Dr. Omar Davies (left), Minister of Finance and Planning, signs an agreement for the provision of the first tranche of just over five million euros by the European Union for the transformation of the island's sugar industry at the Ministry of Finance and Planning, Heroes Circle in Kingston yesterday. Looking on are Ambassador Marco Mazzocchi-Alemanni (centre), head of delegation of the European Commission to Jamaica and German Ambassador Volker Schlegel. - Ian Allen/Staff Photographer

Government yesterday received more than 5 euros million (J$454 million) from the European Union, 4.4 euros million of which will go towards direct budgetary support, as the first tranche of payments for the transformation of the island's sugar industry arising from changes to the sugar protocol.

Dr. Omar Davies, Minister of Finance and Planning, and head of the European Commission delegation to Jamaica, Ambassador Marco Mazzocchi-Alemanni, signed the agreement for the funds yesterday at the ministry's office at Heroes Circle in Kingston.

Ambassador Mazzocchi-Alemanni said it was "the start of a large new policy support programme and a major expansion in the relationship between Jamaica and the EU."

He said the allocations from 2007-2013 are likely to be significantly higher.

The EU Ambassador said the funds were available for immediate disbursement to the Government.

"This programme will be mainly delivered through direct budget support, thus putting the Jamaican Government fully inthe driver's seat when striving to implement its strategy for the sector," he added.

The remaining 800,000 euros will go towards the funding of a feasibility study for the preparation of an implementation strategy, undertake a skills audit and training needs assessment for communities dependent on the sugar industry and the design of capacity building programmes for the people within these communities.

Millennium development goals

Roger Clarke, Minister of Agriculture and Lands, who was also present at the signing, highlighted the importance of the funds to Jamaica, noting that "without this assistance, ACP (African, Caribbean and Pacific) sugar-producing countries would be unable to meet their millennium development goals for rural development, reduction in poverty levels and macroeconomic performance."

Mr. Clarke pointed out that Jamaica will lose some $2.1 billion per annum by 2009 as a result of the changes to the sugar protocol. As part of the changes to the sugar protocol, the EU is reducing the price it pays for sugar coming from ACP countries by 36 per cent over four years, which started last year. Under the programme of accompanying measures to assist ACP countries, which includes Jamaica, to transform their sugar industries, the EU agreed to provide a line of funding from 2006-2013.