Agriculture financing was a common thread throughout the just-concluded Caribbean Week of Agriculture held here in Guyana.
“We have been working assiduously in Guyana and outside Guyana because one of the problems farmers have in accessing loans like any other businessman is that they don’t have the collateral for long term loans. Indeed many of the farmers do not need long term loans, a lot of them need crop financing,” the minister said.
Using rice millers as an example Dr. Ramsammy noted that many of them take loans from the millers and this result in payment issues for their paddy.
“The government of Guyana is working with the CDB (Caribbean Development Bank) for a special instrument for these crop financing kind of loans.”
He added that they were also looking towards the Food and Agriculture Organisation (FAO) and the Inter-American Institute for Cooperation on Agriculture (IICA) to explore other financing mechanisms to support national budget measures.
According to the minister, there is low level financing in place through entities like the Institute of Private Enterprise Development (IPED) but the farmers have outgrown that and the government needs to work with the banks to secure the kind of loan access they need.
“But throughout the Caribbean you have the same problem. Because banks and other financial institutions are well aware that farmers are subjected to the vagaries of the weather they want greater collateral arrangements and the two things don’t go together. So this is where government needs to work and we’re studying it to see how we could do that,” Dr. Ramsammy said.
He added that some consultants and international agencies had proposed crop insurance but Guyana was the only one with a sizeable number of people in agriculture and the kind of premium farmers would have to pay did not make it feasible
“So we’re thinking outside the box how to provide an insurance for farmers. In Guyana it has been government coming in and giving help and that’s not a sustainable thing and it will never be something that every farmer will be comfortable with.”
Dr. Ramsammy said that between now and June Guyana would be doing studies to come up with a mechanism that provides a type of insurance which does not require regular premium payments.