Minister Green Urges Lenders to Extend Credit to Small Farmers

Minister of Agriculture, Fisheries and Mining, Hon. Floyd Green, is calling on financial institutions to re-evaluate their lending practices to the agricultural sector, urging increased support for small farmers and entrepreneurs.

“I am imploring our financial institutions to recognise the significance of supporting our farmers and the agricultural sector as a whole and extend a helping hand through the provision of more credit,” he said.

The Minister was speaking at the Development Bank of Jamaica’s (DBJ’s) Credit Enhancement Facility (CEF) Superstars Awards on Wednesday (August 14) at the Courtyard Marriott in Kingston.

The agricultural sector makes up 15 to 20 per cent of Jamaica’s labour force and is also a significant income earner for the country.

Currently, agriculture accounts for about 8.3 per cent of Jamaica’s gross domestic product (GDP) and the Ministry is looking to enhance the sector’s contribution to economic growth.

A large part of agriculture’s income-earning potential lies in its export opportunities. For example, Jamaica earned US$50.4 million in 2023 through the exportation of yam, a historic achievement for the island.

Minister Green in highlighting the challenges faced by farmers said, “A lot of primary producers want to get into agro-processing but lack the capital to do so. Similarly, there exist ripe export markets and a growing need for climate-smart technologies, evidenced by the devastation brought about by Hurricane Beryl. However, these areas are very capital intensive and, without access to financing, cannot be truly developed.”

In addition, he said, there are a lot of farmers who aspire to utilise more technology in their enterprises but they lack the financial mechanism to attain these resources.

“To take it a step further, basic inputs such as fertilisers, seeds and simple farm machinery are difficult to attain as is, especially for start-ups. As such, a lot of times you will find people with a passion for agriculture and brilliant ideas but they just do not have the capital for execution,” he pointed out.

Noting that financial institutions tend to prioritise lending to larger and more established entities, overlooking the potential and needs of farmers and small businesses, Minister Green said “we have to develop ways that we can lend a hand without much fear of being disadvantaged”.

He noted that initiatives such as CEF exist that can be leveraged to mitigate the associated risks.

CEF aims to increase access to credit for MSMEs, providing Approved Financial Institutions (AFIs) and Micro Finance Institutions (MFIs) with additional collateral coverage on loans extended to MSME operators.

This collateral coverage serves to mitigate risks for the AFIs and MFIs, enabling them to extend credit to a wider range of MSMEs, thereby fostering business growth and economic development in the country.

Minister Green commended the DBJ for pioneering the solution.

“What I love about CEF is that it reduces the risk that would normally be associated with lending to MSMEs and provides the opportunity for eligible MSMEs with viable plans to receive access to term loans,” he said.