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 SEC(2010)331
Date: 2010-03-17
Institutions: European Commission
Subjects: ACP countries, aid system, competitiveness, financial aid, import, most favoured nation, production aid, tariff quota, tropical fruit

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EUROPEAN COMMISSION 

Brussels, 17.3.2010 
COM(2010)103 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 

SEC(2010)331 

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1. 

INTRODUCTION 

The  Special  Framework  of  Assistance  (SFA)  for  traditional  ACP  suppliers  of 
bananas  was  created  in  1999  in  order  to  help  those  suppliers  to  adjust  to  changing 
international  competition  and  expired  in  December  2008.  It  targeted  12  traditional 
banana-supplying  countries:  Belize,  Cameroon,  Cape  Verde,  Côte  d'Ivoire, 
Dominica,  Grenada,  Jamaica,  Madagascar,  Saint  Lucia  (henceforth  St  Lucia),  Saint 
Vincent and the Grenadines (henceforth St Vincent), Somalia and Suriname. In total, 
some €376 million were granted under the SFA scheme. 

The objectives were either improving the competitiveness of traditional ACP banana 
producers, or, if this were no longer feasible, supporting diversification. The aim was 
to be achieved by projects designed to 

•  Increase productivity, 
•  Improve quality, 
•  Adapt production and marketing to the EU’s quality standards, 
•  Establish producers’ organisations focusing on improvements in marketing as well 
as  on  the  development  of  environment-friendly  production  methods,  including 
fair-trade, 

•  Develop  marketing  strategies  designed  to  meet  the  requirements  of  the  EU 

common organisation of its market, 

•  Assist  producers 

in  developing  environment-friendly  production  methods, 

including fair-trade, 

•  Support  diversification  wherever  the  competitiveness  of  the  sector  is  not 

sustainable. 

The yearly country allocations were based on the competitiveness gap compared with 
third country suppliers and on the importance of banana production for the economy 
of  each  ACP  country1.  The  annual  budget  has  gradually  decreased  from  €44.5 
million (1999) to €29.2 million (2008). Until 2003, the allocation key was designed 
to provide more support to countries suffering from a larger competitiveness gap. As 
of  2004,  a  reduction  coefficient  rewarded  countries  that  achieved  competitiveness 
gains. 

2.  LEGAL BASIS 

On 22 April 1999 the Council adopted Regulation (EC) No 856/19992 establishing a 
Special  Framework  of  Assistance  for  traditional  ACP  suppliers  of  bananas.  On  22 
July  1999  the  Commission  adopted  Regulation  (EC)  No  1609/19993  laying  down 
detailed rules for implementation. 

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The methodology is detailed in Commission Regulation (EC) No 1609/1999 of 2 July 1999, OJ L 190, 
23.7.1999, p. 14. 
OJ L 108, 27.4.1999, p. 2. 
OJ L 190, 23.7.1999, p. 14. 

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In  2007  and  2008  the  budget  line  amounted  to  €28.67  million  and  €29.226  million 
respectively.  The  Commission  Decisions  fixing  the  country  amounts  were  adopted 
on 23 April 20074 and 21 April 20085. 

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”. This report covers 2007 and 20086 and is accompanied 
by a Staff Working Document. 

3.  MARKET INFORMATION 

The  European  Union  (EU)  is  the  largest  consumer  and  importer  of  bananas  in  the 
world. Compared to 2007, in 2008, 5 416 449 t. (referred to below as t.) of bananas 
were  consumed  in  the  EU  (+3.5%),  of  which  4  848  889  t.  (+3.7%)  were  imported 
from  third  countries  and  567  560  t.  (+2.3%)  were  of  domestic  origin.  In  2008,  the 
USA imported 3 976 146 t. of bananas, a decrease of 0.7% over the previous year. 
Almost all bananas imported by the US were of Central and South American origin 
(ACP bananas representing 0.003% of total imports). 

The  EU  banana  market  is  supplied  by  Most  Favoured  Nation  (MFN)  countries 
(mainly  Central  and  Southern  American  countries),  African,  Caribbean  and  Pacific 
(ACP) countries, and domestic producers. 

In  2008,  MFN  bananas  consumed  in  the  EU  were  72.5%,  while  ACP  bananas 
accounted  for  17%  and  EU  production  for  the  remaining  10.5%.  The  main  MFN 
suppliers of bananas were Ecuador, Colombia and Costa Rica, with 1 328 033, 1 278 
133 and 893 395 t. of imports. During the same year, the main ACP suppliers were 
Cameroon, Côte d'Ivoire and Dominican Republic, which exported 279 530, 216 583 
and 170 396 t. 

Cape Verde, Grenada, Madagascar, and Somalia no longer export bananas to the EU. 

4.  EU TRADE REGIME 

Since 1 January 2006, the EU applies an MFN tariff of €176/t. to banana imports, in 
line with the EU's commitments to move from its previous quota system to a tariff-
only regime. Statistics monitoring the impact of the new regime on imports show that 
it maintains market access conditions, with increased imports. 

During  this  period,  bananas  originating  in  least  developed  countries  (LDCs)  have 
enjoyed duty and quota free access to the EU market under the Everything But Arms 
(EBA)  initiative.  The  same  applies  since  1  January  2008,  to  bananas  originating  in 
ACP  countries  which  have  concluded  agreements  establishing,  or  leading  to 
Economic  Partnership  Agreements  (EPAs).  All  non-LDC  ACP  countries  that 
exported bananas in 2007 initialled or signed an interim or full EPA. 

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Commission Decision C/2007/1744. 
Commission Decision C/2008/1424. 
The previous report covered 2005 and 2006: COM(2006)806 final. 

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5.  FINANCIAL DECISIONS 

5.1. 

Budget line 2007 

After approval of the Financing Proposals, the 12 Financing Agreements were signed 
in early 2008 for €28.67 million (Table 1). 

Some 42% of the funds are dedicated to improving the competitiveness of the banana 
export  sector  in  4  beneficiary  States  and  58%  of  the  funds  to  diversification  in  8 
beneficiary States (Charts 1 and 2). 

5.2. 

Budget line 2008 

After approval of the Financing Proposals, the 12 Financing Agreements were signed 
in early 2009 for €29.23 million (Table 1). 

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Table 1: Banana Budget Line 21 06 05 (ex B7-8710) 
1999 – 2008 

1999 

2000 

2001 

2002 

2003 

2004 

2005 

2006 

2007 

2008 

Total 

3 100 000 
5 300 000 
6 500 000 
8 500 000 
6 100 000 
1 000 000 
3 100 000 
33 600 000 

3 100 000 
5 300 000 
6 500 000 
8 875 000 
6 450 000 
500 000 
2 700 000 

3 450 000 
5 000 000 
6 700 000 
9 200 000 
6 400 000 
500 000 
2 700 000 
33 425 000  33 950 000 

3 500 000 
4 700 000 
6 400 000 
8 800 000 
6 100 000 
500 000 
2 500 000 
32 500 000 

3 200 000 
4 400 000 
5 900 000 
8 000 000 
5 600 000 
500 000 
2 200 000 

2 930 000 
4 830 000 
5 300 000 
7 260 000 
5 330 000 
500 000 
2 310 000 
29 800 000  28 460 000 

2 490 000 
4 110 000 
4 510 000 
6 170 000 
4 530 000 
500 000 
1 960 000 

1 800 000 
2 110 000 
2 970 000 
3 .490 000 
3 260 000 
3 830 000 
4 600 000 
5 410 000 
3 270 000 
3 850 000 
500 000 
500 000 
1 420 000 
1 670 000 
24 270 000  20 860 000  17 820 000 

2 039 000 
2 525 000 
3 603 000 
4 808 000 
3 463 000 
500 000 
1 207 000 
18 145 000 

27 719 000 
42 625 000 
52 503 000 
71 623 000 
51 093 000 
5 500 000 
21 767 000 
272 830 000 

6 200 000 
4 700 000 

NA 
NA 
NA 
10 900 000 

5 700 000 
4 350 000 

NA 
600 000 
NA 
10 650 000 

5 600 000 
2 850 000 
600 000 
NA 
NA 
9 050 000 

5 100 000 
2 600 000 
2 800 000 
500 000 
500 000 
11 500 000 

4 500 000 
2 100 000 
2 600000 
500 000 
500 000 
10 200 000 

4 380 000 
1 380 000 
2 070 000 
500 000 
500 000 
8 830 000 

3 720 000 
3 750 000 
1 760 000 
500 000 
500 000 
10 230 000 

3 210 000 
4 120 000 
1 500 000 
500 000 
500 000 

4 260 000 
4 310 000 
1 280 000 
500 000 
500 000 
9 830 000  10 850 000 

4 607 000 
4 386 000 
1 088 000 
500 000 
500 000 
11 081 000 

47 277 000 
34 546 000 
13 698 000 
4 100 000 
3 500 000 
103 121 000 

Caribbean Countries 
Belize 
Jamaica 
Dominica 
St Lucia 
St Vincent 
Grenada 
Suriname 
Sub-total 

African Countries 
Cameroon 
Côte d'Ivoire 
Somalia 
Cape Verde 
Madagascar 
Sub-total  

GRAND TOTAL 

44 500 000 

44 075 000  43 000 000 

44 000 000 

40 000 000  37 290 000 

34 500 000  30 690 000  28 670 000 

29 226 000 

375 951 000 

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Some  37%  of  the  funds  finance  activities  improving  the  competitiveness  of  the 
banana  export  sector  in  three  beneficiary  ACP  States.  Some  63%  of  the  funds  are 
dedicated to diversification in the remaining beneficiary States (Chart 1). 

5.3. 

Programme objectives 

5.3.1. 

Response Strategies 1999 – 2008 

The initial Banana Support Strategies targeted competitiveness in most countries, and 
agricultural  diversification  in  Cape  Verde,  Madagascar  and  Somalia.  St  Vincent 
combined both objectives. 

Chart 1: Programme objectives per year of 
allocation

40,00

30,00

20,00

10,00

0,00

10,00

20,00

30,00

40,00

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1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Diversification

Increasing
Competitiveness

Year

The strategies were updated around 2002, shifting the objective for the Windwards to 
diversification. 

In both Belize and Jamaica, the revised strategies allocated a larger amount to rural 
development to stimulate agricultural diversification, as lower exports (Jamaica) and 
higher productivity and efficiency (Belize) reduced the need for unskilled labour and 
excluded the smallest banana growers from the export market. 

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Chart 2: Programme objectives per country in percentage of 
allocation 

0%

10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Belize '99-'03
Belize '04-'08

Cameroon '99-'03
Cameroon '04-'08

Cape Verde '99-'03
Cape Verde '04-'08

Dominica '99-'03
Dominica '04-'08

Grenade '99-'03
Grenade '04-'08

Ivory Coast '99-'03
Ivory Coast '04-'08

Jamaica '99-'03
Jamaica '04-'08

Madagascar '99-'03
Madagascar '04-'08

St Lucia '99-'03
St Lucia '04-'08

St Vincent & Grenadines '99-'03
St Vincent & Grenadines '04-'08

Somalia '99-'03
Somalia '04-'08

Suriname '99-'03
Suriname '04-'08

Diversification

Boosting
Productivity

5.3.2. 

Improving Competitiveness 

Projects to improve banana exporters' competitiveness continued in three countries in 
2005-2008. In 2007 - 2008, Belize allocated more funds to diversification. Jamaica 
used  only  a  limited  amount  of  funds  to  improve  competitiveness  despite  suffering 
from major hurricanes in both years. 

The activities supported under this objective are: 

•  Renewal of plantations in Cameroon, Suriname, and Jamaica. 
•  Investments 

to  acquire/maintain  EurepGAP  and/or 
certifications7 in Belize, Cameroon, Côte d'Ivoire, Jamaica and Suriname. 
•  Handling, packaging and storage in Cameroon, Côte d'Ivoire and Suriname. 
•  Social  infrastructures  on  plantations  and  social  micro-projects  for  plantation 

ISO  14001  quality 

workers in Belize, Cameroon and Côte d'Ivoire. 

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Quality standards are imposed by larger European retailers. 

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•  Technical  Assistance  in  Cameroon,  Côte  d'Ivoire  and  Jamaica  and  institutional 

support for Belize and Jamaica. 

Programmes  supporting  the  competitiveness  represented  almost  48%  of  the  total 
allocations between 1999 and 2008. In 2007 and 2008 they fell to 42% and 37%. 

The 4 countries still supporting this objective (Belize, Cameroon, Côte d'Ivoire and 
Suriname)  have  maintained  or  increased  the  quantities  exported  to  the  EU  in  the 
period 2006-2008. 

The  quantities  exported  by  Jamaica  were  affected  by  hurricane  damage  in  2007  - 
2008: 32 000 t. in 2006, 18 000 t. in 2007 and 0 in 2008. 

Chart 3: Programme objectives per country

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70,00

60,00

50,00

40,00

30,00

20,00

10,00

0,00

Belize

Increasing
Competitiveness

Diversif ication

Cameroon

Cape Verde
Dominica

Grenade

Ivory Coast
Jamaica

St Lucia
Madagascar

Suriname

Somalia

St Vincent & Grenadines

Country

5.3.3. 

Diversification 

Supporting  diversification  was  chosen  by  8  countries  in  2007  and  9  in  2008.  Cape 
Verde,  Dominica,  Grenada,  Madagascar,  Somalia,  St  Lucia  and  St  Vincent  either 
stopped  exporting  or  saw  their  banana  exports  substantially  reduced  between  the 
early 1990s and 2002. Dominica, St Lucia and St Vincent have managed to maintain 
exports  since  2003  at  a  lower  level  (approximately  20%-33%  of  1993  volumes). 
Belize and Jamaica shifted to diversification in 2007 and 2008 (Chart 6). 

The 2007 - 2008 programmes include: 

•  Investments in tourism, to provide alternative employment for banana farmers and 

workers in the Eastern Caribbean. 

•  Agricultural  diversification  towards  horticulture  targeting  local  market  in 
Madagascar  and  the  tourism  industry  as  well  as  local  markets  in  the  Eastern 

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Caribbean  and  in  Jamaica;  institutional  support  to  strengthen  agricultural 
extension services. 

•  Strengthening the Eastern Caribbean tourism and/or private sectors. 
•  Rural  development  in  Belize,  Cape  Verde,  Jamaica  and  Somalia  (including 

investments in small scale irrigation). 

•  Technical assistance and institutional support in all 9 countries. 

6. 

IMPLEMENTATION 

6.1. 

General 

Although the scheme expired in December 2008, ongoing programmes will run for 
some more years. 

Programmes  are  implemented  under  centralised  management  (Grenada,  Suriname, 
Cameroon,  and  Somalia)  and  partially  decentralised  management  (Belize,  Jamaica, 
Dominica, St Lucia, St Vincent, Cape Verde, Côte d'Ivoire and Madagascar). 

6.2. 

Commitments 

Overall, the implementation of the programmes increased rapidly since 2007, aided 
by the measures taken. Both commitments and disbursements in 2007 and 2008 were 
substantially higher than allocations (Chart 4 and Table 1), reducing delays. 

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Table 2: Commitments and disbursements

TOTAL ALLOCATIONS CARIBBEAN + AFRICA                

1999 -  2008

COMMITMENTS CARIBBEAN + AFRICA                     

1999 - 2008

PAYMENTS CARIBBEAN + AFRICA                         

1999 - 2008

RAC CARIBBEAN + AFRICA                               

1999 - 2008

RAL CARIBBEAN + AFRICA                               

1999 - 2008

Allocations Caribbean + Africa           

2006 - 2008

EUR

88.586.000,00

EUR

375.951.000,00

EUR

281.020.642,64

EUR

195.151.162,19

EUR

94.930.357,36

EUR

180.799.837,81

Commitments Caribbean + Africa        

2006 - 2008

15.585.626,72

17,6%

Allocations Caribbean + Africa           

2003 - 2005

111.790.000,00

Commitments Caribbean + Africa        

2003 - 2005

105.360.348,52

94,2%

As of end 2008, 73% had been committed to contracts, compared to 48% committed 
by end 2006 (Table 3). It has taken on average two years after Financing Decisions 
to commit most funds to planned contracts. Efforts are being made to reduce the time 
lag  to  a  maximum  of  18  months  for  funds  allocated  in  2007  -  2008.  The  aim  is  to 
commit most funds in 2010 apart from ex post evaluations and audits. 

The total RAC8 was 27% at end 2008, compared to 52% at end 2006. 

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RAC or Remainder to be Contracted indicates the percentage of funds allocated to the project for which 
no works, supply, services or grant contracts or programme estimates, have been signed. 

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Table 3: Financial Status per year of allocation 
Allocations (€) 
All Countries 

Commitments  (€) 

Year 
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008

Payments (€) 

RAC (€) 

RAC % 

RAL (€) 

RAL % 

44 500 000.00
44 075 000.00
43 000 000.00
44 000 000.00
40 000 000.00
37 290 000.00
34 500 000.00
30 690 000.00
28 670 000.00
29 226 000.00
375 951 000.00
900 000.00
376 851 000.00

43 475 608.78
39 934 158.83
40 483 859.31
36 181 040.48
37 249 522.44
35 385 028.32
32 725 797.76
13 496 220.72
2 089 406.00
0.00
281 020 642.64
695 731.50
281 716 374.14

42 095 728.17
33 462 635.64
34 977 171.91
22 480 047.18
23 573 857.92
20 854 670.49
12 574 525.20
4 420 564.68
711 961.00
0.00
195 151 162.19
635 195.31
195 786 357.50

1 024 391.22
4 140 841.17
2 516 140.69
7 818 959.52
2 750 477.56
1 904 971.68
1 774 202.24
17 193 779.28
26 580 594.00
29 226 000.00
94 930 357.36
204 268.50
95 134 625.86

2% 
9% 
6% 
18% 
7% 
5% 
5% 
56% 
93% 
100% 
25% 
23% 
25% 

2 404 271.83
10 612 364.36
8 022 828.09
21 519 952.82
16 426 142.08
16 435 329.51
21 925 474.80
26 269 435.32
27 958 039.00
29 226 000.00
180 799 837.81
264 804.69
181 064 642.50

5% 
24% 
19% 
49% 
41% 
44% 
64% 
86% 
98% 
100% 
48% 
29% 
48% 

Sub-total 

Total 

Studies

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6.3. 

Disbursements 

Overall disbursements stood at 52% at end 2008, a major improvement compared to 
35% at end 2006 (Table 3). 

Chart 4: Amount committed and disbursed

70.000.000

60.000.000

50.000.000

40.000.000

30.000.000

20.000.000

10.000.000

0

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Commitments
(€)

Payments (€)

< 2002

2002

2003

2004

2005

2006

2007

2008

Year

Disbursements have increased since 2005, reaching €46 million in 2008 - more than 
double compared to 2006. Delays have been substantially reduced. Payments plus the 
RAP9 equal commitments. 

Disbursements are expected to reach €60 million in 2009 and 2010. Remaining funds 
should be disbursed in 2011 - 2012 apart from ex post evaluations and audits. 

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RAP or  Remainder  to be  Paid  indicates  the  percentage of  funds  committed  or  contracted  in  contracts 
but not yet been paid or disbursed. 

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Chart 5: Financial Status per year of allocation
in percentage of total allocation

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Payments

RAP

RAC

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

The total RAL10 was 48% at end 2008, compared to 65% at end 2006. 

6.4. 

Progress at country level 

ACPs  focusing  on 
improving  competitiveness  (Belize,  Jamaica,  Suriname, 
Cameroon,  and  Côte  d'Ivoire)  implemented  their  programmes  faster  and  therefore 
have lower RACs (19% - 24%) and RAL's (35% - 56%) (Table 4). 

ACPs  focusing  on  diversification  (Dominica,  Grenada,  St  Lucia,  St  Vincent,  Cape 
Verde,  Madagascar  and Somalia) have been able to speed up implementation since 
2006. However the RACs (19% - 74%) and the RALs (32% - 81%) are more variable 
and higher than the overall averages of 25.3% (RAC) and 48.1% (RAL). 

10 

RAL or Remainder to be Liquidated indicates the (percentage of the) funds allocated to the programme 
not  yet  paid/disbursed.  This  includes  the  Remainder  to  be  Paid  (RAP)  on  existing  implementation 
contracts. 

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Table 4: Financial Status per Country 

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

Allocations (€) 

Commitments (€) 

Payments (€) 

RAC (€) 

RAC % 

RAL (€) 

RAL % 

27 719 000 00 
42 625 000.00 
52 503 000.00 
71 623 000.00 
51 093 000.00 
5 500 000.00 
21 767 000.00 

272 830 000.00 
47 277 000.00 
34 546 000.00 
13 698 000.00 
4 100 000.00 
3 500 000.00 
103 121 000.00 

21 749 415.38
34 656 171.84
39 472 434.09
50 239 673.65
41 290 569.20
3 887 119.97
16 315 936.67

207 611 320.80
35 349 181.62
22 655 888.96
12 350 524.26
1 053 727.00
2 000 000.00
73 409 321.84

15 959 198.62
27 664 349.83
22 441 384.45
33 004 820.80
23 600 296.00
3 224 044.47
12 176 565.69

138 070 659.86
29 869 122.30
15 333 367.71
9 301 680.17
776 332.15
1 800 000.00
57 080 502.33

5 969 584.62
7 968 828.16
13 030 565.91
21 383 326.35
9 802 430.80
1 612 880.03
5 451 063.33

65 218 679.20
11 927 818.38
11 890 111.04
1 347 475.74
3 046 273.00
1 500 000.00
29 711 678.16

22% 11 759 801.38
19% 14 960 650.17
25% 30 061 615.55
30% 38 618 179.20
19% 27 492 704.00
2 275 955.53
29%
9 590 434.31
25%

23.9% 134 759 340.14
25% 17 407 877.70
34% 19 212 632.29
4 396 319.83
10%
3 323 667.85
74%
1 700 000.00
43%
28.8% 46 040 497.67

42%
35%
57%
54%
54%
41%
44%

49.4%
37%
56%
32%
81%
49%
44.6%

GRAND TOTAL 

375 951 000.00 

281 020 642.64 

195 151 162.19 

94 930 357.36

25.3% 180 799 837.81

48.1%

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7. 

IMPACT MONITORING 

7.1. 

General 

An external evaluation commissioned  in 2008 and completed in the first quarter of 
2009, involved missions to 8 countries (Belize, Cameroon, Côte d'Ivoire, Dominica, 
Jamaica, St Lucia, St Vincent and Suriname). In general the results reported for the 
Eastern Caribbean apply also for the 4 countries not visited. 

On-going programmes were evaluated in terms of: 

•  Relevance and validity of objectives 
•  Validity of medium-term response strategies per country 
•  Efficiency and effectiveness of SFA 
•  Results and impacts of planned activities on the competitiveness of the exporting 

banana producers 

•  Results and impacts of planned diversification activities on (ex-) banana planters 

and (ex-) banana sector workers 

•  Sustainability of programmes 

7.2. 

Relevance of country strategies 

Strategies enhancing competitiveness have proven their relevance and were clear and 
achievable in those countries which 1) demonstrated strong commitment to this goal; 
2)  had  favourable  agronomic  characteristics;  3)  already  had  highly  commercially 
structured  sectors  and  4)  were  in  a  position  to  transform  the  banana  sector  into  a 
more  technological  and  commercial  sector  (Belize,  Cameroon,  Côte  d'Ivoire, 
Suriname  and,  initially,  Jamaica).  Their  SFA  programmes  prioritised  increasing 
productivity,  improving  product  quality  and  environmental  friendliness,  training, 
niche marketing etc. Their strategies also recognised changing market conditions and 
needs. 

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Chart 6; ACP Bananas imported in the EU

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1.000.000

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0

1993

1994

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1996

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Year

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Total ACP, incl.
Cameroon

Cote d'Ivoire

Dom. Rep.

Belize

Suriname
Ghana

St. Lucia
Dominica

St. Vincent
Jamaica

Successful  diversification  stems  from  a  mix  of  macro,  meso  and  micro-level 
initiatives.  The  countries'  economic  diversification  agendas  were  unspecific,  multi-
sectoral  and  had  varying  priorities  and  time  frames;  programmes  would  have 
benefited from clearer guidelines. 

On diversification, the evaluation found that: 

•  Too many projects and programmes were designed/implemented (e.g. in 2008 St 

Lucia had 64 on-going interventions valued at €69 million). 

•  Too many areas were targeted, e.g. tourism, roads, private sector development and 

agricultural development, reducing the prospects for any significant impact. 

7.3. 

Impact 

The  banana  industry  plays  a  crucial  role  in  Belize,  Cameroon,  Côte  d'Ivoire, 
Dominica, Jamaica, Suriname, St Lucia and St Vincent. In Dominica, St Lucia and St 
Vincent, banana exports represented 18.1%, 19.7% and 22.3% of the countries' total 
exports  in  2006  (FAO  2008).  By  comparison,  the  banana  sector  accounted  for  9% 
and 7% of exports by Cameroon and Côte d'Ivoire. 

The  SFA  programmes  have  made  valuable  contributions  to  improving  the 
competitiveness  of  Belize,  Cameroon,  Côte  d'Ivoire  and  Suriname,  offering  them 
stronger prospects for survival in a more liberalised environment. 

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The  share  of  traditional  Caribbean  suppliers  declined  from  52.3%  of  total  ACP 
banana imports in 1992 to 13% in 2008. At the same time, African imports rose from 
37.4  %  of  total  ACP  bananas  in  1992  to  59%  in  2008,  and  exports  from  the 
Dominican  Republic  (not  an  SFA  beneficiary)  and  Belize  rose  from  10%  of  total 
ACP bananas in 1992 to 28% in 2008. 

Suriname  is  a  success  story.  Also  thanks  to  SFA  support,  the  industry  has  been 
revived and transformed into an efficient exporter, the only traditional ACP producer 
to register positive export growth in 2006 - 2008. 

The evaluation report suggests that activities can be expected to be sustainable over 
the  short  to  medium  term.  Whether  Belize,  Cameroon,  Côte  d'Ivoire  and  Suriname 
can remain competitive under a different tariff schedule will depend almost entirely 
on their capacity to increase productivity beyond 2009. 

It  is  too  early  to  ascertain  what  effects  SFA  support  has  on  economic  stability  and 
diversification  since  only  about  50%  of  allocations  have  been  disbursed  as  of  end 
2008.  Also,  the  larger  diversification  investments  are  in  physical  infrastructure-
related  activities  (roads,  buildings  etc)  with  considerable  time  lags  before  efficient 
utilisation of these assets can be achieved. 

The impact could not be quantified as 1) changes in EC financial rules led to slower 
disbursements and time extensions for roughly half of the activities under SFA 2003 
- 2005; 2) the Objectively Verifiable Indicators for some countries e.g. Côte d'Ivoire 
and  Cameroon,  were  not  adequately  developed  and  could  not  be  used  to  assess 
impact, and 3) monitoring and data collection systems were not in place to generate 
cumulative information on expected and/or actual results, e.g. Belize. 

However, as a result of SFA support, the Eastern Caribbean States are now focussing 
on  prerequisites  for  successful  economic  diversification.  This  shift  away  from 
traditional  dependency  on  bananas  to  other  opportunities  is  now  embedded  in  their 
development plans. 

The  current  focus  on  strengthening  essential  infrastructure  (St  Vincent  and 
Dominica),  improving  rural  education  (Belize),  private  sector  development  (St 
Vincent  and  St  Lucia),  incorporation  of  ICT  education  in  school  curricula,  tourism 
master planning and social support systems will eventually produce positive results. 
Diversifying  countries  are  now  much  more  committed  to  building  capacity  to 
diversify on a sustainable basis. 

The SFA programmes had a positive effect on target populations and communities, 
by  funding  specific  social  investments  (i.e.  Social  Investment  Funds,  rural 
development schemes, education and health). 

In  the  competitiveness-oriented  countries,  the  banana  sector  is  now  more  closely 
aligned  to  market  requirements  and  EU  environmental  policies  and  standards. 
Market-dictated  production  protocols  (e.g.  EurepGAP  and  ISO  14001)  have 
improved on-farm working conditions, enhanced prospects for soil conservation and 
reduced the negative environmental impact. In order to obtain European certification, 
producers  were  forced  to  use  inputs  more  rationally  and  to  reduce  overall  use  of 
agrochemicals, packaging materials, machinery, and power. 

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The  sustainability  of  diversification  initiatives  depends  on  the  governments' 
commitment  to  incorporate  those  activities  into  annual  budgetary  allocations  and 
expenditure plans. The evaluation found that diversification countries are using SFA 
resources  to  build  national  capacities  to  address  broader  and  longer  term  economic 
diversification challenges and goals. 

8.  CONCLUSIONS AND RECOMMENDATIONS 

the 

adaptations 

The  Commission  made  efforts  to  speed  up  execution  while  preserving  quality, 
completed 
and 
reviewed/programmed those approved in 2006, 2007 and 2008. Actual disbursements 
from  all  SFA  programmes  increased  from  €21  million  in  2006  to  €46  million  in 
2008. Disbursement of all programmes will be completed in 2012 (apart from ex post 
evaluations and audits). 

ongoing  SFA 

required 

projects 

in 

The Staff Working Document includes an overview of the recommendations made in 
the 2006 Monitoring and Impact Evaluation Report (COGEA, 2006) and the actions 
taken. Across all 8 countries reported in the 2008 Monitoring and Impact Evaluation 
Report  (HTSPE,  2009),  there  was  marked  progress  in  both  competitiveness  and 
diversification related issues. 

Some progress towards improved competitiveness and increased diversification 

The programmes made substantial contributions to achieving the objectives: 

(1) 

(2) 

Improved competitiveness in Belize, Cameroon, Côte d'Ivoire and Suriname, 
although support could not compensate for the hurricane damage in Jamaica 
in 2005, 2007, and 2008. 

Improved  capacity  for  successful  economic  diversification  in  Eastern 
Caribbean and for agricultural diversification (where monitored) in Somalia, 
Cape  Verde  and  Madagascar,  although  the  full  impact  cannot  yet  be 
quantified. 

In  the  competitiveness-oriented  countries,  the  banana  sector  is  now  more  closely 
aligned  to  market  requirements  and  EU  environmental  policies  and  standards, 
establishing the basis for sustainable business development. 

The implementation of recommendations made in the previous report has resulted in 
notable  improvements  in  the  timeliness  and  quality  of  implementation  in  Belize, 
Jamaica and the Windward Islands. This aspect was less relevant for both Cameroon 
and  Côte  d'Ivoire,  which  benefit  from  more  diversified  sources  of  finance  and  thus 
were less dependent on support. 

In  countries  where  diversification  is  a  priority,  efficiency  suffered  from  a  lack  of 
focus, many very small investments, averaging around €1 - €1.5 million, with limited 
potential  for  real  impact.  Furthermore,  linkages  between  the  various  initiatives  are 
still limited and fragile. 

to 
The  external  evaluation 
diversification  should  review  the  contributions  of  their  SFA  portfolios  to  their 
economic diversification agenda at a macro level. This should include an assessment 

that  ACP  countries  committed 

recommended 

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of the cohesiveness of such programmes and facilitate formulation/upgrading of each 
country’s  diversification  strategy,  with  clear  priorities  including  the  quantity  and 
sources of financial resources needed to support and institutionalise key activities. 

In order to improve both monitoring and evaluation of the impact of diversification 
programmes,  it  also  recommended  updating  and  improving  the  logical  frameworks 
and their use as programme management tools to ensure that implementing agencies 
are  continually  aware  of  and  working  towards  expected  results  and  actively 
measuring agreed indicators. 

Sustainability of ACP banana exports still fragile 

The prospects for sustained competitiveness are largely dependent on 1) the outcome 
of ongoing international trade negotiations and 2) the capacity of countries to achieve 
further productivity gains and cost savings. 

The  strategies  pursued  by  some  countries  have  lacked  a  realistic  assessment  of 
challenges  created  by  the  international  market  situation  and  future  potential 
implications  of  the  conclusion  of  WTO  and  ongoing  bilateral  trade  negotiations. 
Results  can  be  delivered  where  countries  1)  demonstrate  strong  commitment  to 
adjust  to  international  developments,  2)  have  favourable  agronomic  characteristics, 
and 3) already have highly commercially structured sectors. 

Challenges  remain  for  banana-exporting  countries.  They  need  to  address  them 
together and with international support. The international community, including the 
EU, has attached greater  importance to assisting developing  countries in increasing 
their  competitiveness  of  the  whole  economy  and  making  better  use  of  international 
trade opportunities. EU Aid for Trade does not focus on just individual sectors. One 
prerequisite  for  success  is  to  draw  and  update  multi-stakeholder  strategies  for 
developing trade and integrating into the international trading system. 

The  SFA's  implementation  over  ten  years  allowed  recipient  countries  to  plan 
strategically and will remain a useful reference point for future action. 

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