Jan 04, 2011 News
By Leonard Gildarie
A $220M credit programme targeting small farmers countrywide was launched yesterday as Government unveiled plans to revamp an industry even further with more training and financing.
Almost $180M of the fund which is a collaborative effort between Guyana and the United Nations International Fund for Agricultural Development (IFAD) will be given out in grants to groups involved in the production of plantains, pumpkins, peppers, pineapples, tubers, small ruminants and swine.
However, the fund, to be disbursed under strict loan-like conditions by the Institute of Private Enterprise Development (IPED), will only work with farmers who have banded into groups in Regions Two, Three, Four, Five Six and Ten.
Financing, studies have shown, remained one of the major hurdles for agricultural development in Guyana with local banks shying away from an industry plagued with uncertainties. A prohibitive high interest rate remained another major turnoff.
During the launching at Regency Hotel, Hadfield Street, which saw scores of farmers turning up, Minister of Agriculture, Robert Persaud, disclosed that the programme is part of the larger one to strengthen the industry.
Later this year, Government will be rolling out a similar programme to target medium scale farmers involved in the non-traditional agricultural sector. Other programmes are coming to focus on the hinterland regions.
Highlighting the growing importance of agriculture in the region, Persaud warned that financing remained a major problem for especially small farmers globally with a demand of up to $100B annually required for the industry.
However, financial institutions and other agencies only managed to come up with a depressingly low $2B.
Regionally, with the food import bill at a staggering, undesired $4B, there seems to be little progress to do something about the situation. While food imports are ridiculously easy, authorities in some member countries of CARICOM are slow to remove the burdensome non-tariff barriers or taxes that are stymieing exports to neighbouring countries.
On the other hand, Guyana seems to be one of the few countries taking steps to move in a food security and food sovereignty direction.
But local farmers, if they want to compete, will have to change their tactics and adjust their operations to meet the demands of the 21st century with new technologies, training and a professional approach to managing part of the mandate.
According to Minister Persaud, there is not a problem of land in Guyana. There is an estimated 300,000 acres on the coastlands and another two million acres in the Rupununi area, without fear that the country’s forests will be encroached on.
He made reference to the defunct Guyana Agricultural and Industrial Development Bank (GAIBANK) which was established to lend to the farming community of Guyana but the funds were misused, forcing the institution to now close.
Pointing out that Government overtime had sought to find financing through different programmes for farmers, Persaud said these include the $1.6B European Union rice project that was managed by the Guyana Bank For Trade and Industry,
The official urged for farmers to continue exploring ways to get involved in cooperatives and groups as it would strengthen their possibilities in competing both locally and internationally. Later this year, Government will be rolling out more support programmes including $260M on genetic improvements for small animals.
The credit facility is part of the US$6.9M Rural Enterprise and Agricultural Development project (READ) launched a year ago and expected to conclude in 2014.
READ specialist, Khemraj Tulsie, yesterday explained that already several groups in the designated regions have been benefitting from the project and can now apply for funding. In addition to improving organisational functioning, farmers’ groups will be given help to build their capacity and for specialised training.
Almost $40M of the fund will be available in a loan format, should the group need to boost their capital, he said.
Low interest rate
IPED’s Chief Executive Officer, Ramesh Persaud, acknowledged the difficulty financial institutions face in an industry besieged by many uncertainties. These include bad management, disease, weather, outdated farming practices and poor infrastructure.
However, IPED has not shied away and almost 45 per cent of its lending portfolios has been dedicated to the agricultural sector for small entrepreneurs.
He too called for farmers to recognise the importance of banding together since there is more bargaining power in the economies of scale.
While, IPED will be ensuring groups meet the requirements and process the applications for grants and loans, the Ministry of Agriculture, under the READ programme, will be assisting in preparing business plans, a critical component.
IPED has also agreed to “subsidise” the interest rates of the loans to six per cent with repayment periods varying up to three years.
There were representatives from Linden farming groups, the Pomeroon Women’s Agro-Processors Association; Parika, Naamryck, Ruby Farmers Progressive Organisation; from the Good Success/Friendship East Bank Demerara villages; West Berbice Sheep and Goat Farmers’ Association and the Young Women’s Christian Association.
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