Report from the Commission on the operation in 1997 of the export earnings stabilisation system under the fourth ACP-EC Convention as revised by the Agreement signed in Mauritius
Date: 1998-09-23
Institutions: European Commission
Subjects: ACP-EU Convention, Stabex, export revenue

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 23.09.1998 
COM(1998) 535  final 

•  1- V"-". 

. 

.+: 
-ijii 

i .; 

REPORT FROM THE COMMISSION 

on the operation in 1997 of the 

export earnings stabilisation system under the 

f .  • 

fourth ACP-EC Convention as revised by the 

Agreement signed in Mauritius 

I. 

INTRODUCTION 

1.  Article  31(3)  of  the  Internal  Agreement  on  the  financing  and  administration  of 

Community aid states: 

"Each  year  the  Commission shall  draw  up  a  comprehensive report for  the 
Member States on the operation of the system of stabilisation of export earnings 
and the use made by the ACP States of the funds transferred. " 

2.  This report covers the activities of the ACP-EC  institutions  and the  administration 
of  the  system  in  1997,  paying  special  attention  to  the  allocation  of  transfers  for 
1996,  the  second  year  of  application  of  Stabex  under  the  fourth  ACP-EC 
Convention as revised by the Agreement signed  in Mauritius. 

For the third year of application in a row, it has been possible to cover all  transfers. 

2-

II.  ACTIVITIES  OF THE ACP-EC  INSTITUTIONS 

3.  The  operation  of  Stabex  was  discussed  at  the  44th  meeting  of  the  ACP-EC 

Committee of Ambassadors (Brussels, 21 March 1997). 

4.  The  Committee  approved  the  procedure  proposed  by  the  Commission  for  Stabex 
transfers  in respect of the  1996 year of application, i.e. that the Commission  would 
adopt  by  31 July  1997 at the  latest,  pursuant  to  Article 207(3)  of  the  Convention, 
the decisions on all transfers  in respect of the  1996 year of application on condition 
that  the  decisions  would  not  come  into  effect  until  the  revised  Lomé  Convention 
came into force. 

3-

III.  TRANSFERS  FOR  THE  1996 YEAR  OF  APPLICATION 

5.  Calculation of the transfer  bases 

For  the  1996  year  of  application,  the  Commission  Sound  2C i 
eligible  for  27  transfers  under  the  Slabcx  arrangements.  The  2 
groups  for  which  losses  of  earnings  eligible  for  compofi^uik;^ 
listed in Table  1  of this report (see page 29). 

\ €f  States  to  be 
7  country/product 
rVjjiC  accorded  are 

After  calculating  iie  reduction  provided  for  in  Article  197(3)  and  (4)  of  the 
Convention, the transfer  bases totalled ECU 87 570 927. 

Under  Article  204  of  the  Convention  the  transfer  basis  calculated  from  the 
Community's import statistics is reduced to the level of the transfer  basis calculated 
from  the  statistics  on  the exports  to  all  destinations  of the  ACP  States  concerned, 
where the latter amount is less than the former. 

Reductions under Article 203 

Trends  in  marketed  output,  total  exports  and  exports  to  the  Community  of  the 
products in question meant that, in many  instances, consultations  under Article 203 
of the Convention  had to be held  between  the Commission  and  the  representatives 
of  the  ACP  States.  The  consultations  resulted  in  the  following  reductions  being 
made: 

7.1.  Reductions  applied  as  a result  of  significant  changes  in  trends  in  marketed 

output of the product in question. 

ACP State 

Product 

Reduction 

Amount in ECU 

% of transfer 
basis (TB) 

77 384 

181 445 

2 525 216 

1216 233 

36 326 

4 288 507 

499 168 

1 245 754 

905 491 

129 817 

14.2 

29.9 

40.3 

57.0 

29.1 

57.4 

55.3 

37.4 

9.7 

39.5 

Gambia 

Togo 

Sierra Leone 

Guinea-Bissau 

Burundi 

Comoros 

Saint Vincent 

Vanuatu 

Cotton 

Shrimps 

Coffee 

Coffee 

Timber 

Coffee 

Uncured hides 

Vanilla 

Bananas 

Cocoa 

- 4-

7.2.  Reductions applied as a result of a decline  in exports to all destinations  as a 

proportion of marketed output: 

ACP State 

Product 

Reduction 

Rwanda 

Comoros 

Kiribati 

Pyrethrum 

Cloves 

Vanilla 

Copra 

Amount in 
ECU 

% of transfer 
basis (TB) 

106 766 

214 063 

478 146 

115 140 

23.6 

43.3 

14.3 

31.6 

7.3.  Reductions  applied  as  a  result  of  a  decline  in  the  ratio  of  exports  to  the 

Community to other exports (all destinations): 

ACP State 

Product 

Reduction 

Gambia 

Rwanda 

Comoros 

Shrimps 

Pyrethrum 

Cloves 

8.  Calculating the transfers 

Amount in  % of transfer 

ECU 

basis (TB) 

95 896 

121611 

76 519 

15.8 

29.2 

15.4 

Following  consultation,  where  appropriate  and  as  required  under  Articles 202 
and 203  of  the  Convention,  the  total  amount  of  eligible  transfers  was  therefore 
calculated as ECU 73 584 806. 

As calculated  in line with the provisions  of Article  191 of the revised  Convention 
and the annexed second Financial Protocol, the annual instalment for the  1996 year 
of application is approximately  ECU 360 million. 

This means that all transfers  eligible in  1996 can be covered, but the funds  will  not 
be available until the revised  Convention comes into force, which  will  not be until 
the second Financial Protocol is ratified. 

In  the  light  of  Decision  No  6/95  of  the  ACP-EC  Council  of  Ministers  on 
transitional  measures  to  be  applied  until  the  entry  into  force  of  the  revised 
Convention, the Commission  decision  fixing  Stabex  transfers  for  the  1996 year  of 
application  therefore  had  to  be  taken  with  suspensive  effect  before  31  July  lc)97 
subject  to the entry  into  force  of the  revised  Convention  and  its  ratification  by  the 
ACP State due to receive the transfer. 

5-

9.  Results by recipient country and product 

Table 2 (page 30) gives the results by recipient  country. As in  1994 and  1995, the 
Caribbean countries are the main recipients, their earnings losses on bananas being 
due to a number of causes  such as bad weather conditions and  structural  problems 
in the sector. 

10.  The balance per product  (see Table  3, page 31) shows that bananas, at 26.9%, are 
still  responsible  for  the  largest  share  of  the  transfers.  In  many  cases  the  transfers 
made represent  a substantial  addition to the recipient  State's  total  export  earnings, 
examples being: 

ACP States 

Product 

Saint Vincent 

Bananas 

Dominica 

Comoros 

Bananas 

Essential oils 

Vanilla 

Transfers as a %  of total 1996 
earnings from the product 
concerned 

21.3 

18.4 

16.9 

32.8 

11.  However, a more precise measure of the effect  of the additional  Stabex revenue on 
the  sector  showing  a  loss of  earnings  can  be  obtained  by  comparing  the  amounts 
transferred  with the earnings from the products for which the transfer  is requested: 

ACP States 

Product 

Senegal 

Gambia 

Groundnuts 

Cotton 

Sierra Leone 

Coffee 

Togo 

Comoros 

Comoros 

Rwanda 

Tanzania 

Coffee 

Essential oils 

Vanilla 

Pyrethrum 

Tea 

Transfers as a % of total 19S 
earnings from the product 
concerned 

10.0 

53.0 

82.0 

51.3 

62.7 

76.0 

94.0 

21.1 

6-

in  min m Éiiiiiiimn 

These proportions  can  be high,  especially  when  exports  of the product  in  question 
are fairly  low and fluctuate substantially  from  year to year. When low market prices 
combine  with  temporary  difficulties  in  the  sector,  losses  of  revenue  can  be  severe 
and  give  rise  to  relatively  large  transfers.  Even  when  export  revenue  from  a 
particular product is high, the transfers make a significant  contribution. 

IV.  USE OF TRANSFERS 

12.  Framework of Mutual  Obligations 

12.1  BENIN 

Application year: 

1995 

Product: 

Palm products 

.  ECU 205 442 

Date of payment: 

09.10.96 

FMO signed: 

18.08.97 

Summary: 

The Stabex funds will be used to finance: 

1. 

activities relating to the renewal of village plantations of selected oil palms: 

-  practical training for private nurserymen 

-  artificial  pollination and production of dry seeds 

-  production of germinated  seeds 

-  supply of seedlings to nurseries 

-  supervision of  planters 

2. 

export support activities. 

8-

12.2  BURKINA FASO 

Application year: 

1994 

Product: 

Cotton 

ECU  13 916 449 

Date of payment: 

22.12.95 

FMO signed: 

23.12.96 (ECU 7 000 000) 

Summary 

involves  supporting 

Community  aid  will  take  the  form  of  budget  support  under  the  structural 
the 
in 
the  government 
adjustment  programme.  This 
implementation  of  the  transport  sector  adjustment  programme  and 
in  the 
restructuring  of the cotton  industry.  ECU 4.65  million  will  be allocated  to  routine 
road  maintenance.  The  remaining  ECU  2.35  million  will  be  disbursed  directly  to 
the  Treasury  subject  to  compliance  with  the  special  conditions  relating  to 
restructuring of the cotton industry. 

12.3  BURKINA FASO 

Application years: 

1994 and  1995 
balance of  1 st Protocol 

• 

Products: 

Cotton 
Hides and skins 
Balance of 1st Protocol 

1994 
1995 

ECU 
ECU 
ECU 

13 916 449 
658 848 
261 077 

Date of payment: 

22.12.95(1994) 
05.03.97(1995) 
05.03.97 (balance) 

FMO signed: 

22.07.97 (ECU 7 836 374) 

Summary: 

Under  the  1994  Stabex  FMO  signed  on  23  December  1996,  ECU  7  million  was 
allocated  to  the  structural  adjustment  programme.  The  present  FMO  concerns  a 
totalofECU7  836 734. 

In  November  1995,  the  Government  of  Burkina  Faso,  together  with  the  joint 
French, World Bank and Community  mission conducted  an analytical review of the 
first  phase  of  the  Agricultural  Sector  Adjustment  Programme  (PASA  I).  The 
implementation of PAS A II reflected  the need to progress from  a phase of reform to 
one of growth. 

The Burkinabé Government  has therefore  set the following  overall  objectives  with 
the aim of stepping up and diversifying  exports: 

- 

revival of cotton production 

- 

improving livestock production 

-  promoting diversification  programmes (oil seeds and  gum arabic). 

- 1 0-

12.4  CÔTE  D'IVOIRE 

Application years: 

Products : 

1993 additional 
I 
balance  1 st Protoco 
1990-1993 

Cocoa products 
Coffee  products 
Cocoa products 
Coffee  products 
Cotton 
Timber 
Interest  1990-1993 

1993 add. 
1993 add. 
balance 
balance 
balance 
balance 

ECU 
ECU 
ECU 
ECU 
ECU 
ECU 

354 238 
945 761 
5 242 883 
12 969 520 
326 031 
1 278 416 
CFAF  3 300 000 000 

Date of payment: 

16.09.96 (1993 add.) 
10.12.96 (balance 1 

st Protocol) 

FMO signed: 

24.03.97 

Summary: 

The activities proposed in the current rider to the  1993 Stabex FMO are in keeping 
with the reduction of state involvement  in productive activity and the  development 
of a more intensive, diversified,  competitive and sustainable  system of  agricultural 
production. The main aims are to: 

1. 

2. 

3. 

4. 

increase  the  long-term  competitiveness  of  the  coffee  and  cocoa  sectors  by 
means  of  technical  assistance  for  continuing  the  reforms  started  in  1990, 
technical  support  to  the  professional  associations  most  involved  in  overall 
management  of  these  sectors  and  technical  and  financial  support  to  the 
cooperative  movement  to  help  build  organisational  and  financial  capacity  in 
the sectors; 

improve  living  conditions  in rural  areas through  the  construction  of  priority 
infrastructure  works  funded  by  the  FRAR  (Regional  Fund  for  Rural 
Development)  which,  from  the  outset,  has  acted  as  an  instrument  of 
intervention  in  the  field  of  land  use  planning  which  can  be  geared  to  the 
requirements of the rural community; 

build the capacity  to diversify  activities  in rural  areas by boosting  the  sheep 
and  cattle-farming  sector  and  fostering  the  development  of  tourism  in  rural 
areas  by  promoting 
supporting 
implementation  of the National Environmental  Programme; 

reserves  and  national  parks  and 

improve  marketing  of  food  products  so  as  to  boost  producer  incomes, 
increase supply and ensure supplies  in urban areas at reasonable  prices  while 
cutting back on imported  foodstuffs. 

11 

12.5  GHANA 

Application years : 

1992 
1993 

Products: 

Cocoa products 
Cocoa products 
Cocoa products 

1992 
1993 
1993 add. 

4 883 722 
ECU 
ECU  15 738 690 
642 396 
ECU 

Dates of payment: 

21.11.94 ( 1992) 
29.11.94(1993) 
05.09.96 (1993 add.) 

FMO signed: 

27.02.97 

Summary: 

The  substantial  contributions  to  the  COCOBOD  (cocoa  state  marketing  board) 
retrenchment  programme  under  the  1990  and  1991  STABEX  allocations  reduced 
COCOBOD's  costs  and  contributed  to  an  increase  of  the  share  of  the  cocoa 
smallholder in the export value. The major  thrust of the  1992/1993 allocations is to 
maintain  and possibly  increase the 50% share of export value to be given to cocoa 
producers and to support other measures to increase smallholder incomes. 

More specific results will be: 

1. 

2. 

3. 

4. 

reduced marketing costs through the improvement of rural feeder roads firstly 
in the  main cocoa  producing  areas  of Ghana  (the  so called  cocoa  roads)  and 
secondly,  in order to  support  diversification,  in  other  areas  with  agricultural 
potential and/or production, with a special  focus on the Western Region; 

diversification  of  crop  production  towards  products  with  export  potential  in 
support of Government's policy to reduce export dependence on cocoa; 

improved productivity and income of smallholder cocoa producers; 

improved  employment  opportunities  for  retrenched  COCOBOD  workers 
through a continuation of the retraining scheme. 

During this process, COCOBOD is expected further  to reduce its cost as part of the 
reform  programme.  Progress  is  expected  to  be  made  towards  liberalisation  of 
external marketing and the transformation  of COCOBOD towards an institution the 
main  tasks  of which  are monitoring  and  coordination  of  cocoa  operations,  quality 
control through certification,  research, disease control. 

- 1 2-

12.6  GRENADA 

Application year: 

1994 

Products: 

Cocoa 
Bananas 
Nutmeg and mace 

ECU 
87 769 
ECU  1  090 639 
803 245 
ECU 

Date of payment: 

18.10.1995 

FMO signed: 

05.05.1997 

Summary: 

Stabex  1994  transfers  in  favour  of  Grenada  are  intended  to  be  used  in  the  three 
sectors concerned  for: 

-  on-farm  incentives to increased production; 

-  appropriate  price-support  and  the  removal  of  bottle-necks  in  agricultural 

production; 

-  development  of  the  domestic  agricultural  sector  and  its  diversification  and 

improvement of the nutritional status of the population, and 

- 

improvement  of the  quality  of rural  life  in order  to reduce  the  rate  of the  rural-
urban  drift. 

The  Government  of  Grenada  is  committed  to  the  strengthening  of  the  national 
economy, thus putting the country on the road to sustainable development. 

-13 

.7  KIRIBATI 

Application year: 

1993 

Product: 

Copra 

Date of payment: 

31.03.1995 

FMO signed: 

25.06.1997 

Summary: 

ECU  36 024 

The  archipelago's  size  is the main  cause  of problems  in the  sector  as it  results  in 
very high production and export costs. 

Since the transfer  is quite low, it will not be used to support producer prices but to 
purchase  the  equipment  which  the  KCCS  (Kiribati  Copra  Cooperation  Society) 
requires in order to meet its obligations for the marketing of copra. 

14 

12.8  MADAGASCAR 

Application 

years: 

1991,  1992 and  1993 in part 

Product: 

Coffee 
Vanilla 
Essential oils 

Coffee 
Vanilla 
Cloves 

Coffee 
Cloves 

Coffee 
Vanilla 
Cloves 

} 
}1991 
} 

} 
}1992 
} 

}1993 
} 

ECU  16 585 084 

ECU 

9 980 228 

ECU 

4 469 771 

(= 

4 294 485+  175 286/add.) 

} Balance 
}  1st 
}Fin. Prot. 

ECU 

2 908 254 

Dates of payment: 

19.02.1993(1991) 
30.08.1994(1992) 
05.01.1995 and 09.09.1996 (1993) 
19.03.1997 (balance from  1st Financial Protocol) 

FMO signed: 

Summary: 

13.12.1997 
(for the use of a maximum of ECU 15 250 000 out of a total 
ofECU38  443 561)> 

It  has  been  agreed  to  use  the  Stabex  funds  in  accordance  with  the  objectives  of 
developing traditional exports and  diversification. 

Funds allocated under the FMO are mainly intended to: 

- 

improve production conditions, product quality and producer incomes; 

-  enable exporting sectors to maintain competitiveness; 

-  help open up access to areas of production by rehabilitating roads and bridges; 

-  help set up an action fund to assist certain activities of traders; 

-  develop,  research  and  administer  quality  standards  for  exported  products  and 

ensure their implementation; 

-  contribute to disease control and (he creation of five new abattoirs; 

1 

N B.  ECU  12 million out of the total of ECU 38 443 561 has already been earmarked  to an FMO signed on 3 October  1996. 

- 1 5-

assist the national authorising officer's  support unit and the Stabex support team 
in the technical  and financial  implementation of projects and programmes under 
the FMO. 

- 1 8-

12.9  MALAWI 

Application year: 

1994 

Product: 

Tea 
+ balance from  1 st Financial Protocol  ECU 

ECU  4  183 470 
291542 

Date of payment: 

02.01.1996 (23.12.1996) 

FMO signed: 

11.08.1997 

Summary: 

The projects on which the above funds will be used aim at: 

-  promoting  agricultural  diversification  away  from  traditional  export  crops  and/or 

agroprocessing for both import substitution and exports, and 

- 

improving  the  accessibility  of  the  major  tea  producing  areas  through  gravelling 
and grading of rural access roads, in order to facilitate  efficient  transportation  of 
agricultural  produce  from  points  of  production  to  processing  and  marketing 
centres. 

The  Government  of  Malawi  is  implementing  a  number  of  macro-economic  and 
structural adjustment  measures supported by the IMF. In the agricultural  sector, the 
Government  liberalised  input and commodity prices and  lifted  a ban  on exports of 
agricultural  commodities. This is expected  to lead to flexible  and diverse  cropping 
patterns,  thereby  creating  new  opportunities  for  agricultural  diversification  and 
agroprocessing. 

17 

12.10  UGANDA 

Application years: 

1993 and  1995 

Products: 

Dates of payment: 

coffee 
hides and skins 
tea 

1993 
1993 
1995 

21.07.1995 (coffee)  1993 
04.09.1996 (hides) 
16.06.1997 

1995 

FMO signed: 

14.08.1997 

Summary: 

ECU  44 434 124 
ECU  1 813 639 
430 212 
ECU 

As a result  of talks  between  the  Ugandan  Government  and  the  Commission  and 
discussion  of  the  problems  affecting  export  products,  it  has  been  decided  that 
reforms  and changes are necessary  to improve farming  of export products and the 
agri-food  processing sector. 

Stabex  1993  and  1995  funds  will  be  used  to  support  development  of  the  rural 
economic  infrastructure,  primary  education  in  rural  areas  and  the  agri-food 
processing sector. 

To  ensure  effective  implementation,  part  of  the  transfer  will  be  earmarked  for 
appropriate  measures,  e.g.  technical  assistance  for  effective  administration  and 
regular payments. 

18 

12.11  PAPUA NEW GUINEA 

Application year: 

1994 

Product: 

Cocoa products 

ECU 7 271 542 

Date of payment: 

20.08.1996 

FMO signed: 

08.10.1996 

Summary: 

The  main  cause  of  the  losses  sustained  is  the  drop  in  world  prices  for  these 
products  which  resulted  in planters  losing  interest  and,  in  some  cases, giving  up 
farming. 

The  funds  will  be  used  to  continue  ongoing  projects  which  form  part  of  the 
overall  policy  and  are  designed  to  stabilise  the  Government's  external  position 
under  the  second  structural  adjustment  programme.  Four  main  sectors  are 
concerned: 

- 

improving performance  in the cocoa and copra sectors, including  rehabilitating 
infrastructure  in the provinces of East New Britain and North Solomons; 

- 

improving coffee  quality; 

-  ensuring a healthy investment climate by means of price stabilisation; 

-  diversification  measures. 

-19 

12.12  RWANDA 

Application year: 

1991 

Products: 

Coffee 
Hides and skins 
Pyrethrum 

Date of payment: 

25.08.1992 

FMO signed: 

18.04.1997 

Summary 

ECU 9 184 660 
ECU  936 227 
11 269 
ECU 

The events of  1994 turned the country upside down.  The loss of human  resources 
and  the  looting  and  destruction  of  infrastructure  brought  the  economy  to  a 
standstill, causing output to plummet.  This state of emergency  made it imperative 
to get production  facilities  back  on their  feet,  including  export  sectors.  The  three 
products giving rise to transfers  for the  1991 marketing year are coffee,  hides and 
skins, and pyrethrum. 

When  allocating  these  resources,  priority  was  given  to  all  agricultural  export 
sectors. 

There  is  a  special  emphasis  on  tea,  even  though  this  sector  has  generated  no 
transfer,  owing  to  the  abrupt  halt  in  production  as  a  result  of  the  war  and  its 
importance to the Rwandan economy. 

This approach is consistent with the rehabilitation objectives laid down in the first 
emergency rehabilitation programme. 

20 

12.13  SAMOA 

Application year: 

1993 

Products: 

Copra products 

Oilcake 

Date of payment: 

20.10.1994 

FMO signed: 

27.02.1997 

ECU  111 589 

ECU  16 602 

Summary 
The main  causes of the  loss of earnings were  unstable  international  copra  prices 
and  the  drop  in  production  since  cyclones  Val  and  Ofa,  the  adverse  effects  of 
which have still to be overcome. 

Transfers will be used to continue activities begun under the earlier FMOs, among 
them the revitalisation and diversification  of agriculture and the rehabilitation and 
maintenance of basic  infrastructure. 

21 -

12.14  TANZANIA 

Application years: 

1991 and  1992 

Product: 

Cotton 

ECU 2 186 054 

Dates of payment: 

29.12.1992(1991) 
24.08.1995(1992) 

FMO signed: 

16.10.1997 

Summary 

Stabex  transfers  for  cotton  are very  important  because  there  is very  little  aid  for 
this sector. 

The  transfers  will  be  used  to  improve  the  quality  of  the  product,  inter  alia  by 
introducing  new  varieties, and  carry  out  general  research  in  the  sector,  including 
looking at ways of improving the working environment. 

22 

12.15  TANZANIA 

Application year: 

1992 

Product: 

Cloves 

Date of payment: 

24.08.1995 

FMO signed: 

11.11.1996 

Summary 

ECU  183 770 

The production of cloves in Zanzibar varies from  year to year, with sales ranging 
from  1  300 to  12 000 tonnes over the past five years. 

The world market is reckoned to be able to absorb about 5500 tonnes a year. 

Another problem is Indonesia's self-sufficiency  in cloves, which has put an end to 
imports from  Zanzibar. 

The Government considers  it necessary  to promote rice production  with a view to 
achieving self-sufficiency  in the long term. 

The  Stabex  transfers  are  intended  to  improve  the  irrigation  of  rain-fed  paddies, 
train growers in more advanced  methods and carry out a study into growing other 
rice varieties. 

- 2 3-

12.16  TANZANIA 

Application years: 

1992 and 1993 

Products: 

Coffee 

Coffee 

1992 

1993 

Date of payment: 

24.08.1995 

FMO signed: 

09.10.1996 

ECU  12 528 623 
ECU  8 300 103 

Summary 
The overall objective is to improve the quality and quantity of production. 

The  measures  funded  complement  activities  financed  by  the  national  indicative 
programme or other donors. 

More specific objectives include: 

- 

- 

- 

repairing infrastructure  necessary  for coffee  production, 

taking measures and launching activities to improve the quality of the  coffee, 

facilitating  operators" access to credit for the purchase of inputs and  equipment 
for producing  coffee. 

24 

12.17  TOGO 

Application year: 

1990 

Products: 

1990 
Cocoa 
1990 
Coffee 
Interest 
1989 
Stabex balance  1989 

1724 659 
ECU 
3 505 259 
ECU 
ECU 
1  521 822 
CFAF 954 825 643 

Date of payments: 

08.05.92 

FMO signed: 

30.09.97 

Summary 

In  September  1992  the  national  authorising  officer  approved  a  draft  FMO 
governing Stabex transfers  for the  1990 application year.  The decision to suspend 
cooperation  between  the  European  Union  and  Togo  meant  the  draft  was  never 
approved by the Community authorities. 

Pending  a  scheme  specifically  designed  to  improve the  competitiveness  of  cash-
crop sectors, the European Commission and the Government of Togo have agreed 
to  give  priority  to  meeting  pressing  needs  in  the  areas  of  basic  education  and 
primary  health  care  in rural  areas by  funding  priority  investment,  equipment  and 
operating costs figuring  in the  1997 budget and complementary  schemes aimed at 
paving  the  way  for  the  implementation  of  the  Government's  policy  in  the  cash-
crop  sectors  and  facilitating  the  future  implementation  of  a  national  regional 
development and decentralisation  policy. 

In the health sector Stabex  funding  will help rehabilitate and equip a third of those 
first-tier  public  health  facilities  (dispensaries  and  medical  welfare  centres) 
considered  operational  (i.e. possessing  at  least  one  nursing  auxiliary)  to  provide 
basic  care. 
It  will  also  cover  frontline  medical  equipment  for  30  prefecture 
hospitals  and  the  refitting  of  five  of  them.  It  will  also  pay  a  proportion  of  the 
operating costs of the Health Ministry departments directly  involved in supporting 
and developing basic health. 

This  FMO  will  serve  to  rehabilitate  a hundred  or  so  schools  in the  coffee/cocoa 
area,  replacing  straw  huts  with  permanent  buildings,  providing  furniture  and 
teaching materials and installing latrines. 

Last but  not  least,  some funds  will  be earmarked  for  repairing  tracks and  bridges 
aimed at opening up coffee-  and cocoa-growing areas. 

25-

12.18  TOGO 

Application years: 

1991-1994 

Products: 

Cocoa 
Coffee 
Cocoa 
Coffee 
Cotton 
Cocoa 
Coffee 
Shea 
Cocoa 

1991 
1991 
1992 
1992 
1992 
1993 
1993 
1993 
1994 

ECU 
ECU 
ECU 
ECU 
ECU 
ECU 
ECU 
ECU 
ECU 

1 676 087 
6 073 184 
1 085 546 
1 720 363 
273 001 
1937 651 
1 718417 
281 571 
360 298 

Dates of payment: 

09.09.92(1991) 
02.05.95(1992) 
02.05.95(1993) 
27.11.95(1994) 

FMO signed: 

30.09.97 

Summary 

The Stabex funds must be used exclusively: 

- 

- 

to support the above sectors, in which reform  and restructuring  are well under 
way, and facilitate  the adoption of the self-management  measures necessary  for 
the withdrawal of the State; 

to  carry  out  a  number  of  investment  projects  of  public  interest  designed  to 
assist  the  smooth  development  of  these  sectors  and  the  implementation  of 
diversification  activities; 

- 

to  help  increase  the  involvement  of  growers  in  the  decision-making  process, 
especially in respect of the prices at which their produce is purchased. 

The relatively  high number of operations is the result of a deliberate choice and is 
possible only because some follow on from  programmes already  being carried out 
or planned  by  other  donors.  However,  to avoid  dependency,  the  sums  allocated 
are for  free-standing  schemes that can be brought  under  way  without  waiting  for 
other  funding. 

The  schemes  proposed  concern  the  means  of  production.  They  are  designed 
either to have knock-on  effects  for  the entire  industry  or to  stop the  deterioration 
in production  conditions  in that  sector.  It  is clear  from  this  programme  that  the 
funds  benefit  producers, even  if there  is no automatic  link  between the  source of 
the loss and the allocation of the Stabex  funds. 

26 

12.19  VANUATU 

Application years: 

1992 to 1994 

Product: 

Copra 

1992 
1993 
1994 

ECU 267 337 
ECU 265 281 
ECU  60 045 

Dates of payment: 

16.06.1995 (1992 and  1993), 03.06.1996 (1994) 

FMO signed: 

22.04.1996 

Summary 

About 90 % of copra is produced by small growers who depend on the income to 
meet their basic cash needs.  Since school fees were cut in  1993 and medical  care 
became free,  the growers have needed  far  less cash and reduced  their activities in 
the  sector.  This  trend  has  combined  with  a  series  of  cyclones  to  reduce 
production  and, therefore,  export  earnings.  The  funds  available  under  this  FMO 
are  used  for  a  single  operation  in  support  of  an  operation  carried  out  under  the 
1988-91 FMO, namely the improvement of the rural road network. 

-27 

12.20  ZIMBABWE 

Application year: 

1994 

Products:  Coffee 
Cotton 
+ balance from  1st Financial  Protocol 
+ balance from  1992 l-'MO 
+ balance from  1993 FMO 

ECU 2 708 633 
ECU 2 145 286 
ECU  1 175 104 
ECU  1319 485 
ECU  1  299  172 

Dates of payment: 

09.09.1996 (23.12.1996) 

FMO signed: 

20.10.1997 

Summary 

The  Government  of  Zimbabwe,  after  consultation  with  the  various  interested 
parties, has  decided  that the  counterpart  funds  generated  by  the  Stabex  transfers 
will be used: 

-  primarily  to  assist  the  productive  capability  of  the  cotton  and  coffee  sectors 
through  the  improvement  of  research  and  training,  as  well  as  infrastructure 
development, and 

-  partly to compensate the economic operators for losses incurred. 

The  Government  of  Zimbabwe  is  committed  to  continuing  the  liberalisation  of 
agricultural  markets as well as facilitating  exports and  investments. Moreover, the 
process  of  restructuring  research  and  training  activities  in  agriculture  will  be 
pursued. 

28 

CALCULATION OF 1996 TRANSFER BASES (in ECU) 

TABLE 1: 

Country 

§8 o 

Product 

Loss of 
earnings 

"Excess 
clause" 

Transfer 
basis after 
deduction of 
excess clause 

Article 
202/203 
consultations* 

Transfer basis 
after 
consultations 

Article 
194(2) 
reduction 

Article 
194(4) 
reduction 

Amount of 
transfer 

224 

Sudan 

Gum arabica 

20.042.631 

445.884 

19.596.747 

236 

Burkina Faso 

Beans 

100.787 

0 

100.787 

Groundnut products 

10.006.992 

3.002.098 

7.004.894 

0 

0 

0 

19.596.747 

100.787 

7.004.894 

248 

Senegal 

252 

Gambia 

257 

Guinea-Bissau 

264 

Sierra Leone 

280 

Togo 

Cotton neither carded nor combed 

Shrimps 

Timber 

Green or roasted coffee 

Green or roasted coffee 

306 

Central African Republic 

Timber 

324 

Rwanda 

Tea 

| Pyrethrum: saps and other extracts 

Uncured skins 

543.655 

605.765 

124.490 

•0 

0 

0 

543.655 

605.765 

124.490 

77.384 

277.341 

36.326 

2.181.588 

48.594 

2.132.994 

1.216.233 

466.271 

328.424 

88.164 

916.761 

6.408.790 

147.407 

6.261.383 

2.525.216 

3.736.167 

4.520.405 

109.780 

4.410.625 

1.657.238 

451.215 

408.364 

0 

0 

-  0 

1.657.238 

451.215 

408.364 

0 

0 

228.377 

0 

4.410.625 

1.657.238 

222.838 

408.364 

328 

Burundi 

Green or roasted coffee 

7.897.038 

425.642 

7.471.396 

4.288.507 

3.182.889 

Uncured skins 

901.905 

0 

901.905 

499.168 

352 

Tanzania 

370 

Madagascar 

375 

Comoros 

Tea 

Vanilla 

Vanilla 

Cloves 

Essential oils 

386 

Malawi 

Green or roasted coffee 

460 

Dominica 

465 

Saint Lucia 

Tea 

Green bananas 

Green bananas 

3.298.181 

247.157 

3.051.024 

2.945.860 

143.705 

2.802.155 

0 

0 

3.378.682 

48.324 

3.330.358 

1.723.900 

493.962 

829.618 

824.946 

1.611.662 

0 

0 

0 

0 

493.962 

829.618 

824.946 

1.611.662 

8.865.785 

1.372.452 

7.493.333 

4.589.495 

'1.376.848 

3.212.647 

290.582 

0 

161.813 

0 

0 

0 

402.737 

3.051.024 

2.802.155 

1.606.458 

203.380 

829.618 

663.133 

1.611.662 

7.493.333 

3.212.647 

467 

St Vincent and the Grenadir 

Green bananas 

10.942.182 

1.638.875 

9.303.307 

;  905.491 

8.397.816 

473 

Grenada 

812 

Kiribati 

816 

Vanuatu 

Green bananas 

Copra 

Cocoa beans 

2.408.643 

155.361 

2.253.282 

1.510.826 

364.690 

328.485 

0 

0 

364.690 

328.485 

115.140 

129.817 

742.456 

249.550 

198.668 

Totals 

96.733.054 

9.162.127 

87.570.927 

13.986.121 

73.584.806 

-29-

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

19.596.747 

100.787 

7.004.894 

466.271 

328.424 

88.164 

916.761 

3.736.167 

4.410.625 

1.657.238 

222.838 

408.364 

3.182.889 

402.737 

3.051.024 

2.802.155 

1.606.458 

203.380 

829.618 

663.133 

1.611.662 

7.493.333 

3.212.647 

8.397.816 

742.456 

249.550 

198.663 

0 

73.584.806 

TABLE  2: 
BREAKDOWN BY RECIPIENT COUNTRY 

1996 application year 

Country 

Amount  in  ECU 

As  %  of  total 

1 

Sudan 

2 

3 

4 

5 

6 

7 

8 

9 

St Vincent  & the  Grenadines 

Dominica 

Senegal 

Central  African  Republic 

Togo 

Burundi 

Saint  Lucia 

Tanzania 

10 

Madagascar 

11 

Comoros 

12 

Rwanda 

13 

Malawi 

14 

Sierra  Leone 

15 

Gambia 

16 

Grenada 

17 

Kiribati 

18 

Vanuatu 

19 

Burkina  Faso 

20 

Guinea-Bissau 

19.596.747 

8.397.816 

7.493.333 

7.004.894 

4.410.625 

3.736.167 

3.585.626 

3.212.647 

3.051.024 

2.802.155 

2.639.456 

2.288.440 

2.274.795 

916.761 

794.695 

742.456 

249.550 

198.668 

100.787 

88.164 

26,632 

11,412 

10,183 

9,519 

5,994 

5,077 

4,873 

4,366 

4,146 

3,808 

3,587 

3,110 

3,091 

1,246 

1,080 

1,009 

0,339 

0,270 

0,137 

0,120 

73.584.806 

100,000 

30-

TABLE 3: 
BREAKDOWN BY PRODUCT 

1996 application year 

Product 

Green bananas 

Gum arabica 

Green or roasted coffee 

Groundnut  products 

Tea 

Timber 

Vanilla 

Essential oils 

Cotton neither carded nor combed 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

Uncured skins 

11 

Uncured skins 

12 

Shrimps 

13 

Copra 

14 

Pyrethrum: saps and extracts 

15 

Cloves 

16 

Cocoa beans 

17 

Beans 

Amount in ECU 

As % of total 

19.846.252 

19.596.747 

8.498.950 

7.004.894 

6.319.924 

4.498.789 

4.408.613 

829.618 

466.271 

408.364 

402.737 

328.424 

249.550 

222.838 

203.380 

198.668 

100.787 

26,971 

26,632 

11,550 

9,519 

8,589 

6,114 

5,991 

1,127 

0,634 

0,555 

0,547 

0,446 

0,339 

0,303 

0,276 

0,270 

0,137 

Total 

73.584.806 

100,000 

- 3 I-

ISSN 0254-1475 

COM(98) 535 final 

DOCUMENTS 

EN 

s 

11  17  02  10 

Catalogue  number  :  CB-CO-98-540-EN-C 

ISBN  92-78-39354-1 

Office  for  Officiai  Publications  of  the  European  Communities 

L-2985  Luxembourg 

-  \A