by Adelle Roopchand
Agriculture is often perceived as a risky sector for investors and banks are generally reluctant to lend to farmers due to their lack of understanding of the sector and associating it with high risk.
However, in recent years various types of innovative financial instruments are being introduced by governments, donors, impact investors and others to make finance more easily available to farmers.
The Caribbean and global demands for sweet potato can be met once financial institutions diversify its services to the micro, small-medium enterprises (MSMEs) in the region. A new financial publication, “ Investment Guide for the Sweet Potato Sector in the Caribbean”, outlines the benefits and challenges in the sector and provides possible solutions for the both the farmers and financial institutions.
The investment guide was written by Dr Basil Springer and developed through the partnership of the Finance Alliance for Sustainable Trade (FAST) and the Technical Centre for Agricultural and Rural Cooperation (CTA) ACP-EU with financial support from the Intra-ACP Agricultural Policy Programme (APP). It highlights the investment potential in the CARIFORUM region’s growing agribusiness sector, with increasing global demand for tubers, added value of cultivating the crop, and the governments’ efforts to promote production and value addition.
CARIFORUM (Caribbean Forum of the African, Caribbean and Pacific Group of States) countries in the Caribbean comprises Antigua and Barbuda, the Bahamas, Barbados, Belize, Cuba, Dominica, Dominican Republic, Grenada, Guyana, Haiti, Jamaica, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Suriname and Trinidad and Tobago.
The investment guide was developed to explore three different streams, the macro economic profile of the Caribbean; the sweet potato value chain; and the creation of a favourable environment for investment.
The following are the key messages outlined in the new guide:
1. It explores innovative financial instruments available for the sweet potato value chain in the Caribbean to mitigate risks and take advantage of the fast growing investment potential in the sector;
2. Call for greater reliance on domestically produced fresh or processed sweet potato rather than imports;
3. More investment in technology needed to enhance sustainability, increase productivity and boost profits in the Caribbean sweet potato sector;
4. The sweet potato sector in the Caribbean provides many investment opportunities in boosting productivity, enhancing production processes and generating and marketing multiple products;
5. The Sweet potatoes is a drought tolerant crop actively promoted to mitigate climate stress;
6. With better access to finance Caribbean farmers could benefit from the growing demand for sweet potatoes in the lucrative UK, US, and EU markets;
7. Growing the export market for sweet potatoes in the Caribbean will heavily depend on support for investment from financial institutions and the efficient management of the value chain;
8. Access to affordable finance is the most critical constraint that inhibits the growth of the sweet potato sector in the CARIFORUM region.
The Guide also highlights that the Caribbean region has the right qualities to promote growth and investment in the sweet potato. These qualities include:
a) Favourable climate for investment;
b) Favourable climate conditions;
c) Import substitution in the region;
d) Potential Export-Ready Countries;
e) Sweet-potato value chain management;
f) The sweet potato sector represents a promising business opportunity;
g) The sweet potato sector offers investment opportunities for the short, medium and long term;
h) Sweet potato as a climate stress resilient crop; and
i) Timely access to appropriate finances is key.
CARIFORUM governments to reap the benefits of the growing demands in the sector, by implementing plans for diversifying the agricultural investment initiatives to provide access to finance by the farmers to improve their production capacity and acquire necessary inputs. Hence, the financial institutions will also have an opportunity to expand its services in the agri-sector to include all aspects along the sweet potato value chain (from the farms to forks). It is, therefore, a much-needed business innovation and creation within CARIFORUM government and financial institutions to address a smart-finance opportunity in the region.
The FAST International President and CEO Noemí Perez said, “This Guide provides practical information to financial services providers (FSPs) that wish to invest in the sweet potato sector in the Caribbean. FAST hopes that, with the right information, more and more FSPs can tailor their financial products and services to the growing demand in the agricultural sector.”
For more information on the sweet potato investment guide, please visit: http://www.cta.int/en/news/investing-in-caribbean-agriculture.html [email protected]