Only 54 of 1,185 loans repaid to Farmers’ Support Company 

Most of the farmers and fishers who have borrowed money from the state-owned Farmers’ Support Company (FSC) have not repaid their loans.

In fact, of the 1,185 loans granted since the company was founded in 2013, only 54 have been repaid in full.

There are still 1,131 active loans, of which 984 are overdue by five years, 126 overdue by one to five years, and 13 are overdue by one to 12 months.

Minister of Agriculture and Fisheries Sabato Caesar presented the information to Parliament on Nov. 23 in response to a question by Opposition senator, Israel Bruce. 

Bruce noted that during the National Address to mark our 44th anniversary of Independence, Prime Minister Ralph Gonsalves had announced the waiver of monies that were to be repaid to the company.

He asked Caesar to say, as of Sept. 30, 2023, what  the total amount of money that was lent under the FSC was, the rate of delinquency on its loan portfolio, as well the major factor that contributed or are contributing to the rate of delinquency.

In response, Caesar told Parliament that a significant number of the 54 people who have repaid their loans are arrowroot farmers, whose payments were automatically deducted from the payment for their crops. 

Caesar said the government has lent a total of $6,065,158.46 since the FSC was established  in 2013.

He said the 1,185 loans to farmers and fishers were valued at $6 million and 31 people died after receiving loans, valued at $132,000.

The 54 loans that have been repaid were valued at $223,000, the agriculture minister said, adding that the 1,131 active loans have an outstanding balance of $4.4 million. 

He said that with the 50% waiver on the principal announced by the prime minister, that is now reduced to $2.2 million.

The agriculture minister said that as the arrowroot factory is state-owned, when farmers sell their rhizomes to the factory, there is a system for automatic deduction of a negotiated percentage. 

“So, over time, the arrowroot farmers were able to repay their loans,” Caesar said.

“We did not have such an arrangement with an off taker, so that we could have the automatic deductions. Hence, one of the bedrocks of the principles on the fleet expansion programme that we have jointly — KCCU and the government of St. Vincent and Grenadines — is that there must be an off taker from which you will have an automatic deduction.”

As regards the rate of delinquency, the minister said many farmers are still grappling with the effects of the April 2021 eruption of La Soufriere volcano.

“… the impacts of 32 volcanic eruptions, explosive eruptions, definitely displaced many farmers and prevented them from being able to make payments,” Caesar said.

He said that in the Volcano Red Zone, there were loan recipients to the tune of $1.8 million. In the Orange Zone, the value of the loans was EC$400,00 and in the Yellow Zone, EC$1.2 million for a total of $3.4 million.

“And persons who are listening would tell you who are farmers that the ash did not fall only on the doorsteps of some farmers. Everyone in St. Vincent and Grenadines was impacted,” Caesar said. 

The second reason for the delinquency was the impact of “a period of climatic turmoil” after the establishment of the FSC in 2013.

He mentioned Hurricane Tomas, which impacted SVG on Oct. 30, 2010 leading to the government establishing the FSC and Tropical Storm Matthew on Sept. 28, 2016, resulting in flooding and landslides.

The minister also spoke of Tropical Storm Harvey on Aug. 18, 2017 which also resulted in floods, landslides and Hurricane Elsa on July 2, 2021, which resulted in flooding, landslides and lahars with significant crop loss and loss of livestock .

“In 2020, we experienced one of the worst droughts in 20 years, and also we were impacted negatively by drought conditions in 2023,” Caesar said.

The third reason Caesar mentioned was the death of 31 farmers who received loans, resulting in those amounts being written off.

“… and we know that the average age of a farm  in St. Vincent and Grenadines and in the OECS (Organisation of Eastern Caribbean States) is over 50 years old.”

Caesar said that the disruptions in the supply chain because of the COVID-19 pandemic also contributed to the delinquency. 

“And not only locally, but because we had an increase in the price of fertiliser, the government had to actually subsidised fertiliser, so we had person with loans, and you had a massive increase because of fertiliser and other inputs, that even though the person’s had a 2% loan from the government, the government still had to come and subsidise those persons,” he said. 

“And the final one, I won’t list this as a five. But, as leaders in the community, we have to be very careful when we speak, because persons are listening.”

Caesar said he remembers one morning hearing a then Member of Parliament, on radio saying that the monies that are available to the FSC was  a gift from Venezuela and t farmers should not repay the loans.

“What that did is that that level of irresponsibility, the 54 persons who repaid went down back for their money.

They said, ‘We hear on radio that we need to come back for our money because we repaid, we heard that the money is for free and we come back for money.’

“Of course, the manager had to say to them, ‘Well, that is a falsehood. And persons have to repay.’ And since then we saw a decline,” Caesar told Parliament.

“Certain persons of a particular persuasion, said, ‘Well, there’s another view I don’t have to repay. It was a gift.’ And I think that — I don’t want to add it as a number five. But the jury is out there as to whether or not it is a number five. I will rest here,” Caesar told Parliament.

Bruce commented: “I’m glad farmers in this country finally getting some ease.”