SCOTIABANK is launching a $100-million loan fund to assist small farmers to plant cash crops for local consumption. The funds, which are being made available at a concessionary rate of 9.95 percent, is part of the Ministry of Agriculture and Fisheries FARM (Financial Access for Responsible Members) Programme.

“This Scotia FARM Fund reinforces the Bank’s ongoing thrust to stimulate growth in the agricultural and productive sectors,” said Scotia in a press release on Thursday.

“Under this initiative, the bank is providing short-term, non-revolving loans to financially viable farming projects with the goal of stimulating increased farming activities, reducing the use of foreign exchange on imports of products that can be produced locally and generating increased employment,” added the firm.

The fund will be available from April 29 to December 31, 2010 to eligible farmers registered with the Rural Agricultural Development Authority (RADA) and approved by the Ministry of Agriculture and Fisheries FARM Programme. Loans will range between $500,000 and $2 million and will be utilised for short-term crop financing, including purchasing of fertilizer,insecticide, seeds, and securing labour directly related to the crop production.

In the first phase of the project, the bank will be lending for the planting of onions, irish potatoes and hot peppers. The maximum loan term for the financing of onion and potato crops is six months and the maximum term for hot peppers is nine months. A maximum of 10 per cent of the project cost (up to $200,000) can also be used for the purchase of capital equipment specific to the project/crop planting. Loans will be disbursed against invoices for material and labour and directly to the suppliers for material.

Speaking about the launch of the programme, Patsy Latchman Atterbury, vice- president for small business banking at Scotiabank, said that the FARM fund was “a great partnership that clearly demonstrates that once we are committed to the process, all parties, the Government, bank and customers can all work together to improve access to financing. We expect that this fund will ease the pressure on our farmers’ cash flow and assist them to improve their yields and produce better quality products and grow the business further.”

Scotiabank and the Ministry of Agriculture have signed an agreement which will see the Ministry and RADA selecting and training farmers, assisting the farmers to prepare business plans and providing an assessment of the financial and technical viability of the project before a formal application for a loan is made to the bank. The Ministry will also monitor and supervise farm operations and help farmers in marketing and sales.