance After Debt ServLce 913,566 51,300 55,681 100,737 145,205 186,345 !44,533 333,589 438,077 542,877 577,320 617,753 639,019 8. Arnnuil Differ ence / - (147,266) (42,885) 2 ,171 46,639 87,779 1145,967 235,023 339,511 444,311 478,754 519,187 540,453 9. AccumunlAted - (147,266) (90,151) (87,980) (41,341) 46,138 192,405 427s,428 766,939 ],211,25C) ,69o,0014 2,20% 191 2,7149,644 10. VaLlue of Increased Stocik 5/ - 14,250 34,000 73,500 125,750 185,250 252,000 325,500 402,500 425,750o 443,750 443,750 4143,750 N3otes:t 1/ Includeas seeds and fertilizers 2/ Includee taxes and contingencies , 3/ Farmer's contribution accounts for 20 per cent of a total investtment of Col.$ 271,400 4/ AA compared with biLLaLnee before developmnt 5/ Value of increased stock as compared wath value before developmient 6/ Allowance is wade f'or concentrates DEVELOPMENT OF A PILOT SHEEP 'ARK A. Stock anCI SalIs Projection (Number of Heads) fYIBar 1 2 3 4 6 7 8 9 10 11 12 13 1.4 1. Sheep InNrentory Ewes No.- 200 3/ 490 528 666 823 1,022 1,128 1,239 1,500 1,500 1,500 1,500 1,500 1,500 Rams No. 6 d 15/ 16 20 25 31 33 37 45 145 45 45 45 45 Lambs No. 1h0 367 422 533 658 818 902 991 1,200 1,200 1.,20 1,200 ]',200 1, 00 Ewe 'Hogget 66 173 200 253 31.2 389 428 471 570 570 570 570 570 REa Hogget 66 173 200 253 312 389 42 8 471 570 570 570 570 570 Wethers - - - - - 67 162 302 529 745 750 750 750 TOtELI 346 1,004 1,31.2 :L,619 2,012 2,455 2,519 3,285 3,989 4,414 4,630 4,635 4,635 4,635 2. Sales Ram Hogget °/ No. - 62 160 185 235 297 300 3(0 300 300 300 300 300 300 Cull Ewes or Ewe Hoggets 7 No. - - - - - -- 140 2(3 84 373 467 467 467 467 Cull Wethers for Mutton / No. - - - - - - 200 200 200 Wool (Col. $ per kg) Kg. 876 2,403 2,971 3,684 4J,574 5,673 6,711 7,776 9,727 11,095 12,067 12,090 12,090 12,090 General tote: Lambing rate: fLrst year 70 per cent, Second year 75 per cent. Thereafter, 80 per cent. Adult mcortal:Lty five per cent. Ewes are replaced after 6 yeaErs at 70 per cent of original eWes hoggets or impcorted stock. 1/ The f'arm will need 150 hectakres of imlprovied pastures plus a further 150 hsetares lIter and h0o hectares of permanent grazing. 2/ Unit of account. 3/ Eves purchased: first year 200, second year 300. / Rams purcChaseds first year six, second year seven. 5/ EDwe and ewe hoggets give 3.5 kgs. of wool; rams 6 kgs.; laubs 1 kg.q wethers 4.5 kgs. Wool clip excludes ram hogget,s soLd 1With wool on. No 1rool incoie for cull ewes or hoggets is aLlowed for. 6/ Col. $ 300 (1/1, or import costs) a 7/ Col. $ 200 (1/2 of import costs) RV/ I01.8 $ *t.SI DEVELOPMENT OF A PILOT ShEEP FARsl B. FINANCIAL PRJ0ECTION rIN PESOS) Year 1 2 3 u 6 7 8 9 10 11 12 1.3 12 1. Sales: (::) S_.eep - 18,600 L6, 000 55,500 70,500 89,100 ll,OOO 130,S00 106,800 16L,600 183,Loo 207,LO 207,Loo 207,400 (b) iool 13,110 36,0L5 44,565 9,5,260 68,51o 85,095 103,665 116,$10 115,90, 166,125 181,005 131,35C 131,350 181,350 Total 13,110 51,645 92,565 10C,760 139,110 174,195 21c,565 2L7,210 252,7015 331,025 36L,L05 338,75, 358,750 3a8,75 0 2. Operating Costs: (aE wages L,0oo0 12,800 17,600 21,600 26,800 33,600 41,120 46,1oo 16,b00 64,400 68,o00 68,500 68,506 0 (; istatlishing Pastures _/ - - - 25,000 - 25,000 - 2-,000 - :25,000 - 25,000 (c Fertilizers 2/ - - - _ 12,000 12,000 12,000 12,1000 12,000 12,000 12,000 12,00C) 12,000 12,000 (cd' Sanitatlon 2,060 6,370 8,g900 1.0,d60 13,510 16,770 20,060 22,910 23,18( 32,110 31,300 34,350 34,350 34,350 (e) Sheering; 206 637 890 1,o86 1,35L 1,677 2,006 2,291 2,315 3,211 3,130 3,.35 3,135 3,139 (f) Repair a3I Maintenance 618 1,911 2,670 3,255 0,062 5,031 6,o18 6,882 6,95L 9,612 10,290 10,305, 10,305 10,305 (g) Others -3) 346 1,001 1,312 1,D1? 2,012 2,495 2,519 3,285 3,989 L,l1l 1,630 1,635; ,635 4.635 Tota' 7,230 22,722 31,372 3B,L23 59,768 96,573 82,723 118,101 9h,841 150,810 133,05C 158,225 133,225 158,225 3. Income Before Debt Service 5,910 31,923 61,193 72,337 79,312 77,622 135,912 128,839 157,861 180,215 231,355 230,525 255,525 230,525 4. Farmer's Contribution L/ 38,700) 38,700 - - -- - - - - - - - - I. Inteirest (121) 18,578 37,155 37,155 37,155 37,155 37,155 37,155 34,059 27,866 21,674 15,181 9,289 3,096 - 6. Loan Repayment - - - - - 25,800 51,600 51,6010 51,600 51,600 51,600 25,800 - 7. Balance after Debt Service (51,368) (13,932) 21,038 35,182 L2,187 40,167 72,987 43,180 78,398 106,911 161,271 169,636 226,629 230,525 6. Accumulated (51,368) (95,300) (71,262) (36,080) 6,107 46,574 119,561 162,712 2U1,139 348,080 512,351 681,990) 908,619 ],139,144 9. ValLue of Increased Stock 91,400 218,860 239,610 229,180 238,,650 282,510 315,360 311,400 ,1,780 165,,780 491,700 192,300 L92,300 492,300 Notes: 1/ Additional improved pastures will be established by t'he sheep farwer, financed from current income. 21/ Refertilization after the fourth year is considered as operating cost. 3/ lncludes taxes and contingencies. CD Farmer's contribution accounts for 20 per cent of a total investment of Col,.$ 387,000. LILv3stock Developiment Project Cash Flow of Increme-ntal Costs and Benefits (Col.$ million) Year 1 2 3 41 5 6 7 8 9 10 11 12 ].3 14 Beef Cattle Section Incremental. Sales ]-/ 1.ot 20.3 43.1 53.1 48.5 54.1 80.6 109.8 130.9 148.6 163.5 178.3 190.1 195.]. Operating Costs 1.20 3.2 6).3 9.0 12.2: 14.9 18.0 21.3 24e4 26a 3 273 27.6 28,,0 28.1] Net Benefits 0.4 1L7.1 36 .8 44.1 36.3 39.2 62.6 88.5 106.5 122.3 136.2 150.7 162,,1 167.( Investment Cost 3/ Assumption A 4/ 36.3 n3.5 53.5 26.2 Assumption B §/ 42.3 62.3 62.3 30.5 Dairy Section Incremental. Sales 1/ 0.9 3.3 7.9 13.8 21.4 31.0 1.7 55.8 68.4 78.1 83.7 85.7 864,3 86.3 Operating Costs 2/t 0.8 2.1 14.0 5.8 8.0 9.9 12.1 14.1 15.8 17.0 17.7 17.'9 17..9 17.9 Net Benefits 0.1 1.2 3.9 8.0 13.14 21.1 29.6 41.7 52.6 61.1 66.0 67.'8 68.,4 68.4 investment Cost. 6/ Assumption A 16.2 20.1 20).1 9.8 Assumption B g/ 18.9 23.4 23.4 11.4 Sheep Section Incremental, Sales -/ 0.1 0.8 L.8 2.9 4.0 4.9 6.1 7.4 8.4 9.6 11.0 12.6 1303 13.6 Operating Costs 2/ 0.1 0.3 0.7 1.1 1.7 2.5 3.0 3.7 3.7 4.L 4.6 5,.1 5 .l 5.3 Net Benefits O.X) 00.5 :L.l 1.8 2.3 2.4 3.1 3.7 4.7 5.2 6.4 7.5 8.2 8.3 Investment Cost, 7/ AssuLmption A 4/ 2.9 5.4 5.4 2.5 Assumption B -/ 3.4t 6.3 6.3 2,.9 1/ At prices to the producer T Y/ Including techni.cal services aft,er c(ompletion of investment per:iod 3/ Including contractors maLchinery and technical services during investment period ! 'Based on nriThe at t.he time om appraisal when the exchange rate was 9 to 1 '/ :Based on an exchange rate of' 13,,5 tc) 1 f'or imported goods which account for about 33% of the total investment ccst / Including investment, costs of dairy cooperatives anci technical services during investment period Wf Including technical se!.-vice cdturiris. ; t. nt ?wer4od U o . ' ,l - U O ) c~ J !> _ S S d E ~w *: W ;. Le . '-................* 1' w,'* C4. . :.t4.-.Rx '> , 1 - A * ', c- { . r cr . . | . v s i / rt (30 \> 1 D a -i.. UU J t ; ' ~~~ / S X ' E ,-1O z , nU 3 . _\ . , . I~~C( ><- '*. U . a . -I /d t ev~C -; W< - 0. *. . I 1 3s <~~~~~~~U 0~~~~ MAP 2 v~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~ Io' WIL I.Ju M1 I f r -i~~~~~~~~~~ & s/o rf' .. .. A C., >, ,'' '< .'. .W. LL ,N ;, -S ,,~* 0 O L ! A A D '' NCIRTE A z - t *CnR A ' ASAlDE R* 4,-.: : - '-. ' .,, .e V E rt- E U E LA | -v \ _ v X~~~~~~~~~~ B.coro-Ingocs * A J R T I ° 1 A . N CT AN, DE.' A,o.c. - ) l i .; " Sas1 x ~~~~A R A U C A. : C\~~~~C H o c o 0 X..t wifi(ue .*- - _ CUNDINAMARCA.' .. . X X ¢- 1 jR { | ({lil - -- V I C H A D A V ~~~~~~~ | 5,? A?V A L L_ f E I M A U 1 4jNii'< J~~~UJ 5[ Nei;jt ~~M E T A ~~'\, AUf~~~~ I L~P ANAD | ,/, Apo W U I L J ---- '--'-__L-E G U A I N I A .I............. P C~~~~~LWS ~~~~~VA C A"E ~~~~~~oI! CUN. ,,,;°tDINMAcA|-' ' -| A I I VMOCO'-- C A Q U E T A |k 4NTLJJr!P U T U M A Y O I .~~~~~~~~~~~~~~* .. -* . ., , ,. Aj!~~~~~~~~~~~~~~NrO~~~~~~~~~ RFlrAco IAUIPEL E C U A D) O R *.A M A Z O N A S JflJU Present Sh-ep ErploitatIon Zones |_ Ft-tirl Shrep Erpioitatbon Z01es | ~~~~~~~P E R U:. *-:Let't,n LrnIE _966 IERD-1536R2 APRIL 1966