Of course, after four years only, all problems have not been solved and, sometimes, the approach used only met with partial success. The problems which still exist are a challenge for future activities.

Thus, the actual decision making process deviates considerably
from the ideal of rules and regulations. While the Board of Directors
is supposed to be the policy and decision making body, in practice,
the absolute authority of the General Manager is unchallenged. The
gap in general education, technical training and actual information
between the members of the Board and the General Manager is so
wide that decision making consists in fact of suggestions of the General Manager and, after discussion, these are approved by the Board. In the history of the FA, there was only one case when the Board argued with the General Manager while, otherwise, it always agreed to his suggestions. This was on the desirability of making profit and contrary to the General Manager’s suggestion who had capital formation in mind the Board decided to have more services instead of profit.

Although the General Manager is, in fact, making the policy of the FA, he still needs the approval of the Board and to obtain it, be has to explain his ideas and convince the members of the Board. The fact that he is required to justify his ideas shows how different his position is from that of a "ruler" of the institution. On the other hand, it has to be taken into account that there is no tradition in decision making on such matters in the rural society and this requires a learning process on the part of the Board members. It is evident that this is taking place since, according to the General Managers experience, today, he is much more questioned than in former times on different aspects of his suggestions. Anyhow, there certainly is scope for leadership training and similar measures.

Here again, the situation is very similar in all FAs. Examples of the Board making their own suggestions are limited to a few requests in the social field: payment of 25$ out of FA funds in the case of members death and payment of a subsidy on textbooks for their children. But, usually, the General Managers still run the FAS and the more qualified one is the more unquestioned his decisions are. His activity and competence determine the development of the FA.

Another field where the optimum has not yet been reached is the communication between the FA and its members. The current setup has no institutionalized line of communication but only irregular and accidental spills of information. The General Manager and his staff are mostly busy at the headquarters, dealing with the economic activities and doing the office routine work. Official meetings fur members are few and unit meetings are so loaded with other subjects that the possibility of getting to know the problems and needs of the members is very restricted. The Board of Directors probably consists of too few people and is perhaps not representative enough to allow the staff to become aware of the problems of the average member. Even unit chiefs have no regular meetings so far.

In this field, a new policy seems to be necessary to institutionalize and improve the generally limited communication between members and decision makers and staff. The current system hardly leads the members to understand the FA as the farmers' own organization, but rather as a service from above. The limited credit recovery in some FAs is perhaps consequence of this attitude.

To a certain extent, this becomes topical because of the shortcomings in the extension work. The potential time for extension work is limited because the staff concentrates its attention an economic activities which provide income to the FA. As extension work has no measurable effect at short term, even the desire for a good record in the annual reports leads to a tendency to give preference to commercial activities rather than to extension work. Quito often, the staff does not know what to advice the farmers except the use of inputs.

This, however, is dealt with in conjunction with the sales activities. Extension work limited to advice, sales and some meetings, however, does not put the staff in touch with members often enough.

It seems that all extension activities lack a basic policy and concept yet and the elaboration of a master plan on FA extension work which would include an outline of the fields of extension, extension methods, etc. is very urgent. The current activities give the impression that the approach used is that of trial and error. The General Managers independence in his work, however beneficial it proved to be in other fields, is perhaps not possible in the case of extension. The staff is trained in doing extension work, but to expect it to elaborate extension strategy is probably asking too much. Here, guidance from the State FAs and the Department of Agriculture might be necessary.

The different staff problems constitute another related factor, All JAAs are graduates of Schools of Agriculture and have the same training in general agriculture. Only recently, a certain specialization has been introduced towards the end of this training. Although this training is valuable for the Chief of the extension section, others still lack training in business management to be able to fulfill their obligations and this becomes more acute as business expands.

Some general managers expressed their feeling that the lack of training in business managemen on their part and that of their staff hinders the economic activities and said that they hesitate to undertake larger projects because of the risk involved if no business specialist is available.

The low salary of the JAAs, which is below the market value of persons with such training, is also important and only the fact that many have to work for a certain period for the government after having been awarded government scholarships prevents them from leaving their posts. The feeling that they are underpaid makes them reluctant to work overtime or in the evenings and this again affects extension work more than other activities. Needless to say that the working capacity and the scope of activities are reduced because of the incomplete staff.

Of crucial importance for the scope of activities and, thus, for its future is the Capital formation of the FA. The still limited working capital does not only limit the credit activities but is more important in marketing. Lack of funds prevents the marketing of more crops and marketing an merchandise instead of consignment basis, which would meet the requirements of farmers to a much higher degree. The tendency of Board members to distribute profits is a burden in the struggle for enlarging the capital stock of the FA.

General managers realize the importance of capital formation and the more active are trying to increase the capital stock in different ways. One of the possibilities is that members buy more shares and save more, but this is limited because of their poverty. As the supply business increases, profits increase too. Therefore, FAs try to deliver to non-members as well, sometimes at the same price as to members. The lorries proved to be a good income producer, especially if they are used in the most profitable way. The most successful way of accumulating capital was by producing seedlings on contract and by performing service functions for other agencies. For instance, a FA accepted a tender to deliver fertilizers worth 500,000$ from the state capital to the single farmers' associations in the stale and made a profit of 6,000$ within three months. While income and capital. stock can thus be increased, the staff is taken up at the cost of extension and other servile activities.

The question of capital formation is crucial, not only as regards the possible activities of the single FA hut also as regards expenses of the whole FA organization for the government. Successful as it is with its intensive approach, the system is very expensive and government has to carry not only the expenses for the initial building, but for the salary of the staff as well. In order to be freed at least from pant of these expenses, FAs have to be made so profitable that, they can pay their staff’s salaries out of their own income. This is only possible with a large turnover in the economic activities which again require a sizeable capital stock as working capital. The FA organization has, so to speak, a built-in pressure to extend activities and the government has to assist as much as possible because only large scale business can ultimately free it from the expenses. Large-scale business, which the government can support by policy measures, requires highly trained staff, especially in business management. One of the problems is that not all areas offer equal chances for large scale business. While in tree crop areas there are many possibilities, the prospects are few in areas with rice as monoculture a factor which may eventually call for a reappraisal of the current rice policy.