The financing agreement for the Competitive Local Innovations for Small-scale Agriculture Project was signed today by Steve Dave Carl Fanny, Principal Secretary of the Ministry of Finance, Trade and Investment of the Republic of Seychelles, and Kanayo F. Nwanze, President of IFAD.

Since its independence in 1976, Seychelles has steadily moved into the upper-middle income group of countries. Although the tourist sector - which employs about 30 per cent of the labour force and provides more than 70 per cent of the country gross domestic product (GDP) - has led economic growth, the country's economy is extremely vulnerable to external shocks, such as food price volatility and financial crisis. The agriculture sector contributes only 3.2 per cent of GDP and employs 3 per cent of the population. To meet the country's food requirements and sustain the tourism industry, food imports are as high as 90 per cent.

The new project will focus on improved production of fresh vegetables and fruits, and improving the quality of organic food, small livestock, pork and fish, for both local consumption and potential development for other markets. It will then link smallholder farmers to the hotel and restaurant industry through public-private partnerships.

Seychelles, along with other Indian Ocean Island countries, is faced with the tough realities of increased pace of climate variability and climate change.

The project will also address climate change adaptation issues and reduce consumption of non-renewable energy. The risks associated with production systems are expected to decrease. Farmers will also gain better control over water management. Importation of products by sea and air will also decrease. In addition, the fish species targeted and marketed by the artisanal fishers will be diversified to reduce pressure from overfishing.

Cofinanced by the government of Seychelles, the project will be implemented by the Ministry of Natural Resources and Industry. Over 9,500 rural households composed of smallholder farmers and artisanal fishers will benefit directly from this new project, with an emphasis on households living below the poverty line and the youth. Most of them are already producing for domestic markets or engaged in small-scale agriculture and backyard gardening.

With this new project, IFAD will have financed two projects in Seychelles, for a total investment of approximately $4.1 million.