Those in agriculture will tell you that farming is costly, case in point, the scores of farmers in Flagaman, St Elizabeth, whose crops went up in flames last week, with an estimated $45 million in losses.

Already, the Ministry of Agriculture has pledged its support to enable those farmers to regain a solid footing. But the question of where to access funding becomes a pressing issue.

Varun Baker, the CEO of a local tech-company that is helping Jamaican farmers access capital, believes that solutions can be found with the utilisation of technology-trending crowdfunding platforms.

“Financing agriculture is a huge problem in Jamaica. In our economy, it is much easier to get a loan to buy a car than it is to put into agricultural production. There is a fundamental problem there that I think needs to be solved. That is why we are utilising technology to build profiles on behalf of farmers who otherwise might have a challenge getting financing,” Baker told the Jamaica Observer in an interview earlier this month.

“Food and agriculture contributes about seven per cent to the country’s GDP. How much more would that be if it was supported by the financial institutions? Right now they are lending less than two per cent of the total lending they do.

“Beyond just building these profiles and showing them to our microfinancers in our network, we are also launching a crowdfunding platform for farmers so that even individual investors can get involved and make what we call micro investments in these farms,” said the tech CEO.

He explained that the idea came together at a hackathon put on by the National Commercial Bank and the International Business Machines Corporation in 2017, where Baker and his team coded their way to the top spot of the competition, having created a prototype digital tool that reduces the paperwork and loan processing time for creditors and agents.

“We emerged the winners because of this idea, which we now call Farm Credibly,” said Baker.

The start-up is currently targeting 200 small farmers whose profiles will be launched on their crowdfunding platform with a focus on peppers.

“Right now there is unmet demand in that area. The agro-processors and exporters tell me that they have to turn down orders for pepper every year. So there is a guaranteed market for a very high value product that is something we have an edge on in Jamaica.

“It is very important for the farmers we support to make sure that their produce hits the market and that they get a good price for what they have been growing. It is all about finance and making sure everyone gets back their money at the end of the day,” said Baker.

The farmers are recommended by other agricultural stakeholders and agro-processors with whom they have established relationships and who, Baker explained, are the primary users of the digital tools afforded by the company.

“It is technology driven, but there is not a huge requirement on farmers to use the technology. A lot of the data that goes into building farmer profiles come from third parties; it comes from us establishing a relationship with the agro-processors or a hotel, or whoever is in the farmers’ business network, they are the people who interface more with our technology. We do the leg work on behalf of the farmers so that there is no burden to fill out forms or paper work,” said Baker.

The company works with a tailored budget of $2 million per acre for each farmer, who can access the funds incrementally.

“We want to make sure that every aspect of it is financed and there are no short cuts. It is very much a process where we help to monitor and track the progress of the farmers. The money is handed over in small sums generally.

“We have a programme where, for example, we disburse $50,000 to farmers each fortnight based on them hitting the targets that they set. We ensure that everything is going on track with the farm, and those regular payments last for six months, and pepper itself takes just three months to start reaping and hitting the market,” said the young CEO.

He explained that the traction of microlenders and individual investors is what led to the opening of Farm Credibly’s crowdfunding platform.

“For the most part we see the most traction with microlenders who have reasonable interest rates because we are not trying to enable situations where our farmers fall into debt traps. In terms of the micro investors on our platform, we are promising them a 20 per cent return on their investment, so farmers need to take that into consideration if they are going the investment route.

“If they are just borrowing from lenders, it may be a bit less. We would like to enable more finance for more of our farmers, so we have added individual investors as another type of lender. We are seeing good traction,” said Baker, adding that the biggest potential comes from Caribbean wide microlenders.

Crowdfunding is but one way in which technology is being used to assist farmers, as Baker explained:

“There is also the general use of technology for monitoring the progress on a farm. Another way we are using technology is through prepaid credit cards. Not all farmers have bank accounts and right now farmers don’t have to have a bank account to work with us either. There are cards available through Sagicor; they can walk into the bank, show them a TRN and get the equivalent of a credit card that can be used the same way a master card is used. We use this to disburse loans as well.”

“We also encourage financial literacy among our farmers to ensure that they are investing their money back into the farm and to treat it as a business,” said Baker.

Farm Credibly is being funded by the Netherlands-based Technical Centre for Agricultural and Rural Co-operation and the Development Bank of Jamaica.

“Once we prove our model, we are looking forward to expanding,” Baker said.