Communication from the Commission to the Council and the European Parliament - Biennial Report on the Special Framework of Assistance for traditional ACP suppliers of bananas
Date: 2006-12-15
Institutions: European Commission
Subjects: ACP countries, agricultural trade, aid policy, aid system, tariff policy, tariff preference, tropical fruit

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 15.12.2006 
COM(2006) 806 final 

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE 
EUROPEAN PARLIAMENT 

Biennial report on the Special Framework of Assistance for traditional ACP suppliers of 
bananas 

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COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE 
EUROPEAN PARLIAMENT 

Biennial report on the Special Framework of Assistance for traditional ACP 
suppliers of bananas 

1. 

INTRODUCTION 

Banana  imports  in  the  European  Community  have  traditionally  been  regulated 
by  a  quota-system  with  strong  preferential  treatment  for  bananas  from  Africa, 
the Caribbean and the Pacific (ACP). There were several disputes on this matter 
in  the  1990s  and  early  2000s.  Various  changes  were  then  made  to  the  quota 
system (in 1998 and in 2001), which was finally replaced by a tariff-only system 
starting from 1 January 2006. 

In order to help the twelve traditional ACP banana suppliers in coping with the 
modifications  to  the  trade  arrangements,  a  Special  Framework  of  Assistance 
(SFA)  was  put  in  place  in  1999,  financed  by  a  dedicated  budget  line.  The 
following five African and seven Caribbean countries were traditional suppliers 
and hence beneficiaries of the SFA: 

Belize, Cameroon, Cape Verde, Dominica, Grenada, Ivory Coast, Jamaica, 
Madagascar, Saint Lucia, Saint Vincent and the Grenadines, Somalia, and 
Suriname 

This  framework  provides  technical  and  financial  support  for  specific  projects 
presented by the countries concerned, based on a long-term strategy previously 
agreed  with  and  approved  by  the  Commission.  The  individual  country 
allocations  are  calculated  on  a  yearly  basis,  taking  into  account  two  criteria, 
namely  the  competitiveness  gaps  observed  in  comparison  with  third  country 
suppliers and the importance of banana production to the economy of the ACP 
country  concerned.  The  annual  budget  has  gradually  decreased  from  €44.5 
million in 1999 to €30.7 million for 2006. Between 1999 and 2003 the allocation 
key was conceived in such a way as to provide more support to those countries 
suffering  from  a  larger  competitiveness  gap  and  with  a  higher  share  of  the 
banana sector in total GDP. As of 2004, a maximum reduction of 15% has to be 
applied  to  national  allocations  in  performing  the  calculations,  the  rate  being 
lower for those countries that have achieved competitiveness gains. 

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2. 

LEGAL BASIS 

On 22 April 1999 Council adopted Regulation (EC) No 856/19991 establishing a 
Special Framework of Assistance for traditional ACP suppliers of bananas. On 
22 July 1999 the Commission adopted Regulation No 1609/19992 laying down 
the detailed rules for its implementation. 

The  overall  objective  of  the  scheme  is  to  improve  the  competitiveness  of 
traditional  ACP  banana  production,  or,  if  this  is  no  longer  feasible,  to  support 
diversification. In summary, the aim is to achieve this goal by funding projects 
designed 

•  To increase productivity, 

•  To improve quality, 

•  To adapt production and marketing to the Community’s quality standards, 

•  To  establish  producers’  organisations  focusing  on 

in 
marketing as well as on the development of environment-friendly production 
methods, including fair-trade bananas, 

improvements 

•  To develop marketing strategies designed to meet the requirement of the EC 

common organisation of the market in bananas, 

•  To  assist  banana  producers  in  developing  environment-friendly  production 

methods, including fair-trade bananas, 

•  To support diversification wherever the competitiveness of the banana sector 

is not sustainable. 

In  2005  and  2006  the  budget  line  amounted  to  €34.5  and  €30.7  million, 
respectively.  The  relevant  Commission  Decisions  fixing  the  (individual) 
amounts available in 2005 and in 2006 were adopted on 29 April 20053 and on 
31  March  20064.  The  country  allocation  formula  is  based  on  two  criteria:  the 
competitiveness  gap  between  each  ACP  country  and  Third  Country  banana 
suppliers  and  the  importance  of  the  sector  to  each  beneficiary's  economy.  As 
regards  the  former,  the  evaluation  referred  to  in  section  7  concluded  that  the 
choice of CIF prices as a tool to measure competitiveness has drawbacks, in that 
it does not necessarily fully reflect the competitiveness gap between the ACPs 
and the Most Favoured Nation (MFN) suppliers. 

Article 9 of the Council Regulation specifies that “by 31 December 2000, and 
every two years thereafter, the Commission shall present a report, accompanied 
if appropriate by proposals, on the operation of this Regulation to the European 
Parliament  and  the  Council”.  The  present  report  covers  the  years  2005  and 

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OJ L 108, 27.4.1999, p. 2. 
OJ L 190, 23.7.1999, p. 14. 
Commission Decision C/2005/1303 
Commission Decision C/2006/1137 

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2006. The previous report, which covered the years 2003 and 2004, was issued 
on 21 December 20045. 

3. 

MARKET INFORMATION 

In 2005 4 371 324 tonnes of bananas were consumed in the EC, among which 
3 722 949 tonnes were imported and 648 375 tonnes were produced internally, 
making  it  the  second  largest  import  market  in  the  world,  after  the  USA 
(3 824 409  tonnes).  Almost  all  bananas  imported  in  the  USA  in  2005  were  of 
Southern  America  origin  (ACP  bananas  representing  only  4  437  tonnes  or 
0.12% of total imports). 

In  contrast,  the  EC  is  supplied  by  three  different  groups:  South  America,  the 
ACP and EC producers. In 2005 the South American share of imports into the 
EC  was  79.5%  of  the  total,  while  the  remaining  20.5%  represented  the  ACP 
share.  The  main  South  American  suppliers  to  the  EC  in  2005  were  Ecuador, 
Colombia and Costa Rica, with 1 059 245 tonnes, 878 229 tonnes and 623 468 
tonnes,  respectively.  During  the  same  period,  the  major  ACP  suppliers  to  the 
Community  were:  Cameroon,  Ivory-Coast  and  Dominican  Republic,  which 
exported 253 349 tonnes, 183 397 and 144 683 tonnes, respectively. 

As  of  1  January  2006,  the  EC  has  modified  its  import  regime.  In  the  first  six 
months of 2006, prices for all bananas (from South America, the ACP and the 
EC) were lower than in 2005, though at a level comparable to 2004. 

4. 

EC TRADE REGIME 

As from 1 January 2006, the EC is applying a new import regime for bananas 
consisting  of  an  MFN  tariff  of  €176/tonne  and  a  duty-free  tariff  rate  quota  of 
775  000  tonnes  for  bananas  of  ACP  origin.  This  new  regime  responds  to  the 
EC's  commitments  to  move  from  its  previous  quota  system  to  a  tariff-only 
regime as of 2006. It also takes into account two 2005 arbitration awards on the 
tariff  level  proposed  by  the  EC,  which  were  issued  following  a  special  WTO 
arbitration  procedure  established  in  the  Annex  to  the  Waiver  on  the  Cotonou 
Agreement. 

The EC undertook to closely monitor the impact of the new regime on imports 
of different origins in order to ensure that it maintained equivalent market access 
conditions as in the previous regime. 

As far as ACP suppliers are concerned, the final trade regime for bananas will 
be  covered  by  the  Economic  Partnership  Agreements  (EPAs)  currently  being 
negotiated between the EC and the ACPs and scheduled to enter into force on 1 
January 2008. 

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COM(2004)823 final 

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5. 

FINANCIAL DECISIONS 

5.1. 

Budget line 2005 

The Financing Proposals submitted by all twelve beneficiaries were approved by 
the EDF-Committee in November 2005. On this basis, the Commission adopted 
the  corresponding  Financing  Decisions  in  December  2005  and  all  Financing 
Agreements  were  signed  in  the  first  half  of  2006.  The  total  amount  of  all 
Financing agreements was €34.5 million, which represented a reduction of 7.5% 
from the budget outturn for 2004. 

Within the agreed programmes, 48% of the funds are dedicated to improving the 
competitiveness of the exporting Banana Sector in six countries. Some 52% of 
the funds are dedicated to diversification within eight ACPs. Annex 1 provides a 
detailed overview of the distribution of funds between the two main objectives 
of the scheme. 

5.2. 

Budget line 2006 

The Financing Proposals put forward by all twelve countries were approved by 
the  EDF-Committee  in  October  2006.  On  this  basis,  the  Commission  adopted 
the  corresponding  Financing  Decisions  in  December  2006.  All  Financing 
Agreements  are  expected  to  be  signed  in  the  first  half  of  2007.  The  overall 
amount of these twelve Financing Agreements was €30.7 million, representing a 
reduction of 11% from the budget for 2005. 

Within the agreed programmes, 39% of the funds are dedicated to improving the 
competitiveness of the exporting banana sector in five ACP States. Some 61% 
of  the  funds  are  dedicated  to  diversification  in  nine  beneficiary  ACP  States. 
Annex 1 provides a detailed overview of the allocation of funds between the two 
main  objectives  of  Council  Regulation  (EC)  No  856/1999.  Chart  1  gives  an 
overview of the allocation of funds to these objectives over time whereas Chart 
2 shows this per country. 

6. 

IMPLEMENTATION 

6.1. 

General administrative performance of the programmes 

The  introduction  of  new  financial  rules  has  had  a  profound  effect  on  the 
execution modalities for all programmes financed from the budget line. During 
2005  and  2006  most  of  the  adaptations  needed  to  these  modalities  were 
completed.  They  included  extending  by  24  months  the  validity  of  most 
programmes decided before 2003. 

The  results  of  the  first  verification  exercise  in  2004  under  Article  164  of  the 
Financial  Regulation  led  to  ten  countries  opting  for  a  partially  decentralised 
mode  of  programme  management,  while  in  the  remaining  two  countries  the 
programmes  were  to  be  implemented  through  centralised  management.  These 
modalities were adopted for the programmes decided for the budget years 2003, 
2004,  2005  and  for  the  programme  proposed  for  2006,  with  the  exception  of 

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Belize,  which  is  switching  to  a  partially  decentralised  management  mode.  For 
the programmes implemented under centralised management (Belize, Grenada, 
Suriname,  Cameroon  and  Somalia)  the  Commission  prepares  all  the  contracts 
and effects  all the  payments.  For  the programmes  implemented under partially 
decentralised management (Jamaica, Dominica, Saint Lucia, Saint Vincent and 
the  Grenadines,  Cape  Verde,  Ivory  Coast  and  Madagascar)  part  of  the 
programme  is  implemented  by  the  Contracting  Authority  designated  in  the 
Financing Agreement via Programme Estimates. The Commission endorses the 
Programme  Estimates  and  controls  ex-ante  the  contracting  procedures  for 
contracts  >50  000 euros  and  ex-post for contracts <50 000 euros. Through the 
Programme Estimates, payments are decentralised for operating costs and small 
scale contracts up to the following ceilings: 

Works 

Supplies 

Services 

Grants 

< €300 000 

< €150 000 

< €200 000 

≤ €100 000 

For  contracts  not  covered  by  Programme  Estimates,  the  Commission  controls 
ex-ante the contracting procedures for contracts >50 000 euros and ex-post for 
contracts <50 000 euros and executes the payments. 

During  2005  responsibility  for  the  programmes  of  all  beneficiary  ACP  States 
was devolved to the respective Delegations. In August 2005, this exercise was 
completed,  and  it  has  greatly  contributed  to  improving  the  execution  of  the 
programmes  in  terms  of  both  quantity  (contracts  signed)  and  quality.  The 
Delegations  involved  are  Jamaica  (Jamaica  and  Belize),  Barbados  (Dominica, 
Saint  Lucia,  Saint  Vincent  and  the  Grenadines  and  Grenada),  Ivory  Coast, 
Cameroon, Kenya (Somalia) and Madagascar as well as the offices in Suriname 
and Cape Verde. 

6.2. 

Improving Competitiveness 

Projects  targeting  the  competitiveness  of  banana  exporters  have  continued  in 
those  five  countries  that  supported  this  objective  during  2002-2004.  For  2005 
and 2006, these programmes include: 

•  Renewal  of  plantations  in  Belize,  Cameroon,  Jamaica  and  Suriname.  In 
Jamaica plantations were severely hit by hurricanes in both 2004 and 2005. 
In  Belize,  Jamaica  and  Suriname  new  varieties  of  bananas  that  are  more 
resistant to diseases such as Black Sigatoka, are being introduced. 

•  Investments  to  acquire  or  maintain  EUREGAP  and/or  ISO  14001  quality 
certification in Belize, Cameroon, Ivory Coast, Jamaica and Suriname. These 
quality standards are imposed by the larger European retailers. 

•  Handling,  packaging  and  storage  of  bananas  in  Cameroon,  Ivory  Coast  and 

Suriname. 

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•  Social Infrastructures on plantations and social micro-projects for plantation 

workers in Cameroon and Ivory Coast. 

•  Technical Assistance for Belize, Cameroon and Jamaica, mainly focused on 

rural development and institutional strengthening. 

Under SFA 2005 Saint Lucia asked to use 30% of its allocation for training and 
technical  assistance  to  support  the  remaining  banana  export  sector.  Although 
programmes  supporting  the  competitiveness  of  banana  exports  took  up  almost 
50% of the available allocation in 2005; the figure fell in 2006 to 39%, which is 
similar  to  the  percentages  for  the  period  from  2000  (see  Annex  1).  All  of  the 
five  countries  supporting  this  objective  have  been  able  to  maintain  or  increase 
the quantities of bananas exported to the EC during the period 2003 to 2006. 

Chart 1 : Programme objectives per year of allocation

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40,00

30,00

20,00

10,00

0,00

-10,00

-20,00

-30,00

-40,00

1999

2000

2001

2002

2003

2004

2005

2006

Increasing Competitiveness

Diversification

Year

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6.3. 

Diversification 

The diversification objective was opted for by seven countries in 2005 and 2006 
(Cape Verde, Dominica, Grenada, Madagascar, Somalia, Saint Lucia, and Saint 
Vincent and the Grenadines). These countries have either stopped exporting or 
seen  their  banana  exports  substantially  reduced  between  1990  and  2000.  None 
of them have been able to recover markets during the period 2003 to 2006. The 
activities  planned  cover  a  wide  range  of  economic  sectors  and  types  of 
investments,  but  all  aim  to  provide  (ex-)banana  farmers  and  workers  access  to 
alternative  sources  of  income.  The  programmes  also  have  a  longer  duration, 
typically four to five years, as they take longer to achieve their full impact. The 
programmes for 2005 and 2006 include: 

•  Vocational training, including adult literacy, to improve the employability of 
former  banana  farmers/workers  in  the  service  sectors  in  the  Eastern 
Caribbean countries. 

•  Agricultural diversification towards horticulture targeting the local market in 
Madagascar  and  the  tourism  industry  and  local  markets  in  the  Eastern 
Caribbean.  In  Jamaica  ex-banana  exporters  are  being  helped  to  diversify  to 
banana and plantain production for the local market (Jamaica consumes some 
100 000 tonnes per year in both fresh and processed bananas and plantains). 
Support  for  agricultural  diversification  includes  strengthening  agricultural 
extension services provided by Ministries of Agriculture. 

•  Strengthening the tourism and/or the private sector in general in the Eastern 

Caribbean. 

•  Rural  development in areas traditionally producing bananas in Belize, Cape 
Verde, Jamaica and Somalia (including investments in small-scale irrigation). 

•  Technical assistance and institutional support in all seven countries. 

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60,00

50,00

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40,00

30,00

20,00

10,00

0,00

Belize

Cameroon

Cape Verde

Chart 2 : Programmes objectives per country

120,0%

100,0%

80,0%

60,0%

40,0%

20,0%

0,0%

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Somalia

Suriname

Increasing Competitiveness

Diversification

Increasing Competitiveness

Diversification

Dominica

Grenade

Ivory Coast

Jamaica

St Lucia

Madagascar
St Vincent & Grenadines

Country

6.4. 

Commitments and Disbursements 

Overall the implementation of the programmes remains delayed. Only 48 % of 
all funds allocated have been committed to works, supplies, and service or grant 
contracts  and  only  35%  have  been  disbursed.  For  the  programmes  decided 
between 1999 and 2005, therefore, some €150 million remain to be contracted 
(RAC) and some €186 million remain to be disbursed (RAL). 

TOTAL ALLOCATIONS CARIBBEAN + AFRICA             

1999 -  2005

COMMITMENTS CARIBBEAN + AFRICA                  

1999 - 2005

PAYMENTS CARIBBEAN + AFRICA                      

1999 - 2005

RAC CARIBBEAN + AFRICA                           

1999 - 2005

RAL CARIBBEAN + AFRICA                           

1999 - 2005

EUR

286,865,000.00

EUR

136,497,654.09

EUR

100,798,874.22

EUR

150,367,345.91

EUR

186,066,125.78

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Table 2 presents the progress per year of allocation. 

 Table 2: Financial Status per year of allocation
Allocations (€)
All Countries

Year

Payments (€)

1999
2000
2001
2002
2003
2004
2005
2006

Sub-total without 2006

44,500,000.00
44,475,000.00
43,000,000.00
44,500,000.00
39,500,000.00
37,290,000.00
34,500,000.00
30,690,000.00
287,765,000.00

Countries allocations and studies

Commitments (€)
41,674,389.15
29,092,520.01
27,538,027.55
20,691,397.47
11,165,678.00
5,463,873.41
2,107,500.00
0.00
137,733,385.59

38,775,116.57
26,724,232.22
18,358,707.14
9,962,299.53
5,328,709.06
2,508,005.01
177,000.00
0.00
101,834,069.53

RAC (€)
2,825,610.85
15,382,479.99
15,461,972.45
23,808,602.53
28,334,322.00
31,826,126.59
32,392,500.00
30,690,000.00
150,031,614.41

RAC %
6%
35%
36%
54%
72%
85%
94%
100%
52%

RAL (€)
5,724,883.43
17,750,767.78
24,641,292.86
34,537,700.47
34,171,290.94
34,781,994.99
34,323,000.00
30,690,000.00
185,930,930.47

The  allocations  for  2006  are  included  in  Table  2,  but  as  the  Financing 
Agreements  are  still  to  be  signed,  they  are  not  included  in  the  sub-totals.  In 
particular,  the  programmes  decided  after  the  introduction  of  the  Financial 
Regulation in 2003 are delayed. 

 Table 3: Financial Status per Country

Allocations (€)

Commitments (€)

Payments (€)

RAC (€)

RAC %

RAL (€)

Belize
Jamaica
Dominica
St Lucia
St Vincent
Grenada
Suriname
Sub-total Caribbean
Cameroon
Ivory Coast
Somalia
Cape Verde
Madagascar
Sub-total Africa

21,770,000.00
33,640,000.00
41,810,000.00
56,805,000.00
40,510,000.00
4,000,000.00
17,470,000.00
216,005,000.00
35,200,000.00
21,730,000.00
9,830,000.00
2,100,000.00
2,000,000.00
70,860,000.00

11,801,831.80
19,784,450.02
18,319,854.00
23,443,666.49
11,308,278.00
2,349,639.83
10,577,607.23
97,585,327.37
18,503,298.46
10,001,282.00
9,293,966.26
613,780.00
500,000.00
38,912,326.72

8,731,223.40
16,540,148.01
9,920,793.04
20,338,125.37
7,134,508.99
1,777,643.45
7,464,445.75
71,906,888.01
16,401,755.40
8,309,891.55
3,672,573.26
107,766.00
400,000.00
28,891,986.21

9,968,168.20
13,855,549.98
23,490,146.00
33,361,333.51
29,201,722.00
1,650,360.17
6,892,392.77
118,419,672.63
16,696,701.54
11,728,718.00
536,033.74
1,486,220.00
1,500,000.00
31,947,673.28

13,038,776.60
46%
17,099,851.99
41%
31,889,206.96
56%
36,466,874.63
59%
33,375,491.01
72%
2,222,356.55
41%
39%
10,005,554.25
55% 144,098,111.99
18,798,244.60
47%
13,420,108.45
54%
6,157,426.74
5%
1,992,234.00
71%
1,600,000.00
75%
41,968,013.79
45%

GRAND TOTAL

286,865,000.00

136,497,654.09

100,798,874.22

150,367,345.91

52.4% 186,066,125.78 

The financial status per country, as presented in Table 3, shows a wide variation 
with almost all funds committed to contracts for Somalia and just ¼ committed 
for  Madagascar  and  Cape  Verde.  The  programmes  decided  for  the  Eastern 
Caribbean  countries,  all  supporting  diversification,  show  the  greatest  delays. 
However,  with  the  adaptations  to  the  programmes  almost  completed  and 
responsibility for implementation handed over to the Delegations, the execution 
of  the  programmes  has  recovered.  As  Chart  3  shows,  for  2006  the  amounts 
committed  in  contracts  and  disbursed  up  to  the  end  of  October  have 
substantially improved over the previous years. The Commission expects to be 
able to recover some of the lost ground in the coming two years. 

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In  the  evaluation  of  the  SFA  mentioned  in  section  7,  the  comparison  of  the 
financial execution of diversification and competitiveness activities in terms of 
speed  shows  that  the  latter  have  done  better.  The  analysis  of  programme 
execution  to  date  shows  that  the  long-term  efforts  required  from  the  banana 
sector do not sit easily with the requirement under the Council Decision to have 
the  support  programmes  decided  annually.  In  addition,  the  need  to  adjust  the 
programme  modalities  after  the  introduction  of  the  new  Financial  Regulation 
has  temporarily  curtailed  the  activities  and  therefore  the  impact  of  the 
programmes.  However,  most  operational  problems  encountered  did  find  a 
solution in 2005. This contributed to the strong acceleration of the programmes 
in 2006. 

Chart 3 : Committed and disbursed amounts

60.000.000,00

50.000.000,00

40.000.000,00

30.000.000,00

20.000.000,00

10.000.000,00

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Commitments (€)

Payments (€)

0,00

2002

2003

2004

Year

2005

2006

7. 

EVALUATION OF THE IMPACT OF THE SFA 

7.1. 

General 

An external evaluation of the scheme was carried out between the end of 2005 
and  the  beginning  of  20066.  It  was  possible  to  scrutinise  interventions  in  nine 
ACP  countries  (Belize,  Cameroon,  Ivory  Coast,  Dominica,  Grenada,  Jamaica, 
Saint Lucia, Saint Vincent and the Grenadines and Suriname), as these countries 
saw in general in the period 2003-2005 a strong acceleration in project activities, 
whereas  the  three  remaining  beneficiaries  (Cape  Verde,  Madagascar,  and 
Somalia) had not yet started any investment under the SFA at the beginning of 
the study. 

6 

CRIS No of contract 2005/102-529. 

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7.2. 

Relevance of the country strategies under the SFA 

The  medium-  to  long-term  strategies  (as  expressed  in  the  Banana  Strategy 
Papers), which were agreed with the beneficiary ACPs and which form the basis 
of  the  programmes  agreed  annually  with  their  governments,  have  proven  their 
relevance.  Those  States  opting  to  support  the  competitiveness  of  their  banana 
sectors have been able to maintain or increase the quantity of bananas exported 
to the EC, including in the first few months of 2006. Those that have chosen to 
support  diversification  have  seen  their  banana  exports  (the  Windwards  were 
exporting  some  191  000  tonnes  altogether  in  1996  and  only  79  000  tonnes  in 
2004)  and  market  share  further  eroded  in  the  EC  in  the  period  1996-2004.  A 
special case is Jamaica, which supports both objectives. 

These strategies were also found to be coherent with the development strategies 
of the respective ACPs and the support strategies agreed with the Commission 
in the Country Strategy Papers. 

On the whole, the 2003-06 strategies (basis for the financing agreements, under 
which  investments  are  launched),  reflect  in  a  more  coherent  way  the  national 
and  international  changes  and  the  future  prospects  for  the  Community  banana 
market.  This  consideration  is  all  the  more  valid  for  those  countries  that  are 
resolutely  aiming  to  improve  the  competitiveness  of  their  national  banana 
sectors: Cameroon, Ivory Coast, Belize and Suriname. 

7.3. 

Impacts of the SFA on the banana sector 

In those countries where, for the period preceding SFA investments, the banana 
sector  had  grown  or  was  stable,  the  SFA  has  had  an  impact  in  strengthening 
productivity  and  efficiency  and  reducing  cost.  This  is  the  case  for  both 
Cameroon  and  Ivory  Coast.  Here,  the  sector  is  increasingly  concentrated  and 
relies  on  the  presence  of  medium  to  large  production  companies  and/or  trade 
companies  (multinationals  or  not).  The  SFA  has  had  an  appreciable  impact  on 
production and the organisation of the sector, which was already favourable. For 
Cameroon,  data  show  that  the  average  yield  rate  grew  by  13.9%  when 
comparing the period 1994-98 with 2002-04; exports increased by 20% between 
1998  and  2003;  the  number  of  workers  employed  per  1000  tonnes  decreased 
from 50.78 in 1998 to 40.77 in 2003; and for one specific company the costs of 
the  packed  product  shrank  by  12.8%  between  2000  and  2005.  In  Ivory  Coast, 
substantial progress had already been made in the period 1991-99, with exports 
going  from  118  400  tonnes  produced  on  a  surface  area  of  12  000  hectares  in 
1991 to 217 500 tonnes produced on a surface area of 5 493 hectares in 1999. 
Further improvements were seen in the period 1999-2004, with exports reaching 
229  000  tonnes,  produced  on  a  surface  area  of  5  120  hectares  in  2004. 
Accordingly, the yield rate was 9.9 tonnes per hectare in 1991, 39.6 tonnes per 
hectare in 1999, and 41.7 tonnes per hectare in 2004. 

The adaptation of SFA strategies to the context and structural characteristics of 
the sector has had good results both in Belize and in Suriname, where the SFA 
has played a fundamental role in the revival of the sector. In Belize, following 
hurricane  Iris,  which  devastated  all  plantations  in  2001,  production  went  from 

EN 

12 

   EN 

 
472  boxes  per  acre  in  2001  up  to  760  boxes  per  acre  in  2004.  In  Suriname, 
following the crisis and closure of the plant in 2002-03, the production yield fell 
from  15.7  tonnes  per  hectare  in  2001  to  14.5  tonnes  per  hectare  in  2004,  but 
recovered strongly to 34.8 tonnes per hectare in 2005. 

Moreover, the improvement in competitiveness (measured by total export trends 
and  positioning  on  the  Community  market),  obtained  partly  thanks  to  SFA 
investment  to  increase  productivity  (measured  in  terms  of  rising  outputs  and 
work  productivity,  along  with  declining  production  costs),  has  had  positive 
consequences for employment in the banana sector, in particular for Cameroon, 
Suriname and Belize. 

In  Jamaica,  the  SFA  has  been  used  to  support  the  competitiveness  of  those 
companies  remaining  in  the  banana  export  sector,  through  a  well-designed 
technical assistance strategy focusing on the commercial quality of the product. 
Its  first  effects  can  be  seen  in  the  evolution  of  the  competitiveness  indicators. 
The SFA has also promoted activities (financed under both the competitiveness 
and diversification objectives) aimed at supporting producers in their shift to the 
local market and to the plantain banana, with quite successful results. 

In the Windward Islands, after an initial focus on programmes partially aimed at 
enhancing the competitiveness of the banana sector, there has been a progressive 
shift  to  projects  clearly  oriented  towards  diversification.  Although  the 
weaknesses  of  the  Windward  banana  sector  and  the  increasing  level  of 
competition  on  the  EC  market  were  probably  underestimated  when  the  initial 
strategy was drafted, this change has been the result of a gradual awareness in 
the Windwards of the need to change the thrust of economic development in the 
islands.  However,  despite  its  general  decline  since  the  1990s,  the  Windward 
banana  sector  remains  present  on  specific  EC  markets.  A  key  element  of  this 
relative  success  of  the  Windward  Islands  strategy  for  their  banana  sector  has 
been  its  orientation  towards  the  fair  trade  market.  Although  the  SFA  has 
supported the banana sector in general, so far no project has been put forward to 
directly support that aspect of their strategy. 

It is worth noting the relationship between the SFA and commercial quality. In 
Jamaica,  Belize  and  Cameroon,  during  the  period  evaluated,  SFA  funds  were 
devoted  to  a  commercial  strategy  aimed  at  obtaining  EUREPGAP  (European 
retailers  standard  based  on  environmental  and  social  criteria)  and  ISO14001 
(environmental  management)  Certification.  Certified  quality  is  an  increasingly 
important requirement of the retail trade, especially on the Community market. 
These investments, financed by the SFA with a view to obtaining certification, 
have  had  a  positive  impact  in  improving  both  the  environmental  aspects  and 
to 
socio-economic  working  conditions 
strengthening the sector's position in the marketing chain. 

the  plantations, 

in  addition 

in 

EN 

13 

   EN 

 
7.4. 

Impacts on the diversification of economies and social conditions 

Although  it  is  still  early  for  an  overall  evaluation,  the  impact  study  reported 
mixed  results  from  the  diversification  activities  financed  in  the  period  1999  to 
2004. On the whole, however, it can be stated that the diversification activities 
under  the  SFA  seem  to  have  had  a  social  impact,  as  the  social  projects  and 
infrastructures  they  financed  aimed  to  improve  the  living  conditions  of  the 
population affected by the decline of the banana sector. 

8. 

CONCLUSIONS AND RECOMMENDATIONS 

In  its  analysis  of  the  state  of  play  with  the  implementation  of  the  SFA,  the 
Commission  recognises  the  difficulties  encountered  in  the  implementation  of 
this  instrument.  However,  most  of  the  operational  problems  encountered  in 
relation  to  the  Financial  Regulation  were  resolved  in  2005,  which  has 
contributed  to  the  strong  acceleration  of  the  programmes  in  2006.  The 
Commission  will  continue  to  make  all  efforts  to  further  accelerate  execution 
while ensuring the quality of the interventions. 

Given  the  complexity  of  the  scheme  and  the  constraints  faced  by  most 
beneficiaries,  the  recommendation  is  to  reinforce  assistance  both  for  the 
technical  bodies  in  charge  of  implementation  at  local  level  and  for  the  final 
recipients. Such technical support has to focus on administrative and procedural 
problems and obviously requires highly qualified expertise. 

As  regards  the  allocation  of  the  budget  between  beneficiary  countries,  the 
evaluation  highlights  the  drawbacks  of  using  CIF  prices  to  measure  the 
competitiveness gap. However, as the SFA will in any event come to an end in 
2008, it is not in the interest of good administration to consider any change in 
this area at this point in time. 

Finally, in terms of impacts of the SFA on the socio-economic situation of the 
banana sector and the countries concerned, the evaluation showed that it is still 
too early to measure the impacts of SFA on the diversification of the economies 
concerned. The impact was generally satisfactory for programmes targeting the 
banana  sector  where  the  conditions  for  its  competitiveness  were  reasonably 
favourable.  However,  the  SFA  could  also  draw  lessons  from  other  relatively 
successful  experiences,  such  as  the  Windward  conversion  to  the  fair  trade 
market,  as  an  opportunity  for  smaller-scale  enterprises  to  survive  in  global 
market competition. 

EN 

14 

   EN 

 
Boosting Productivity (I) 

Country 

1999 

2000 

2001 

2002 

2003 

2004 

2005 

2006 

Total 

Amount 

Type 

Amount 

Type 

Amount 

Type 

Amount 

Type 

Amo
unt 

Type 

Amount 

Type 

Amount 

Type 

Amount 

Type 

Belize 

3,10 

(1) 

3,10 

(2/6) 

3,00 

(1) 

2,70 

(2/3) 

3,20 

(2/11/14) 

2,93 

(2/11/14) 

2,49 

(4/7/14) 

1,22 

(2,3,14) 

21,74 

Cameroon 

6,20 

(1/2/5/11) 

5,70 

(1/2/5/11) 

5,60 

(1/2/5/11) 

5,10 

(1/2/5/11) 

4,50 

(1/2/3/5/6/11
) 

4,38 

(1/2/3/5/6/11) 

3,72 

1/2/5/6/9) 

3,21 

(1,2,3,5,6,1
1,14,20) 

Cape Verde 

Dominica 

5,49 

(1/14) 

5,23 

(1/14) 

0,00 

Grenade 

0,94 

(1/5/8/14) 

0,50 

(1/14) 

0,00 

(-) 

(-) 

0,00 

(-) 

0,00 

0,00 

(-) 

0,00 

(-) 

(-) 

0 

0 

(-) 

(-) 

0 

0 

(-) 

(-) 

0 

0 

0 

(-) 

(-) 

38,41 

0,00 

10,72 

1,44 

Ivory Coast 

4,32 

(1/2/5/14) 

4,05 

(1/2/5/9/14) 

2,60 

(1/2/5/9/14) 

2,60 

(6/7/14) 

2,10 

(1/2/5/9/14) 

1,38 

(5/9/12/14) 

3,75 

(6/9) 

4,12 

(5,11) 

24,92 

Jamaica 

5,30 

(3/5/6/12) 

5,30 

(1/2/3/4/5/6/
8) 

3,47 

(10) 

2,90 

(1/2) 

2,75 

(1/12/14) 

2,42 

(1/12/14) 

2,45 

(12/14) 

1,75 

(2,12,14) 

26,34 

Madagascar 

0,00 

0,00 

0,00 

0,00 

0,00 

St Lucia 

4,69 

(1/14) 

4,96 

(1/14) 

0,00 

1,26 

(5/14) 

0,80 

(5/14) 

0,00 

St  Vincent 
& 

Somalia 

(-) 

(-) 

0,00 

(-) 

0,00 

0,00 

(-) 

0,00 

(-) 

(-) 

0 

0 

0 

0 

(-) 

(-) 

1,45 

(12/14) 

0 

(-) 

0 

0 

0 

0 

(-) 

(-) 

0,00 

11,10 

2,06 

0,00 

Suriname 

3,10 

(1/14) 

2,70 

(1) 

2,70 

(1) 

2,50 

(1) 

2,20 

(1/5) 

2,31 

(1/12/14) 

1,96 

(1) 

1,67 

(2,3,22) 

19,14 

TOTAL 

34,40 

32,34 

17,37 

15,80 

14,75 

13,42 

15,82 

11,97 

155,87 

EN 

15 

EN 

 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
Country 

1999 

2000 

2001 

2002 

2003 

2004 

2005 

2006 

Total 

Diversification (II) 

TOTAL 
I and II 

Amount 

Type 

Amount 

Type 

Amount 

Type 

Amount 

Type 

Amount 

Type 

Amount 

Type 

Amount 

Type 

Amount 

Type 

Belize 

Cameroon 

0,45 

(9/10) 

0,80 

(7) 

0,89 

(9,12,13) 

2,14 

23,88 

0,00 

0,00 

38,41 

Cape Verde 

0,50 

(7) 

0,50 

(7) 

0,50 

(7/14) 

0,50 

(7/14) 

0,5 

(7/12) 

0,5 

(7,12) 

3,00 

3,00 

Dominica 

1,01 

(7/10
)

1,27 

(7/10
) 

6,70 

(7/10/11) 

6,40 

(10/14) 

5,90 

(17/18) 

5,30 

(15/19) 

4,51 

(16) 

3,83 

(13/14/17
)

34,92 

45,64 

Grenade 

0,06 

(14) 

0,00 

(-) 

0,50 

(10) 

0,50 

(10) 

0,50 

(12/13/14) 

0,50 

(15) 

0,5 

Ivory Coast 

0,38 

(7/14
)

0,30 

(7/14
) 

0,25 

(7/14) 

Jamaica 

1,53 

(14) 

1,80 

(7) 

1,65 

(7/14) 

2,42 

(7/14) 

1,65 

(15/16
)

(12/14
)

0,5 

(13/14) 

3,06 

4,50 

0,00 

0,93 

25,85 

1,75 

(7,12,14) 

10,80 

37,14 

(7/11
) 

(8/14
) 

Madagascar 

0,00 

3,81 

4,84 

(7/11
)

(8/14
)

St Lucia 

St Vincent & 
Grenadines 

Somalia 

Suriname 

TOTAL 

10,60 

% de 
diversification 

24% 

45,00 

0,00 

3,92 

5,65 

11,14 

26% 

43,48 

EN 

0,00 

9,20 

0,50 

(7) 

0,50 

(7) 

0,50 

(7) 

0,5 

(7/12) 

0,5 

(7) 

2,50 

2,50 

(7/9/10/1
1/13/14)

8,80 

(7/9/10/11/
13/14)

8,00 

(20) 

7,26 

(7/11/12/
14)

3,06 

(7/11/
15/20)

5,41 

(7/11/13/
14/21)

49,46 

60,56 

6,40 

(8) 

6,10 

(11/14) 

5,60 

(11/14) 

5,33 

(15) 

4,53 

(16) 

3,85 

(14/17) 

42,30 

44,36 

0,60 

(14) 

2,80 

(1/7) 

2,60 

(1/7/14) 

2,07 

(1/7) 

1,76 

(7/13) 

1,5 

1/7 

11,33 

11,33 

25,63 

60% 

43,00 

28,20 

64% 

44,00 

25,25 

63% 

40,00 

16 

23,88 

64% 

37,30 

17,01 

52% 

32,83 

18,73 

61% 

30,70 

0,00 

19,14 

160,44 

316,31 

51% 

316,31 

EN 

 
  
  
 
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes on Boosting Productivity and Diversification tables: 

1 

2 

3 

4 

5 

6 

7 

8 

9 

IRRIGATION AND DRAINAGE 

RENEWAL OF PLANTATIONS 

PHYTO-SANITARY TREATMENT 

FERTILISER 

PACKING 

COLD STORAGE 

AGRICULTURE / RURAL DEVELOPMENT 

ROADS  

SOCIAL INFRASTRUCTURE 

10  MICRO-CREDIT 

11 

SOCIAL PROJECTS 

12  TRAINING 

13 

INSTITUTIONAL SUPPORT 

14  TECHNICAL ASSISTANCE 

15 

PRIVATE SECTOR 

16 

ICT 

17  TOURISM 

18  WATER 

19 

INFRASTRUCTURE 

20  ENVIRONMENT 

21  ENERGY 

22  CABLEWAY 

EN 

17 

   EN