Covering 1978-1979, the third annual report of the Partnership for Rural Improvement (PRI) highlights the progress made toward major program objectives and points out certain weaknesses in the model. Section I discusses program rationale, program design, and evaluation research design. Section II summarizes a selection of the major achievements which can be largely or partly credited to initiatives through PRI. Sub-headings of this section are: interorganizational development, institutional development, local project development, training and preparation of educational materials, documentation and evaluation, and unanticipated outcomes. Section III, on program analysis, focuses on areas of effectiveness and inadequacy in the model, and discusses: obstacles to use of partner resources; use of research; project proliferation; sub-regional variation; program associates; communication and evaluative feedback; partner contributions; allocation of institutional resources; and status of progress toward PRI goals. Section IV outlines plans for 1979-80. Section V contains financial management and budget information. Appendix A describes all major activities of PRI. Appendix B includes case studies which illustrate how specific projects have implemented the PRI concept. Appendix C contains a summary and recommendations of the external evaluation. Appendix D discusses the basis for the PRI model. (CM)