R 211650Z AUG 09
FM AMEMBASSY BELMOPAN
TO SECSTATE WASHDC 1988
WHA CENTRAL AMERICA COLLECTIVE
EUROPEAN POLITICAL COLLECTIVE

UNCLAS BELMOPAN 000320 
 
 
DEPT FOR WHA/CEN (JENNIFER VANTRUMP) 
 
E.O. 12958:  N/A 
TAGS: PGOVPREL EUN BH
SUBJECT: EUROPEAN DEVELOPMENT FUND ACTIVITIES IN BELIZE: SUGAR, 
BANANAS AND RURAL DEVELOPMENT 
 
¶1.  Ambassador Marco Mazzocchi Alemanni, the Head of the European 
Commission's (EC) Delegation to Belize, visited Belize from 20th to 
24th July 2009 to promote several European Development Fund 
initiatives.  More than Euro 46 million has been allocated to assist 
rural Belizean agricultural communities that produce sugar and 
bananas. The programs are designed to enhance competitiveness in the 
sugar and banana industries, improve the road system, increase 
access to electricity, offer greater educational opportunities, and 
assist the communities in their efforts to diversify into other 
agricultural and non-agricultural sectors. 
 
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Accompanying Measures for Sugar 
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¶2.  The EC provides grant funding to Belize through its program of 
Accompanying Measures for Sugar (AMS) Protocol countries.  In 2005, 
the EU proposed to overhaul its sugar regime by cutting the price of 
raw sugar by 36% over a four-year period.  Linked to this reform, 
the EC introduced its AMS program to support African, Caribbean and 
Pacific countries which traditionally played an integral role in the 
EU sugar regime and whose export earnings would be negatively 
affected by the price reduction. 
 
¶3.  In Belize, the overall objective of the AMS program is to 
contribute to poverty reduction and improve the standard of living 
for sugar-dependent communities in northern Belize. The AMS is 
expected to have three main areas of intervention which include 
improved efficiency for sugar cane production, road rehabilitation 
in the 'Sugar Belt' region and diversification into alternative 
agricultural and non-agricultural sectors. 
 
¶4.  Under the AMS program, Belize is expected to receive Euro 46 
million (BZ$124.2 million) for the period 2006-2010 to be disbursed 
through Annual Financing Agreements. (Note: The Belizean dollar 
exchange rate with the Euro is currently BZ$2.70 for  one Euro.  End 
Note.)  The 2008 Financing Agreement was signed on July 23, 2009 and 
provides for the allocation of Euro 9 million (BZ$25 million).  Of 
this amount, Euro 5.8 million (BZ$16.1 million) has been apportioned 
to road rehabilitation in the Orange Walk and Corozal districts. 
Another Euro 2 million (BZ$5.6 million) has been allocated to 
improving competitiveness of the country's sugar industry through 
institutional capacity building of the cane farmers association and 
support of a cane replanting and rehabilitation program. 
Additionally, Euro 1 million (BZ$2.8 million) has been allocated to 
assist with rural diversification through employment generation in 
these communities. 
 
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Special Framework of Assistance for Bananas 
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¶5.  Under the 2008 Special Framework of Assistance (SFA) for 
bananas, the EC will contribute approximately Euro 2 million (BZ$5.6 
million) towards rural development in Belize. This will mark the 
final allocation of a 10-year program amounting to almost Euro 30 
million for the banana sector and the communities of southern 
Belize.  The 2008 SFA allocation focuses on improved access to 
education at the technical high school level, improved access to 
adult skills training, teacher training as well as institutional 
support and capacity building. 
 
¶6.  Under the European Union Banana Support Programme (EU BSP), 
there is also a project for the electrification of rural communities 
in southern Belize.  Seven villages will be connected to the 
national electricity grid over the next year.  On 22 July 2009, the 
project was officially inaugurated by Alemanni in Santa Cruz Village 
of the Toledo district and is expected to expand to the other 
villages by mid-2010. 
 
¶7.  The total cost of the project is estimated at Euro 1.8 million 
(BZ$5 million) which will be jointly financed by the European 
Commission (75%) and the Government of Belize (25%). 
 
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Belize Rural Development Programme (BRDP) 
----------------------------------------- 
 
¶8.  The Belize Rural Development Programme (BRDP) is also financed 
jointly by the European Commission (EC) in collaboration with the 
Government of Belize (GoB). 
 
¶9.  The overall aim of the BRDP project is poverty reduction in 
Belize with a particular focus on empowering rural communities.  The 
key characteristics of the project are (i) facilitating SME 
development at the rural level (farm and non-farm); (ii) developing 
infrastructure for basic support services in rural areas; and (iii) 
strengthening policies, institutions, and rural communities. 
 
¶10.  The program was initiated in March 2006 following the signing 
of the Financing Agreement (FA) between the GoB and the EC in 
November 2005.  The total cost allocated to the BRDP project is 
almost Euro 8.9 million for the period 2006- 2011.  Of this, the 
EU's contribution is Euro 7.2 million.  Other contributors to the 
project include the GoB (Euro 800,000) and the final beneficiaries 
of the BRDP (Euro 875,000). 
 
¶11.  On July 24, Alemannni officially opened a new wing of the Young 
Women's Christian Association (YWCA) in Belize City.  The 
construction of the new wing was commissioned in May 2008 and was 
funded under the BRDP at a cost of Euro 272,222 million (BZ$ 
735,000).  The new wing will provide a venue for entrepreneurial 
training for women and youth. 
 
¶12.  Under the 10th EDF, additional grants for Euro 11.8 million 
(BZ$33 million) have been earmarked for the period 2010-2015 for a 
second phase of the BRDP as well as for institutional support to the 
National Authorising Office (U.S. GAO equivalent) and other 
government agencies. 
 
¶13.  Comment.  The majority (52%) of Belize's population live in 
rural areas and are primarily dependent on agricultural activities 
for employment and income. Bananas and sugar are two of Belize's top 
three agricultural exports and have played a vital role in Belizean 
rural development and livelihood.  Although the evidence is only 
anecdotal, Post notes that the Belizean public views the EDF 
programming positively and as effective in assisting rural 
Belizeans.  Alemanni's visit received wide, positive coverage in the 
Belizean press.  Given the importance of bananas and sugar to 
Belize's economy and culture, it is Post's understanding that 
programs designed to assist Belizean rural farming communities 
resonate with the Belizean public.  The EU is focused on the sugar 
and banana industries as part of their own agriculture policy. 
However, there remains in Belize considerable opportunity for 
poverty reduction through small-scale development of agriculture, 
particularly in the south, should USAID or Peace Corps resume this 
type of programming.  End Comment. 
 
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