JIS News

Nearly 200 farmers, in eight parishes, are currently benefitting from the Ministry of Agriculture and Fisheries’ Financial Access for Responsible Members (FARM) programme.
The initiative, which commenced in November 2009, aims to enhance Jamaica’s agricultural output by facilitating individuals serious about making a livelihood out of farming, with access to funding to finance their undertakings.
Upwards of $87 million has already been disbursed to beneficiaries in St. Elizabeth, St. Catherine, Manchester, Clarendon, St. Thomas, St. Mary, St. Ann and St. James, where the programme is being executed on a pilot basis.
Chief Technical Director in the Ministry, Dr. Marc Panton, tells JIS News that FARM evolved out of a United States Agency for International Development (USAID) funded production and productivity programme, initiated after Tropical Storm Gustav caused significant damage to infrastructure, impacting virtually every sector, including agriculture in 2008.
He said that the intention is to help the agricultural sector recover from the devastation of the storm, by working with the farmers, through training and inputs to get them producing again.
“The process worked quite well, and we saw significant growth over the (ensuing) quarters. As a matter of fact. over the last (seven) quarters, we have had sustained growth,” Dr. Panton outlines.
He points out however that, despite its success, the programme did not lend itself to sustainability, as the provision of incentives, including fertilizers and sprays, could not be subsidised in perpetuity. In this regard, he says, the Ministry engaged the input of financial institutions to provide funding assistance to the farmers, hence the advent of
Outlining the concept, Dr. Panton explains that beneficiaries are “carefully selected” by Rural Agricultural and Development Authority (RADA), which has responsibility for executing the initiative.
Consideration for selection is given to persons who: own or have access to at least one acre of land; have some track record in agriculture; and are located within close proximity to a reliable irrigation water source, to mitigate against drought.
“However, if you look at areas such as North Manchester, which is the potato belt.they have challenges with water but, because of their elevation, they have been able to grow successfully with a small amount of we don’t ignore those people, but we encourage the use of rainwater harvesting,” he adds.
Regarding the selection of beneficiaries, Dr. Panton points out that the programme was looking at “responsible people”, who have been in the industry, have stuck with it and have demonstrated the ability to grow crops. “We’re just simply helping them to get better,” he says.
Once they meet the prerequisites, the farmers are then provided with training in areas such as best farming practices, business plan preparation and record keeping, which are executed by RADA extension and marketing officers in the parishes where the programme is undertaken. He contends that this will ensure that they implement best practices.
He explains that RADA plays a very significant role in this regard because, as basically the extension arm of the Ministry, they interact with the farmers.
“They are the ones who are helping the farmers to grow (and) they are helping them right from the beginning (of the programme),” he says.
Thereafter, he says, arrangements are made to facilitate the farmers meeting with financial institutions partnering with the Ministry, to discuss funding access. These institutions include the People’s Cooperative (PC) banks, credit unions, building societies, and commercial banks.
The Chief Technical Director also points out that under FARM, two categories of loans are available to beneficiaries. The first entails allocations of up to $500,000 for a maximum six-month loan period, at an interest rate of two per cent per month on repayment. These loans, he explains, are financed by the institutions channeling their own resources into the initiative.
The second category provides allocations ranging from $500,000 to $2 million, at a repayment rate of 10 per cent per annum on the reducing balance over seven years. Financing, he says, is provided by the Development Bank of Jamaica (DBJ), which has made the equivalent of US$7.8 million available for on-lending to the farmers.
Regarding the security for the smaller loan category, Dr. Panton explains that the farmer is required to give soft collateral.
“It can be either your good character, depending on the institution, or they may require things like.household articles, etcetera. In addition, the farmer is not required to make any monthly payments. You are, basically, paying that loan. once you have sold the crop. You are not required to take anything out of your pocket on a monthly basis,” he notes.
“The financial institutions, basically .provide the financing for 80 per cent of the project. We, at the Ministry, in turn, have below $500,000 at 20 per cent. Which means, we are offering 20 per cent of the input supplies to farmers who receive loans below $500,000,” he states.
Funding for the incentives, which Dr. Panton says is paid directly to the suppliers of the inputs, amounts to some $40 million and has been provided by USAID. He adds that, of this amount, the Ministry has already paid out over $18 million.
Outlining the rational for incentives, he explains that, at a rate of two per cent, the figure amounts to 12 per cent for the six month period, as against 10 per cent rate per annum for the larger option. In this regard, it was deemed pivotal to offer some assistance to farmers accessing the smaller loan category.
Regarding the larger loan category, Dr. Panton points out that while the repayment period spans seven years, the Ministry has been promoting full repayment of loans, once the crop is harvested.
“So when they sell their onions or their Irish potatoes, which are the two key crops in this project, they literally just make the full repayment to the bank, and the rest is deposited into their accounts,” he informs.
The system encourages timely payment of the loans, and builds the farmers’ credit history.
“The ultimate goal is to strengthen the relationship between the farmers and the financial institutions,” says Dr. Panton.
Another crucial aspect of the programme is that farmers are required to have a contractual relationship with approved buyers, which ensures a market for the farmer and a consistent supply for the buyer.
“The buyers are our traditional importers,” Dr. Panton emphasises, while pointing out that the relationship and the farmer is also being strengthened.
The range of crops which the FARM programme focuses on include: Irish potatoes, onions, ginger, sorrel, scallion, hot peppers, and root tubers such as yams, some of which have markets considered to be “very deep”.
He points out that, last year, some US$4 million worth of the US$12 million of onions consumed and 70 per cent of Irish potatoes consumed were imported.
“So that is a tremendous amount of savings that we could realise if we were, basically, to ramp up production. At the same time, we want to ensure that the consumers continue to receive high quality products (and) that they don’t have to pay a tremendously higher price,” he adds.
Underscoring the importance of the transactions which the farmers negotiate with the financial institutions, Dr. Panton says beneficiaries are assisted in ensuring that accurate documentation of their outputs is maintained.
“We give them record keeping books, which is (a) very important.part of this programme. They are required to do monthly reporting to the financial institutions, just to update their progress, and this has to be signed off by a RADA extension officer,” he says.
“We want to ensure that the relationship between those farmers and our extension officers is very strong, because we know (that) the success of the programme really relies upon that continued dialogue between the Ministry, the farmers, the buyers and the financial institutions. As such, we also have a committee that, on a weekly basis, basically, looks at how this entire process is working,” he shares.
The technocrat is full of praises for RADA’s input, pointing out that they have been “very good on the ground” in terms of working with the beneficiaries.
“They have not only maintained strong contacts, but have been out there looking at the fields, checking (them) regularly, (and) guiding the spraying times along with other agronomic practises. Our that we want to hand-hold the farmers, because we want them to learn, in terms of best practices, so that next year they will, absolutely, on their own without question, do what is needed to improve their level of productivity,” he states.
Dr. Panton contends that the programme has enjoyed “very good success” thus far, while noting challenges arising relating to drought and diseases which, he says, the Ministry moved to, as best as possible, address decisively. He says the expectations for FARM are high, and key stakeholders are hoping it will be able to position farmers to drive Jamaica’s economy forward.
“We are hoping that, over time, we will be able to roll it out even more, and really be able to replicate this going into the future. We will evaluate the programme (later this year) to analyze the positives and the negatives, in order to determine the way forward,” Dr. Panton assures.

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