A woman on the Geneva Estate fertilizes her yam field. She obtained a loan last year to grow ginger.
IFAD photo by Horst Wagner

Name of project
Rural Enterprise Project

Location of project
Saint Lucia and Dominica

Responsible organization
International Fund for Agricultural Development (IFAD)
Cofinanced by the Caribbean Development Bank

Description

Dependence on banana exports has posed a serious challenge to the economic and social stability of Saint Lucia and Dominica. Since the mid 90s, the small farmers have encountered economic difficulties due to the fall of banana prices and to the changing banana policies in the European Union.

In order to reduce the uncertainty linked to banana production and raising the income of the local population, in 1996 the International Fund for Agricultural Development and the Caribbean Development Bank financed the Rural Enterprise Project in Saint Lucia and Dominica. The aim of the project is to enhance on- and off-farm activities among the smallholders and other rural poor households, particularly those headed by women. The regional approach adopted is considered more appropriate for small projects as it allows cost savings and enhances an exchange of ideas, as well as marketing opportunities and technical assistance between the two projects.

The project is being implemented on the basis of the following strategy:

• to strengthen the market for rural services, considering both the producer’s and the consumer’s side;
• to maximize poor rural households’ participation in project decision-making;

The project is promoting new income-earning opportunities for resource-poor households, thus broadening the economic base and reducing dependency on bananas. The development of eco-tourism facilities, the assistance in fish processing and the improvement of the efficiency of cocoa bean processing are among the activities designed by the project.

The project is targeting the most disadvantaged families in rural communities throughout the islands, unemployed youth, disadvantaged women, landless producers but particularly the smallholder farming households, which have become marginalised because of the changing banana market.

A strengthening of the market system, which would provide the poor rural households with market opportunities, is foreseen. In an effort to make producers more market-oriented, the project encourages them to serve not only the local market, but also the tourist market, regional market, and extra-regional market. Other components aim to help them improve their business skills. The project strives to put them in contact with buyers and to assist them in promoting the market for local products, as well as to work with the hotel and restaurant industry.

In order to overcome the constraints within the rural financial sector, such as high transaction costs per loan, the project has envisaged giving poor households access to credit for on- and off-farm activities. This initiative provides a small amount of credit necessary to build credibility with non-traditional financial institutions, and to enhance the involvement of the community in decision-making with regard to access to and use of credit. Moreover, a Carib Territory Guarantee Fund has been established to facilitate access to project credit lines by the residents of the Territory.

Results achieved

• Owing to the successful results obtained to date, the project will be replicated in Grenada.

Lessons Learned

• The project has managed to organise the local communities, by encouraging and enabling their members to actively participate in project activities;

• A Mid-term review is scheduled for September 2000.

IFAD Operations in Saint Lucia and Dominica | IFAD Through Photography - Dominica