Banks Urged to Re-Evaluate Agricultural Financing

Lending institutions are being urged to re-evaluate their approaches to the agricultural sector, shifting from consumer lending to providing more accessible, affordable credit for farmers.

Making the call, Minister of Agriculture, Fisheries and Mining, Hon. Floyd Green, said that banks have been more comfortable financing consumer-related purchases, like a new car, noting that “this mindset must change”.

“Part of what we are going to do to change that is… I have directed the Agro-Investment Corporation (AIC) to work with the banks, so that they have the competence to analyse agricultural enterprises,” he indicated.

The Minister, who was addressing the recent launch of the Matching Grant Scheme (MGS) of the Southern Plains Agricultural Development Project (SPAD), at the Parnassus Agro-Park in Clarendon, noted that there was a time in Jamaica that every bank had a trained agriculturalist on staff who would help to analyse agricultural proposals to see “what makes sense and what don’t make sense”.

“The banks don’t have that capacity now, so the Agro-Invest Corporation must provide that capacity. They must work with the farmers to help them, free of cost, to develop your business plans and ensure that you have your record-keeping. Then they [AIC] will work with the banks so that the banks can analyse your proposals so that when the money comes, you have a better chance of success. That is the direction of the Agro-Invest Corporation,” he said.

Additionally, the Minister reported that following discussions with the Development Bank of Jamaica (DBJ), the institution has reshaped its criteria to ensure that it is easier for farmers to access funds.

“What we want to see is the Development Bank start direct lending to some of our agricultural entrepreneurs to ensure that you will have access to capital,” he said.

Mr. Green also urged the People’s Cooperative (PC) Banks to “come back to the table in a big way” and provide resources for farmers to expand.

The Minister further indicated that he has asked the Food and Agriculture Organization (FAO) to look at the ecosystem around agricultural financing, and to come up with new facilities that can provide more access to farmers.

The MGS is being undertaken by the Government with support by the United Kingdom Caribbean Infrastructure Development Fund (UKCIF) and managed by the Caribbean Development Bank (CDB).

It is geared towards enhancing the economic stability of small and medium-sized farmers in St. Catherine and Clarendon by providing them with essential resources and support.

The AIC, which is an entity under the Ministry, drives agricultural development by managing land distribution and upgrading infrastructure such as irrigation, drainage, and roads to benefit small and medium-sized farmers in Amity Hall and Bridge Pen in St. Catherine and Parnassus in Clarendon.