JAMAICA Agricultural Society (JAS) President Senator Norman Grant has called on the agriculture ministry, the Development Bank of Jamaica (DBJ), and the Agricultural Credit Board (ACB) to review a decision to suspend DBJ loans to farmers through the National People’s Co-operative Bank (NPCB).

“At this time, the farmers do need funding. The farmers should not suffer because of a lapse in oversight,” Grant said of the controversy which has emerged over the past few weeks after an audit ordered by the ministry revealed gross mismanagement and grave operational breaches at the bank. The audit found that $665 million of depositors’ monies was “not substantiated”.

Grant said that while the investigations are being carried out, and corrective measures put in place, the core functions of the NPCB must be continued.

He said, too, that there is no need for farmers and depositors to withdraw their funds from the bank.

“I am confident that the action that has been taken is of such that the PC Bank will be stabilised, the investments will be secured, and certainly the PC bank will continue to play a critical role in the transformation of the agricultural sector by providing funding,” he told the Jamaica Observer yesterday.

But at the same time, Grant said the JAS is “very concerned” about the findings. “I was the first chairman of the amalgamated PC bank between 1993 and 2003. In fact, the merger of all 137 PC banks took place under my watch, and the intention there was to grow the savings mobilisation; at that time it was $300,000 [and] it has moved to $3 billion,” he recounted.

The JAS president said despite the discovery of the improprieties, the association takes comfort in the fact that the agriculture ministry has moved to arrest the situation by appointing a receiver in the form of the regulator (the ACB). “That receiver we have great confidence in, because they understand the process and the overall objective of the PCB, which was to create a rural community-based financial institution to service the farming population and the rural communities,” Grant said.

Last week, Agriculture Minister Derrick Kellier stressed that the untidy situation at the bank had been exposed as a result of “astute surveillance” by the ACB and its partner agencies, and “the result of quick action on my part to unearth the true situation by virtue of the commissioning of the audit”.

In the meantime, Grant said the JAS wants to see a tightening-up of the areas where the gaps were found, as well as the strengthening of the regulator. “Maybe the minister may have to look at appointing a new ACB, with persons with the requisite skill to provide strong supervisory regulatory functions, to ensure that this tremendous growth that we are seeing in the PC Bank is not stymied,” he added.

Grant proposed also, that the DBJ should reintroduce the unit that was formed some time ago to provide operational oversight to the NPCB, at least for a period of time.

Meanwhile, he said the farmers have always complained that they face great difficulty securing loans without collateral. A part of the repositioning of the PC Bank was to ensure that the loans are disbursed in keeping with the core function of the bank — for agriculture and for the purpose for which it is borrowed — and to ensure that the depositors’ funding is safe,” he explained.

“I am very surprised that there was a situation where funding would have been provided for building a complex, but let me not go there yet,” Grant said.