Activity under preparation Vanuatu Sustainable and Inclusive Rural Development Programme (VaVaC II) The Vanuatu Sustainable and Inclusive Rural Development Programme (VaVaC II) responds to the needs of Vanuatu as expressed by the economic, environment and social pillars of the National Sustainable Development Plan (NSDP) 2016-2030, and more specifically by the recommendations of the Overarching Productive Sector Policy (OPSP) 2020-2030.The overall objective of this action is to contribute to a climate-resilient rural development which enables opportunities for rural communities. The specific objective is to promote climate-resilient food systems including production, value addition, safety and quality, and trade. The expected outputs will contribute to: (i) enhanced capacity to implement and monitor climate-resilient rural development policies, (ii) the delivery of stability-orientated macro-economic policies, (iii) public finance management (PFM) reforms, and (iv) improvements in budget oversight and transparency. The action aims to build upon the work laid down by the previous budget support programme under the 11th European Development Fund (EDF11).The Vanuatu Sustainable and Inclusive Rural Development Programme will support the government budget to create fiscal space for rural development, and specifically support climate-resilient production, value addition, trade, safety and quality. It will also provide complementary support for the productive sector line ministries, notably the Ministry of Agriculture, Livestock, Forestry, Fisheries and Bio-security (the `Ministry of Agriculture¿), the Ministry of Tourism, Trade, Commerce and Ni-Vanuatu Business (the `Ministry of Trade¿), along with the Ministry of Finance and Economic Management (the `Ministry of Finance¿) for its leading role in PFM reforms, and the Ministry of the Prime Minister for its central position in the overall coordination of development assistance. The action will thus help to strengthen the resilience of the primary sector while reducing its environmental and climate impact, to ensure fair economic returns and to stimulate green business models. Therefore, it will support Vanuatu¿s transition towards a green economy and it is intended to stimulate private sector involvement and investments in the agricultural sector and value addition, opportunities for complementarity with European Fund for Sustainable Development (EFSD+) will be sought.The action will contribute to the Pacific Multi-Country Multi-annual Indicative Programme 2021-27 priority area 2 `Inclusive and Sustainable Economic Development¿ and in particular to the following specific objectives: To support diversified, sustainable and resilient economic growth, in particular by strengthening the role of micro, small and medium-sized enterprises (MSMEs) and supporting local livelihoods through diversification of the economy. It also has strong links with priority area 1 `Climate Action and Environmental Sustainability¿.