JIS News

Minister of Agriculture and Fisheries, Hon. Dr. Christopher Tufton, has said that his Ministry will be introducing several measures this year to address the challenges facing small farmers seeking to access credit from financial institutions.
Dr. Tufton, who was speaking in the Sectoral Debate in Parliament on July 7, said that the main challenge is to ensure that once funds are available, as they are now, farmers and fishers can access them.
One of the measures to be introduced is a loan insurance scheme that will reduce the collateral requirements for farm loans of up to $2 million by 50 per cent, he said.
“What it means is that someone who is interested in borrowing $500,000, instead of being required to collateralise the entire loan amount, they will now be required to collateralise 50 per cent. In other words, we (Government) are going to guarantee the other 50 per cent of the loan,” he told the House of Representatives.
He said that the reprieve will come with some conditions, however. These include strict supervision by the loan officers, and the institution granting the loan must work closely with the Rural Agricultural Development Authority (RADA) and the Extension Services to ensure the viability of the project.
“That viability assessment is going to move from the potential markets that are available to sell the product, right through to the soil preparation, to water management. RADA therefore has to sign off on that loan,” he explained.
These loans will attract an interest rate of 9.5 per cent, and a moratorium on payment that will vary for up to 10 years, depending on the farmers’ crop cycle.
Dr. Tufton said that the move was in response to the difficulties being experienced by small farmers and fishers in meeting the collateral requirements of the financial institutions, and the lack of expertise to develop proper business plans.
He said that this year the Government will be working with the Development Bank of Jamaica (DBJ) and international partners to review and restructure the PC Banks, which lack the institutional capacity to assist these farmers and fishers to access its loans, resulting in only two per cent of its loan funds reaching them.
In addition, Dr. Tufton said that his Ministry also plans to expand distribution outlets for loan funds to include more credit unions and other micro-financing entities, such as Jamaica National Small Business and Nation Growth.
The Youth in Agriculture Programme will, this year, provide participants with access to credit of up to $1 million, in technical support and raw materials, including tools, seeds and marketing assistance.
He said that, last year, loan funds to the agricultural sector amounted to some $890 million, representing a 181 per cent increase over 2007. Loans are currently available at rates of between 7.8 per cent and 13 per cent for farmers and agro-entrepreneurs through approved financial institutions.
He urged interested farmers and agro-investors to contact their RADA parish offices for further information on the new programmes.

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