Clarke holding talks on funding for ginger industry
THE Ministry of Agriculture and Fisheries is expected to conclude discussions soon with a major private investor entity in Switzerland for the provision of funding, through a venture capital programme, for the local ginger industry.
Portfolio Minister Roger Clarke said that the entity's input is expected to significantly boost "active interventions" already undertaken by the ministry which have yielded tremendous success in the industry, while providing farmers with working capital support "they so desperately need."
The entity, he said, is "extremely fascinated" by the model of small farmers working in contractual relationships with a guaranteed market.
The minister made the announcement while making his contribution in the 2014/15 Budget Debate in the House of Representatives last Wednesday, under the theme: 'Continuing the Growth - Going for Export'.
Clarke advised the House that the ministry is currently midway in discussions with the entity, which is being pursued in collaboration with Jamaica Promotions Corporation (JAMPRO), adding that "it is our expectation that we will soon wrap up an agreement."
He noted the level of ginger production recorded through interventions such as the provision of, among other things, planting material and an enabling environment through extension and marketing support.
"In our ginger programme, from the surplus that the export division makes on processing and trading ginger, we provided some $150 million in the last two years in pre-financing farmers, through the provision of clean planting material working capital, and other inputs," the minister outlined.
He pointed out, however, that despite the ministry investing substantially in providing planting material in particular, its capacity to provide these input is "way below" the demand for such. This, he pointed out, has been a "major limiting factor" to facilitating an even more rapid expansion in ginger production.
Clarke advised that scale of production in the area of processing has "seriously challenged" the capacity of the export division to process the volume of ginger produced, hence their having to outsource a portion of this undertaking.
He also informed that the ministry cannot sustain the interventions due to fiscal challenges.
Minister Clarke said that with the industry having an export potential of 21,000 tonnes, valuing US$105 million, there is room for more investors.
In noting the challenges that the country's ginger farmers are likely to encounter, particularly in accessing funding from traditional financial institutions with the kind of ease that is required for efficient production, Clarke called for wider stakeholder intervention in the industry, particularly the private sector.
He said that the policy environment created by the ministry to prioritise local production over imports, coupled with strong extension support, and market guarantees, "should provide the stimulus to the private sector to come on board to provide willing farmers with the working capital support they so desperately desire".
"If we are going to realise the full potential of the ginger industry, including value-added and utilise this to create wealth for our farmers and our people, it is time for the private sector to get on board," he said.