Realising Equity through Financial Literacy
The story of Sakeasi Tivika of Tailevu documents how financial literacy initiatives improved his farming production through a changed behaviour towards financial record keeping.
Today, Sakeasi has a better understanding of linking his cropping plan to ‘Cash Flow’ projections.
Agriculture value chain
His business is part of an agriculture value chain and he has been able to secure a market for his ginger with Kaiming Agro Processing Ltd.
Further, he has accessed financing by assigning the contract with Kaiming to secure the loan with the Fiji Development Bank (FDB). Despite having farmed Dalo and Cocoa as well as managing a cattle farm for over 20 years, Sakeasi did not have a habit of keeping farm or financial records.
He was not tracking his income or expense. As a result, he could not have a budget or a savings plan. While he had farming experience, his attempt at accessing financing was initially declined.
“I started ginger farming in 2018 on a small scale just to increase my income,’ said Sakeasi.
“After being assisted by the Ministry of Agriculture in 2017 through aid money, I was able to buy farming tools such as spade, forks and knives. Then I started to concentrate on ginger,” he said.
He said that the Fiji Crop and Livestock Council (FCLC) assisted him with the hiring of a digger service provider. It was through this assistance he was able to complete land clearing which is a costly exercise.
‘FCLC also assisted me in securing a market for my ginger with a large processing company and open the doors to FDB,’ said Sakeasi.
In November 2018, FCLC and FDB signed a memorandum of understanding to work together to improve farmers’ understanding of financial management through its Financial Literacy Tool Kit, crucial to increasing returns from their agricultural businesses. Then in December of 2019, FDB participated at a workshop organised by FCLC and the Ministry of Agriculture with over 50 ginger farmers from Tailevu, on the main land. “FDB brought a consultant from ADB, Simon Thompson, who talked about the Agri value chain financing and the new reform by Government, the Personal Properties Security Act (PPSA) that would allow farmers to use assets such as crops and contracts as collateral for loans,’ he said.
“When I initially approached FDB for a loan, it was declined because I did not have any form of security nor records to prove my financial management skills or bank statements,’ said Sakeasi.
“What I did have was a viability farm report from Ministry of Agriculture and support from the Agriculture Ministry, FCLC and my cluster group,’ he said.
Drekenivuci Ginger Farmers Cluster
Sakeasi is the head of the smallholder ginger farmers of the ‘Drekenivuci Ginger Farmers Cluster’, based in the Naloto district in Tailevu.
“With no security, no cash deposit, no farming experience in ginger in particular, I had to start from scratch.
“I had to concentrate my attention to changing my attitude towards farming and start treating farming as a business,’ he said. “Through the FDB team I was introduced to cropping plan and budgeting templates to use in recording my farm activities as well as my income and expenses,’ said Sakeasi. “We talked about the balance sheet, income statement, monthly farm trading account, cash flow, and I was able to understand one thing – recording helps to make decisions,’ he said.
He said that the facility that FDB financed him through also required the business to engage his family in it.
“The loan account is under my wife, Merewalesi, and my name and our children and my brothers are all involved in the farm,’ said Sakeasi.
He said now that he knows more about his projected income, expense and cropping plan, he is able to plan effectively.
Sakeasi had also undertaken ‘Contract
Farming’ training through the Fiji Crop Livestock Council, funded by Food & Agriculture Organisation (FAO).
“The Ginger cluster that I belong to has signed an agreement with Kaiming Agro Processing Limited I also have a contract farming agreement which I used to get a loan from FDB for my land development, agro inputs, land clearing and planting materials,’ he said.
In order to sustain his contract with Kaiming, Sakeasi now has a positive attitude towards record keeping.
His changed behaviour has helped him to be more productive.
Sakeasi’s story reflects how financial knowledge combined with skills, attitudes, and actual behaviour change when applied effectively, lead to a strong foundation for the financial wellbeing of him and his business.