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Lessons from the Caribbean rum-sector development programme

31 December 2009

CTA and ECDPM have published a paper entitled ‘The Caribbean rum programme Cost-Sharing Grant Scheme experience: Lessons for programme development in other ACP countries’. The paper reviews the origins of the programme in a unilateral change of policy by the EU, and the recognition of the need for adjustment support for ACP rum producers. It summarises the overall structure of the rum programme and locates the CSGS in this context. The main body of the report looks at the lessons arising for both the design and implementation of the CSGS established to support trade and production adjustments in response to trade-policy changes.

In terms of design, the paper highlights the following areas:

  • the importance of clearly defining specific objectives to be attained via the CSGS;
  • the need for well conceived and managed accompanying measures to support CSGS implementation in pursuit of the overall programme objectives;
  • the importance of providing EC co-financing support at a level which provides an incentive for the adoption of proactive trade- and production-adjustment responses;
  • the importance of addressing tendering and procurement issues in the design phase so as to avoid any disruption of normal commercial ‘best practice’ procurement;
  • the need to build flexibility into the budget process, so that the use of aid funds can be recipient driven;
  • the importance of establishing efficient and transparent decision-making systems that take into account issues of commercial confidentiality.

In terms of implementation, the paper highlights:

  • the importance of providing effective support to the administration of the reimbursement process;
  • the need for an ongoing review process so that problems can be identified early and remedial measures can be set in place;
  • the difficulties faced in using CSGS to support certain types of activities, and hence the need to define carefully what should and should not be eligible for support (particularly in the marketing and distribution area).

The paper goes on to review the lessons arising for other ACP countries, stressing:

  • the importance of sustained advocacy, alliance building and industry leadership in moving from conceptualisation to operationalisation of trade- and production-adjustment support;
  • the importance of dealing with tendering and procurement issues through a dedicated manual of procedures jointly agreed with the EC services;
  • the importance of ensuring the EC co-financing contribution is sufficient to incentivise proactive, market-led production- and trade-adjustment activities;
  • the importance of establishing flanking programmes of administrative support for the implementation of the programme and the attainment of overall programme objectives;
  • the central importance of trade-adjustment and marketing support to the overall process of production adjustment.

Overall the paper concludes that once initial design and establishment problems have been addressed, cost-sharing grant schemes can provide a relatively quick way of committing and disbursing funds in support of operational improvements targeted at improving the competitiveness of ACP production, in ways which are market-led and private-sector based.

Editorial comment

The CTA-ECDPM paper on the restructuring of the Caribbean rum programme highlights the importance of effective private-sector leadership of sector-specific production- and trade-adjustment processes, and hence the need to redefine the role of public authorities in the design and implementation of such programmes. This closely parallels the EU’s own internal experience under its rural development programmes, which have taken many years to evolve into programmes focused on investment that serves emerging differentiated markets rather than providing straightforward subsidies for traditional patterns of production.

The importance of basing production- and trade-adjustment support programmes on evolving market trends and existing commercial practices also emerges clearly from this review. This has important implications for the scope for replicating such programmes across other, very different, ACP regions or sectors which have a different internal organisational structure.


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