IFAD Asset Request Portlet

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Address by the Minister of Agro Industryand Fisheries, Republic of Mauritius to the 30th Session of IFAD's Governing Council

Mr Chairman,

I welcome the opportunity to address such a distinguished gathering on rural employment and livelihoods and to share my country's expectations on the contribution of IFAD to making a positive, sustainable and lasting impact on the lives of the underprivileged rural poor.

Among these are some 28 000 sugar cane farmers owning very small plots of land, less than one hectare in 95% of cases and about 5 000 artisanal fishermen who have been traditionally fishing in the lagoons of Mauritius and Rodrigues, and whose impoverishment is in a large measure attributable to overexploitation of fish, and non-exploitation of non-traditional sectors, e.g. seaweed cultivation.

The Republic of Mauritius is an island state comprising Mauritius, Rodrigues, Agalega, Tromelin, Cargados Carajos and the Chagos Archipelago including Diego Garcia. We are a Net Food Importing Small Island Developing Country, with a large degree of dependence on income form exports of sugar, textiles and tourism.

We have suffered a triple shock. First, the dismantlement of the Multifivre Agreement, whereby Mauritius has to compete with giants like China. Second, we have to face a 5% price reduction in our exports of sugar, effective as from 1 July 2006, to the EU market under the Sugar Protocol, an international treaty, as a result of the reform of the EU Sugar Regime. This price reduction will be 36% as from 2009. Third, the soaring oil prices are having an adverse effect on the overall economy. I wish to point out that we have no renewable energy sources except from some hydro facilities, and what we can produce from the sugarcane biomass. Our energy and transport costs are therefore highly affected by any increases in the price of oil on the international market.

Currently, agriculture occupies about 43% of land resources in Mauritius and it generates more than 84 000 direct employment. During the past years the contribution of agriculture to GDP has drastically decreased from 23% in 1970 to 5.8% in 2005.

At the WTO level, we have yet to see developments, but already we fear that cuts in tariffs within NAMA can adversely hit our tuna industry, which is based on preferential access to the EU market. We have started to broaden the base of our economy. One priority is the development of a Seafood Hub to optimize on revenue derived from the resources in our Exclusive Economic Zone which stretches over 1.8 million sq. kilometers. We have already alerted our EU partners on the need to keep 24% tariff for non preference country imports, and to "carve out" an exemption for canned tuna sector, to take fully into account the effects of preference erosion.  In any negotiations with non-ACP countries including the ASEAN countries, we have called on the EU to ensure that canned tuna be excluded from the scope of a possible Free Trade Agreement.  Doing otherwise will increase poverty as the fisheries sector currently employs about 11 000 persons.

It is our view that reciprocity in market opening should be asymmetrical and introduced in such a manner that it does not have an adverse impact on domestic industries, employment or Government revenue.  They are all crucial for economic development and poverty alleviation in ACP States.

Mr Chairman,

Mauritius has benefited from 2 IFAD loans:

  1. SDR 5.22 M for a Small Scale Agricultural Development Project approved in 1981, which project is now closed.
  2. SDR 8.2 M for Rural Diversification Project approved in 1999, which project is still ongoing.

I want to speak about the indicative lending programme of IFAD for 2007, as stated on page 34 of Document GC 30/L4.  Mauritius is on the reserve projects list.  The identified project is entitled "Marine and Agricultural Resource Programme, or MARS.  An IFAD team was recently in Mauritius in this regard.  Two of the most vulnerable groups have been identified as:

  1. the coastal communities with heavy dependence on marine resources; and
  2. stallholder sugar planters and their families who are doubly disadvantaged by declining sugar prices and loss of manufacturing industry employment opportunities in the textile and sugar processing sectors

The target groups are:

  1. existing registered small scale fishermen in both Mauritius and Rodrigues, including the octopus fisherwomen in Rodrigues (about 3.800 potential beneficiary households);
  2. approximately 25% of small-scale cane planters who would no longer be able to grow cane (about 6 500 households);
  3. retrenched textile workers in the rural areas and other unemployed youths and women (may be as many as 8 000 individuals).

The goal is to contribute to improved livelihoods and incomes of the rural households in Rodrigues and in selected Village Council Areas of Mauritius with highest incidence of poverty, and to assist smallholder farming households to diversify and intensify their agricultural systems, establish off-farm income-generating enterprises, and improve their prospects of gaining employment in rural areas.

The programme would last over 6 years, starting in March 2008.

The programme will have a component on sustainable marine resource management, covering both Mauritius and Rodrigues.  It will test and demonstrate innovative means of generating income from the lagoons, assistance for fishers to convert to off-lagoon fishing, improved capacity for regulating and controlling the sustainable utilization of marine resources, improved solid and liquid waste management to reduce pollution of the coastal environment and the development of marine eco-tourism.

The second component relates to diversification of rural incomes and employment to accelerate the diversification of the sugar farming system, technical and vocational training programme to improve the employment prospects of poor and vulnerable households, and the establishment of an agricultural diversification grant facility to reduce the risks involved in testing new production system and development of new marketing arrangements.

The IFAD team proposal that the grant element in the programme be provided from Government funds and technical assistance be funded from the IFAD loans are not acceptable to Government, given the economic situation explained earlier.

We can afford to take the IFAD loan provided the rate of interest is close to that of the current Rural Diversification Programme loan (i.e., around 2.2%).  The Aide Memoire prepared by the IFAD team mentions an IFAD loan on ordinary (commercial) terms, with possibility of blending with cheaper sources.  Given the poverty focus of MARS, and the unlikelihood for beneficiaries who are poor farmers and fishermen, to be able to bear the full cost of the investment, the loan should be provided on no less favourable terms than the current Rural Development Project loan at 2.18% interest.

Where there is a will there is a way.  Last year, I made a strong plea on behalf of the ACP Sugar Protocol countries that in view of the high adaptation costs of the Sugar Protocol countries as a result of 36% price cut, 100 million Euros from the grant envelope should be mobilized on the basis of national adaptation strategies for the financing of interest rate subsidies.

The EU understood, and in a Community Declaration acknowledged the  high adaptation costs to which the Sugar Protocol countries are confronted as a result of the EC sugar reforms.  They agreed that the EIB should endeavour to direct part of the resources of the Investment Facility, and of its own resources, towards investments in the sugar sector of the ACP Sugar Protocol countries and an amount of up to 100 M EUR shall be mobilized from the grants envelope for the financing of the interest rate subsidies.  This has been welcomed.

I have noted that IFAD is benchmarking with other international organizations.  I therefore put up this proposal for interest rate subsidy for your consideration.

I appeal that IFAD also look at alternative ways and means of providing very soft loan facilities for the poor.  Why cannot IFAD borrow tested and tried schemes like the Grameen Bank?

I thank you for your kind attention.

Dr the Hon Arvin Boolell, Minister of Agro Industry and Fisheries, Republic of Mauritius