By PAUL CONSTANCE

A few years earlier, a combination of wage disputes, plant disease and sinking banana prices had led the area's biggest employer, a foreign fruit concern, to sell its 28,000 hectares to the government.

Costa Rica's Institute for Agrarian Development (IDA) had distributed much of the land in parcels to the former banana workers and landless peasants, who then built precarious dwellings and turned to subsistence agriculture. But things were not going well. Roads and drainage systems crucial to cultivating the rain-soaked land were falling into disrepair for lack of capital. Much of the land had been damaged by industrial fertilizers used on the former banana plantations, and the corn, beans and rice planted by the new owners were doing poorly.

That's when the IDA, working with a fledgling local farmers' cooperative and officials from the IDB, devised a plan for large-scale commercial production of cocoa and African palm oil for national and export markets. Some 13,000 hectares, divided among local farmers in lots averaging 19 hectares, were selected for extensive rehabilitation work on drainage systems, bridges and roads. Of these, 3,900 hectares were deemed ideal for growing African palms and 500 hectares for cocoa, two crops that were known to thrive in the region.

The plan also called for installing a palm-oil extraction plant capable of processing the anticipated maximum yield of the plantations and for providing technical advisers to draw up production and marketing plans. All the facilities and related equipment were to be owned by local farmers via the cooperative, which was subsequently named Coopeagropal R. L. Farmers would also be given official title to their land so that they could eventually use it as collateral for loans. The IDB agreed to finance $33 million of the $51 million project with a credit channeled through the National Bank of Costa Rica and the IDA.

Today, Coopeagropal generates domestic and international sales of $20 million per year and is one of Costa Rica's five most profitable businesses, according to a recent report by the EFE news agency. The cooperative has grown from 60 landholding members to 435, and the total area planted in palm has expanded to 5,740 hectares. Co-op members are planning to plant an additional 4,000 hectares in coming years with seedlings from their own nursery. Although it started out simply supplying raw palm oil to outside companies, Coopeagropal now refines and processes oil into 15 different products, including edible and industrial oils, margarine and palm-nut flour.

While succeeding as a business, Coopeagropal has transformed the lives of Coto Sur's residents. Clean drinking water, practically unavailable in the early 1980s, now runs through taps in 75 percent of the region's homes. Access to residential electricity and telephone service now averages 93 percent, up from 30 percent and 3 percent, respectively. The area is currently served by five health clinics instead of one, and usable roads have increased to 250 kilometers from the original 20.

The co-op supplies its members with technical assistance and training, agricultural inputs, credit and infrastructure maintenance services. It also finances medical care, housing and schools for member families.

Not surprisingly, Coopeagropal's shareholders are determined to make their venture succeed. "In less than 15 years, local farmers went from fighting against corporations to becoming entrepreneurs themselves," Israel Avila, a former congressman who serves as president of Coopeagropal's administrative board, told EFE in October. Edwin Oviedo, a former labor leader who now owns 22 hectares planted in palms, said, "We started without even basic education, but today we have property, credit, know-how, better living conditions and responsibility."

News of Coopeagropal's success has generated interest outside Costa Rica. According to EFE, Colombian agriculture minister Carlos Murgas recently met with officials from IDA and the cooperative to learn about how its business model might be applied in parts of Colombia that are attempting to rebuild after guerrilla conflicts.