Address at the 4^th Annual General Meeting of Small Business Development Finance Trust

By the Minister of Agriculture, Hon. Robert M. Persaud, M.P., MBA

28^th June 2007

Hotel Tower

 

I am very humbled to have been asked to address the 4^th Annual General meeting of the Small Business Development Finance Trust. The need for investment and greater access to credit facilities in Agriculture is of significant importance to expand our capacity as principal source of agriculture products for both local and international markets. This was emphasized only a few weeks ago at a CARICOM Agriculture Donor conference in Trinidad where we were seeking donor funds for numerous agricultural projects across the region.  

It is good to note that this institution is in its fourth year, young but growing and this is the type of support that the farmers, especially the small farmers need: an institution that can provide access to credit at not only a competitive but, an affordable interest rates. For a long time, farmers have been asking for financing institutions to appreciate their needs and the distinct nature of agriculture as opposed to other sectors particularly the commercial group.  A relatively young Institution like yours can take greater leadership in satisfying this need and responding to it accordingly.

We are at a point in time where we are focusing on diversification of our agriculture sector to be able to move away on our dependence of our two major crops, namely rice and sugar. That is not to say we are letting them go, they have been undergoing their own restructuring to make them more competitive on the international markets. But in order to make our economy more resilient and to be able to withstand the challenges that we continuously face due to globalization and other external factors we have to diversify our Agriculture sector as we have to for the entire economy. 

However, this takes time and money. This is where institutions like yours become an important element in our formula for success. As Professor Muhammad Yunus, the founder of "Grameen Bank" and its Managing Director noted, “if financial resources can be made available to the poor people on terms and conditions that are appropriate and reasonable, these millions of small people with their millions of small pursuits can add up to create the biggest development wonder." 

I would like to challenge your institution to take a leaf out of Grameen methodology and try to emulate its successes and make an impact to our poor rural farmers in Guyana. 

We in the Ministry of Agriculture are very willing to work with any institution that can provide greater access to credit and support to our rural farmers and to sit, discuss and facilitate progress on all issues related to credit and other related matters. For if we can provide a means for farmers to be able to do what they know best, we can become the supplier of agricultural produce through out the region and further a field. This is not a dream but a reality that can be made possible with the participation of all relevant stakeholders, be them financiers, providers of Agricultural inputs, marketing organizations and the whole production chain. 

I ask of the farmers who can access credit to use it wisely for the purpose it was obtained, build trust and confidence with your financiers. This way a very fruitful relationship can develop and everyone wins.  Sometimes that is all we can utilize to achieve many things, the importance of trust and reliability.  

The main objective of any Credit Service that serves the agriculture sector is to provide adequate credit for producer, by financing agricultural investments and short term needs.  This will allow for improvement in the agricultural value chain and disposable income of the agricultural producers.

The outcome of all this is that poverty is alleviated, food security is enhanced and development is stimulated.

We all know the sad history of GAIBANK but we must acknowledge in this new dispensation that the private sector is a significant player in allowing for greater access to credit to agricultural producers.  We expect that the private credit providers will design new financial products to provide greater access to agricultural producers especially small producers.  This is the kind of development windows that our Government will support.

Under the Government of Guyana IFAD Funded Credit Facility, agricultural producer and rural micro-entrepreneurs were beneficiaries of G$550 million of micro credit in Region #2 and #3 from 2001 to 2007.  The Government only had G$385 million at its disposal but this money was revolved to allow greater fund access to farmers.  Over 7,000 farmers, fisher folks and micro-entrepreneurs were able to benefit from this facility.  A significant positive of this facility was that the leakage rate or rate of bad debt was only 4%, much lower than the national average at the commercial banks.  We in the Government would like to encourage more operation of these types.  In this regard, we are reviewing some models that will allow us to be partners with the private sector to pursue for single digit credit to agricultural producers on a sustainable basis and without interfering with the Banking Sector.

 As a Government we want more small farmers, more fisher folks, more rural micro-entrepreneurs, more of the landless, more of the near landless, more Amerindians and more women to expand their production.  But we also have to support the large scale commercial agricultural producers in penetrating the international markets so that we can have a more significant collective impact on our balance of trade position. However, without access to credit, the tasks at hand can be very challenging.  That is why I charge you today to more aggressively expand your loan portfolio so that more agricultural producers can become your partners in development.

 In closing I must congratulate the Small Business Development Finance Trust for its confidence in the Agriculture Sector and its services that it has provide and I wish all success in its ventures and may you grow and help us to develop our agricultural producers so that we can achieve all our goals.

Thank you.