Service Contract No 2007 / 147-446 Strategic ... - Swaziland

2 BACKGROUND2.1 The EU sugar reformSwaziland has benefited from the European Union/ACP Sugar Protocol, allowing it to exporta quota of sugar to the EU market at a preferential price. In 2006, the EU CommonOrganisation of the markets in the sugar sector was reformed. Main features of the reformare: (a) a significant reduction in the price of sugar (36%) over four years beginning 2006/07;(b) voluntary reduction in the production quota through a high-incentive restructuringscheme; (c) introduction of a decoupled payment for sugar beet producers; and (d) newquota system and simplified quota management to ensure market balance in each marketingyear.The reform involves a reduction of the EU sugar prices, reflected in the price obtained byACP Sugar Protocol countries. The European Commission (EC) proposed a scheme to helpSugar Protocol countries that depend on the EU market to adapt to the new situation. From 1October 2009, the Sugar Protocol has been denounced and LDC ACP countries benefitingfrom the 'Everything But Arms' (EBA) initiative will have access to the EU market. Anautomatic volume safeguard clause will also be applied to ACP non-LDCs, such asSwaziland, allowing for a substantial increase of export levels. In the case of Swaziland theadaptation strategy for the sugar sector is reflected in the National Adaptation Strategy inresponse to the EU sugar sector reforms (NAS), developed in 2006.The EC’s Response Strategy to the NAS is reflected in the form of the Multi-annualAdaptation Strategy (2006-2013), which is implemented according to the Multi-AnnualIndicative Programmes (MIP) for Swaziland under the Accompanying Measures for SugarProtocol Countries (AMSP) (currently 2007-2010 and 2011-2013 under preparation) and thecorresponding Annual Action Programmes. The Sugar Reform Accompanying Measurescome under Regulation (EC) No 1905/2006 of the European Parliament and of the Council.The adaptation strategy aims to support the effective implementation of the NAS in responseto the EU Sugar Sector Reforms in specific areas, selected on the basis of added value,eligibility under EC financing policies, EC development policy guidelines and comparativeadvantages. The EC Response Strategy is incorporated into the 10 th EDF CSP.As the implementation of the NAS may have impacts on the environment, the EC and theGoS have called for a Strategic Environmental Assessment (StrEA) with the following globalobjective: “…to describe, identify and assess the likely significant impacts on theenvironment of the implementation of the country’s NAS actions.” The StrEA will providerecommendations to the EC and the GoS on how to enhance the environmental performanceof the NAS.It should be highlighted that the NAS was prepared in 2006. The fact that the StrEA wasnot done concurrently with NAS preparation inevitably limits the potential to influenceits contents. Nevertheless there are still opportunities to enhance the environmentalperformance of NAS implementation if the GoS and the EC have the willingness tostudy and integrate recommendations that this StrEA makes.The sugar sector in Swaziland is described below.RDMU (Strategic Environmental Assessment of the National Adaptation Strategy) - Page 13