President, Dr Mohamed Irfaan Ali on Saturday announced that the government in the next five years will work to reduce agricultural interest rates from the current 8-12 per cent to as low as 3.5 per cent that will reduce input costs and increase productivity.
The head of state made the announcement on Saturday when he travelled to the township of Anna Regina, Region Two (Pomeroon-Supenaam) to continue his engagement with cash crop and rice farmers, as well as fisherfolk.
He informed the audience that it is the People’s Progressive Party/Civic (PPP/C) Administration which reduced housing loan interest rates from about 37 per cent to 3.5 per cent, thereby making home ownership more viable.
“This is what we have to do for [the] agriculture sector,” heaffirmed in his address, before adding, “this is a next wave of policy initiative that must give the incentive to the banking sector, to bring down that interest rate…from 12 to 3.4 to 5 per cent.”
This will become possible through a special co-investment fund that will help farmers to move away from solely relying on grants or loans.
By backing the investment and co-financing, the president explained that the government lowers the financial risks to commercial banks.
“[it] reduces the risk [for] the banks, and give you [farmers] a better opportunity to get a better loan,” he explained.
Additional support will be provided to farmers via grants. The president explained that a farmer needing $6 million might get up to $1 million as a grant. This will lower the remaining amount the bank needs to finance and thereby reducing the interest rates.
And, “because of that grant element, the agreement for the bank, is to reduce the interest rate from 8 per cent to 4.5 or 5 per cent. That is the type of initiative [the government] is talking about.”
Risks will be reduced further through investments in drainage and irrigation, construction of all-weather roads in the dams and granting land-ownership to small-scale farmers. These measures are expected to unlock private sector capital, lower the barrier to entry for small and medium-scale farmers and support wealth creation.
On Friday, President Ali journeyed to West Coast Berbice in Region Five, where he outlined the government’s strategic vision for the sustainable development of region’s agriculture sector.
Similarly, on Thursday he hosted discussions with farmers of Region Six, reflecting his on-the-ground approach to developing policies that are integral to farmers’ livelihoods.
