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					        Food and Agriculture Organization of the
        United Nations




  Pacific Island Countries’ Agriculture Sectors:
   Challenges, Constraints and Opportunities


  Background Information and Country Profiles


                 FEBRUARY 2008




Prepared for the Pacific Region Kick Off Workshop
        Apia, Samoa, 27-29 February 2007




  All ACP Agricultural Commodities Programme
                                             Introduction

This document provides background information on the agriculture sectors of fifteen Pacific
Island Countries. Following a brief review of the Pacific region‟s profile, two page1 synopses
are provided for each country, giving key information on the general economic and social
situation, before focusing on the agriculture sector, the constraints and challenges that it
faces, and the opportunities for its development.

The briefs draw heavily on country reports developed under Formulation Missions to 14
Pacific Island Countries undertaken during 2007 in advance of the expansion phase of the
FAO Regional Programme on Food Security.

For Timor-Leste, a country not covered by the FAO Regional Programme on Food Security
for the Pacific, material was drawn from documents developed in the context of the World
Bank Country Assistance Strategy and Poverty Reduction Strategy Paper and well as Timor-
Leste‟s National Development Plan.

The information contained in those reports is supplemented by data from the World Bank
World Development Indices and from the Asian Development Bank. It should be noted that
data is relatively sparse in the Pacific region, and that not all sources of data are consistent.
Whilst attempts have been made to ensure consistency in the treatment of economic and
social data across the country synopses, the data contained therein should be treated as
indicative.


                                       Acknowledgements

This document was prepared by Massimo Diomedi and Jamie Morrison (Trade and Markets
Division, FAO). Statistical assistance was provided by Julie Claro and Filippo Dall‟Oglio.

The support of the FAO Sub-Regional Office in providing access to the Country Reports
prepared under the auspices of the RPFS, and upon which the country synopses are based,
is fully recognised.

This document has been prepared as a contribution to the All ACP Agricultural Commodities
Programme with funding by the European Union.




1
    Extended synopses are provided for Papua New Guinea, Solomon Islands and Vanuatu


                                                    -2-
Table of Contents

Introduction .......................................................................................................................... - 2 -

Acknowledgements ............................................................................................................ - 2 -

Pacific region profile ........................................................................................................... - 4 -

Cook Islands ........................................................................................................................ - 6 -

Federated States of Micronesia ....................................................................................... - 8 -

Fiji ........................................................................................................................................ - 10 -

Kiribati ................................................................................................................................. - 12 -

Marshall Islands ................................................................................................................ - 14 -

Nauru .................................................................................................................................. - 16 -

Niue ..................................................................................................................................... - 18 -

Palau................................................................................................................................... - 20 -

Papua New Guinea .......................................................................................................... - 22 -

Samoa ................................................................................................................................ - 26 -

Solomon Islands ............................................................................................................... - 28 -

Timor- Leste ...................................................................................................................... - 32 -

Tonga.................................................................................................................................. - 34 -

Tuvalu ................................................................................................................................. - 36 -

Vanuatu .............................................................................................................................. - 38 -




                                                                      -3-
                                    Pacific region profile

The PICs vary considerably in size, availability of natural and mineral resources and economic
development. The larger islands include Papua New Guinea (almost 90% of land area), Solomon
Islands, Vanuatu and Fiji. These are mainly volcanic and generally rich in biological and physical
resources. In marked contrast, the atoll countries (Federated States of Micronesia, Kiribati, Nauru,
Niue, the Republic of the Marshall Islands, Tuvalu and Palau) are small, have limited natural
resources and poor soils. The remaining countries (Cook Islands, Tonga and Samoa) lie somewhere
in between. Access to and use of land based natural resources is essential to the health, socio-
economic and cultural development of Pacific island communities. Especially in the larger countries,
natural and man-made forest plantations are of great economic, socio-cultural and ecological
importance. Along with the mid-sized PICs, farming and fishing are the predominant occupations of
the rural populations, and these countries earn or have the potential to earn significant income and
foreign exchange from agriculture and forestry exports. In the smaller PICs, agriculture is mainly
subsistence farming, while most activities in their forestry sector concern agro-forestry development,
watershed management and coastal forest management. Natural resources also underpin the growing
tourism sector in many PICs.

The total population of the PICs is estimated at 7 million (2000), with Papua New Guinea accounting
for some 70% and Nauru, Niue, Palau and Tuvalu together for less than 1%. Regionally, annual
population growth is around 2.2%. Outward migration is important, providing a major source of both
national and household income. Indigenous cultures and traditions remain generally strong and
continue to play an important role in political, economic and cultural life. Strong cultural and social
systems, in turn, provide an important safety net against absolute poverty, particularly amongst
vulnerable groups.

In terms of Human Development Indices (HDI), there are three broad categories: the smaller island
states, Tonga, Samoa, Fiji, Palau, Cook Islands, Tuvalu and Niue, rank amongst the highest; the
Micronesian states of Kiribati, Marshall Islands and Federated States of Micronesia are in the middle
strata; and the large Melanesian countries of Vanuatu, Solomon Islands and Papua New Guinea, and
Timor Leste rank in the lower strata. Some Pacific Island countries have recently demonstrated
                                                                          th                       th
improved performance in their HDI. In 2006, Tonga moved from its 107 position in 2002 to 55 ,
                  th     th               st     th
Samoa from 117 to 75 , Fiji from 101 to 90 . During this period, Vanuatu, Solomon Islands and
PNG all showed improved performance as well (see table 1).

Farming is predominantly small scale, low in productivity and based mainly on family labour and
limited adoption of modern technologies. Produce is largely consumed on farm, with limited amounts
marketed. Root crops are the main staple, commonly grown with coconuts, breadfruit, bananas and
plantains. Although the agriculture sector in Fiji is more commercial, subsistence farming still remains
important. The PICs have substantial marine resources, with fish providing an invaluable source of
revenue, food and protein. Although in-shore aquaculture is poorly developed it has considerable
potential. Typical constraints faced by producers in the region include poor quality and availability of
planting material, lack of efficient pest control and monitoring programmes, high post-harvest losses
and inadequate agro-processing, poor animal health, high cost of feed and a poorly developed
domestic and export industry. Technology transfer and information systems to encourage producers to
be more price and market responsive, therefore, can be developed significantly, to enhance
efficiencies.




                                                 -4-
         Table 1. Human Development Index Rankings and Geographic/Economic Key Data

                                                                     Land Area        Sea Area 000        GDP/Capita
     Country               (HDI) Ranking           Population
                                                                       (km2)             (km2)              (US$)
                    2002     2007
High HDI            1–53     1-63
Palau                 46        -        19 900            488         700             7 196
Tonga                107       55       100 200            688         700             2 967
Medium HDI         54–137   64-155
Cook Islands          62        -        18 700            240        1 830            5 044
Niue                  70        -         1 707            259         390          NZ$ 8 318
Fiji                 101       93       848 000          18.272       1 260            3.508
Nauru                103        -        10 065             21         320             1.400
Samoa                117       77       183 746           2.935        120             2.253
Tuvalu               118        -         9 900             26         750         AUS$ 2 878
FSM                  120        -       108 300            700        2 900            2.236
Marshall Islands     121        -        63 600            181        2 131            1 817
Kiribati             129        -        92 533            726        3 600            1 059
Vanuatu              140      120       217 000          12.190        680             1 700
Solomon Islands      147      129       533 540          29.540       1 340             641
PNG                  164      145      5 900 000        462.243       3 120            1 796
Timor Leste            -      150      1 015 000         14.874                         364
Low HDI           138–173 156-177
Sources: UNDP Human Development Report. SPC Statistical Summary. ADB Country Information

 Specifically for export markets, failure to meet assured quality and quarantine standards remains a
 major impediment. Currently, although national food laws are at various levels of development, food
 standards and regulations are generally inadequate. These considerations and the process of meeting
                                          2
 WTO agreements for existing members and negotiations for entry of potential members will be major
 issues in future trade and export development strategies. In addition to WTO, regional trade in
 agriculture is also subject to a number of other agreements. These include the Pacific Agreement on
 Closer Economic Relations (PACER), which allows preferential access to Australia and New Zealand,
 the Pacific Island Countries Trade Agreement (PICTA), which will progressively remove tariffs and
 duties amongst participating countries, the Cotonou Agreement for European Union market and the
 Generalised Systems of Preferences (GSP) for USA and Japan.

 Commonly shared problems in the PICs include: (i) limited natural resources and fragile environment;
 (ii) economic uncertainty and low growth reliant mainly on tourism and primary exports; (iii) small and
 poorly integrated domestic markets; (iv) little product differentiation/comparative advantage leading to
 limited intra-regional trade; (v) high freight costs due to distances from international markets; (vi) high
 energy costs; (vii) poor infrastructure and transport; (viii) low human and institutional capacity (ix) large
 dependence on the public sector and limited private sector development and (x) increasing
 occurrences of social and political instability in some countries. In response to these constraints, there
 is growing awareness amongst the Island countries that appropriate strategies and investments are
 required to ensure future food and nutritional security and sustainable use of natural resources. In
 meeting these objectives, agriculture plays a critical role, both in production and trade, though
 presently its capacity to do so is limited by various factors. In addressing these, the development
 strategies of PICs have common elements which inter alia include increasing agricultural productivity
 and food self-sufficiency, reducing food imports, diversifying production, improving marketing and
 export performance, developing human capacity and improving the quality of life of poor and
 vulnerable groups.

 These elements are now elaborated in the context of the individual country profiles that follow.




 2
  WTO members in the Region include Fiji, Papua New Guinea, Solomon Islands and Tonga. Amongst the remaining countries,
 principally Samoa and Vanuatu have applied for accession.



                                                         -5-
                                          Cook Islands
               2                                                          2
Land Area (km ) 240                            Sea Area/EEZ (million km ) 1.8
Population (No.) 18,700 (2000)                 Annual Population Growth (%) 2.6
GDP (US$ million) 95.8 (1997)                  Rural Population (% of total population) 31
GDP per capita (US$) 5,044 (1997)              Agricultural GDP (% of total GDP) 22
Value of Food         1990 3.03                Value of Food                1990 1.07
Imports/Total Ag      2000 30.3                Imports/Total                2000 0.43
Exports               2004 5.48                Merchandise Exports          2004 0.958
Information Sources: FAO, World Bank, Asian Development Bank

1. General
The Cook Islands consists of 15 small islands and atolls with a total land area of 240 square
kilometres, scattered over some 2 million square kilometres of the Pacific Ocean. They lie in the centre
of the Polynesian Triangle, flanked by Fiji 2,300 km to the west, Tahiti 1,140 km to the east, Hawaii
4,730 km north and New Zealand 3,010 km southwest. The country has no immediate exploitable
mineral or energy resources. Its natural resource base is primarily the fertile soil and the marine
resources. Agriculture and fisheries, although far from reaching their full potentials, provide a base for
food security.
The Cook Islands economy is based on tourism, offshore financial services, pearl farming, fishing, and
agriculture. Remittances and investment from Cook Islanders in New Zealand and Australia, and
returning Cook Islanders also contribute significantly to the economy. In addition to Rarotonga, Aitutaki
is becoming an important tourism destination and the industry now accounts for around 50% of GDP.
Other than Rarotonga, the economies of the southern islands centre on agriculture, increasingly for
export.
The country‟s customary land tenure system has resulted in fragmentation of land ownership and
limited ability to secure long term loans for agriculture development. In Rarotonga, the demand for
land by the tourism industry and younger Cook Islanders for residential purposes has substantially
reduced availability of arable land for agricultural purposes.
Exports have dramatically declined over the last 3 years. Cyclones destroyed the pawpaw crop in
2005. Principally as result of migration of the tuna, fresh and chilled fish export has declined rapidly
from a maximum of 8.2 million NZ$ in 2003 to 3.4 million NZ$ in 2005. The value of the pearl industry
has also declined substantially from more than NZ$ 14 million in 2001 to only NZ$ 1.6 million in 2005,
as result of a bacterial disease outbreak in 2002 and poor quality control and branding in the industry.
The Cook Islands National Sustainable Development Plan, 2007-2010 or “Te Kaveinga Nui” outlines
the priorities for national efforts to be complemented by assistance of development partners. With the
assistance of FAO, a National Agriculture Strategic Plan was drawn up in 2001, covering the period
2001-2006. A review of this strategic plan has just started with the assistance of FAO.
2. The Agriculture Sector
Agriculture contributes around 22 percent to GDP and employs less than 5 percent of the employed work
force. Although 67 percent of all households are agriculturally active, they do so part-time to grow
some of their basic local food and not for income. Only 1 percent of the agricultural households derive
all of their income from agriculture and all of them are in Rarotonga. None of the households in the
outer islands depends on agriculture for all of their income although almost all households engage in
agriculture for both subsistence and semi-commercial purposes.
The land area of the Cook Islands is 58,452 acres of which 58 percent (33,826 acres) is arable land.
Arable land is classified into two categories. Class 1 land includes lands which are suitable for cash
and subsistence crops including vegetables. Class 2 land includes lands which are suitable for tree
crops only. Twenty eight percent of total land falls in Class 1 category. Class 1 and Class 2 land varies
widely across the different islands. In Rarotonga the proportion of arable land is the lowest but 71
percent of it is Class 1 land, whereas in the northern islands the proportion of arable land is highest
but all of it is Class 2 land.
3. Major Challenges and Constraints
Due to the right of Cook Islanders to settle in New Zealand, the recent dramatic decline in commercial
activities in agriculture and fisheries, and the comparatively more attractive income opportunities in the


                                                  -6-
tourism industry, agriculture and fisheries in the Cook Islands have been choices of last resort. In
addition, a labour net migration from outer islanders into Rarotonga poses particular challenges for
national and outer islands development. In Rarotonga, large tracts of agricultural land have been
turned to other uses, mainly residential buildings and tourism facilities. A major challenge is how to
make agriculture competitive, profitable and an attractive choice for income generation.
Access to land of sizeable proportion to generate sufficient income comparable with alternative sources is
one of the main constraints to development of commercial agriculture. In Cook Islands, land parcels are
generally small with most common parcel size being between 0.25 and 0.5 acres representing 34% of the
total 3,500 parcels. In terms of area, the biggest proportion of land area is made up of parcels in the size
category of 1 to 1.99 acres. This constraint, though related to the land tenure system (and multiple
ownership), is more due to expected opportunities for commercial and residential use of land.
Water is an important requirement for increasing productivity. Increased production and quality of fresh
vegetables and fruit will crucially depend on availability of water. At present water for agriculture is drawn
from the system supplying water for domestic use. This system, it is anticipated, will not be able to meet
the increasing demand for domestic, industrial and agricultural use. It is therefore, highly probable that
agriculture production and particularly productivity and quality of output may be severely affected by
inadequate water supply.
The Cook Islands is a small and environmentally fragile country. In Rarotonga, nearly 70 percent of
land area consists of steep slopes and hills. These hills, if improperly cultivated, risk being eroded and
degraded. In the coastal areas, destruction of the coral reefs, intrusion of salinity through surface and
underground water may become a major concern for agriculture. Control and prevention of
degradation of the hills and the coastal areas is a major challenge and critical for sustainability of the
resource base and long run sustained prosperity of the people.
Cook Islands‟ economic development is constrained by the shortage of labour due to migration of the
population to New Zealand and other countries on account of the dual Cook Islands-New Zealand
citizenship status of its citizens, isolation from foreign markets, limited market access, high costs of
fuel for local production combined with high shipping costs, periodic devastation by natural disasters
and inadequate infrastructure.
4. Options and Opportunities
A considerable local market exists for fresh vegetables, fruits and root crops. An FAO Local Market
Study, implemented in 2006, found that of the NZ$ 24.6 million worth of vegetables and NZ$ 8.5
million worth of fresh fruits sold annually to residents and tourists in Rarotonga, only 13% and 25%
respectively, were produced locally. The higher percentage of locally produced fruits relative to
vegetables reflects the quantities of pawpaw available for the domestic market from the pawpaw
export industry. Twenty two types of vegetables were in demand including: beans, broccoli, cabbages,
chilli, carrots, cauliflower, celery, spring onions, courgettes, cucumber, egg plants, herbs, pumpkins,
corn, lettuce, radishes, spinach and water-cress. Seventeen fresh fruits were in demand including:
grapefruit, lemons, limes, oranges, mandarin, avocado, banana, breadfruit, chestnut, coconut, guavas,
mangoes, melons, pawpaws, passion fruit, star fruit and pineapples. Eight root crops were in demand:
ginger, sweet potato, taro, tarua, cassava and yams.
Key strategic focus thus should consist of:
                   Increased production in the Southern Island Group other than Rarotonga, of fresh
                    and value added products from, root, fruit tree and vegetable crops for the
                    domestic market and potentially, export;
                   Relocation of the Cook Islands Agricultural Research Station out of Rarotonga to
                    one of the other islands in the Southern Group and increased research on suitable
                    species and varieties of vegetables, fruit trees and root crops, as well as, improved
                    appropriate technologies.




                                                    -7-
                             Federated States of Micronesia
Land Area (km2) 700                                   Sea Area/EEZ (million km2) 2.9
Population (No. thousands) 108,300 (2005)             Annual Population Growth (%) 0.2
GDP (US$ million) 242.1 (2005)                        Rural Population (% of total population) 73
GDP per capita (US$) 2,236 (2005)                     Agricultural GDP (% of total GDP) 3 (2001)
Value of Food           2000: 89.2                    Value of Food              2000: 0.31
Imports/Total Ag                                      Imports/Total              2004: 0.43
Exports                                               Merchandise Exports
Information Sources: FAO, World Bank, Asian Development Bank

1. General

The FSM is the largest and most diverse part of the greater Micronesian region and is comprised of
four States, which are, in geographic sequence from west to east, Yap, Chuuk, Pohnpei and Kosrae.
All but Kosrae State include more than one island and each State has considerable autonomy within
the Federation. The total landmass is 438 square miles (702 km2), with a declared EEZ covering over
1 million square miles (16 million km2). The FSM comprises 607 islands with land elevation ranging
from sea level to 791m. Rainfall is extremely high on the high volcanic islands of Kosrae, Phonpei and
Chuuk and can exceed 400 inches a year. The region is affected by storms and typhoons that are
generally more severe in the western islands, and by periods of drought and excessive rainfall
associated with the “El Nino”.

The political set up of the Federated States of Micronesia is unique in that the National Government
with headquarters at Palikir in Pohnpei has very little jurisdiction on the four States. All the four States
are in themselves countries of their own with distinct cultures and languages but agreed to come
together as a one nation under the Compact of Free Association with the United States.

2. The Agricultural Sector

Agriculture has been typified over the last 20 years by a lack of a consistent and agreed vision, and by
failed government investments. Senior public servants and politicians have made policy and
investments in relative isolation, with little or no data, and without reference to the needs and priorities
of either rural communities or the private sector. Recent policies in the FSM have tended to favour
commercial development of agriculture, and less emphasis on the subsistence and semi-subsistence
farming systems and their inherent characteristics.

Traditional subsistence foods have been overwhelmingly replaced by imported foods. Support
services have not targeted traditional agriculture. Most young people are escaping agriculture,
preferring other employments or migration. Commercial agriculture has had some successes in niche
export markets, but products where government has been involved or is active have either largely
failed (pepper, livestock) or continue to require subsidies (copra).

Subsistence farmers tend to sell with a sum of money in mind to meet an immediate cash need. Betel
nut, kava and copra suit this mentality well, being largely non-perishable, with flexible harvesting
times. Conversely vegetable crops, which are currently imported in significant quantities, require more
labour and greater precision in harvesting. Most produce is marketed through supermarkets, however
supplies of local product are limited and erratic.

Arable land in FSM is generally sufficient to underpin food production needs. The exception is Chuuk,
where a combination of high population and limited land means food production capacity is stretched
under traditional farming practices. Chuuk accounts for over 50 percent of FSM‟s population, but has
only 12 percent of the arable land.

3. Major Challenges and Constraints
Access to affordable capital is a constraint. Frequently farmers‟ credit needs fall below the minimum
threshold of finance agencies. Opportunities for capital formation from savings are constrained by
social issues and a shrinking job market. Government budget for agriculture in 2004 demonstrates the



                                                   -8-
lack of support for the sector, with only 1.8 percent of the total allocations being applied to agriculture
in 2004

4. Options and Opportunities

There are opportunities to work with village communities, and to introduce simple but improved
technologies, business understanding and market awareness. Subsistence farmers require, however,
different strategies from commercial farmers. A number of agencies are using a community-based
approach to improve the performance of traditional agriculture. The work by the Island Food
Community of Pohnpei is remarkable and has already gained positive grounds and should be
replicated throughout the four States.

Recent blood and dietary surveys have highlighted very high levels of vitamin A deficiency which leads
to major health complications. In a recent dietary survey in Kosrae, not a single mother or child was
meeting vitamin A dietary needs, but many were eating three times their need for protein. While some
traditional FSM foods are high in beta keratin (bk), the source of vitamin A others such as rice contains
no bk. Taro and the giant swamp taro in particular are very high in Vitamin A

The coconut crop provides the only cash crop option for the people living in the outer islands. The crop
has been heavily subsidized by Government - through copra price support and shipping subsidies,
although subsidy allocations by the national government have dropped by 62 percent since 2002.

Government‟s role is to provide an enabling environment, including a consistent and appropriate policy
framework, secure land tenure, provision of public infrastructure, R&D and effective quarantine and
protection services. The private sector‟s role is to secure markets with quality product, on a consistent
basis and in a way which treats farmer suppliers equitably. One important aspect is to provide farmers
with up-to-date market information, including prices, marketing costs and customer feedback. These
roles cannot be played in isolation. There needs to be a regular dialogue which does not regularly
occur in FSM.




                                                   -9-
                                                  Fiji
               2
Land Area (km ) 18,272                           Sea Area/EEZ (million km2) 1.26
Population (No.) 848,000 (2005)                  Annual Population Growth (%)1.6
GDP (US$ million) 2,975 (2005)                   Rural Population (% of total population) 54
GDP per capita (US$) 3,508 (2005)                Remittances received ($ millions) 24 (2005)
GDP growth             1990: 7.4                 Agricultural GDP (% of total GDP): 15.8
(annual %)             2000: -1.7                Industry GDP (% total GDP): 25
                       2005: 0.7                 Services GDP (% total GDP): 59
Foreign direct         1990: 92                  Aid ($ millions)          1990: 50
investment, net        2000: -18                                           2000: 29
inflows ($ millions)   2005: -4                                            2005: 64
Value of Food          1990: 0.47                Value of Food             1990: 0.17
Imports/Total Ag       2000: 0.61                Imports/Total             2000: 0.16
Exports                2004: 0.77                Merchandise Exports       2004: 0.24
Information Sources: FAO, World Bank, Asian Development Bank

1. General
                                                                                                  2
Fiji is an archipelagic nation comprising about 320 islands with a total land area of 18,300 km and a
                                          2
surrounding EEZ of about 1.3 million km . The group includes two large islands, several medium-sized
islands, and numerous small islands and atolls. Most of the islands are surrounded by fringing and
barrier coral reefs. There are three substantial rivers, a few lakes and some man-made impoundments
where fishing and aquaculture take place, but marine fisheries are predominant.
The largest sector of the economy is tourism followed by agriculture. Sugar exports, a growing tourist
industry as well as garment exports have traditionally been the major sources of foreign exchange.
Gross Domestic Product grew at an average annual rate of just over 2 per cent between 1996 and
2005. Macroeconomic, climatic and political phenomena, notably the coups of 1998, 2000 and 2006
caused negative economic impact. Public sector debt has grown from 37.3 per cent of GDP in 1999 to
51.2 per cent in 2005. The sugar and textiles industries are in sharp decline and the current account
deficit is widening. The current political instability in the country is expected to considerably slow
progress into the immediate future.
2. The Agriculture Sector
Subsistence farming and sugar cane production dominate the Fijian agricultural sector. In 2004,
subsistence provided 38 per cent of the total agricultural GDP, sugar cane 27 per cent, other crops 16
per cent and other sub-sectors 19 per cent.
Sugar production contributes 6 per cent of GDP, 25 per cent of total domestic exports, and employs
around 40,500 people. The major shift in agriculture is the increasing role of cash crops and livestock.
This represents a diversification towards more commercial agriculture as some farmers move out of
sugar.
The loss of forest cover, forest degradation and agro-deforestation is prevalent in Fiji. Most of the
deforestation in the hilly areas has been caused by sugar cane and taro farmers clearing sloping
areas for farming. These areas have experienced soil depletion, soil moisture deficits and decreasing
productivity.
3. Major Challenges and Constraints
The most challenging food security issues for Fiji are sustaining domestic food production levels in line
with food demand and market potential, and continuing the transition from subsistence to commercial
agriculture. Fiji‟s ability to meet this challenge is greatly enhanced by its comparative advantage in the
production of traditional food crops. Although farmers are well versed in growing traditional crops,
further improvements in research and extension can have high dividends, particularly in pest or
diseases control and making farmers aware of unsustainable agricultural practices. Strategically
located roads can open up significant markets for traditional food crops and provide an incentive for
increased production of food crops.

Past interventions by the Ministry of Agriculture to transform the subsistence sector to semi
commercial have been failures. The main cause of such failures have been the adoption of a mode of



                                                 - 10 -
project implementation whereby staff mostly focus on production with limited attention given to
addressing constraints along the entire supply chain. Finance for farming remains a key constraint.
The outreach of rural financial services is limited, because there are insufficient borrowers to make it
viable. The uncertainty over Land Leasing Arrangements is an overriding constraint towards a more
commercial focus. In addition, there is a need for farmers to develop better farm management and
business skills, and to develop and implement business plans for viable enterprises which will in turn
improve access to finance.

Profitable opportunities have been identified for exporting certain high value niche products. Such
products are not new to Fiji. More significant examples are fresh ginger to North America, mangoes to
Japan, taro to New Zealand, eggplant to Canada, coconuts to Australia, organic banana puree to
France, and kava to Germany. However, quality, volume and continuity of supply are seen as
marketing problems. Fiji‟s past experience has shown that high value export markets can not be
developed and sustained with small exporters securing supplies from farmers in an informal ad hoc
fashion.

Marketing problems are prevalent in rural areas and outer islands in Fiji. Marketing networks are
virtually absent or weak, and physical access to markets is constrained and costly because of
inadequate infrastructure. Poor product handling practices and the absence of local cool-stores and
grading and packing facilities lead to severe quality deterioration during the passage from farm to
market. The small size and large number of farms is a constraint to effective communication,
mechanization, technology transfer and marketing. Existing and new farmer groups need to be
fostered and empowered so that they support members‟ needs in a farmer-to-farmer network.

4. Options and Opportunities
Provided the issue of expiring land leases can be satisfactorily resolved, a significant portion of the
existing sugar industry can remain viable in the future, even at world market prices. However this will
require significant, but achievable, reductions in costs. Thus the appropriate policy emphasis should
be on improving the efficiency of the existing industry and not on encouraging large-scale transfer of
lands out of sugar.

Despite the unfavourable future prospects for sugar, and other bulk commodities such as copra,
agriculture has realistic potential to be a lead sector in growth and employment generation. Based on
Fiji‟s competitive advantage relating to climate, location and environment, some product growth
opportunities have been identified. These include: fresh and processed fruit; root crops; spices and
herbs; kava; indigenous nuts, floriculture; non copra coconut products; vegetables; handicraft raw
materials; certified organic products; fresh fish exports; and value added timber products.

Bilateral Quarantine Agreements (BQAs) need to be in place to boost exports. Because of BQAs
negotiated to date, opportunities already exist for the export of crops such as fresh tropical fruit. In this
respect, market access already secured under BQAs are for pawpaw, eggplant, chilli, herbs,
pineapple, breadfruit, and mango to New Zealand; kava to Vanuatu; watermelon, yams, and vanilla to
Tonga; coffee and copra to Papua New Guinea; and pawpaw to Australia.

Solving marketing constraints requires support to the farmers and food industry organisations to
improve product standards and marketing such as post harvest facilities and the establishment of
value added facilities. This would include the establishment of rural marketing centres in critical
locations of the sugar cane belts in Viti Levu and Vanua Levu.

Key strategic focus should consist of:
      Ensuring the sustainable alternative uses of land released from sugar cane, such as increased
production from beef and dairy and other livestock, informal small holder vegetable farms, and coastal
fisheries and aquaculture;
      Providing an enabling environment through developments such as infrastructure as access
roads, and cool storage facilities to facilitate marketing of horticultural and agricultural products;
      Providing support for improved agricultural production on a sustainable basis, especially
through improved irrigation, drainage and reforestation with trees for watershed protection;
      Initiatives to promote the creation of effective farmer organisations particularly the involvement
of youth and women.




                                                   - 11 -
                                               Kiribati
               2                                                              2
Land Area (km ) 726                                Sea Area/EEZ (million km ) 3.6
Population (No.) 92,533                            Annual Population growth (%) 2.5
GDP (US$ million) 98 (2005)                        Rural Population (% of total population) 46
GDP per capita (US$) 1059                          National budget for agriculture 3% (2007)
GDP growth              1990: 2.1                  Agricultural GDP (% of total GDP): 8
(annual %)              2000: 1.9                  Industry GDP (% total GDP): 12
                        2005: 0.3                  Services GDP (% total GDP): 79
Foreign direct          1990:                      Aid ($ millions)        1990: 20
investment, net         2000:                                              2000: 18
inflows ($ millions)    2005:                                              2005: 28
Value of Food           1990: 4.81                 Value of Food           1990: 2.29
Imports/Total Ag        2000: 6.07                 Imports/Total           2000: 1.43
Exports                 2004: 6.19                 Merchandise Exports 2004: 1.39
Information Sources: FAO, World Bank, Asian Development Bank

1. General
                                                                                                     2
Kiribati is an archipelagic nation comprising 33 atolls. Kiribati has a total land area of only 810 km but
                                                  2
with a surrounding EEZ of about 3.5 million km . The country is divided into three widely separated
island groups: the Gilbert Group in the west, the Phoenix Group in the centre, and the Line Islands in
the east. The distance between the eastern and western extremes of the EEZ is over 4,500 km.

Water in Kiribati is scarce and there are no rivers, lakes or other freshwater impoundments.
Groundwater resources are limited and rainfall is light. Natural disasters in the form of strong westerly
winds (November to March) and droughts are common. The atolls and islands are low-lying making
them vulnerable to sea level rise and the vagaries of typhoons.

The population of Kiribati is about 92,500 over ninety percent of which live in the Kiribati Group. South
Tarawa, the capital and commercial centre, accommodates over fifty percent of the total population. In
the five years, 1995-1999, current price Gross Domestic Product (GDP) increased by 21.5 percent,
which reflects an average annual growth rate of 5.0 percent. However, after adjusting for inflation, real
growth in GDP averaged to only 3.3 percent per annum. According to ADB figures, economic growth
slowed to an estimated 0.9% in 2006, while it averaged 2.0 percent a year between 2002 and 2006.

2. The Agricultural Sector

Kribati‟s economy continues to depend heavily on agriculture and fisheries for the sustainable
livelihoods of the people and as well as accounting for the bulk of exports. Kiribati‟s economy is
heavily dependent on the primary sector, agriculture and fisheries accounting for 17.6% of GDP in
1994 and for 21.5% of GDP in 2000. Exports of copra of just over 3000 metric tons in 2002 fetched
overseas earnings of AUS$ 1 million.

A government owned copra mill was constructed in 2002 at a cost of AUS$ 4.1 million to process
copra and export coconut oil. Coconut oil is being exported to Australia in small quantities while copra
mill is supplied to the Government milkfish and poultry farm at Temaiku. The operation is yet to run on
full recovery basis and given the importance of copra to the sustainable livelihoods of the people on
the outer islands, the government has made it a policy to continue to subsidise this industry for the
foreseeable future.

Kiribati relies heavily on imported food. The level of imports reached AUS$ 91.6 million in 2002 while
exports value was only $6.3 million. The imports value for 2002 is an increase of 22% over the 2001
imports valued at $75 million. The corresponding trade deficit therefore in 2002 was $85.3 million.
According to the National Statistics Office, the two main groups of imported items are food and
transportation equipment – each has over 20% share of the total imports.

The traditional farming system in Kiribati comprises mainly the taro (babai) pits and groves of coconut
trees with a dense undergrowth of shrubs including „noni‟ trees. Cultivation of the „babai‟ in itself is a



                                                 - 12 -
sustainable farming system using organic manure. The skills vary from family to family and are
usually considered sacred to the family and are passed from father to son. At present, the
consumption of „babai‟ has greatly diminished made worse by the widespread of the taro beetle way
back in the 70s and there is widespread concern among the people consulted of the disappearance of
the „babai‟ traditional farming system.

The coconut tree on the other hand is the „tree of life‟ for the people of Kiribati and hence why the
continuing political commitment by all governments so far to subsidise the copra price and mill
operations as described above. Copra is certainly seen as an imperative means of „equitably
distributing the fruits of development to the people of Kiribati‟ as in accordance with its National Vision.
There is currently recognition of greater focus on coconut by a national rehabilitation and replanting
programme taking into full account the utilization of the coconut trunk and other coconut by-products

3. Challenges and Constraints

The absence of a clear national policy on food security is seen as a major challenge and early
attention will greatly contribute to the achievements of the various national goals stipulated in the
present National Development Strategies (NDS) 2004-2007. FAO assisted Kiribati in 2002 to
formulate a Strategy for National Agricultural and Fisheries Development: Horizon 2010 for the
Republic of Kiribati. As in many other small island countries, however, the agricultural sector lacks a
sufficient allocation of resources. In the present NDS for Kiribati, there is no specific policy area issue
on agriculture. Nonetheless, agriculture is still the mainstay of the lives of the majority of the people.

The conventional and inherent challenges of atolls, such as Kiribati, are well documented. These
include: poor soil, isolation from markets, scarcity of land and poor infrastructure. The poor soil of an
atoll was improved by the early settlers hundreds of years ago through the „babai‟ pit systems. This
traditional farming system, however, is gradually disappearing being overtaken by a large
consumption of imported food products.

An imperative challenge to be addressed is the emergence of „absolute poverty‟ in Kiribati. The
perception that absolute or significant poverty is not found in the Pacific continues as conveyed in
many development reports may not be fully reflected in Kiribati. Kiribati, with its relatively small land
area, narrow based economy, and rapid urban growth shows significant signs of emergence of urban
poverty as can be observed by the proliferation of squatter areas and an overall deterioration of the
quality of life in Tarawa. According to the UNDP Pacific Human Development Report 1999, Kiribati has
the lowest per capita GDP among the Pacific Member Countries, the highest infant mortality rate after
Papua New Guinea (PNG), and the third lowest human development index (0.515).

There has been significant migration of people from the outer islands to the urban centre of South
Tarawa. The latter now accommodates over 50% of the total population, more than one third of the
total population, which is putting pressure on the land and the services provided in South Tarawa.

There is very limited market outlets for the sale of local food made worse by the lack of processing and
packaging opportunities available to local farmers. The domestic market is thus small with little
potential for economies of scale. Sea and air transport between atolls/islands is inadequate both in
suitability and regularity. Access to major international markets is expensive and hard to arrange.

4. Strategic Options and Opportunities

There is a wealth of indigenous knowledge on viable atoll agricultural production technologies already
available and could be used to support improved agricultural production. A variety of vegetables have
been tested to grow well on the very poor soil of Temaiku. There are also potentials to develop the
coconut industry and produce coconut timber and other by-products, such as virgin oil, coconut juice
and copra meal for livestock feed and organic manure. The pandanus fruit has been identified as one
of the crops to be potentially processed into juice and baby food.

Kiribati is a member of Codex Alimentarius and intends to develop its food standards in line with the
provisions of Codex.




                                                  - 13 -
                                               Marshall Islands

                   2                                                                  2
Land Area (km ) 181                                         Sea Area/EEZ (million km ) 2.1
Population (No.) 63,600                                     Annual Population growth (%) 3.9
GDP (US$ million) 99 (2001)                                 Rural Population (% of total population) 35
GDP per capita (US$) 1817                                   Aid ($US millions) 57 (2005)
GDP growth              1990: 7.0                           Agricultural GDP (% of total GDP): 9
(annual %)              2000: 0.9                           Industry GDP (% total GDP): 19
                        2005: 3.5                           Services GDP (% total GDP): 72
Information Sources: FAO, World Bank, Asian Development Bank

1. General

The Marshall Islands consists of 29 low-lying coral atolls and five islands spread over a sea area of
over 750,000 square miles, in the Central Pacific. There are more than 1,200 islands and islets with a
                               2                                             2
total dry land area of 180 km . Inhabited islands and atolls occupy 156 km or 15,600 hectares. The
islets and islands have a mean elevation of 2 meters above sea level, making them particularly
vulnerable to sea level rise and the destructive forces of tropical storms.

The soils are sandy and alkaline and lacking in many essential elements, particularly nitrogen,
phosphorus, potassium and calcium. Lack of organic matter and calcium makes water-holding
capacity very low.

In 1992, the GDP was estimated at approximately US$80 million (US$1,540 per capita), USA funding
accounting for about 65%. In 1999, GDP was US$97 million, with approximately 80% accounted for by
US funding. And in 2001 GDP increased to US$99 the bulk of which come from the US Compact
funding. GDP is dominated by the service sector, mainly supported externally. Domestically
generated economic activity is based upon the agriculture sector.

Increasing urbanization coupled with high wage levels that do not reflect domestic productivity,
generates a high level of consumption. In turn the high level of consumption is reflected in very high
imports and a substantial deficit in the balance of trade. In 1997, total imports were valued at $80.2
                                                   3
million compared to exports of US$16.7 million . About US$25 million or 31% of the total import bill
was for food. For the most part, the trade deficit is covered by external funds.

2. The Agricultural Sector

Agricultural production is relatively small but important to the livelihood of people and the economy of
the Marshall Islands. It comprises food crops, small livestock and one cash crop, copra. Land for
agricultural production is limited. Less than one half of the total land area is considered as potential
agricultural area. Use of available land for housing, infrastructure and US military needs competes
with that for cropping.

A typical landholding (weto) is a strip of coconut grove that stretches across an atoll from the ocean to
the lagoon. Near the dwelling the coconut canopy would be accompanied by a few breadfruit, papaya,
banana and pandanus trees. Within the coconut grove there may be a taro pit. Room may be found to
house a few poultry or pigs. Very few wetos include area for vegetable production and there is no
commercial production of food crops. Since early this century, coconuts (copra) have provided the
main household income. This is still the predominant pattern although the role of copra is weakening
and indigenous staples now combine with increasing amounts of imported food.

Breadfruit is the most widely available starch food and regularly consumed. Production of sweet
bananas varies between atolls, with Namdrik and Ebon atolls having the greatest relative production.
Production of taro and sweet potato has fallen dramatically because of increased access to imported
staples, which are more convenient for preparation and storage. Arrowroot, the traditional staple of the
atolls, has virtually disappeared from use.

3
    SPC Selected Pacific Economies – a Statistical Summary (SPESS) 1997.



                                                          - 14 -
3. Major Challenges and Constraints

The country is isolated from overseas markets making transport costs high and undermining the
competitiveness of agricultural products that have potential for export. Many of the outer-atolls/islands
are isolated from the markets at the urban centres. The domestic market is small and undeveloped,
resulting in volatile prices for local produce, limited opportunities to diversify production, inefficiencies
and diseconomies of scale in production, processing and marketing. Local market, air and sea
transport infrastructure is generally undeveloped.

While the land tenure system has ensured equitable access to the land for food production, the small
size of the farming land constrains commercial agricultural development. Typical of the atolls, the soils
are generally thin, sandy, alkaline and lacking in minerals (particularly nitrogen, phosphorus,
potassium and calcium) and micronutrients essential for plant growth. Low and poorly distributed
rainfall combined with the poor water retaining properties of the soil limits the range and quantities of
crops that could be cultivated.

4. Options and Opportunities

Like most Micronesian countries, Marshall Islands has a very strong traditional base reflected in the
Iroij and alap kinship and land tenure system. A small market for farmers is located at the main
downtown area. Majuro and Ebeye are the two main urban markets. Surrounding them are islands
that are located closely and have good soils on which more intensive agricultural production can be
undertaken.

The land tenure system can provide easy access to land for farming. All land in the Marshall Islands is
owned by Marshallese individuals. Land can commercially be farmed, provided it obtained the
                                                           4
necessary approval from the three current title holders (iroij, alap and dri-jerbal). Government may
lease land from the title holders and sub-lease it out. In addition, the social system facilitates equitable
distribution of food and material wealth, and caring for the less fortunate members of communities.

For what it concerns food safety, Marshall Islands does not have any food standards and is not a
member of the Codex Alimentarius.




4
 Ownership rights to land are held by the hereditary chief or iroij (or leroij if female). The iroij bequeaths custodial rights to a
particular lineage called alap. Both the iroij and alap rights are inherited through the female line. User rights are held by all
members of the lineage who stand to inherit the alap position. These claimants known as dri-jerbal or workers, may or may not
actually use the land holding.



                                                              - 15 -
                                               Nauru

               2                                                     2
Land Area (km ) 21                                Sea Area/EEZ (km ) 320,000
Population (No.) 10,065                           Annual Population growth (%) 1.0 (2005)
GDP (US$ million) 377 (1996)                      Rural Population (% of total population) 100
GDP per capita (US$) 1400                         Agricultural GDP (% of total GDP) 10.3
Value of Food           1990:                     Value of Food           1990: 0.03
Imports/Total Ag        2000:                     Imports/Total           2000: 0.02
Exports                 2004:                     Merchandise Exports 2004: 0.03
Information Sources: FAO, World Bank, Asian Development Bank

1. General
                                                                             2
Nauru is a single, raised coralline island with a land area of only 21 km but with an EEZ which
                         2
extends over 320,000 km . Nauru lies 42km (26 miles) south of the equator.

Phosphate mining was the main economic activity, with production running at around 2million tons a
year until the early 1980s, after which it declined and then ended in 2003. Phosphate exports restarted
in September 2006. According to ADB, GDP growth in FY2006 (ended 30 June 2006) was estimated
at 4.5%, primarily reflecting investment in transport and mining. Gross national income was boosted by
A$33million of aid in FY2006, of which A$20million came from Australia. Other inflows included
A$7million for a refugee processing center, A$7million in fishing licenses issued to foreign fleets,
A$6million in repatriated capital, and A$1.7million under a land rehabilitation settlement. Nauru uses
the Australian dollar as its currency, and imports almost all its basic requirements, mainly from
Australia.

2. The Agricultural Sector

Having been dependent on imported food for over a century of phosphate mining, farming and fishing,
subsistence or otherwise were no longer a mainstay of the Nauruans everyday life. It was
nonetheless very encouraging to observe many families now growing home gardens nearby their
homes. There were also a number of locals starting piggery and small poultry farms. The agricultural
sector has certainly featured very well in the National Sustainable Development Strategy (NSDS) 2005
– 2015 of Nauru.

The only fertile areas are in the narrow coastal belt where there are coconut palms, pandanus trees
and indigenous hardwoods, and the land surrounding Buada lagoon, where bananas, pineapples and
some vegetables are grown. Some secondary vegetation grows over the coral pinnacles. Very little
crops are grown; most food items and much of the drinking water are imported. Limited varieties of
fruit trees and vegetables are grown on a very small scale for home consumption.

The Government hopes to develop a local fishing industry. Although there is virtually no tourism at
present, there is potential to develop such an industry. A colourful reef dotted with WWII sunken
wrecks surrounds the island, the waters make great diving and sport fishing is good.

3. Major Challenges and Constraints

A century of mining has stripped four-fifths of the total land area. The island is surrounded by a coral
reef, exposed at low tide and dotted with pinnacles. The reef is bounded seaward by deep water,
inside by a sandy beach. Landward from the beach is a 150–300m wide fertile coastal strip. With
porous soils and uncertain rainfall, this area offers limited opportunity for expanded agricultural
production.

Land tenure is the most critical consideration relating to the practicality of implementing programs for
the rehabilitation and or development of resource (agricultural) based initiatives. Settlement problems
are exacerbated by a land tenure system that is made up of some 630 irregular sized and shaped
pieces of land, some less than a metre wide and only a few square metres in area, which do not
appear to relate to any ordered plan or access rights. The land problem is further aggravated by a joint



                                                 - 16 -
ownership system where many individuals hold “a share” in a piece of land. As well, a consensus has
to be achieved among owners before development can proceed.

Similar issues relate to water rights. Water is owned by the owners of the land upon whose land the
opening to the well is found. The water recovered from the well belongs to the land owner who can
allow or not others access to the well. The main consideration is access. As a result, the development
of tube wells (bores) in order to provide a reliable water supply will be the subject of ownership
disputes similar to those relating to land.

The area of land potentially available for agricultural purposes is small. Availability and sustainability is
constrained by plot size, soil type, proximity to housing and other alternate use. This is further
constrained as a result of land tenure conflicts and water rights.

Although estimates can vary depending upon the criteria used, there are approximately 100 ha of
vacant land, which could be used for agricultural purposes. The 14 ha around the Buada lagoon is
perhaps the most fertile. In comparison some areas have already been subject to building, and will
require rehabilitation (removal of concrete, road gravel, building rubbish, car bodies, rusting and
derelict machinery, other unused buildings and obstructions).

Land is fragmented and often polluted. It is relatively infertile, has poor water holding capacity and
narrow available water range. Irrigation, if available, is rudimentary and will rely on a potentially
brackish underground water resource or a fragile rainwater collection system. The use of fertilisers and
composting is not common.

Rainwater catchments are used to supplement bore water although frequent droughts make
dependence on this source risky for commercial operations. FAO recently completed a study into the
feasibility of setting up a hydroponics system for the production of vegetables. Insufficient availability
of water was identified as one of the most limiting factor.

4. Options and Opportunities

A recent Food Security Assessment for Nauru, undertaken by FAO and AusAID, made the following
concluding remarks: “Quantification of the level of supplementation of the food requirements by local
activities as food gardens is not possible, given that this practice is uncommon, and will be limited by
land availability and water rights. Measures to alleviate these problems include education programs
within schools to improve awareness of the necessity to produce local food, mobilization of community
groups to train the families for food production activities, and the provision of propagation materials for
home garden activities. A food deficiency crisis will occur within the next year(s) unless appropriate
arrangements are put in place”.

In line with the above conclusion, small-scale production of vegetables and tree crops can be
encouraged and effort to improve productivity made, targeted at the coastal strip. Furthermore, a
farming system based on growing suitable crops on medium largely comprising compost in - for
example, half drums and wooden boxes - can be piloted to provide nutritious base food and to help
get the population into a self help mode that could underpin sustainability.




                                                   - 17 -
                                                Niue

               2
Land Area (km ) 259                              Sea Area/EEZ (million km2) 0.39
Population (No.) 1,707 (2002)                    Annual Population Growth (%) -3.1
GDP (NZ$ million) 14.2 (2002)                    Rural Population (% of total population) 68
GDP per capita (NZ$) 8,318 (2002)                Agricultural GDP (% of total GDP) 34
Value of Food           1990: 17.4               Value of Food             1990: 12.7
Imports/Total Ag        2000: 1.60               Imports/Total             2000: 1.27
Exports                 2004: 1.91               Merchandise Exports       2004: 1.88
Information Sources: FAO, World Bank, Asian Development Bank

1. General

Niue Island lies 200 miles east of Tonga, 300 miles south of the Samoa and 600 miles west of the
Cook Islands. Although a single island, it is 8,000 acres larger than the combined area of all the
islands and atolls of the Cook Islands Group. The island is 11 miles wide by 13 miles long, with a
coastline of 50 miles encompassing an area of 64,900 acres.

Niue is an uplifted atoll, the largest in the world. Its centre - the site of a former lagoon and now a
plateau of gently undulating relief - is completely surrounded by a narrow rim, the “Mutalau reef”, and
then sloping down a moderately steep incline to the sea shore. The soils are characteristically thin,
with exposed coral-reef limestone outcrops on arable land almost everywhere.

Since the 1970s, Niuean citizens have held dual Niue-New Zealand citizenships and thus
depopulation of the country has been an ongoing phenomenon for the last 30 years. Economic
development heavily sponsored by the New Zealand Government has traditionally focused on
agriculture and associated processing. Government policy has consistently aimed at maintaining and
developing a permanent living community. A number of constraints and adverse events, however,
have contributed to disrupting development and weakening the economy. These included the
continuing depopulation of Niue, severe disruptions to airline (currently there is one Air New Zealand
flight per week) and shipping schedules, and extreme events such as Cyclone Ofa in 1990 and more
recently, the most destructive ever, Cyclone Heta in 2004.

2. The Agriculture Sector

Subsistence farming is the predominant activity of the Niue residents. The country‟s major export
commodity is taro and a fledging vanilla industry is being nurtured with minor exports made to New
Zealand. The main overseas market is New Zealand although small quantities of taro have been
exported to American Samoa.

Agriculture in Niue is based on shifting cultivation normally with 8-10 year periods of fallow between
crops. Where the fallow period has been repeatedly reduced to 3-5 years, fertility had declined so
markedly that soils were no longer capable of producing worthwhile crop yields.

Planting taro is a year round activity. Bananas are planted mainly from August, the end of the dry
season to the end of December. Sweet potatoes and yams are planted mainly after Christmas
although some families prefer to plant in September. Taro and bananas are harvested throughout the
year. The main breadfruit season is from February to April.

The total volume and value of Niue‟s exports are difficult to calculate, as a substantial portion is made
up of parcels sent on a private basis. The annual value is estimated to be in a range of NZ$200,000 to
350,000 between 2001 and 2005 and about 90% are from the export of taro to New Zealand. Between
2001 and 2005, value of imports exceeded value of exports by NZ$ 4.1 million.

Traditionally women‟s role in the household excludes agriculture. However they now increasingly play
a supporting role to men particularly in planting, harvesting and marketing. There is an increasing
trend of women involving directly in the production of newly introduced commodities vanilla and kava.
Many of the current growers of vanilla are women.



                                                 - 18 -
3. Major Challenges and Constraints

Like other small island states with small populations, Niue faces the challenges of a small local
market, lack of scale, geographic isolation from overseas markets, transport and post harvest
problems, brain and labour-force drain and lack of effective and efficient services. And like other small
island states in the Pacific, Niue agriculture confronts significant risks associated with natural disasters
in cyclones and droughts. Niue‟s population has been declining from 5,200 in 1970 to 1,990 in 2000.

The departments of agriculture and fisheries have restructured a number of times, drastically reducing
their capacity. Of particular significance was the loss of critical mass of professionals necessary to
undertake effective research work.

Niuean soils are generally shallow, interspersed by coral rock outcrops, moderate to high alkalinity
and deficient in potassium, nitrogen and zinc. These limitations have made long periods of fallow
between crops, necessary. Gross misuse of these fragile soils in the past has resulted in vast tracts of
land being turned into “Niuean desert lands”.

Niuean soils are free draining and the clays are only moderately retentive of moisture, drain quickly
and dry out rapidly. When rainfall falls below four inches per month for two or more successive months
all plants other than a few deep-rooted species are markedly affected. Droughts occur frequently and
have negatively affect food security and the continuity of agricultural export.

The local market is made up of less than 2,000 persons with perhaps no more than 200 under fully
paid employment. Export of agricultural produce is constrained by the infrequency, unreliability and
expensiveness of shipping and airfreight.

4. Options and Opportunities

In line with the NISP, the highest priority in the strategy for developing Niue agriculture and forestry is
the sustainability of the production system and prevention of environmental degradation. Particular
attention should be given to prevent destruction of virgin forests and pollution of the water table and
coastal areas by animal wastes, pesticides and fertilizers. Niue needs to maintain her status of relative
freedom from exotic pests and diseases of plants and animals. Depending on one crop, taro, as staple
and to earn foreign exchange earnings puts Niue‟s food security and economy in an insecure position.
Accidental introduction of leaf blight or of the taro beetle would devastate the economy. Root crops
other than taro, specifically yams, wild yams and giant taro have good potential as alternative staples
and export commodities to New Zealand.

There is good potential for enhancing Niue‟s coconut based farming system and home gardens by
incorporating fruit trees and other crops. Growing fruit trees (local and introduced species and
improved varieties) and vegetables for home consumption and income generation will potentially
strengthen food and nutrition security. Adding pandanus to the agroforestry mix would facilitate
women‟s handicraft making.

Niue is being supported by NZAID in its effort to expand the production and marketing of vanilla and
Noni. A national vanilla industry committee has been established and an Organics & Fair Trade
Association is in place which should facilitate certification of vanilla and noni for export. The Reef
company has a noni farm in excess of 100 acres and a modern noni processing facility and plant.
There is good potential for a commercially viable noni industry being established on Niue.




                                                  - 19 -
                                                Palau

               2                                                       2
Land Area (km ) 487                                Sea Area/EEZ (km ) 600,900
Population (No.) 19,900 (2005)                     Annual Population growth (%) 0.8 (2005)
GDP (US$ million) 143.2 (2005)                     Rural Population (% of total population) 23
GDP per capita (US$) 7,196 (2005)                  Aid ($ millions) 23 (2005)
GDP growth             1990: -6.4                  Agricultural GDP (% of total GDP): 3
(annual %)             2000: 0.3                   Industry GDP (% total GDP): 19
                       2005: 5.5                   Services GDP (% total GDP): 77
Information Sources: FAO, World Bank, Asian Development Bank

1. General
The 343 islands of the Republic of Palau are diverse in geological origin and include volcanic, low
platform, high platform, and atoll types. The Republic includes the islands of Koror (the administrative
centre and capital), Babelthuap (the largest island in terms of land mass, making up 78% of Palau‟s
land area), Angaur, Peleliu and several other coral outer islands. The westernmost islands of Palau
are closer to Indonesia that they are to Koror, which comprises only 4% of the land area but is home
to more than 70% of the population.

Traditional life is organised by matrilineal clans. Men and women had strictly defined roles. A Council
of Chiefs governed the villages, while a parallel Council of Women held an advisory role in the control
of land, money and the selection of chiefs. While women were caretakers of their homes and families,
they also carry the responsibility of educating their children about Palauan traditions and culture,
ensuring the continuity of the village or clan.

2. The Agricultural Sector

Over the past 25 years Palau‟s economy has grown rapidly from a GDP estimated at US$14.5 million
in 1975 to US$143 million in 2005. Along with this growth has come a significant shift in the
composition of the economy away from primary production towards services. Agriculture and fisheries
constituted in 2005 3.1% of the economy (down from 25% in 1990) while services constitute 76.9% of
the economy.

Under-representation of informal production greatly complicates analysis of agriculture productivity. A
1996 survey placed the value of the informal sector (consisting primarily of agricultural products) at
US$5 million or twice the value of agricultural products recorded in official economic statistics. This is
manifested by the extensive sale of local food in restaurants and by the roadsides as well as the
numerous taro fields all around the islands of Koror and Babelthuap. Despite this, statistical measures
clearly demonstrate that agriculture is declining in importance in comparison to other economic
sectors.

Today, remnants of the traditional system still remain although less than three per cent of land is now
under agro-forestry production. An additional one per cent of land is estimated to be under non-
traditional cultivation (e.g. without tree cover). Virtually, all mature rural women and many urban
women produce some of their household‟s food needs through cultivation of a garden or gardens.
Typically, a woman will have one or more taro gardens and at least dry land garden for tapioca.
Although traditional methods of composting and mulching are still used, imported agricultural
chemicals are also in use. Most crops produced in this informal economy are used for family food and
customary exchange. Only small volumes reach the market and still smaller volumes are reflected in
official economic statistics.

Agriculture in Palau appears to be entering an „extended dualism‟ phase. That is, crops are produced
for subsistence and for sale in typical dual-economy mode, but traditional crops of importance to both
social activities and subsistence, principally taro, are also now often produced with the assistance of
hired, foreign labour.

Subsistent crop production is the predominant agricultural activity with the main crops being taro,
cassava, sweet potato, banana and coconut. Betel nuts and betel pepper leaf are also commodities of



                                                 - 20 -
considerable importance. „Backyard‟ chickens and pigs are also important. Commercial agricultural
activity is limited.

3. Major Challenges and Constraints

An important reason for the continuing decline of agriculture is that with few exceptions the cost of
local production exceeds the cost of equivalent imported foods. This is especially true with staple
crops such as taro, tapioca and sweet potatoes, which cannot compete against imported rice or
flavour. It is also the common view, especially working mothers, that local food takes considerable
time to prepare compared to rice.

Other contributing factors include: the changing roles of and expanding opportunities for women,
Palau‟s traditional agriculturists; shortage of agricultural labour especially in the rural areas; changing
attitudes among young Palauans who view agriculture as a livelihood option of “last resort”; land
tenure disputes and limited access to prime agricultural land.

The current market system is cumbersome and problematic. Little information is available about
returns from agriculture and fisheries, nor is there any provision of formal market information e.g.
production and price trends. There has also been little or no thorough investigation into export market
potentialities.

The other major constraints on development of agriculture in Palau relates to human resources.
Agriculture is considered to have low status and be typified by low returns. Palau is seriously lacking in
agriculture professionals. A very important challenge that must be addressed as quickly as possible is
the National Market for Farmers that is presently stalled. The project was approved a while ago and
funds were secured including the land, however the facility has not been constructed.




                                                  - 21 -
                                      Papua New Guinea

               2                                                              2
Land Area (km ) 461,690                            Sea Area/EEZ (million km ) 3.1
Population (No.) 5.9 million (estimate 2005)       Rural Population (% of total population) 81
Annual population growth (%) 2.8 (2005)            Remittances: $US 16 million (2005)
GDP (US$ billion) 4.7 (2005)                       National Budget for Agric. Sector 3% ( 2007)
GDP per capita           1990: -3.0                Agricultural GDP (% of total GDP): 42
(US$) 796 (2005)         2000: -1.2                Industry GDP (% total GDP): 39
                         2005: 3.3                 Services GDP (% total GDP): 19
Foreign direct           1990: 155                 Aid ($ millions)        1990: 412
investment, net          2000: 96                                          2000: 275
inflows ($ millions)     2005: 34                                          2005: 266
Value of Food            1990: 0.77                Value of Food           1990: 0.14
Imports/Total Ag         2000: 0.45                Imports/Total           2000: 0.07
Exports                  2004: 0.47                Merchandise Exports 2004: 0.07
Information Sources: FAO, World Bank, Asian Development Bank

1. General

Papua New Guinea (PNG) comprises the eastern half of the island of New Guinea in the western
Pacific Ocean, several large volcanic islands and some 600 small and scattered islands to the east
and north in the Bismarck and Solomon Sea. The country is richly endowed with natural resources,
but exploitation is constrained by the rugged terrain and the high cost of developing infrastructure. The
topography of Papua New Guinea is among the most rugged in the world, with altitudes of over 4,000
metres. Large geographical diversity exists with offshore islands, lowland forests and extensive
marches, dry savannah and temperate highlands. Some 90% of the country‟s area is classified as
forests and woodland.

PNG has a diverse and complex sociology, with about 800 distinctive cultures and languages. The
2000 census gives the total population of Papua New Guinea as 5.2 million with over 80% of the
population living in rural villages. PNG has a rapidly increasing population. Since1966, the average
rate of population growth has been about 2.5% per year. There are an estimated 800,000 school
leavers in 2007 with few opportunities for formal employment.

Since independence in 1975, the PNG economy has been characterized by large fluctuations in real
growth rates. The marked volatility in growth rates reflects changes in international commodity prices,
macro economic policy and past impacts of the Bougainville crisis. Since Independence, the
contribution of agricultural, forestry and fisheries products to GDP, in current terms, has declined from
a high of 36.7% in 1977 to 26.7 % in 2003. Recent macroeconomic performance has benefited from
relative political stability, sound macroeconomic management, and favorable commodity prices.

Agriculture is the dominant economic activity in Papua New Guinea, providing livelihood for about 85%
of the total population, either through subsistence agriculture or the cultivation of cash crops.

Forestry contributes less than crops to rural livelihoods, but is the second largest foreign exchange
earner after mining. Income from the forestry sector, almost completely from round log exports, has
been nationally significant since the 1980s. However, unsustainable forest harvesting levels and
practices over more than 30 years mean that commercially-accessible natural forests will largely be
depleted by 2015.

Mining represents a substantial part of the country‟s economy, generating about a quarter of the GDP.
Major exports include oil, gold, copper ore, logs, palm oil, coffee, cocoa, crayfish, prawns. Agricultural
exports (K1, 083 million in 2003) constitute about 14% of total exports. PNG maintains a positive
balance of trade. Total imports in 2003 were valued at K4331 million of which rice imports were K219
m and meat imports K141m.




                                                 - 22 -
Domestic food production is PNG‟s most important industry, with the country enjoying an exceptionally
                                                                                      5
high level of self-sufficiency in staple food production. Bourke and Vlassak (2004) estimated that 4.5
million tonnes of staple foods are grown in PNG each year, that is, a little more than one tonne every
year for every rural villager. They valued this production at K2850 million in 2004, based on the cost of
obtaining the energy equivalent from imported rice. Sweet potato is by far the dominant staple. Using
                                                               6
data from the 1996 PNG Household Survey, Gibson (2001) estimated that sweet potato accounts for
26.7 % of the calories provided by all food.

According to ADB projections, poverty has been increasing at an alarming rate in recent years. The
proportion of poor living on less than US$1 a day is estimated to have increased from 24.6% in 1996
to 39.1% in 2003. Meanwhile, general development continues to be hampered by poor national peace
and order situation.

2. The Agricultural Sector

The agricultural sector is made up of a number of sub-sectors: food crops, industrial tree crops,
livestock and other cash crops. Food crop production is dominated by smaller semi-subsistence or
semi-commercial farm households. Tree crops are produced by both smallholders and larger
commercial estates that maintain their own production base as well as purchasing raw materials from
smallholders

There are four main smallholder farming systems: (i) sago and taro-based systems in the wet
lowlands; (ii) yams, bananas, and cassava-based systems in the dry lowlands; (iii) taro and sweet
potato-based systems in the highlands and its fringes; (iv) sweet and Irish potato systems in the high
altitude valleys. Smallholders have traditionally accounted for most of the output of the main export
and staple agricultural commodities, namely coconut, cocoa, coffee, rubber, oil palm, cardamom,
chillies and pyrethrum. Tea is the only export crop, which is almost entirely grown on estates. The
principal crops for domestic consumption include sweet potatoes, banana, taro, yam, cassava,
sugarcane, maize and groundnut. Virtually all smallholder crops are rainfed, intercropped, have low
input levels and low productivity. Food crops account for more than 50% of total agricultural output, of
which about 25% of production is marketed.

Low income urban households face widespread problems of access to food of adequate quality at
affordable prices. In large measure this reflects inadequacies in the produce marketing system and
insufficient cash income, rather than a shortage of food. There has been only limited development of
the value adding food processing sector High value food crops can compete effectively with imports in
the domestic market, provided key marketing constraints are effectively addressed. However, these
products generally cannot compete on export markets. Trade statistics show that PNG has no fresh
produce exports. This might be considered surprising given the superior agronomic conditions
available for a range of fruit and vegetables. However, the absence of horticultural exports can be
explained by three key factors: an unfavorable fruit fly status; no apparent comparative advantage in
the export of fresh fruit and vegetables; a strong comparative advantage in the export of traditional
                       7
tree crop commodities .

3. Major Challenges and Constraints

Major challenges facing PNG in increasing productivity and improving food security are: improving the
research, extension and information systems and the human resource capacity to help small farmers
to participate effectively in income generating agricultural activities in their respective communities.
This would help reduce the marginalization of the rural poor and reduce urban drift. Poverty is the
biggest threat to food security in PNG with isolated and marginalized groups being the most
vulnerable in their access to adequate quantities of nutritious food. An estimated 29% of the
population are undernourished and nutrient deficiencies are reflected in high recorded levels of
anaemia in some regions (Health Department National Micronutrient Survey 2007). Forty percent of

5
  Bourke R.M and V. Vlassak. 2004. Estimates of Food Crops Production in Papua New Guinea. Rice Development Policy
2004-2014.
6
  Gibson, J. (2001). The Economic and Nutritional Importance of Household Food Production in PNG. In RM Bourke MG Allen
and JG Salisbury (eds). Food Security for Papua New Guinea. Proceedings from ACIAR Conference PR099.
7
  Andrew McGregor Special Products and Special Safeguards Mechanism: The Papua New Guinea Country Study, ICTDS
November 2006.



                                                        - 23 -
rural children are stunted (low-height-for-age) due to malnutrition compared to 20% in urban areas.
Serious child malnutrition due to protein and energy deficiencies exist in Sandaun, East Sepik,
Madang, Morobe, Western, Central, Milne Bay, Eastern Highlands and Gulf Provinces A study of the
spatial pattern of child growth in PNG found that cocoa and coffee were associated with the best child
                                                           8
growth, as were fish and food sales (Mueller I2000 p. 414) . None of the major cash crops grown by
small holders in PNG were associated with poor child growth. Rather child growth significantly
improved with increasing incomes from cocoa and coffee.

Some key constraints to developing the agriculture, livestock, forestry and fisheries sectors are:
    The poor state and high costs of transport and communication.
    Lawlessness in rural areas and existing land tenure system prevents villagers from working
      gardens and also increases costs particularly for plantations, buyers and processors;
    Lack of affordable finance for investment and working capital for small farmers, traders and
      wholesalers.
    Poor public service terms and conditions are disincentives to retaining high quality and
      experienced professional staff in rural areas;
    Dysfunctional service deliver systems with widespread confusion over functional (who does
      what) and financial (who pays for what) responsibilities across the three levels of government
      (National, Provincial and Local)
    Weak linkages between farmers, extension and research;
    Weak market systems and linkages
    Unstable yields as a consequence of increasing soil erosion, declining soil fertility, increasing
      disease and pest pressure;
    Lack of an effective government inspection and monitoring system to ensure both domestic
      and export product quality meet relevant standards

4. Options and Opportunities

Consistent with the goals and commitments of the World Food Summit, PNG intends to pursue a dual
track approach, which offers the best option for fostering agricultural development. Such an approach
requires: creating a positive environment for increased production on the cash (tree) plantations; and
addressing the needs of the smallholder sector, which is still the backbone of PNG agriculture. The
first requires maintaining macro-economic stability and a positive policy environment, reforms, trade
interventions and infrastructure. The latter requires a systems approach for upgrading agricultural
services, especially for an improved and more adequate research and extension. Based on
participatory analyses of existing farming systems in the different agro-ecological zones, constraints,
potentials, options and related risks should be identified and taken as the basis for recommendations
towards sustainable agricultural development and resource management.
         The NADP (2007-20016) identifies the following key priority areas and programmes:
      Development of an effective national agricultural research system; packaging of technologies;
         introduction of NARES; improve research extension linkages; and human resources
         development
      Promote economic production of food and horticultural crops, for domestic consumption and
         for exports in crops that PNG has competitive advantage. Down stream processing will be
         promoted for value
      Mobilize the population in the various production areas, to increase on the productivity and
         production of tree and industrial crops. This will be achieved through; rehabilitation of
         plantations, planting of new plantations / farms, promotion of nucleus estates where feasible,
         organizing farmers into cooperatives for production and marketing purposes, promote access
         to credit and markets and encourage down stream processing. The tree crop sector will
         continue to play an increasing role in income and revenue generation for the country.
      Increase production of livestock, apiculture and aquaculture for imports replacement and to
         provide affordable quality nutrition to Papua New Guineans. This would entail rehabilitation of
         breeding centers, introduction of quality breeds, promotion of small livestock, promotion and
         production of local stock feed and draught animal power for cultivation and transport



8
 I Mueller. The Spatial Patterns of Child Growth in PNG. In RM Bourke, MG Allen and JG Salisbury (eds.). Food Security for
Papua New Guinea. Proceedings from ACIAR Conference PRO99.( 2002).



                                                         - 24 -
   Promote spices and minor crops economic potential as alternative export crops; through
    capacity building, supply of quality planting materials and post harvest quality
    management/control and improved marketing opportunities.
   Strengthen the regulatory and technical services include agricultural quarantine, land use
    planning and development and codex and food safety.
   Promote equal participation of women in all aspects of agriculture and livestock development,
    so as to improve the status of women through economic development




                                           - 25 -
                                              Samoa
               2
Land Area (km ) 2,934                           Sea Area/EEZ (million km2) 120,000
Population (No.) 183,746 (2004)                 Annual Population Growth (%) 0.6
GDP (US$ million) 390.28 (2004)                 Rural Population (% of total population) 79
GDP per capita (US$) 2,253 (2005/06)            Remittances: $US 45 million (2000)
GDP growth (annual     1990: -4.4               Agricultural GDP (% of total GDP): 14
%)                     2000: 7.0                Industry GDP (% total GDP): 27
                       2005: 5.4                Services GDP (% total GDP): 59
Foreign direct         1990: 7                  Aid ($ millions)          1990: 48
investment, net        2000: -2                                           2000: 27
inflows ($ millions)   2005: -4                                           2005: 44
Value of Food          1990: 2.05               Value of Food             1990: 1.80
Imports/Total Ag       2000: 4.70               Imports/Total             2000: 1.37
Exports                2004: 5.87               Merchandise Exports       2004: 2.21
Information Sources: FAO, World Bank, Asian Development Bank

1. General
Samoa consists of two dormant volcanic islands – Upolu and Savai‟i – together with a few smaller
                                                              2
adjacent islands, whose total land area is just below 3,000 km . The country is vulnerable to
devastating storms and cyclones.

Agriculture remains the backbone of the Samoan economy. Two thirds of households engage in some
form of agricultural activity, a mixture of subsistence and commercial agriculture. Many wage-earning
households also engage in supplementary subsistence production. The fisheries sector has been the
leading foreign exchange earner for some time, through returns from sale of tuna to the canning
operations in American Samoa.' Contribution of agriculture to GDP has trended upward on average
2.6% per annum over the period 1998 to 2005 at current prices. During the same period, the fisheries
sector‟s contribution to GDP had negative trend at -0.3% and manufacturing 0.5%.

The manufacturing sector processes mainly agricultural products. Tourism is an expanding sector,
accounting for 15% of GDP; about 85,000 tourists visited the islands in 2000.

2. The Agriculture Sector

About 80% of the land in Samoa is held under customary tenure and about 70% of all land is arable.
The land use pattern is a blend of two farming systems where subsistence village cropping (taro,
bananas, other root crops, mixed vegetable gardens and a variety of minor crops) has had a
plantation cropping system (coconuts, cocoa) imposed upon it since European contact. These crops
give the production system much of its flexibility. Samoa‟s generally rocky and steep landscape limits
mechanisation.

Coconut-derived products continue to be important for the economy. With the international copra price
remaining at floor levels for extended periods, motivation for replanting of senile trees and
maintenance of productive trees has been low. The coconuts‟ value as an important component of the
local diet however means that special effort should be made to ensure sufficient replanting and new
planting are maintained. The need to further diversify coconut products is also important and is
recognised by private sector. Cocoa production is geared mainly for processing for the local market. A
growing exotic fruit production industry has been successfully developed for local consumption but
potential for export exists. A small HTFA plant has supported the establishment of papaya and
breadfruit export industries and vegetable growing for local consumption and export continues.
Expanding the volumes of these exports require substantial increase in the capacity of the HTFA
treatment plant.

Livestock development has always been an import substitution strategy as well as to serve customary
obligations. Government has been the main source of beef, dairy and pig breeding stock. The size of
the national stock of these animals has frequently had to be built up by imports. The importation and
successful establishment of the Fiji Fantastic sheep in Samoa gives hope for increased income
generating opportunities and improved food security for the Samoan population.



                                                 - 26 -
3. Major Challenges and Constraints

The most challenging food security issues for Samoa towards 2010 are sustaining domestic food
production levels in line with food demands (import substitution) and market potentials, increasing the
productivity and returns to subsistence and commercial agriculture (diversification and intensification),
the rising volume and prices of poor quality and nutritionally inferior food imports, and increasingly, the
existence of environmental degradation associated with poor land management practices
(deforestation, soil and water degradation, and encroachment onto marginal uplands and ecologically
vulnerable marine ecosystems). These resource management issues involve many Government
agencies, private companies and communities, and could be addressed by implementing an
integrated approach to land and natural resource management, as advocated by the National
Environment Management Strategy (1994).

Some key constraints to developing the crop, livestock, forestry and fisheries sectors are:
    Limited market access caused by, among other factors, stringent quarantine requirements of
      importing countries, and lack of competitiveness of locally produced agricultural products;
    Lack of formal security of tenure arrangements on customary lands;
    Weak land use planning capability and lack of an enabling institutional structure that promotes
      an integrated approach to land and natural resources management;
    Inadequate levels of human resource development;
    Under-development and under-supported informal sector opportunities;
    Low levels of agricultural product and market diversification and investment in agri-business
      support systems (post-harvest technology, agro-processing, information);
    Slow growth and progress of finance markets (rural credit and savings mobilisation);
    Poor market information dissemination (market prices, market outlets, exporters of products,
      world market prices, prices and demand/supply of major trading partners, etc); and
    Periodic devastation by cyclones and to lesser extent, droughts.

4. Options and Opportunities

The SDS 2005-2007, as well as the working document on the SDS 2008-2010, sees food security as
top order priority consistent with the MDGs. It requires the raising of productivity of rootcrops, tree
crops and vegetables to be strengthened. Success hinges on strong collaboration between the
relevant Government departments, private sector, NGOs and community groups. More opportunities in
the form of aquaculture, honey bees and improved crop varieties need to be explored and
strengthened.

Market access for existing and potential export products need to be continually reassessed and
investigated. Research with objective to develop bilateral quarantine agreements (BQAs) should be a
continuous activity of the Ministry of Agriculture, with assistance of regional organisations like SPC.

Good progress has been made in nurturing new industries such as noni. The part played by organic
certification in the growth of this industry is encouraging. A number of NGOs and private sector
organisations are promoting organic certification along with that for fair trade. With SPC Land
Resources Division recently partnering with the International certification agency IFOAM and IFAD to
develop Pacific regional organics standards and later a certification system, this export value adding
effort should be actively pursued. Diversification into new high value crops such as vanilla, pepper and
fruit trees with good potential for export should also be pursued.

Key strategic focus thus should consist of:
      Strengthening research and development effort to raise productivity of food crops and livestock
       and of value adding technologies to boost production for local consumption and for export;
     Provide critical and essential infrastructure to support commercial and export growth;
      Expand fruit and vegetable production and the capacity of the HTFA plant to handle volumes
       requiring pre export treatment;
      Strengthen Government‟s research function and pursue research and development work on
       products that Samoa has comparative advantage on;
      Promote aquaculture of commodities that have been proven successful in other similar
       environments.



                                                  - 27 -
                                                  Solomon Islands
                     2                                                                  2
Land Area (km ) 29,540                                         Sea Area/EEZ (million km ) 1.3
Population (No.) 533,672 (2005)                                Annual Population Growth (%) 2.8
                       2
Density (inhabitants/km ) 17                                   Rural Population (% of total population) 84
GDP (US$ million) 342 (2005)                                   Agricultural GDP (% of total GDP) 20 (2005)
GDP per capita (US$) 641 (2005)                                National Budget for Agriculture 2%
GDP growth (annual      1990: 1.9
%)                      2000: -14.3
                        2005: 5.0
Foreign direct          1990: 10                               Aid ($ millions)        1990: 46
investment, net         2000: 1                                                        2000: 68
inflows ($ millions)    2005: -1                                                       2005: 198
Value of Food           1990: 0.60                             Value of Food           1990: 0.17
Imports/Total Ag        2000: 0.33                             Imports/Total           2000: 0.14
Exports                 2004: 0.18                             Merchandise Exports     2004: 0.06
Information Sources: FAO, World Bank, Asian Development Bank

1. General
Solomon Islands is the third largest archipelago in the South Pacific consisting of six large and 986
small islands with a total land area of 27,540 km². The islands, mostly rugged mountains with some
low coral atolls, are scattered leading to major challenges in the development of infrastructure,
transportation, communications networks and rural development in general.

Livelihoods are based mostly on a mixture of subsistence and cash crop farming, gathering of forest
products, and fishing. The only major urban centre is the capital Honiara, located on the island of
Guadalcanal, with an estimated population of about 69,189.

There are disparities in access to resources, services, income and education. The areas with the
greatest resources attract the largest share of national investment, and also the largest share of
migrants. Growing disparity in access to social and economic opportunities has played a significant
role in an increasing rural-urban drift, especially of young people heading to Honiara. The lack of
employment opportunities there has contributed to the recent period of armed conflict between militant
groups from the two islands of Malaita and Guadalcanal.

The violence erupted in 1998 and continued until the arrival of the Regional Assistance Mission to
Solomon Islands (RAMSI) in July 2003. The tensions led to the collapse of government structures,
service delivery and key export industries, discouraged private investment and reduced employment
opportunities. Impacts on communities included limited mobility, decreased social cohesiveness and
access to gardens and markets due to fear, mistrust and militant activity.

Real GDP per capita fell by more than 25% between 1995 and the end of the tensions in 2003. To
restore per capita income to the 1995 levels a 5% annual growth will be needed over the coming 20
years. The current pattern of economic growth in Solomon Islands (real GDP increases between 4%
and 4.5% over the period 2003-2005) cannot be sustained in the medium-term, as it is fuelled by
                                                                                                9
unsustainable logging that exceeds the estimated sustainable extraction rate by about four times (as
well as uncertain donor flows whose pace and size is unpredictable).

The economy of the Solomon Islands is characterised by a dualism, which originates from the
country‟s past. There is a large under-capitalised rural sector, linked only by smallholder production of
copra and cocoa to the commercial export sector, where fishing and logging account for 80% of the
economic output. Adverse weather conditions and cyclones in addition to world price fluctuations
make primary sector export commodities such as copra, cocoa, palm oil, wood products and fish
highly vulnerable. Several factors including poor transportation, the narrow economic base, and limited
physical infrastructure contribute to the difficulty of developing a self-reliant economy. The country is
still mainly a primary producer, with little processing capability. The shortage of trained human
resources is also a fundamental constraint.

9
    SI export of whole logs provided 65% of total export earnings in 2004



                                                               - 28 -
National Policy Framework
In November 2003 the Solomon Islands Government, after a consultative process, finalised its
National Economic Recovery, Reform and Development Plan (NERRDP) 2003-2006. The plan set out
an ambitious programme of action in several strategic areas and represents an important attempt to
introduce order to policy, planning, and public expenditure. The NERRDP set out a program in five key
strategic areas:
(i)      Normalising law and order and security;
(ii)     Strengthening democracy, human rights and good governance;
(iii)    Restoring fiscal stability and reforming the public sector;
(iv)     Revitalising the productive sector and rebuilding supporting infrastructure; and
(v)      Restoring basic social services and fostering social development.

Agricultural policy is set out in the National Economic Recovery, Reform and Development Plan 2003 -
2006. The key points of the Plan are to redevelop plantation enterprises in oil palm, copra and cocoa
production, and to support smallholder and small to medium scale production of copra and coconut oil,
cocoa, rice, honey, poultry and pigs.

2. The Agriculture Sector

Agriculture consists of three sub-sectors: subsistence smallholder farming; a commercial sub-sector
and large plantations.

The smallholder mixed subsistence-cash crop system is the main livelihood of the large majority of
over 80% of SI households, and accounts for up to 95% of SI farming systems. Subsistence
agriculture takes place in “gardens” with various root crops, especially sweet potato, but also cassava,
yam and taro, and banana, pumpkin, and vegetables - notably, slippery cabbage. These crops are
cultivated in various forms of shifting cultivation - fallowing systems. For income generation, most
households have plots with cash crops - notably coconut and cocoa, with copra and wet cocoa beans
being sold mostly to local / regional traders. Added to the produce of this agricultural base are forest
products such as leafy vegetables, nuts, honey, and fruits, and for coastal communities, fish

There are a small percentage of commercially oriented farmer-processor-traders who set up
enterprises for income generation .and employ hired labour and may use purchased inputs. They
often engage in processing and value-adding, mostly of cocoa and copra. A few larger commercial
farmers produce high quality products to supply urban consumers on a regular basis.

Before the tensions Solomon Islands had several large scale plantations managed according to
modern business principles and employing gangs of hired labour to cultivate perennial crops, notably
oil palm, coconut and cocoa, on property leased from customary land owners. Severe damage was
inflicted on these businesses during the tensions. Where there is uncertainty over the land titles no re-
development is currently taking place.

Irrigation is undeveloped in Solomon Islands. Irrigation development is now being pursued as more
intensive commercial crop production becomes necessary for food security and export purposes. A
pilot project to reintroduce rice farming and irrigated food and cash crops is underway. Irrigation and
farm mechanisation technology may gradually evolve through investment in adaptive research and in
response to market opportunities.

3. Major Challenges and Constraints

Solomon Islands is one of the least developed Pacific island countries, ranking 128 out of 177
countries covered in the 2005 Human Development Index (HDI), slightly ahead of Papua New Guinea
and Timor-Leste. The country lacks an adequate social infrastructure and services and does not
generate enough income-generating and employment opportunities for a fast-growing population, of
which about 50% is below 25 years and 84% lives in rural areas. The annual population growth rate of
2.8% is among the highest in the world. There is little formal employment outside urban Honiara;
unemployment is rising, particularly among the youth; there is a high incidence of malaria; and
HIV/AIDS has emerged as an important issue. If poverty is to be reduced and the social fabric healed,




                                                 - 29 -
there needs to be a substantial improvement in delivery of basic social services and economic growth
that engages the rural population.

Increasing the productivity and income of traditional subsistence and commercial smallholder and
corporate plantation agriculture and improving potentials for diversification and modernisation,
constitute the most important challenges to the development of rural economy of Solomon Islands

Some key constraints to developing the agriculture, livestock, forest and fisheries sectors are:

       Shortage of experienced and qualified staff at all levels of Government and private sector.
       Inadequate resource allocation to the primary sector to fulfil its strategic role as provider of
        food, fodder and fuel, employment and foreign exchange. The share of public resources to the
        MAF has been limited to 2-3% of the national budget during the last 10 years.
       Lack of sustainable management of natural resources (forest, fisheries) and land use planning
        policy covering all types of lands.
       Low productivity, non-remunerative employment and limited diversification of subsistence
        production system resulting in limited dynamism and intensification of the agricultural sector.
       Limited product and market diversification and investments in crops, livestock, fisheries and
        forestry production, as well as in agro-industries and agribusiness sectors (transport, post-
        harvest, processing, communications).
       Slow development in the rural financial market particularly in improving access to rural credit,
        savings mobilisation and development of new financial instruments and capital markets to
        encourage agricultural and agro-industrial investments.
       Inadequate advisory services to resource managers and entrepreneurs in the primary industry
        sector.
       Limited and distant markets
       Difficult and costly transport due to widely dispersed population throughout islands together
        with inadequate transport and communications infrastructure.

4. Options and Opportunities
Quick yielding actions are essential for addressing food insecurity and nutrition concerns (particularly
the serious income inequality and unemployment) and laying the foundation for sustained long term
growth and development of the agricultural sector.

The agriculture sector of Solomon Islands requires an investor-friendly policy environment, public
sector investment, (particularly in technology, infrastructure and information systems) and a field-
action programme aimed at mobilising existing institutions and resources towards more efficient
delivery of technology and support services to the farming, forestry and fishery sectors. There is a
need to intensify collective efforts and partnership with the private sector towards products (processed
woods, fish and foods, fruits, traditional and organic foods) and market diversification (e.g. seasonal
comparative advantage and niche products).

As a small country, Solomon Islands suffers from the vagaries of severe price fluctuations, generally
long term structural decline in commodity prices (although commodity prices recently have been more
favourable) and global competition for its principal export commodities (copra, cocoa, palm oil and
kernel). The country requires flexible coping mechanisms, namely: (a) improve productivity and
marketing efficiency to achieve comparative advantage in agriculture and ensure high profitability and
returns to labour; (b) develop value adding upstream processing of its export crops (e.g. virgin coconut
oil, cream and bio-fuel, chocolate and confectioneries for cocoa, processed wood, fish and food
products); and (c) further improve supporting infrastructure and diversity both the production and
marketing systems to provide farmers with greater flexibility to respond to price signals. In the pursuit
of such strategies, the SIG has to address the wide disparities in levels of agricultural and
infrastructure development, in market access, investment, income and employment opportunities
between Guadalcanal (Honiara) and the outer islands of the country.

An appropriate development strategy focuses on the intensification and diversification of the
subsistence customary production system with special emphasis on increasing the levels of
productivity and returns to labour. The communal, plantation and commercial agricultural sector needs
to be supported through stringent food quality and safety measures, development of markets and


                                                 - 30 -
modernisation of technology, post-harvest, sanitary and phyto-sanitary measures and processing
systems. The growth in the agricultural sector will result from favourable macroeconomic fundamentals
and sector policies, and producers‟ response to price signals for specific crops (e.g. cocoa, vanilla,
chillies), livestock (particularly pigs and poultry), forest (e.g. teak) and fisheries products. The country
can develop relative comparative advantage based on market signals and new niche market
opportunities (e.g. indigenous tree nuts).

Public investments are needed in rural infrastructure (roads, small ports, transport, communications
and market facilities), technology development and transfer schemes. This calls for strengthening the
research, extension and farmers‟ training and other support (e.g. access to investment information,
credit, market). Public investment is also needed to improve the capacity of the Ministry of Fisheries
and Ministry of Forestry in policy analysis, statistics and computerised databases, land-use planning,
programme and project formulation, benefit/cost analysis, input and output monitoring and
evaluations.

The main priority for the Primary Production sector is to direct more funding to strengthen the
institutional capacity of the relevant Ministries and associated departments. Policy objectives and
specific priorities and strategies cannot be achieved without considerable attention to improving
institutional capacity.




                                                  - 31 -
                                          Timor- Leste
Population (No.) 923,198 (2004)                    Annual Population Growth (%) 3
GDP (US$ million) 326 (2005)                       Rural Population (% of total population) 86
                                                                  2
GDP per capita (US$) 370                           Land Area (km ) 18,900 sq km
GDP growth             2000: 15.4                  Agricultural GDP (% of total GDP): 25.4 (2001)
(annual %)             2002: -6.7                  Industry GDP (% total GDP): 17.5
                       2005: 2.8                   Services GDP (% total GDP): 57.1
Value of Food          1990: 3.28                  Value of Food           1990:
Imports/Total Ag       2000: 4.45                  Imports/Total           2000: 2.63
Exports                2004: 3.23                  Merchandise Exports 2004: 0.14
Information Sources: FAO, World Bank, Asian Development Bank

1. General
The outcome of a referendum on the restoration of independence from Indonesia in 1999 was met
with a campaign of violence in which the country‟s infrastructure was left in ruins. Although major steps
have been taken to build the nation, the private sector has faced formidable constraints. Since the
restoration of independence, farmers have had to adjust to a significant change in the role of the
public sector, including the loss of significant subsidies, extension services, and markets.

Timor-Leste is a petroleum-rich country, and following the launch of petroleum production in 2004,
approximately two-thirds of future government income level is predicted to come from petroleum
revenues. In 1999, non-petroleum GDP dropped 35 percent. Growth recovered to reach 15 percent in
2000, but then fell by about 6 percent in both 2002 and 2003. In 2004, GDP grew but at under 2
percent. Given that the population is growing at well over 3 percent, per-capita GDP declined to USD
366 in 2004. The recovery in the early years of the transition was fuelled by high public expenditures,
supported by high levels of aid and a large international presence. Aid peaked at USD 300 per capita
in 2002, but fell to USD 175 per capita in 2004. In 2001, the output of the agricultural sector accounted
for 26 percent of non-oil GDP, with industry at 19 percent, and services 55 percent.

In 2001, almost three-quarters of the labour force were employed in agriculture. 16.8 percent of the
potential labour force were unemployed with urban youth unemployment at 43 percent. One in five
people lived on less than one dollar per day, with 40 percent below the national poverty line. There is
a significant difference in poverty between urban and rural areas, and across geographic zones.
Eighty-six percent of poor people live in rural areas, where households experience food insufficiencies
for approximately four months per year, on average. Food security is an important concern. There is
severe stress in food availability during December and January, the lean months preceding the
harvesting of maize and rice, the major food crops, with significant stress during November and
February.

2. The Agriculture Sector
East Timor is an agrarian society with a largely subsistence economy in which much of the production
is consumed by producers. Data from the poverty assessment undertaken in 2001 showed that
agriculture is the main source of income in 94 percent of sucos. Seventy-six percent of the land area is
under secondary forest and 10 percent is grassland. Only 13 percent of the land area is suitable for
agriculture. Drought and poor soil restrict yields.

Traditionally, East Timorese farming families have attempted to minimize risks from crop failure due to
adverse weather or other unforeseen events through the practice of intercropping and low seeding
rates. Other approaches to risk minimisation such as the use of drought resistant varieties, improved
water use including irrigation management, and high yielding crop varieties are feasible.

Low productivity results from farmers‟ shortage of cash, low input systems, inadequate knowledge of
alternative production systems the continued use of traditional cultivation techniques, zero or minimal
fertiliser use, and high seeding rates to guard against losses.

There is a narrow base of agricultural production for exports, although domestic production of food
crops is well diversified. The main food crops are rice, maize, and cassava. Coffee, vanilla, candlenut
and coconuts are grown commercially in small quantities. Approximately 28 percent of households



                                                 - 32 -
earn some income from coffee. Approximately one-third of the crop fetches a 20 to 100 percent mark-
up for high quality. Candlenut, organic vanilla, and livestock are slowly gaining importance as export
products. Coffee was responsible for more than 90% of export income during the Indonesian
administration. The quality of agricultural commodities is generally quite poor. This reduces farm
incomes and competitiveness in both domestic and international markets. Before the restoration of
independence, the presence of thousands of Indonesian soldiers and civil servants constituted a large
and reliable market for agricultural and other goods throughout the territory, which has since
dissipated.

3. Major Challenges and Constraints
East Timor faces a number of challenges including the inadequate food supply from November to
February, low productivity agriculture, and the lack of availability of quality seeds suited to local
conditions. The Ministry of Agriculture and Fisheries faces a lack of institutional and personnel
capacity and severe budgetary constraints for staffing, other recurrent costs and capital equipment.
Irrigation schemes were extensively damaged in 1999. Water shortages and poor management are
typical and result in irrigated rice normally grown only as one crop per year. Lack of clarity about land
tenure presents a constraint on commercial agricultural development, as well as on various support
services that require access to land to become established. Infrastructure is poorly developed, and
factor costs are high. The road network is in very poor condition. Commercial air transport to and from
Timor-Leste is expensive.

Environmental degradation is also a significant problem, which will have an increasing impact on
agricultural productivity in coming years. The rapidly growing and dispersing population puts pressure
on agricultural land, much of which is situated on steep slopes. This is exacerbated by accelerated
deforestation following the substitution of kerosene by firewood, the latter now being the most
important energy source for 98 percent of households.

4. Options and Opportunities
There is recognised potential to increase productivity and production, promote specialisation in niche
commodities to take full advantage of the agro-ecological diversity, to enhance market exchange, and
expand exports. In the short and medium term, the sector is not only an important driver of economic
growth, but is also a key vehicle for poverty reduction in the rural areas. Proposed initiatives include
rehabilitation, construction and operation of irrigation systems, introduction of water harvesting
techniques, and wider distribution of improved seeds.

Modernisation of production will require markets both for the supply of inputs and for the
sale of products and services. Strengthening existing markets and developing new markets is
feasible through improved infrastructure, reduction of transaction costs, improved access to
information, and the promotion of competition.

Diversification and production of quality food, commercial crops, and horticultural products based on
integrated farming systems and practices will require well developed agricultural industries, the
formation of agricultural associations to undertake group projects, including irrigation and water
supply and to improve marketing and bargaining power.

Agricultural policy and strategies need to recognize the likelihood of seasonal food shortages and
accord suitable priority to programs to overcome those shortages. The goals of MAF reflect these
opportunities. They include: to achieve food security and improve food self-sufficiency; to diversify
agricultural production and increase export earnings by the sector; to facilitate agro-industrial
development leading to increased processing and value adding in-country and to improve the quality
of agricultural commodities produced.

Note: This country profile is derived from publications prepared by the World Bank and the
Government of Timor-Leste, notably the Worl Bank Country Assistance Strategy, the Poverty
Reduction Strategy Paper and Timor-Leste’s National Development Plan.




                                                 - 33 -
                                               Tonga
               2
Land Area (km ) 688                               Sea Area/EEZ (million km2) 700,000
Population (No.) 100,200                          Annual Population Growth (%) 0.6
Density (inhabitants/km) 154                      Rural Population (% of total population) 64
GDP (US$ million) 297.3 (2003/04)                 Remittances: $US66 million (2005)
GDP per capita (US$) 2,967 (2003/04)
GDP growth              1990: -2.0                Agricultural GDP (% of total GDP): 29
(annual %)              2000: 5.4                 Industry GDP (% total GDP): 15
                        2005: 2.3                 Services GDP (% total GDP): 56
Foreign direct          1990: 0                   Aid ($ millions)        1990: 30
investment, net         2000: 5                                           2000: 19
inflows ($ millions)    2005: 5                                           2005: 32
Value of Food           1990: 1.77                Value of Food           1990: 1.14
Imports/Total Ag        2000: 2.07                Imports/Total           2000: 0.80
Exports                 2004: 1.32                Merchandise Exports 2004: 0.59
Information Sources: FAO, World Bank, Asian Development Bank

1. General
The Kingdom of Tonga, an archipelago of more than 170 islands spread over an area of the South
Pacific roughly the size of Japan, has no strategic or mineral resources and is highly dependent on
agriculture, fishing, remittances from Tongans living abroad, and a developing tourism industry.

Tonga‟s structural composition of the economy has not changed significantly in the last five years.
Agriculture, Forestry and Fishing industry remains the highest contributor to economic activity at
24.9% of GDP, followed by Commerce, Hotels and Restaurants (17%); Government Administration
and Community Services (13.4%), Finance and Business services (11.96%), Construction (9.95),
Transport and Communication (8.6%). Private remittances from the USA, Australia and New Zealand,
which accounted for 41.2 % of GDP in 2002.

While experiencing growth, the Tonga economy remains in a very fragile state. The latest official
Gross Domestic Product (GDP), at 2000/01 prices, stood at $297.3 million for 2003/04, representing
real economic growth of 1.4%. This level is below the 3% average growth rate for Tonga in the five
years to 2003/04. Real GDP growth rate is estimated of 2.3% in 2004/05 and 1.9% in 2005/06.

Tourism continues to be an important part of the economy in contributing to the GDP and foreign
exchange earnings. The number of tourist visitors has grown by 6% in 2005, compared to 1.5% in
2004 and a fall of 4.3% experienced in 2003.

Inflation rate has returned to more moderate levels, with both local and imported goods and services
contributing to the downward trend in total inflation. In March 2006, inflation rate was recorded at
7.1%, which is a lower rate than the inflation rate of 9.9% for 2005 and the rate of 11.4% for 2004.
Inflation is expected to be about 8% for 2005/06. The Balance of Payments showed a deficit of $7.6
million in 2004/05, compared to a $52.8 million surplus in the previous year. At the end of March 2006,
gross official foreign reserves amounted to $77.4 million, equivalent to 4.2 months of imports, slightly
less than a year earlier (4.5 months).

2. The Agriculture Sector
Although agriculture remains the cornerstone of the Tongan economy, more recently the sector
registered its second consecutive year of negative growth rate in 2004/05, recording a rate of -3.0%
compared to -3.3% in 2003/04.

The land tenure system has gradually evolved to accommodate commercial agriculture. It is based on
tax allotments, which are normally either 8.25 acres or 4 acres, registered to a Tongan male citizen
over the age of 18 years. Originally, all adult males received a tax allotment, but limits on the amount
of available land have made it impossible for all adult males to own land.

The growth of informal leasing arrangements has led to the emergence of a vigorous land rental
market. This evolution of a land market may have contributed significantly to the reasonable level of



                                                 - 34 -
prosperity that currently exists in commercial agriculture. This commercialisation has proceeded
furthest on Tongatapu and „Eua.

Squash, together with vanilla, kava and marine products are the main export earners. However,
Tonga‟s small, open economy is vulnerable to fluctuations in world commodity prices and susceptible
to natural disasters such as cyclones. Major fluctuations in the price of agricultural produce such as
squash and vanilla have affected Tongan farmers adversely. Exports of root crops have dropped from
the high level recorded in 2004 by about 50% in 2005 for both volume and value, so have exports of
kava.

The total area of agricultural land is 42 000 ha, of which around 42 per cent is currently farmed.
Roughly one-half is cropped and one-half is fallowed, indicating that the length of fallow period has
shortened considerably in recent times. The national average farm size is 1.6 ha, but farm size land
tends to increase with commercialisation (it is 2 ha on Tongatapu).

3. Major Challenges and Constraints

Favourable land resources and climate, absence of serious pests and diseases and the characteristics
of „islandness‟ present producers and marketers in Tonga with opportunities for export-led agricultural
development. The land tenure system has traditionally given secure access to land for almost
everyone, enabling Tonga to avoid the emergence of a class of landless poor common in many
developing countries. Also, the social system in rural villages provides a safety net for those who find it
difficult to fend for themselves.

Economic growth is expanding the domestic market for food, especially for items with relatively high
income elasticities such as fruits, vegetables, and animal and fish products. The Tongan expatriate
population provides a target consumer group for market differentiation strategies that further develop
the export of traditional and new high-value products. An expansion of tourism could also increase
domestic food sales to the tourist sector.

A reliance on export-led agricultural development makes Tongan agriculture susceptible to export
market risks that are difficult to manage. These risks are magnified by the relatively narrow range of
possible destinations for agricultural exports and ubiquitous threats to niche markets. At present, there
is an excessive reliance on a single niche market for squash in Japan.

Tonga‟s inherent advantages in high-value exporting are by no means secure. Failure to comply with
phytosanitary requirements could restrict access to export markets. Lapses in quarantine procedures
could result in the introduction of serious pests and diseases. Inadequate maintenance and quality
control practices in production and marketing of export crops could also damage or destroy export
industries and make new export industry initiatives short-lived.

4. Options and Opportunities

The preferred strategic approach is two-pronged: (1) to build on the sector‟s strength in efficient
production of staple foods; and (2) to continue development of high-value niche export markets.
Improving production of staple foods will require support in areas where only the government can play
the major role, such as rural infrastructure.

The Tongan government remains committed to an export-led growth strategy with a strong emphasis
on high-value agriculture as part of this strategy. It continues to see its role as one of accelerating
private sector development, restructuring government ministries and departments to support
expansion of the private sector, and streamlining administrative procedures. Yet, net direct foreign
investment has remained at low levels despite the government putting in place a number of measures
for foreign investment.

Given an agriculture semi-subsistence system, the government needs to be cautious about
encouraging a transition towards fully commercial operations based on just one or two commodities
sold into niche export markets. The collapse of one market or rapid decline in production due to a pest
or disease outbreak could mean considerable hardship for the people involved in the industry.




                                                  - 35 -
                                              Tuvalu
               2
Land Area (km ) 26                                Sea Area/EEZ (million km2) 0.757
Population (No.) 9,900 (2002)                     Annual Population Growth (%) 1.4%
Density (inhabitants/km2) 381                     Rural Population (% of total population) 58
GDP (AUS$ million) 27.6 (2002)                    GDP per capita (AUS$) 2,878 (2002)
GDP growth (annual      1990:                     Agricultural GDP (% of total GDP):
%)                      2002: 5.5                 Industry GDP (% total GDP):
                        2005: 2.0                 Services GDP (% total GDP):
Value of Food           1990: 12.8                Value of Food           1990: 3.84
Imports/Total Ag        2000:                     Imports/Total           2000: 1.73
Exports                 2004: 166.1               Merchandise Exports 2004: 1.37
Information Sources: FAO, World Bank, Asian Development Bank

1. General

Tuvalu comprises nine widely dispersed atolls and low coral islands lying between 5° and 10° south
latitude and 176° to 179° east longitude. Total land area is 25.9 square kilometres, making Tuvalu one
of the world‟s smallest nations. The atolls and islands do not rise more than 3 meters (m) above sea
level. Tuvalu is situated in an area of the Pacific recognised to be the “spawning ground” for cyclones;
in general, once formed, these pass out of Tuvalu, and on to other areas.

The soils of Tuvalu‟s atolls and islands are geologically young, poorly developed, and infertile. Soils
are typically calcareous sands and gravels formed almost entirely of corals and coralline algae. These
components sit atop a solid limestone platform. On the larger islands, groundwater occurs as a lens of
fresh to brackish water under the surface, which floats upon the denser saltwater below; on the
smaller islands, groundwater is almost entirely lacking. Vegetation is dominated by coconut woodland.

The independent nation of Tuvalu was formed on 1 October 1978. With few resources other than fish
and coconuts, Tuvalu is heavily dependent on foreign aid. Over the years the Tuvaluan government
amassed sizeable cash reserves - savings from the Tuvalu Trust Fund, fish licensing fees and other
sources of income.

Subsistence farming and fishing are the primary economic activities in Tuvalu. Substantial income is
received annually from an international trust fund established in 1987 by Australia, New Zealand and
the United Kingdom and supported also by Japan and South Korea. This Fund grew from an initial $17
million to over $35 million in 1999.

The subsistence economy accounts for about 25% of GDP. The business sector focuses heavily on
providing goods and services to the very small domestic market. Exports of goods (mainly stamps,
copra and clothing) averaged 4% of GDP, and service exports (transport, financial, tourism and boat
charters) were 19% of GDP.

Road services are generally adequate for needs on Funafuti and the outer islands. International
transport comprises shipping which are usually twice monthly; and an air service provided by Air Fiji
twice a week.

2. The Agriculture Sector

Agriculture has traditionally been the preoccupation of Tuvaluans and involves the cultivation of trees
and crops and raising a limited number of pigs and chickens. Crop production is primarily for
subsistence, crops comprising coconut, babai (swamp taro), taro, breadfruit, pandanus, banana,
pumpkin, sweet potatoes and pawpaw.

The traditional farming system is characterized by groves of coconut trees with various layers of crops
inter-planted between the trees. A significant feature of the system is the presence of family owned
pits in which swamp taro and giant taro are cultivated.




                                                 - 36 -
The coconut tree dominates agricultural production both for household purposes and commercial
activity. Copra export traditionally provided a significant proportion of the country‟s export earnings
and livelihoods of the population despite the persistent low prices. Due to major marketing difficulties
however the Tuvalu Copra Board ceased export of copra in 2000.

Toddy and fresh nuts are now the most important of coconut products. Breadfruit is consumed in
various forms. The major root crops are babai and taro tarua, which are commonly grown in babai pits.
Babai and taro production has been declining in cultivation, evidenced particularly by the number of
abandoned pits. Unpredictable and transient invasion of pits by saline water has been a major cause
of this decline.

3. Major Challenges and Constraints

Tuvalu has limited land and fresh water available for development. The atoll soils are generally thin,
coralline and lacking in a number of plant nutrients and micronutrients. The narrow islands and islets
are over-exposed to wind and salt sprays. There is no running water and the fresh water-lens is thin
and highly susceptible to pollution by inorganic farming practices and intensive livestock production.

The atolls and islands are widely scattered and sparsely populated. The domestic market is thus small
with little potential for economies of scale. There is no air transport between the atolls / islands of the
country. Domestic sea transport has often been irregular and unreliable. Access to major international
markets is expensive and hard to arrange. The local and overseas telecommunication service is
unreliable and expensive. Although the land tenure system facilitates household access to land for
planting food crops, it has also fragmented holdings into very small lots, which constraints
development of more commercially oriented production.

The local people generally have limited understanding and experience with business concepts and
practices. The labour force lack job skills needed to support economic development. In terms of
improving nutrition, it has been difficult to persuade the Tuvalu population to consume introduced
vegetables, particularly the leafy types. On the other hand, consumption of introduced starchy foods
like rice and flour has overtaken that of their locally produced counterparts.

4. Options and Opportunities

There is good potential for improving productivity of coconut groves by intercropping with local and
introduced fruit trees and cash crops such as noni. Coconut based intercropping is a traditional
farming system that can be revived and improved. Diversifying the coconut industry to coconut timber
production (and perhaps downstream processing) and to other coconut products e.g. hydrogenated
oil, shampoo etc. represent opportunities.

Tuvalu is not yet a member of Codex Alimentarius. Government should develop its food standards in
line with the provisions of Codex. When completed and approved by Government the food standards
would enhance Tuvalu‟s potential industry in exploiting, processing and exporting its fisheries
resources.

Key strategic focus should consist of:
                  Improving and applying nationwide coconut based farming systems incorporating
                   local and introduced fruit trees, breadfruit, pandanus, noni and other crops as
                   preferred by landowners;
                  Promoting the revitalisation of pulaka pit cultivation;
                  Facilitating the safe transfer of crops and livestock from the outer islands to
                   Funafuti and providing slaughter facilities (food safety considered) for pigs and
                   poultry on Funafuti to supply local demand;
                  Assessment of existing coconut oil extraction plants on the islands and atolls and
                   of potential for further diversifying coconut products;
                  Promoting value adding, including traditional methods, of agricultural produce.




                                                  - 37 -
                                              Vanuatu
               2
Land Area (km ) 12,189                             Sea Area/EEZ (million km2) 0.68
Population (No.) 217,000 (2005)                    Annual Population Growth (%) 2.6
Density (inhabitants/km2) 16                       Rural Population (% of total population) 82
GDP (US$ million) 368.9 (2005)                     Remittances: $US 11 million (2005)
GDP per capita (US$) 1,700 (2005)                  National budget for agriculture 3%
GDP growth             1990: 0.0                   Agricultural GDP (% of total GDP): 15
(annual %)             2000: 2.7                   Industry GDP (% total GDP): 9
                       2005: 2.8                   Services GDP (% total GDP): 76
Foreign direct         1990: 13                    Aid ($ millions)        1990: 50
investment, net        2000: 20                                            2000: 46
inflows ($ millions)   2005: 13                                            2005: 39
Value of Food          1990: 0.81                  Value of Food           1990: 0.51
Imports/Total Ag       2000: 0.88                  Imports/Total           2000: 0.55
Exports                2004: 0.68                  Merchandise Exports 2004: 0.62
Information Sources: FAO, World Bank, Asian Development Bank

1. General

The archipelago of Vanuatu is situated in the southwest Pacific Ocean approximately 2,300 km off the
east coast of Australia, between New Caledonia, the Solomon Islands and Fiji. It is comprised of some
80 islands and islets extending over 800 km north to south. The total land mass area measures
           2                                                           2
12,190 km , with an exclusive marine economic zone of 680,000 km . Based on geographical locality,
the country is divided into six provinces, which are administered by local governments.

The economy is based primarily on subsistence or small-scale agriculture, which provides a living for
over 70% of the population. Fishing, offshore financial services, and tourism, are other mainstays of
the economy. Economic development is hindered by dependence on relatively few commodity
exports, vulnerability to natural disasters, and long distances from main markets and between
constituent islands.

In recent years Vanuatu has not been able to reach its full development potential despite the
substantial reforms and restructuring that have occurred since the 1997 Comprehensive Reform
Programme (CRP). In the last few years there has been reasonably positive government revenues,
economic growth and debt management, but high population growth rate which has consistently
outpaced GDP growth, has resulted in long-term decline in income per head. Real GDP per capita is
still lower than in the early 1980‟s.

There have been many reasons for this lack of performance. Chief amongst these has been the
generally poor standards of governance at all levels of public service. Weak institutions and poor
standards have been widely recognized within Vanuatu as critical factors constraining development.
Progress with reform has been hampered by lack of political stability leading to frequent policy shifts
and inconsistency in policy analysis, formulation and application.

The high cost of doing business in Vanuatu also negatively affects development in all sectors including
primary production. Unreliable and high cost transport (land, sea and air) is a binding constraint to
development of the rural economy. A wide variety of taxes, policies and regulation, including high
trade taxes and high utility costs as well as difficulties in accessing utilities have further hindered
development. Lack of micro-finance and credit facilities limit opportunities for small agribusiness to
expand and diversify into value adding enterprises.

Vanuatu‟s vulnerability to natural disasters, particularly cyclones, earthquakes and seasonal droughts
pose further challenges for development of the agriculture, forestry and livestock sectors.

2. The Agriculture Sector

A productive agriculture sector is important for the national economy, vital for food security as well as
rural poverty alleviation, and provides links to downstream industries such as agricultural processing.



                                                 - 38 -
About 82% of population lives in rural areas and their economic livelihood is dependent on agricultural
production for survival.

Agriculture including forestry and fisheries, accounts for approximately 18% of GDP and almost all
merchandise exports. Agriculture consists of two sub-sectors (a) subsistence smallholder farming
which accounts for almost 10% of GDP and (b) large commercial farms and plantations (8 % of GDP).
Coconut oil, copra, kava and beef contributes about 20% to total exports

The production of beef, pork, poultry and goat for local consumption forms an essential part of the
rural economy. Vanuatu has one of the most conducive environments in world for raising beef cattle
and the livestock sub-sector contribution to GDP and exports is significant [cattle exports (beef and
hides) were valued at VT365 million in 2006].

Vanuatu's farming systems are a mixture of subsistence gardening (home gardens) and cash
cropping. Ni-Vanuatu involvement in the agricultural cash economy has increased quite markedly
since Independence (1980). Their outputs from cash enterprises and export commodities are more
dominant than the purely commercial plantation agricultural sector. Smallholders produced 80% of
copra, 70% of cocoa, 20% of beef, and all kava.

3. Major Challenges and Constraints

A significant challenge for Vanuatu towards 2015 is the high rates of population growth (2.6%
annually) and growing urbanisation and unemployment, which is creating widening income inequality
and mounting pressure on national and household food security. Vulnerable groups comprise those
who have limited access to resources and entitlements due to factors associated with resource
degradation, gender inequality, age and physical disability, and the emerging colonies of squatter
families in urban and peri-urban centres who lack the communal or social resources which are
relatively available to rural families.

Compounding this is the erosion of traditional systems for helping disadvantaged people and
households. Growing dependence on cash, even in remote areas, a shift away from subsistence
farming amongst many young people and increasing urbanisation are all reducing the effectiveness of
traditional coping mechanisms, leaving more people exposed to poverty and hardship. Past economic,
social and infrastructure development policies have failed to recognise or build on Vanuatu's dynamic
customary institutions that provide food security and socio-economic stability to the traditional
communal family system.

Some key constraints to developing the agriculture, livestock, forest and fisheries sectors are:
    Widespread lack of skilled Ni-Vanuatu and severe shortage of experienced and qualified staff
      at all levels of Government and private sector.
    Inadequate resource allocation to the productive sector. The share of public resources to the
      MAQFF was 2% in the national budget for 2006.
    Incomplete policy framework and strategies for agriculture, livestock, fisheries and
      accompanying integrated and holistic food security, health and nutrition policy and action
      plans and a consolidated food regulatory body.
    Disputes over the ownership of customary lands coupled with lack of security of tenure on,
      and non-commercialisation of customary lands.
    Direct government involvement, interventions and competition with private sector in
      agricultural trade (factor and product market) as well as constraining regulatory barriers to
      private sector participation and investment, resulting in waning investors' confidence in the
      economy.
    Low productivity, non-remunerative employment and limited diversification of subsistence
      production system resulting in limited dynamism and intensification of the agricultural sector.
    Slow development in the rural financial market particularly in improving access to rural credit,
      savings mobilisation and development of new financial instruments and capital markets to
      encourage agricultural and agro-industrial investments.
    Poor transport and communication infrastructure.
    Small domestic markets coupled with lack of appropriate market facilities, market information
      systems.




                                                - 39 -
       Frequency of destructive climatic events particularly cyclones, periodic droughts and risks
        associated with seismic activity including earthquakes and tsunamis.

4. Strategic Options and Opportunities

The agriculture sector of Vanuatu requires an investor-friendly policy environment, robust public sector
investment, (particularly in technology, infrastructure and information systems) and a field-action
programme aimed at mobilising existing institutions and resources towards more efficient delivery of
technology and support services to the farming, forestry and fishery sectors. The Government needs
to intensify its collective efforts and partnership with the private sector towards products (beef, kava,
high value fruit/nuts and organic foods). Disaster mitigation measures and cyclone-proofing strategies
are essential to moderate the adverse impact of natural disasters.

As a small country, Vanuatu suffers from the vagaries of severe price fluctuations, general long term
structural decline in commodity prices and global competition for its principal export commodities
(copra, cocoa, beef and squash). The country requires flexible coping mechanisms, namely: (a)
dramatically improve the levels of production and marketing efficiency to ensure high profitability and
returns to labour; (b) develop value adding upstream processing of its export crops (e.g. coconut oil
and cream, chocolate and confectioneries for cocoa, pharmaceutical products from kava, processed
beef and beef products, and fruit/nuts e.g. Canarium indicum and Terminalia catappa); and (c) further
diversify both the production and marketing systems to provide farmers with greater flexibility to
respond to price signals. In the pursuit of such strategies, the government has to address the wide
disparities in levels of agricultural and infrastructure development, in market access, investment,
income and employment opportunities between Port Vila and Luganville vis-à-vis the outer islands of
Vanuatu. Reforms in the rural financial market should focus on rural savings mobilisation and linking
banks with self-help production and marketing groups as well as on enabling farmers and fisherfolk to
have access to new financial instruments and services of financial institutions. The relative
comparative advantage of the booming beef cattle industry should be further strengthened.

Key areas for strategy focus are:
    Intensification and diversification of the subsistence traditional production system with special
       emphasis on increasing the levels of productivity and returns to labour.
    Improved systems of food storage, preservation and processing to add value, especially for
       seasonally produced foods and coastal fish catches.
    Updated nationally appropriate and properly enforced legislation on food quality and safety
       and consolidate national food regulatory authority.
    Development of agro-industries, build markets and modernisation of technology, post harvest,
       sanitary and phyto-sanitary measures and processing systems for high value niche products
       (e.g. beef, nangae nut etc.)
    Enforcement of the code of conduct for logging to ensure that logging and reforestation
       practices comply with international standards and place increased emphasis on tree planting
       in farm and community forestry through development of agro-forestry systems.
    Sustainable and community-based fishery resources management, and the rationalisation of
       the tuna fishing industry to boost its contributions to food security and sustainable growth of
       the economy.
    Promotion of aquaculture farming
    Strengthen bio-security and develop response strategies for invasive pest and disease
       outbreaks
    Mobilise public resources and donor assistance to improve rural infrastructure




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