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Opening Statement

Sietse van der Werff[2]
Common Fund for Commodities

Mr. Chairman, Ladies and Gentlemen,

It is a pleasure to be here in FAO on the occasion of this seminar with its focus on alternative applications for sisal and henequen. I will keep this introduction brief, because, as you can see from the programme, we have a busy day ahead of us.

I want to address two issues briefly. First, I want to explain in short what kind of organization the Common Fund for Commodities is, for those of you who are not familiar with the Fund. Secondly, I will touch upon the goals set for today's seminar.

The Common Fund for Commodities is an autonomous intergovernmental financial institution established within the framework of the United Nations.

The Common Fund forms a partnership of 104 Member States and three intergovernmental organisations. Membership is open to all State members of the United Nations, any of its specialised agencies, or any intergovernmental organisation of regional economic integration which exercises competence in fields of activity of the Fund.

The focus of the Common Fund is on commodities and this has good reasons. As you are aware, many developing and least developed countries are heavily dependent on commodities which form the backbone of their economies and account for the bulk of their export earnings. The Common Fund, therefore, deals with a core question of development in many regions of the world.

The Common Fund operates under the novel approach of commodity focus instead of the traditional country focus. The activities of the Fund mainly comprise:

By the beginning of November 2000, the Fund had approved 90 projects, with a total cost of about US$ 280 million. Of this, CFC finances approximately 45 percent, the balance being provided by other donors and participating institutions through counterpart contributions. The average project size is US$ 3 million and the duration is between two to five years. In addition, 18 so-called Fast Track projects have been approved. These Fast Track projects are small projects, requiring a CFC contribution of up to US$ 30 000.

The Fund concentrates on focused, low cost, high impact projects which have the potential of becoming self sustainable, involving whenever possible the private sector.

Project proposals have to be submitted to the Common Fund through a designated International Commodity Body such as the Intergovernmental Group on Hard Fibres.

The Fund prefers to support projects which provide solutions to general problems of the commodity concerned or which involve a number of commodity producing developing countries, in particular the least developed among them. Single country based projects are the exception and should be pilot projects with replicable results for other developing countries. The majority of our projects are grant financed. Those projects, however, which will have a financial return, will be loan financed, for instance investment related 'national-based' projects. Loans would need to be guaranteed by the government of the country concerned, or by an entity acceptable to the Common Fund.

With regard to project formulation and preparation, these fall within the responsibilities of the International Commodity Bodies. Any project submitted to the Fund for financing should fit in the context of an overall commodity development strategy of the International Commodity Body. The International Commodity Body acts as Supervisory Body for its projects, while the actual project implementation is undertaken by a specialized institution with expertise in the field concerned (the "Project Executing Agency").

This being said, as a background to the operations of the Fund, today we are meeting to hear the views of experts on the topic of one of the commodities covered by the Common Fund, namely sisal.

The Fund is currently supporting one project in the field of sisal. This is the project Product and Market Development for Sisal and Henequen. It is being implemented in Kenya and Tanzania. Broadly stated, it has an emphasis on agronomic research (aiming to reduce production costs), and on development of improved fibre extraction techniques, which should result in obtaining fibres which are of a sufficient quality to meet technical standards set for use in paper making, while at the same time meeting the financial parameters set by its competitor in the market, namely softwood.

If results could be achieved in the field of fibre production for large scale use in papermaking, a sizeable market could be opened. Although this is a promising perspective, still a lot of work needs to be done in that area. And, while looking at one promising large scale use of sisal, one should not forget to also look at other options. It appears that there is a lot of knowledge and insight in possible alternative uses for sisal but, one way or another, this has not resulted in an increased use of sisal.

The purpose of today's seminar is not to solve in one day of presentations the problem of sisal's declining demand and declining production. Its aim is to discuss possible realistic options for increased use of sisal. While the technical elements related to sisal characteristics and possible new uses will no doubt be important, of crucial importance will be the next step, the possible uptake by the market of new uses for sisal. The invited experts who will make presentations on different alternative uses, are specifically requested to touch on the issue of what would be required in order to make sisal more competitive in new fields, provided of course it meets the specific technical requirements. The outcome of the presentations and the exchange with you, as professionals in the field of sisal production, processing or marketing, should be guidelines for the sisal sector how effective inroads can be made into new applications.

A positive outcome of this seminar and promising new perspectives for sisal use, can hopefully be instrumental in reviving the currently stagnant sisal production. New dynamism in sisal should provide, in particular to the many, many small sisal growers, new opportunities and perspectives to increase their sisal production in reply to a sustainable demand.

It is the wish of the Common Fund that such a scenario may indeed result from today's discussions.

Thank you, Mr. Chairman.

[2] First Project Manager, Common Fund for Commodities, Stadhouderskade 55, 1072 AB, Amsterdam, the Netherlands. Tel +31 20 575 4949, Fax +31 20 676 0231; E-mail: [email protected]

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