The plea came from the Minister and Agriculture Dr. Timothy Harris as he gave an address at a workshop on Financing and Servicing of Agricultural Development Projects last week.
Dr. Harris however hailed entities such as the FND Enterprise Cooperative Credit Union, the Development Bank, the St Kitts Cooperative Credit Union and the Nevis Cooperative Credit Union for the support they have given to the Agricultural sector over the years.
“I hope that as a result of their respective contributions we will get a better appreciation as to how working cooperatively, the farmers can access more support,” Harris added.
It was also reminded that agriculture is an inherently risky financial activity as a large array of uncontrollable elements can affect production output and prices, resulting in high variable economic returns to farm households.
“In developing countries like St Kitts and Nevis, farmers also lack access to both modern instruments of risk management – such as agricultural insurance, future contracts, or guarantee funds – and ex post emergency government assistance. Such farmers rely on different “traditional” coping strategies and risk-mitigation techniques, but most of these are inefficient.”
He also stated that recognized financiers like commercial banks tend to amplify the use of immoveable collateral as the primary buffer against default risk, which means they provide services to a limited segment of the farming and fishing communities.
“Small and medium sized farmers, who constitute the vast majority of farm operators, often do not have secured title land, which is the preferred type of collateral; if they do, its value may be insufficient to cover the loan in question,” Harris said.
Most of the farm lands in St. Kitts and Nevis are usually leased or rented and the formal banking sector has not been too willing to rely on this form of security.