Costa Rica - Capital Goods Importation Project

RESTRICTED RETURN TO REPORTS DESK Report No. T.O. 92-C WITHIN ONE WEEK This document was prepared for internal use in the Bank. In making it available to others, the Bank assumes no responsibility to them for the accuracy or completeness of the information contained herein. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT APPRAISAL OF THE IMPORT PROGRAM FOR AGRICULTURAL AND INDUSTRIAL DEVELOPMENT COSTA RICA August 31, 1956 Department of Technical Operations  CONVERSION FACTORS Official Buying Rate 5.6 Colones a US $1 Free Buying Rate 6.63 Colones * US $1 1 Hectare a 2.4 Acres I Manzana a 0.7 Hectares or 1.75 Acres  TABLE OF CONTENTS Page No. I - Introduction 1 II - Import Program 1 III - The Demand for Capital Goods 2 IV - Benefits Derived from the Program 4 V - The Banking System 6 VI - Agricultural Credit 7 VII - Conclusions and Recom%endations 9 Appendices I - Consejo Nacional de Produccion II - Statement of Account on December 28,1,54 and 155 - Central Bank of Costa Rica III - Profit and Loss Statement of the Banco Central l954 and 1955 IV - Consolidated Balance Sheet as of December 31,1954 and 1955 - Commercial Banks V - Consolidated Statement of Profit and Loss Januarxy 1-December 31,1954 and Januany 1-December 31,1955 - Commercial Banks VI - List of Goods MNap of the Agricultural Regions of Costa Rica.  COSTA RICA Report on the Program of Capital Goods imports for Agricultural Production and Processing I. INTRODUCTION 1. In September,1954, a request wTas received from Costa Rica for a loan for the importation of capival goods required for t.he deve'opment of agricultural production and related processing and light industries. The loan would be for the equivalent of USs'3 million for a term of seven years, including two years of grace. The borrower would be the Banco Central de Costa Rica and the loan would be guaranteed by the Republic of Costa Rica. 2. The Bank sent a consultant ban-king expert to Costa Rica in November,1954 and a staff member of T.O.D. in March,1955. Up-to-date in- formation has been obtained from the i4inistry of Economy and Finance of Costa Rica. 3. This report is an appraisal of the loan proposal. II. TEE lTSORT PROGRAOI 4. Towards the end of 1952, the Governxrent of Costa Rica initiated a program for the encouragement of imports of capital goods by a special program of credit through the Nationalized Banking System. For this pur- pose, the Central Bank allocated Colones 26 million from its foreign exchange reserves, althlough steps were being taken at the same time to linit the importation of non-essential goods. 5. In 1''5k, foreign exchange reserves fell materially because of the drop in coffee prices and the Government consIdered abandoning the special capital goods import program. However, the demand for these capital goods was strong, and the benefits appeared so obvious to the Government that they approached the Pank with a request for a loan. This request was con- sidered by the Bank in July,1955. INegotiators wrere invited to come to Washington. Pending the passing of appropriate authorizing legislation permitting Costa Rica to borrow, Costa Rica continued the program with its own resources throughout 19<5. In February,l956 the orogram was suspended by the Banco Central because of short-term balance of payment difficulties. Tt was resumed during Mlarch or a limited scale in anticipation of the loan from the Bank and the necessary legislation was passed in July,1956. 6. hlie purpose of the loan is to continue during 1S56 and 1957 the import of capital goods for the developnment of agricultural production and related processing and other industries under the program initiated in 1952 at a rate similar to that which prevailed during l19% and 1955. 7. The loan funds would be used for the importation of goods within the catego:ies already specified for the program (see Appendix VI). The goods would be imported through the usual channels of trade.  8. 'The method of operating the program (see par. ljL) which has worked well, would remain unchanged. The Central Bank would lend to the commercial banks the equivalent of the foreign exchange necessary for the import of program goods by their customers who require credits. 9. The comnercial banks would extend credits to their customers for import program goods in accordance writh their normal practices. The counter- part funds accumulating as a result of repayment of credits by recipients would be retained by the Commercial Banks and would continue to be used for credits until repaid to the Central Bank on terms corresponding approximately to the amortization schedule of tha loan. 10. The coraaercial banks would pay the Banco Central the saine rate of interest which the Banco Central obtains from IBRD, plus 1/2% per annum on the outstanding amounts of the credits provided them by the Banco Central as a contribution towards the exchange risk which is to be borne by the Banco Central. III. TIE DEIaIND FCR CAPITAL GOODS 11. Costa Rica is primarily an agricultural cruntry, and its require- ments for capital goods have been mainly for agriculture and the primary processing of agricultural products. MTanufacturing is limited to small scale production of goods for local consumption, such as textiles, leather goods, and other consumer goods. In 1950, the latest year for which figures are available, agriculture accounted for 45% of the national income and manu- facturing for 13%; the remaining 42% was from commerce, transport, services, etc. 12. Out of the total area of Costa Rica of 5.1 mil'lion hectares, the total land in farms accounts for about 1.8 million hectares. Of this, only about 2C%o is cultivated cropland and about 35% is natural and planted pasture. In spite of the very important place of coffee which accounts for 14% of the cultivated cropland, the agriculture of the country is extremely varied and there are 14 rather well defined agricultural regions. The rnilti- plicity of regions arises from rapid changes in elevation, the influence of prevailing wrinds on total rainfall and its seasonal distribution and the varied soil types. Since all thiese different conditions occur within rela- tively short distances, each agricultural region is comparatively small. A map showing the agricultural regions is attached. 13. Of the total farns in the country, about 60% raise corn, 38% beans ard 36% coffee. About four-fifths of the farms have livestock of one kind or another, most of them keeping milk cows. 14. Practically all the farms are owned by farm operators. The largest farms, by area, are in the North Livestock Region, there they average 320 hecuares, comparing with 9 hectares in the Coffee Region. The average size of farm for the country is 42 hectares, of which 8 hectares are cultivated cropland. 15. Coffee, bananas and cacao are the main export crops, while maize, beans, rice, sugarcane and livestock products are the most important for domestic consumption.  - 3 - 16. Technical services have been developed to an unusual degree in Costa Rica. The research and training center of the Inter-American Institute of Agricultural Affairs is located at Turrialba. This is the major agricul- tural and livestock research station in Central America, responsible for the more fundamental aspects of research for the region. Aprplied research - includi7ng the application of TLrrialba findings to local conditions in other parts of Costa Rica - is undertaken on a satisfactory scale 'oy STICA (Servici Tecnico Inter-Americano de Cooperacion Agricola), and the Ministry of Agri- culture. The research is back.ed by an adequate extension service also pro- vided by STICA and the 11linistry. Important opportunities for technological improvements are being demonstrated and farmers are unusually receptive and keen to adopt improved practices. In most cases, this involres investment in equipment, materials or property development and a proportion of farmers have been able to take advantage of credits unider the program for this pur- pose. The procedures for the appraisal of such credit applications are set out in par. hit. 17. The scope for technological improvement is not confined to produc- tion, and additional facilities for storing and processing agricultural products are also required if improvements are to be effected which will widen market opportunities. These include, at farm level, new facilities for processing cacao and coffee, for tobacco curing and milk cooling, and for farm storage. Further facilities for commercial scale processjng of tomatoes, other vegetables, fruits, milk and for slaughter houses are also reouired. In addition, there is need for equipment for light industries using local raw materials. The Consejo Nacional de Produccion (Appendix I), which reviews individual projects which come before it (see par. 44), is not equipped to appraise the merits of new types of industries. 18. Capital goods need to be imported both because of the very varied agriculture which needs equipment if it is to adopt improved techniques of prcduction and because of the need for additional processing facilities to handle the present and expected increased agricultural output of the country. The demand for these capital goods should be considered from two angles, as follos: - a) Type of Demand A wide range of implements, equipment and materials is needed for farm improvermernt, cultivation, harvesting, storing and processing many kinds of agricultural products, and for light industries utilizing these products. The List of Goods as set out in Appendix VI is designed to meet these require- ments. b) Volume of Demand During the first 40 months of the program, imports of implements, equipment and materials amounted to about Colones 29 million (US$5.2 million). There is little doubt that demand for imported capital goods of these cate- gories should at least remain at this level of over US$ 1.5 million per year for the next two years. The demand will probably extend over a longer period and on an increasing scale.  - 4 - IV. BENEFITS DERIVED FROM THE PROGRAM 19. It would be unrealistic to attempt to calculate the financial benefits of a program of this nature and assessment rests on more general grounds, as follows: 20. Agriculture is of paramount importance to the Costa Rican economy, contributing 45h of the national income and about 90%, of exports, While 54% of the working population is directly engaged in agriculture. 21. Conditions for agriculture are particularly favorable. The physi- cal environment is good; a sound land tenure system sets a firm basis to the use of land resources, and farmers are relatively well educated and capable of managerial standards well above average for the region. 22. Agricultural production has been expanding during recent years due basically to: a) adequate technical services and sound agric-ultural poli- cies and administration; and b) the availability of credits under the special development program. 23. It is necessary to maintain this expansion. Production for domes- tic consumption has more or less caught up w-ith demand but population is increasing by 3% per annum and demand may well increase at a higher rate vith increased per capita consumption. A rate of increase in agricultural production of even 3% per annum is hard to maintain indefinitely. Expansion of export products is even more important. The most promising are: coffee, bananas (which weuld not be influenced oy the loan), cacao and beef cattle for slaughter. The export market for these products is becoming more selec- tive and competitive and exoansion must be based on efficient production of quality products. 24. Technological improvements have been demonstrated which, if adopted, will lead to greater output and more efficient production. This is the primary purpose of the loan. 25. The scope and means of improving and expanding production of coffee. cacao and beef cattle are reviewed briefly in thLe following paragraphs. 26. Coffee Costa Rica produces about 500,000 bags of good quality coffee. A considerable proportion comprises speciality lines identified at the point of sale against actual district of origin. Recently, about 80% of exports has beer sold against dollars on the selective European market, principally Getnany. Although markeets are assLred, the coffee program is based on the expectation that prices will fall rather than rise. 27. The opening of new land to coffee is not encouraged under the program (and few loans are given by the banks for that purpose), because the improvement of existing plantations, to permit increased and more efficient production, is considered to warrant priority.  - 5 - 28. The main forms of investment are in soil conservation work, use of fertilizers, spraying, sprinkler irrigation, replanting and better pro- cessing facil4ties. IMost of these improvements can be covered by credits to growvers amortized in about sever years. According to an example cited by the Banco Anglo Costarricense, the return to capital invested in improve- ments of this nature amounts to about 33% after the third year. This esti- mate is based on the low price expectancy of 35 cents per lb. at the farm. 29. Considerable importance is attached to the use of fertilizer in expanding coffee production. Only about 17% of coffee fincas use fertilizer at present so that most will be using it for the first time. Ohere ferti- lizer has not been used before, there is a delayed response and consequently the initial use of fertilizer cannot be covered by a short-term crop loan. Three year credits are appropriate for this purpose. 30. Cacao Costa Rican cacao is also of good quality, but market prospects are considered less favorable than for coffee and less emphasis is placed on cacao development. Practically all loans are for improved production, mainly through spraying of operating plantations or rehabilitation of old plantations. 31. Yields on many operating farms are very low - 900 to 1300 lbs. per hectare - because of the effects of a fungus disease. By spraying with lime and copper sulphate, experience has shown that yields can be doubled by- the third year with an increase of only about 25% in operating costs. Invest- ment in spraying equipmerit can be amortized over about four years. 32. Beef Cattle Production has been expanding and during the last year about 4,00O head have been exported on the hoof to Venezuela, Cura9ao and Colombia. The Costa Ricana consider that these markets can be expanded as long as the quality and price are satisfactory. 33. The expansion has been brought about through the improvement of pastures, breeds and management, and from the opening up of new country in the San Carlos area following the control of malaria and new road construc- tion. 34. Loans are required particularly for pasture development and - to a lesser extent - for imports of breeding stock. Pasture development in the Sar Carlos area involves land clearance, pasture establishment and mainte- nance including control of re-growth and weeds. Clearing by the traditional meuhod of axe and machete is both costly and slow. After 10 years, when about 10% - 15% of the land is still covered by logs and stumps, the carry- ing capacity is one beast per hectare. 35. On the other hand, the land can be completely cleared by machinery. This can most economically be undertaken by custom work. There is a small governmental machinery pool which undertakes land clearing by bulldozer at  - 6 - 50 Colones per hour vhich is acceptable to farmers. Private contractors wTith equipment more suitable for the local type of vegetation should be able to perform the work at lowver cost per hectare and vould be encouraged. After mechanised clearing and pasture establishment, farmers can control re- growth and improve the productive capacity to at least two head per hectare by the use of w1heel tractors and rotary mowers. Investment in machinery for better pasture maintenance, and in materials for additional fencing, can add greatly to the productive capacity of existing as Yell as of new pastures, and coritribute materially to more efficient production. V. TUE PANIKIY'G SYSTEM 36. As mentioned in par. 8, 9 and 10 above, the import program is operated through the banking system of Costa Rica wVhich is regulated by the General Banking Law no. 1664 of 1953. In addition to the Banco Central de Costa Tica, the banking system includes the folloAzng comr.ercial banks:- El Banco Nacional de Costa Rica El Banco de Costa Rica El Banco Anglo-Costarricense El Banco Credito Agricola de Cartago. 37. The functions of the Banco Central are to organize and direct the nationalized banking system, regulate foreign exchanges, promote credit faci- lities and supernise the operations of all banks and banking agencies in the country. 38. The Banco Lyon S.A. is the only private bank operating in Costa Rica. It does not receive deposits. It provides normal commercial credit and in the agricultural field makes loans almost entirely for coffee. Banco Central 39. The Banco regulates credit given by the commercial banks by estab- lishment of credit ceilings, by fixing interest, re-discount rates, and maximum bank charges and by varying the proportion of cash and Banco Central balances in relation to deposits. 40. The balance sheets for the years ended December 28,1954 and 1955 are given in Appendix II. They show a satisfactorv financial position. 41. The Profit and Loss Statenents for 19514 and for 1955 are given in Appendix III. The net earnings of the Banco Central have been satisfactory. The past history has been as follows:- (Million Colones) 1950 1951 1952 1953 1954 1955 Operating receipts, etc. 5.1 5.4 5.7 7.9 8.1 8.6 Operating costs, etc. 2.0 2.2 2.4 2.6 2.7 3.2 Profit 3.1 3.2 3.3 5.3 5.4 5.4  -7- The Commercial Banks 142. The banks have operated well in the past and in general their loan experience has been reasonably good. The executives in all the banks seem to be thoroughly experienced and are using sound banking practices. 43. Consolidated balance sheets at December 31,1,54 and 1955 for the commercial banks are given in Appendix IV. These show that the banking syrstem as a whole is in a sourLd financial condition. 44. Credit procedures are sound. The banks exchange credit information regardirg clients; a physical inspection of properties is made and borrowers submit financial statements. Applications are considered by the Board of Directors of the bank concernied. If the apprication is approved and comes under the Program, it is sent to the Ministry of Agriculture (where appro- priate) and to the Consejo Nacional for further consideration. For import credits a margin of 25% is required. The banks charge 6% for loans secured by collateral, such as mortgage, liens, etc., and 8% to borrowers with guarantees but no collateral. No sununary of delinquent debts is compiled; at December 31,1955 court proceedings were in process for recovery of Colones 3,358,cCO. On May 31,1956, this amount had increased to Colones 3,613,000. The former amount represents 1.5% of the loan portfolio outstanding. 45. Consolidated Profit and Loss Statements for 19514 and for 1955 are given in Appendix V. Net earnings have been satisfactory and should continue so. Net earnings have been as follows:- Million Colones 1950 4.7 1951 14.5 1952 4.6 1953 6.3 1954 8.0 1955 8.2 VI. AGRICULTURAL CREDIT 46. In general, the supply of agricultural credit in Costa Rica is short, particularly for medium term loans of three to eight years. In 1954 a rough estimate indicates that the proportion of agricultural credit to the value of agricultural production is about 20%. 47. The Banco Central, in regulating credit, favors agriculture through volume of re-discounts, re-discount rates, special loan ceilings and maximum interest rates charged by the comnercial banks. 48. Of the loans of the commercial banks outstanding at Nay 31, 1956, about 48% were to agriculture. Of the loans to agriculture, the Banco Nacional de Costa Rica accounted for 53%. Except for the Barnco Nacional, the bulk of the lending to agriculture by the commercial banks is for short- term crop loans. About 40% of the loans to agriculture are for coffee.  - 8 - 49. Virtually all the medium and long-term lending for agricultural development is done by the Banco Nacional through a specialized section of its commercial department, the Juntas Rurales de Credito Agricola. This section, established in 1937, operates through ocal agencies. There are now 40 of these Juntas, each of which is corriposed of a Board of five mem- bers, local farmers, appointed by the directors of the Panco Nacional. A manager, a paid exaployee of the bank, controls and supervises the loans approved by the Board; the manager is normally a qualified agronomist who makes technical appraisals on behalf of the Board. 50. The Juntas Rurales made 16,967 loans during 1955, totalling 26.5 million Colones. 714 loans, totalling 2.8 million Colones were for long- term loans of 5-151 years. The loans outstanding at December 31,1955 and April 30,1956 were as follows:- Loans to Agriculture, Cattle and Industry Million Colones -12/31/55 1/30/56 Short-term 10.5 9.9 IMedium-term 19.9 22.8 Long-term 8.8 8.8 39.2 41.5 Loans to Agriculture 22.3 22.6 Cattle 16.0 18.0 Industry 0.9 0.9 39.2 41.5 51. The loan experience is fairly good. Of the loans outstanding at December 31,1955, some 171 were in the hands of the courts. 52. The agricultural credit procedures are generally satisfactory and shortcomings can be traced basically to the barks makind, short-term credits for longer term purposes such as the fattening of livestock and the purchase of breeding stock. Farmers interviewed expressed themselves basically satisfied with credit procedures. 53. The increased credit to agriculture made available through the medium of the capital goods import program would in turn require supplemen- tany credit which should be forthcoming frora local sources. The obvious case is that investment in spraying, fertilizing and herbicides will increas yields and consequently the demand for harvesting credit will rise. No attermpt has been made by Costa Rica to assess the probable amount of supple- mentary credit that would be required.  .&9 _ VII. CONCLUSIOQNTS MND RECOMMI DATIONS 54. The purpose of the loan as sound. It would contribute signifi- cantly to increased and more efficient agricultural production for both domestic and export markets and assist in the development of asscciated light industries. 55. The program for the import of capital goods is simple, has been in operation some time, and requires no new organizations or unusual con- trols. The program, therefore, would face no special organizational problems. 56. In general, the nationalized banks are operated on a business- like basis. Interest rates are moderate and credit procedures are sound. ,7. Credit extended by the comriercial banks in connection with the program w-uld vary from about three to eight years. The proposed term for a loan of seven years would be suitable. Disbursement over two years would maintain imports of capital goods at the same level as prevailed duAing 195V/1955. 58. ThLe categories of capital goods on which loan funds wTould be disbursed would be those already established for the existing program. The bulk of imports is likely to be for agricultural development which will need a variety of goods with no particular emphasis on any single item. 59. The countorpart funds accumulating as a result of repayment of credits by recipients would be retained by the commercial banks and would continue to be used for credits until repaid to the Central Bank on terms corresponding approximately to the anortization schedule of the loan. 60. The program is suitable for IBKD financing in the amount of the equivalent of lS$ 3 million for a term of seven years, including a grace period of two years for disbursement on condition that credits for commer- cial scale storage, processing plants and light industries under the loan would be submitted to the Bank for prior approval, wvith the exception of credits for existing enterprises where the foreign exchange component does not exceed $10000. 61. The Costa Rican Governurent will study the benefits derived from the import program for the country as a whole so as to assess the importance of the program as a continuing operation.  APPENlDIX I CONSEJO NACIONAL DE PRODUCCION The National Production Board established in 1948 for the purpose of promoting the production of basic foodstuffs is a Government agency. It is managed by a Board of Directors composed of the Ministers of Agriculture, Commerce and Labor, and of one representative of the Central Bank. It employs a staff of agricultural technicians who assist farmers. More precisely it has been entrusted with the following functions:- a) Co-ordinate the work of the Departments and the Banks, in order to develop and improve the production of basic consumption goods, needed raw materials and any other cormodity of vital importance to the national economy. b) Fix the minimum prices at which the N-ational Production Eoard will buy the above products in order to guarantee the returns necessary to the continuation of their production. c) Finance entirely or partly specific projects conducive to the produc- tion or distribution of the abovementioned products. d) Finance any other project to meet emergencies detrimental to the national economy. Since l9b9 the Board has facilitated the extension of credit to small farmers either by distributing loans by itself or by guaranteeing loans granted by the banks. Any extension of credit is combined wnith the adoption of new agricultural techniques and the farmers asking for credit agree to follow the advice of the agricultural technicians of the National Production Board. The funds are advanced periodically according to the needs for dis- bursements and are secured by lien or mortgage vhich may include second liens. The loan policy has constituted an incentive and a guarantee for the farmers as -ell as for the credit institutions. Credit has been made more easily available for the crops favored by the National Production Board because the Banks knew there wTas greater security for the repayment of the loans. Recent' credit activities of the Board have been restricted. If the farmers cannot find a better market for their produce, the Board buys it from them at the cfficial prices. It operates granaries and cold storage plants for the preservation of the commodities purchased, which it may export or sell in the local market.  APPENDIX II C7ENTRAL BAIK OF COSTA RICA STATEMa'T OF ACCOUNT (in mlion Colones) December 28,1954 December 28,1955 Assets A. International Monetary Reserves 91.6 110.4 1. C%n assets 87.8 1o9.g 2. Subscription to the F.M.I. 28.0 28.0 Total International Mionetary Assets 115.8 137.5 Less International Monetary Obliga- tions 24.2 27.1 B. Cash - - - C. Loans and Discounts 122.3 99.1 3. Credits to Commiercial Banks 97.8 77.3 4. Other 24.5 21.8 D. Investments 11.8 18.5 5. Securities 2.8 9.3 6. Fixed Assets 9.0 9.2 E. Other Assets 41.9 7.1 7. Miscellaneous 17.7 20.0 International Monetary Obligations contra account 24.2 27.1 Total Assets 267.6 275.1 Liabilities F. International Monetary Obligations 24.2 27.1 G. Domestic Monetary Obligations 223.4 226.1 8. Monetary issue 177.3 178.9 9. Deposits on current account 33.1 34 .1 10. Sight deposits 13.0 13.1 11. Term deposits - - H. Other Liabilities 2.5 2.6 I. Fuhnd for the Amortization of Contingent Assets and Liabilities 10.6 11.7 J. Capital and Reserves 6.9 7.6 Total Liabilities 267.6 275.1  APPENDIX III PROFIT AID IOSS STATEEI\TT OF TEE BANCO CEIT\EA (in million Colones) 1954 1955 Income Interest on loans and discounts 2.4 1.5 Interest on investments 1.0 1.9 Profits on exchange 4.1 4.5 Commissions 0.6 0.7 Other profits - Total Income 8.1 8.6 Expenditures Wages and other payments to personnel 1.8 2.2 Per diem for the Board of Directors 0.1 0.08 Imports, taxes and services 0e1 - Other costs of administration 0.7 0.9 Tota'l Expenditures 2.7 3.2 Net Profit 5.4 5,4 Distribution of IYTet Pxofit Amortization, Temporary Allocations: on loans .2 .1 on real properties .2 .2 on other properties .1 .2 on furniture and installations .2 .2 on library and numismatic collection .2 .1 of fractional currency .7 .7 reserve for social lawrs .2 .2 reserve for exchange fluctuations .05 .1 servicing of 7% Bonds of Nat'l Panking system 2.7 2.7 employees retirement fund .15 .2 legal reserve .7 .7 5.4 5.4  COMERCIAL BANKS APPENDIX IV CONSOLIDATFD BALANCE SHEET AS OF DECEMBER 31,1954 AND 1955 (nmillion C-oe Banco Banco Credito Nacional Banco de Banco Anglo Agricola Banco Lyon Costa Rica Costa Rica Costaricense de Carta o S.A. T o t a 1 r9II- 1955 1_95 193- 1954 1955 19514 1955 I. Assets Cash on Hand r. ,Cash on Hand 10.7 12.3 7.5 9.6 2.6 3.1 1.1 1.1 - - 22.0 26.1 2. Less cash surplus 0.8 1.3 0.4 1.4 - - 0.5 0.3 - - 1.7 3.0 3. Portion of minimum legal cash on hand in vaults 9.9 11.0 7.1 8.2 2.6 3.1 o.6 0.8 - _ 20.3 23.1 4. Deposits in the Central Bank of Costa Rica 12.1 13.9 9.6 8.4 2.9 6.0 0.8 0.9 - - 25.4 29.2 Total legal cash on hand 22.0 24.9 16.7 16.6 5.5 9.1 1.4 1.7 - - 45.7 52.3 Other Availabilities 5. Surplus cash 0.8 1.3 0.4 1.4 - - 0.5 0.3 - - 1.7 3.0 6. Other funds 0-3 0.3 2.8 1.5 0.1 0.3 0.3 0.4 0.2 3.8 2.4 7. Funds in foreign currencies 7.0 9.6 9.5 10.2 4.8 5.1 0.2 0.3 0.8 0.7 22.3 25.9 Total available funds 30.1 36.1 29.4 29.7 10.4 14.2 2.4 2.6 1.2 0.9 73.5 83.6 B. Loans and Discounts T. Credits and current account 0.7 0.4 3.0 2.2 0.4 0.5 0.2 0.2 - - 4.3 3.3 9. Short-term loans 34.1 44.4 50.6 51.3 22.5 41.1 11.1 11.0 3.4 3.2 121.7 151.0 10. Long-term loans 22.0 31.5 8.7 11.5 1.8 2.7 0.5 2.1 - - 33.0 47.8 11. Loans with Bond issue - - 1.5 13.9 - - - - - - 1.5 13.9 12. Loans and discounts from Agricultural 43.3 39.5 32.0 31.7 20.7 - - - - - 96.0 71.2 and Industrial Credit Section 13. Discounted notes 47.6 147.4 10.9 10.2 0.9 - 0.7 1.0 - - 60.1 58.6 14. Special loans - 5.5 - - - - - - - - - 5.5 15. Other loans 6.7 5.7 - - 0.4 0.4 - 0.1 - - 7.1 6.2 16. Loans in foreign currency - - - 0.1 - - - - - - 0.1 17. Less reserve for doubtfuL loans - - 0.2 0.5 - - - - - - 0.2 0.5 Total Loans and Discounts 154.4 174.4 106.9 121.4 46.7 44.7 12.5 14.4 3.4 3.2 323.9 358.1 C. Investments 18. Real Estate 5.1 6.2 8.5 8.3 3.0 3.3 1.1 1.4 - - 17.7 19.2 19. Securities 0.2 0.2 3.3 1.6 - 3.0 0.3 0.4 - - 3.8 5.2 20. Furniture, fixtures and equipment 4.2 4.8 0.9 1.0 1.1 1.1 0.1 0.3 - 6.3 7.2 Total Investments 9.5 11.2 12.7 10.9 4.1 7.4 1.5 2.1 - - 27.8 31.6 D. Other Assets 21. Bak fices (remittance in transit) 5.1 3.5 1.9 2.0 - - - - - - 6.9 5.5 22. Interest to be collected 0.6 o.6 - 0.1 0.1 0.1 - - - - 0.7 0.8 23. Interest paid in advance 0.1 0.2 0.3 0.1 - - - - - - 0.5 0.3 24. Misc, accounts, stationary and equipment 0.6 0.4 0.9 0.9 0.1 0.2 0.1 0.1 - - 1.7 1.6 Total Other Assets 6.4 4.7 3.1 3.1 0.2 0.3 0.1 0.1 - - 9.8 8.2 TOTAL ASSETS 200.4 226.4 152.1 165.1 61.4 66.7 16.5 19.3 4.7 4.1 435.1 480.5  A."'RNDIJ IV ~~~~~~~~~~~COMMERCIAL BANKS s' BNDIX IV CONSOLIDATED BALANCE SHEET AS OF DECF ER 31,1954 AND 1955 Cntinued) (in million Colones) Banco Banco Credito Nacional Banco de Banco Anglo Agricola Panco Lyon Costa Rica Costa Rica Costarricense de Cartago S.A. T o t a 1 195 1955 1954 1955 1954 1955 1954 1 955 1951 1955 II. Liabilities E. Payable onDemand or Less than 30 Days 25. Deposits on current account 77.4 81.2 57.3 65.5 27.7 30.5 5.1 6.4 - 167.5 183.6 26. Demand and due deposits 2.0 2.9 - 0.1 0.4 0.2 0.3 0.4 -- - 2.7 3.6 27. Managers checks 0.3 o.6 2.2 1.7 - - - _ - - 2.5 2.3 28. Certified checks 0.4 0.4 0.5 0.5 0.2 0-3 - - - - 1.1 1.2 29. Dollar demand saving deposits 18.4 23.4 8.3 10.9 3.0 4.1 0.9 1.4 - - 30.7 39.8 Total Payable on Demand or Less than 30 Days 98.5 108.5 68.3 78.7 31.3 35.1 6.3 8.2 - - 204.5 230.5 F. aable at 30 Days or More 30. Term dposi o.6 1.7 4.6 5.6 0.6 1.0 0.3 0.2 - - 6.2 8.5 31. Term saving deposits 0.6 0.7 0.5 0.7 - - 0.1 - _ 1.1 1.4 Total Payable at 30 Days or More 1.2 2.4 5.1 6.3 0.6 1.0 0.4 0.2 - - 7.3 9.9 G. Payable in Foreign Currency 32. Deposits on current account and on demand 1.7 1.8 2.4 2.8 2.8 3.1 - 0.1 _ _ 6.9 7.8 33. Term deposits - - - 0.1 - - - - - - - 0.1 34. Obligations on letters of credit issued 5.3 7.4 1.9 1.9 0.5 1.5 0.1 0.2 0.8 0.5 8.6 Ll.5 35. Collections in transit to be remitted - - - - - 0.1 - - 0.2 - 0.2 0.1 Total Payable in Foreign Currency 7.0 9.2 4.3 4.8 3.3 4.7 0.1 0.3 1.0 0.5 15.7 19.5 H. Bonds in Circulation 36. 7%, 1954 Economic Development Bonds - - 5.0 15.0 - - - - - - 5.0 15.0 37. Coffee rehabilitation Bonds - - - - - 3.0 - - - - - 3.0 Total Bonds in Circulation - - 5.0 15.0 - 3.0 - - - - 5.0 18.0 I. Owed to the Central Bank of Costa Rica 38. Credit operations 53.6 54.3 30.2 14.7 10.9 5.5 1.7 1.8 1.3 1.1 97.7 77.4 J. Owed to other Banks in the Country 39. To Commercial Banks - - - - - - - - - - - - 40. To Mortgage Department, National Bank 1.7 - - _- - - - 1.7 - Total Owed to Other Banks in the Country 1.7 - - - _- - - 1.7 - K. Other Liabilities 41. Bank offices (remittance in trareit) - - - - - - - - 42. Interest to be paid - 0.1 0.1 0.1 - - - -- - - 0.1 0.2 43. Unearned interest 0.7 0.7 0.6 0.7 0.2 0.2 0.1 0.1 - - 1.6 1.7 44. Miscellaneous accounts 4.0 4.1 0.8 0.8 0.9 1.1 0.2 o.e 0.3 0.4 6.2 6.6 Total Other Liabilities 4.7 4.9 1.5 1.6 1.1 1.3 0.3 0.3 0.3 0.4 7.9 8.5 Total Liabilities 166.7 179.3 114.4 121.1 47.2 50.6 8.7 10.9 2.6 2.0 339.8 363.9 L. Ca ital and Reserves 45 ial 30.0 40.0 30.0 30.0 12.0 12.0 6.0 6.0 1.0 1.0 79.0 89.0 1l6. Legal Reserves 3.7 7.1 7.7 13.0 2.2 4.1 1.6 2.4 1.1 1.1 16.3 27.7 Total Capital and Reserves 33.7 47.1 37.7 43.0 14.2 16.1 7.6 8.4 2.1 2.1 95.3 1l6.7 TOTAL LIABILITIFS 200.4 226.4 152.1 165.1 61.4 66.7 16.5 19.3 4.7 4.1 435.1 480.5 Note: Failure of figures to add is due to rounding.  COMMERCIAL BANKS APPENDIX V CONSOLIDATED STATEIENT OF PROFIT AND LOSS Jan.1 to Dec,31,1954 and Jan.1 to Dec.31,1955 (in million Colonies) Banco Banco Credito Nacional Banco de Banco Anglo Agricola Banco Lyon Costa Rica Costa Rica Costarricense de Cartago S.A. T o t a 1 1954 1955 1954 1955 1954 1955 194 13- 1954 195 1954 1955 Income Za-r~ned interest 12.6 14.4 7,0 7.9 3.0 3.l 0.9 1.0 0.3 0.2 23.8 26.6 Exchange 0.3 0.2 0,4 0.5 0.2 0.2 - - 0.2 0.2 1.1 1.1 Commissions 1.8 2.1 1.4 1.6 0.5 0.5 0.1 0.1 0.2 0.2 4.0 4.5 Other profit 0.8 0.7 0.4 0.3 0.1 0.1 _- - 1.3 1.1 Total Income 15. 1-7.4 *9,2 10.3 3.8 3.9 1.0 1.1 0.7 T5 33 3 Expenditures Interest paid 2.9 3.6 1.1 1.3 0,4 0.3 0.1 0.08 0.04 0.03 4.54 53 Per diem of the Board of Directas 0.2 0.2 0.1 0.14 0.1 0.07 0.07 0.08 - - 0.47 0.5 Salaries and other payments to personnel 6.9 8.1 2.8 3.6 1.4 1.7 0.3 0.5 0.3 0.3 11U7 14.2 Imposts, taxes and services 0.1 - 0.1 0.1 - 0.03 _ 0.01 0.06 0.07 0.26 0.2 Other administrative expenditures 1.8 1.5 0.8 0.8 o05 0.4 0.1 0.1 0.03 0.03 3.23 2.8 Amortizations, reserves and fines 0.7 1.0 0.2 0.5 0,5 0.4 0.1 0.03 0.02 0.02 1.,42 2.0 Other losses 0,4 0.1 0.1 - - - - - - - .5 0.1 Total Expendituares r3TU 14-5 ?757 ~64 2.9 2.9 0.7 5 T01.4 22.2 25.1 Net Profit 2.5 2.9 4.0 3.9 0.9 1.0 0.3 0.3 0.25 0.2 8.0 8.2 Distribution of 1955 Net Profit: Amor~tizations and Temporary Allocations on lom s - 0.21 - 0.01 0.22 on real properties - 0.24 - - - 0,24 on furniture and installations 0.15 0.22 - - - 0.37 reserve for Social Law - - - 0.01 - 0.01 servicing of 7% Bonds of National Banking system 0.9 0.23 0.1 0.03 - 1.26 employees retirement fund 0.3 0.4 0.1 0.03 0.03 1.86 legal reserve 1.6 2.6 0.8 0.2 0.03 5.23 Dividends .- - - 0. 0.1 Total distributed 9 3.9 10 0.3 0.2 8.2  APPEN'DIX VI LIST OF GOODS Equivalent US$ 1. Agricultural tools and implements 2. Animmal-drawn machinery 3. Tractors and tractor-drawn machinery 4. Other agricultural machinery, including spraiying, irrigation and dairy refrigeration equipment 5. Other requisites, including barbed wire, drainage pipes, well drilling equipment and farm building materials 6. Fertilizers, fungicides, insecticides, weedicides, and seeds 7. Breeding stock 8. Farm power plants 9. Machinery, equipment and building materials for storage and processing plants & light industries Total US$ 3,000,000.00  -wil | \\\\S\' ~ ~ ~~~~\V \> N&A I ~~~~~~~AGRICULTURAL REGIONSIOFII E=UNI 1//M E T 4C EO FE-NER EA L IS 32 9 IIO3461 12 7 12 A S " ; SO UTH CI E T ACA EAANS 3 88 35176551 54 | 9/ GEN OR AL FAR ING 2, 43051 ,462,9386 6 | A GIC U LUA 20G ON 30 \ 0 1' NORTH LIVESTOCK | 971 457, 8871 267 fOMS-J FOREST & - I4,747, 100 IUNCULTIVATED I I__I_I_______