Commercialising SIT

Full text: There are a number of ways in which funding from the private sector can contribute to solving SIT control problems. There is a clear need, and opportunity, for companies to build profitable businesses supplying goods and services for SIT programmes which have, up to now, been supplied by governmental and supra-governmental agencies. By their nature, these agencies are limited in the scope their operations and will always leave some needs unsatisfied. In fact, a dynamically growing SIT sector around the Mediterranean will quickly outgrow the ability of public sector organisations to service it. Building start-up companies in the sector will require significant investment. Understanding the different capabilities, interests and requirements of the various funding institutions, which can be approached is essential. In particular it is important to understand how and when the financiers will want to see a return on their investment. In addition to the need for a commercially driven service sector, there will be an increasing need for private finance for SIT programmes. The long-term running costs for SIT control are broadly similar to those for control using chemical insecticides. It is relatively easy to see how these can be paid in the same way, and by the same people. However, in almost all cases there are significant upfront costs relating to both infrastructure and the high initial running costs. It seems reasonable that these costs should be borne by those that will get the long-term benefits - not only the growers, exporters, the fruit industry which could be expected to benefit. But also consumers, other local businesses (beekeeping is an obvious example) and the population at large who all benefit from lower levels of residue in their fruit and their environment. It is clear that the only practicable way for this wider group to contribute to the cost is through Government funding. Governments may be prepared to accept the environmental and strategic benefits as sufficient return on this investment. Otherwise, they must look to recoup through taxation or production levies. I would argue that in many cases there will be a need for short-term finance beyond what will be available from the local industry and Government. The question is: how is it possible to provide the returns that will attract private sector investors? Such financing can easily be understood in the form of traditional loan finance. A bank or other institution provides upfront cash in return for repayments made from the financial benefits, which accrue later. As part of its work within the Cleanfruit project, InSecta has been investigating a contracting mechanism, which combines commercial finance with private service companies. Provision of control services can be modelled on the insurance business. Local Government or industry takes insurance against damage by medfly with the insurer assuming the financial risk. In turn, the insurer will contract with a private company to provide control services. (author)