Agro processors and suppliers of bulk fresh produce to end markets can now benefit from a $50 million Glut Management Fund, which is a pool of revolving loan funds available at concessionary single digit interest rates.
To be administered by Agro-Investment Corporation (Agro-Invest), the Fund, launched at the office of the Ministry of Agriculture and Fisheries in Kingston Tuesday (November 30), will address problems agro processors experience, including shortage of raw material and inability to purchase additional quantities when supplies are abundant.
Agro-Invest negotiated funds from the Development Bank of Jamaica (DBJ) Limited for on-lending to eligible borrowers.
Speaking at the launch, Minister of Agriculture and Fisheries, Hon. Dr. Christopher Tufton, said the Ministry considers the Fund an important step in the building of a sustainable agricultural sector, focusing on the value chain and no particular segment.
Minister of Agriculture and Fisheries, Hon. Christopher Tufton (second left), greets General Manager, Direct Client Relationships, Development Bank of Jamaica, Denise Arana (right), when she arrived at the Ministry in Kingston today (November 30), to participate in the launch of a $50 million Glut Management Fund. Others from left are: Chairman of Agro-Investment Corporation (Agro-Invest), Paul B. Scott; Chief Technical Director in the Agriculture Ministry, Dr. Marc Panton; and Chief Executive Officer, Agro-Invest, Hershell Brown.
He said that the Fund, with an interest rate below 10 per cent, is aimed at ensuring that when there is a glut in the market, interim financing is available to the agro-processing sector to take off the excess capacity, using the available financing and store the excess capacity for use during shortages.
Dr. Tufton lamented that, for a long time, farmers have produced and then expect to sell immediately after reaping and, when they are unable to do so, there are major post-harvest losses. He noted that last year, post-harvest losses were estimated at some $5 billion, a significant revenue loss that has to be recouped through higher prices.
He pointed out that agro processors depend on farmers to provide them with raw material and, because farmers tend to “grow traditionally with the rain”, there are “periods of peaks and periods of shortages”.
“It’s very important for us….as part of addressing the value chain, to even out the flow of raw materials that are available to our agro-processors,” he stated.
The Fund is intended to create a more harmonious relationship between the primary producers and those who add value to what farmers produce.
“It is a critical relationship for us, because our view is that farmers will not prosper, if we do not have an agro processing sector that is also prospering, and the intention is to create a link with our local farmers, as opposed to farmers elsewhere, to provide that critical raw material that is necessary,” he explained.
General Manager, Direct Client Relationships at the DBJ, Denise Arana, said the bank was happy to be associated with the Fund.
“As far as the DBJ is concerned, this is certainly one of the most important developments to have taken place in the agriculture sector, within the past several years,” she said.
She applauded the Ministry’s “bold role” in providing support to farmers and agro-processors under the Fund.
“This means that farmers will have ready market for their produce, and processors will absorb the excess and re-package the product for usage during times of shortage,” she noted.
Chief Executive Officer, Agro-Invest, Hershell Brown, said that with its mandate to mobilise and facilitate investments in the agricultural sector, the organisation was currently implementing a number of programmes, and that the Fund was a natural complement to these initiatives.
For further details, the telephone numbers to call Agro-Invest are: 758-8963; 923-9268; 723-9261.
The Corporation was created to meet the needs of farmers, exporters and agro-processors, through the provision of processing facilities, packaging houses and abattoirs, as well as provide the necessary quality control mechanisms.