New Partnership for Food and Agriculture Organization Africa’s Development (NEPAD) of the United Nations Comprehensive Africa Agriculture Investment Centre Division Development Programme (CAADP) GOVERNMENT OF THE REPUBLIC OF THE SEYCHELLES SUPPORT TO NEPAD–CAADP IMPLEMENTATION TCP/SEY/2903 (I) (NEPAD Ref. 05/07 E) Volume III of VI BANKABLE INVESTMENT PROJECT PROFILE Sustainable Vegetable and Fruit Production January 2005 SEYCHELLES: Support to NEPAD–CAADP Implementation Volume I: National Medium–Term Investment Programme (NMTIP) Bankable Investment Project Profiles (BIPPs) Volume II: Sustainable Pork and Poultry Production Volume III: Sustainable Vegetable and Fruit Production Volume IV: Agro–Processing Pilot Project Volume V: Evaluation and Commercialisation of Underutilized Marine Resources Volume VI: Support to Wood Exploitation and Utilization NEPAD–CAADP BANKABLE INVESTMENT PROJECT PROFILE Country: Seychelles Sector of Activities: Agriculture Proposed Project Name: Sustainable Vegetable and Fruit Production Project Location: National Duration of Project: 5 years Estimated Cost: Foreign Exchange............ US$5.7 million Local Cost........................ US$1.4 million Total................................US$7.1 million Suggested Financing: Source US$ million SR million % of total Government 1.4 7.5 19% Financing institution(s) 5.7 31.5 81% Beneficiaries Private sector Total 7.1 39.0 100% SEYCHELLES: NEPAD–CAADP Bankable Investment Project Profile “Sustainable Vegetable and Fruit Production” Table of Contents Abbreviations........................................................................................................................................ iii I. PROJECT BACKGROUND.......................................................................................................5 A. Project Origin ....................................................................................................................5 B. General Information..........................................................................................................5 II. PROJECT AREA.........................................................................................................................7 III. PROJECT RATIONALE..........................................................................................................10 IV. PROJECT OBJECTIVES.........................................................................................................12 V. PROJECT DESCRIPTION ......................................................................................................12 A. Development of an Agricultural Land Use Plan...........................................................13 B. Infrastructural Development..........................................................................................13 C. Institutional support and capacity building ..................................................................14 VI. INDICATIVE COST .................................................................................................................15 VII. PROPOSED SOURCES OF FINANCING .............................................................................15 VIII. PROJECT BENEFITS ..............................................................................................................15 IX. IMPLEMENTATION ARRANGEMENTS ............................................................................16 X. TECHNICAL ASSISTANCE REQUIREMENTS .................................................................17 XI. ISSUES AND PROPOSED ACTIONS ....................................................................................17 XII. POSSIBLE RISKS.....................................................................................................................17 NEPAD – Comprehensive Africa Agriculture Development Programme Seychelles: Investment Project Profile “Sustainable Vegetable and Fruit Production” Abbreviations ADB African Development Bank BIPP Bankable Investment Project Profile CAADP Comprehensive Africa Agriculture Development Programme FAO Food and Agricultural Organization of the United Nations GDP Gross Domestic Product GIS Geographical Information System ICM Integrated Crop Management IPM Integrated Pest Management MENR Ministry of Environment and Natural Resources (formerly MAMR) MERP Macro–economic Reform Programme NAFP National Agricultural and Fisheries Policy 2003–2013 NEPAD New Partnership for Africa’s Development NGO Non–governmental Organization NMTIP National Medium–Term Investment Programme SMB Seychelles Marketing Board iii NEPAD – Comprehensive Africa Agriculture Development Programme Seychelles: Investment Project Profile “Sustainable Vegetable and Fruit Production” I. PROJECT BACKGROUND A. Project Origin I.1. In line with the last major agricultural project, the Integrated Agricultural Development Project funded by the African Development Bank (ADB), this sector still requires further development. Due to sanctions imposed on the government in the 1998 part of the above project components were not finalized. Much assistance was to be delivered to the project beneficiaries, mainly in the area of irrigation equipments, inputs and machineries. The past project funded development in major infrastructure such as road, irrigation and drainage to exploit the limited land resource. Such infrastructures are still required for the same agricultural zone and others. I.2. Addressed in the National Agricultural and Fishery Policy 2003–2013 (NAFP) are seven thematic areas focus on sustainable agriculture and fisheries development to enhance food security. Precisely as shown in the policy document two of the focused areas are a) Agricultural Land and Use Optimisation and b) Arable Agricultural Production. The two mentioned domains are in line to achieve at least 80% production of arable crops, in areas where there are comparative advantage, required for local consumption. I.3. As set in its strategies government would identify agricultural plots along with suitable private sector interests to undertake crop production and would also encourage households to engage in agricultural production. To ensure sustainability in crop production, new improved technology needs to be applied amongst which are to promote improved crop varieties and t the same time conserve the biodiversity and the genetic resources of the local varieties. As it is in the best interest of the government to increase local production of fruits , vegetables spices root and tuber crops, there is also the need to further promote and support sound and environmental friendly cultural practices (IPM, ICM), technologies (fertigation, tropical green houses), and edible landscaping. I.4. Crop production is undertaken by private entrepreneurs farming either on private land or on land lease from the government. B. General Information I.5. As from 1971 with the development of tourist industry profound changes occurred in the agricultural sector. A general decline in the production of traditional cash crops (copra and cinnamon) was observed. However, there was an increase in the production of food crops and livestock to response to the increasing demand for both the local and tourist population. Intensive units for production of, vegetables, livestock and fruits came into operation. Production and supply however, is still insufficient and the country still resorts to imports. I.6. Agricultural contribution before the tourism industry took grip of the economy was 40% of the GDP. Three decades down the line agriculture’s contribution toward GDP dropped to 2.9% in 2002. In 1947 agriculture and forestry employed 80% of the working force compared to less than 7% in 2002. Even though there has been an increase in the average monthly earning of approximately 75% from 1990 to 2002, it is still much lower than in most other sectors of the economy I.7. The economy is highly dependent upon imports. The country is however vulnerable, even with the increase in export earnings, it does not sufficiently cover the cost of import. In 1993 the deficit in the balance of trade was SR969.8m compared to SR1,045.8m in 2002, reaching a maximum of SR1,541.9m in 1999. 5 NEPAD – Comprehensive Africa Agriculture Development Programme Seychelles: Investment Project Profile “Sustainable Vegetable and Fruit Production” I.8. For the past 10 years government expenditure has not surpassed SR2bn in any given year. With the macro–economic reform programme in mid 2003, the budget for 2004 has been reduced to SR1.23bn for allocation to different ministries and departments. Allocation to the former Ministry of Agriculture and Marine Resources (MAMR) has not surpassed SR23m accounting for less than 2% of the total government expenditure. In 2004 the above ministry merged with the Ministry of Environment, now the Ministry of Environment and Natural Resources and allocation for this ministry accounts for less than 7%, the bulk being from environment. I.9. Agricultural production is carried out on three main islands of the Seychelles, Mahé, Praslin and La Digue. The bulk of the production is on Mahé and Praslin. Mahé is the largest of the three islands. Around 86% of the population lives on the main island, Mahé, 9% on Praslin and 4% on La Digue. Agriculture on Mahé is concentrated mainly at Anse Boileau, Val d’Endor, Port Glaud, Barbaron, La Gogue, Anse Royal and Anse Aux Pins. Whiles on Praslin the main areas are Amitié, Cap Samy and Côte d’Or. La Digue has lost its major agricultural areas to other