Financing the region's agriculture sector


Financing the region's agriculture sector

Private sector investment is crucial

Business reporter

Friday, May 08, 2020

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As the Caribbean grapples with the fallout in key sectors there are renewed calls for the expansion of others such as the agri-industry, which some stakeholder groups such as the private sector believe if properly invested in will help the region in food proofing its status during and after the COVID-19 pandemic.

Among the investment financing mechanisms mentioned yesterday at a Food and Agriculture Organization (FAO) and Caricom webinar was the renewed call for a regional stock exchange.

Patrick Antoine, representative of the Caribbean Private Sector Organisation (CPSO), said that investing in agriculture continues to be a strong strategic move as agri-food has been recession-proofed — this as irrespective of a recession, people must eat.

“To finance agriculture we need to have more instruments; commercial bank loans will not do it. We need to have a regional stock exchange, we need to have a Caricom stock exchange that essentially drives private equity and remove the constraints, and we need to have a junior stock exchange like Jamaica. We would like to see that extended to agriculture,” he said.

“Where we are now looking into the future of COVID[-19] we need to be concerned about driving exports, cutting imports and driving intra-regional trade — we need to do that from a perspective of private sector investment,” he continued.

He reasoned that the next 10 years will be critical for the Caribbean, not just because of the period that we are engaged in but because it will define what the Caribbean will look like in terms of investment going forward. The CPSO representative therefore noted that the involvement of the private sector in the unfolding scenario of growth, employment and economic activity is going to be indispensable —becoming almost critical to the solution.

Outlining further mechanisms to provide blended financing options for the agri-industry, he proposed the need for more equity management firms to pool funds for the sector, likewise the need for more government and private sector joint funding.

“We need to understand that our capital and finance markets are extremely underdeveloped. There is an opportunity for government to use some of its borrowing power at this time and blend that with private sector funding,” he said.

With a World Bank projected loss of six per cent of real gross domestic product (GDP) for the region, which could significantly impact food security, Antoine said that the region needs to work at addressing the impediments that exist, i.e. intra-regional trade and movement, and also formalise protocols in order to facilitate the needed transitions.

“We believe that in the most difficult circumstances that we face, there is scope and room for us to make a quantum shift. The CPSO members and the private sector are now engaged like never before and we are committed,” he shared.

Saboto Caesar, the minister of agriculture in St Vincent and the Grenadines who also sits as chair of Caricom's agriculture sector COVID-19 response task force, in contributing to the discussion also underscored the importance of private sector engagement and the continued commitment of agriculture and fisheries stakeholders to the sector.

He expressed a strong belief that wealth can be created in the region through intra-regional trade, if the issues of linkages and investments in the sector are addressed.

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