Agri­cul­ture gets a fi­nan­cial beat­ing

Jamaica Gleaner - - ANNOUNCEMENTS -

THERE IS an in­creas­ing need to in­vest in the agri­cul­tural in­dus­try due to changes in peo­ple’s di­etary pref­er­ences as they try to take a health­ier ap­proach to eat­ing. Agri­cul­tural in­vest­ment is also rel­e­vant due to ris­ing lo­cal and global pop­u­la­tion rates. The Ja­maican pop­u­la­tion has in­creased from 1.62 mil­lion peo­ple in 1962 to close to three mil­lion to­day. The pop­u­la­tion in the United States of Amer­ica (USA), for ex­am­ple, has grown from 75 mil­lion in 1900 to 307 mil­lion peo­ple presently.

Ac­cord­ing to World Bank es­ti­mates, the de­mand for food will in­crease by 70 per cent by 2050, which will re­quire at least US$80 bil­lion worth of in­vest­ment to meet the de­mand. Most of this is ex­pected to be gen­er­ated from the pri­vate sec­tor, not the Gov­ern­ment. While agri­cul­ture pro­duc­tiv­ity has been in­creas­ing in the USA and other de­vel­oped coun­tries, agri­cul­ture pro­duc­tiv­ity has been de­clin­ing in Ja­maica due to lack of re­search, de­vel­op­ment and im­ple­men­ta­tion of new tech­niques and strate­gies on a wide­spread ba­sis. This, to some ex­tent, has been due to lack of fund­ing in some re­gard. The pri­vate sec­tor, es­pe­cially in de­vel­op­ing coun­tries, has been less than will­ing to lend to the pro­duc­tive sec­tor, es­pe­cially the farm­ing sec­tor, due to the high level of risk and un­cer­tainty sur­round­ing out­put crop yield and rev­enue gen­er­a­tion.

Banks and fi­nan­cial in­sti­tu­tions over the last two decade’s have re­duced the amount they lend for pro­duc­tive pur­poses grad­u­ally year to year and have in­crease the amount they lend for con­sump­tion pur­poses, mainly be­cause the funds lent for con­sump­tion loans (car and mort­gages) are backed by the per­son’s salary. Mean­while, the un­cer­tainty sur­round­ing do­ing busi­ness in Ja­maica, es­pe­cially farm­ing, has pre­vented the in­dus­try from ex­pand­ing and se­cur­ing it­self to be vi­able to con­sis­tently at­tract fund­ing. Ac­cord­ing to the World Bank, the bank­ing sec­tor in de­vel­op­ing coun­tries has lent less to the agri­cul­tural sec­tor than the agri­cul­tural sec­tor’s share of GDP.

Newspapers in English

Newspapers from Jamaica

© PressReader. All rights reserved.