Since winning the election and coming into power, the JLP has indeed kept this promise, as Agriculture Minister Dr Christopher Tufton reported in his contribution to the 2009/2010 sectoral debate in July that loans are available at rates of between 7.8% and 13% for farmers and agro-entrepreneurs, through approved financial institutions such as the PC banks and credit unions.

Tufton has reportedly said: “The Government has done a lot to increase the pool of funds available to fishers, farmers and agro-investors. Last year, the uptake of loan funds amounted to approximately J$890 million, a 181 per cent increase when compared with the loan uptake in 2007 of J$316.8 million.” But he also added that while the low-interest loans are now available, access to credit is a major challenge facing farmers as they have difficulty meeting the collateral requirements and often do not have the expertise to develop proper business plans … more here.

In terms of a partial project breakdown, approximately $20 million went to four pig rearing projects, $12.4 million went to three vegetable cultivation projects, $5.4 million went to two horticulture projects and $7 million went to three sheep-rearing projects.

The AIC was formed through a merger of the agriculture ministry’s Agriculture Support Services Project and the Agriculture Development Corporation. It was publicized at an investment expo held in March of this year, that the AIC offers a range of business venture and support services to facilitate bankable projects in the agriculture sector. As a result, there have been numerous queries from potential investors, and they expect many more over the coming months.

“What it means is that someone who is interested in borrowing $500,000 instead of being required to collateralize the entire loan amount, they will now be required to collateralize 50 percent. In other words, we (the Government) are going to guarantee the other 50 per cent of the loan,” Ministry of Agriculture and Fisheries, Hon. Dr. Tufton told the House of Representatives recently as he made his contribution to the Sectoral Debate.

This reprieve will come with some conditions – there must be 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,” the Agriculture Minister 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.

The Government will also expand distribution outlets for loans funds to include more credit unions and other micro-financing entities such as Jamaica National Small Business and National Growth.

Importantly also, there will be discussions with the Development Bank of Jamaica and international partners to review and restructure People’s Co-operative banks, which Dr. Tufton asserted, are “institutionally weak”.