Compiled by Adelle Roopchand, CTA (ACP-EU)
PORT OF SPAIN, Trinidad, Jul 27 2017 – Agriculture is often perceived as a risky sector for investors and banks are generally reluctant to lend to farmers due to their lack of understanding of the sector and associating it with high risk. However, in recent years various types of innovative financial instruments are being introduced by governments, donors, impact investors and others to make finance more easily available to farmers.
The Caribbean and global demands for sweet potato can be met once financial institutions diversify its services to the micro, small-medium enterprises (MSMEs) in the region. A new financial publication, “ Investment Guide for the Sweet Potato Sector in the Caribbean”, outlines the benefits and challenges in the sector and provides possible solutions for the both the farmers and financial institutions.
The investment guide was written by Dr Basil Springer and developed through the partnership of the Finance Alliance for Sustainable Trade (FAST) and the Technical Centre for Agricultural and Rural Cooperation (CTA) ACP-EU with financial support from the Intra-ACP Agricultural Policy Programme (APP). It highlights the investment potential in the CARIFORUM region’s growing agribusiness sector, with increasing global demand for tubers, added value of cultivating the crop, and the governments’ efforts to promote production and value addition.
CARIFORUM (Caribbean Forum of the African, Caribbean and Pacific Group of States) countries in the Caribbean comprises Antigua and Barbuda, the Bahamas, Barbados, Belize, Cuba, Dominica, Dominican Republic, Grenada, Guyana, Haiti, Jamaica, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Suriname and Trinidad and Tobago.
The investment guide was developed to explore three different streams, the macro economic profile of the Caribbean; the sweet potato value chain; and the creation of a favourable environment for investment.
The following are the key messages outlined in the new guide:
- It explores innovative financial instruments available for the sweet potato value chain in the Caribbean to mitigate risks and take advantage of the fast growing investment potential in the sector;
- Call for greater reliance on domestically produced fresh or processed sweet potato rather than imports;
- More investment in technology needed to enhance sustainability, increase productivity and boost profits in the Caribbean sweet potato sector;
- The sweet potato sector in the Caribbean provides many investment opportunities in boosting productivity, enhancing production processes and generating and marketing multiple products;
- The Sweet potatoes is a drought tolerant crop actively promoted to mitigate climate stress;
- With better access to finance Caribbean farmers could benefit from the growing demand for sweet potatoes in the lucrative UK, US, and EU markets;
- Growing the export market for sweet potatoes in the Caribbean will heavily depend on support for investment from financial institutions and the efficient management of the value chain;
- Access to affordable finance is the most critical constraint that inhibits the growth of the sweet potato sector in the CARIFORUM region.
The Guide also highlights that the Caribbean region has the right qualities to promote growth and investment in the sweet potato. These qualities include:
- Favourable climate for investment;
- Favourable climate conditions;
- Import substitution in the region;
- Potential Export-Ready Countries;
- Sweet-potato value chain management;
- The sweet potato sector represents a promising business opportunity;
- The sweet potato sector offers investment opportunities for the short, medium and long term;
- Sweet potato as a climate stress resilient crop; and
- Timely access to appropriate finances is key.
CARIFORUM governments to reap the benefits of the growing demands in the sector, by implementing plans for diversifying the agricultural investment initiatives to provide access to finance by the farmers to improve their production capacity and acquire necessary inputs. Hence, the financial institutions will also have an opportunity to expand its services in the agri-sector to include all aspects along the sweet potato value chain (from the farms to forks). It is, therefore, a much-needed business innovation and creation within CARIFORUM government and financial institutions to address a smart-finance opportunity in the region.
The FAST President and CEO Noemí Perez said, “This Guide provides practical information to financial services providers (FSPs) that wish to invest in the sweet potato sector in the Caribbean. FAST hopes that, with the right information, more and more FSPs can tailor their financial products and services to the growing demand in the agricultural sector.”
The sweet potato is a drought-tolerant crop which harvest takes some five to six months, and as with most agri-sector commodity the process to secure financing delays the cycle for production which also includes export in a timely manner.
The Guide also identifies the Beauregard variety of sweet potato [orange fleshed sweet potato] as a preferred choice of consumers which is highly nutritious. Due to the variety together with proper agronomic practices and favourable weather and soil conditions, it highly resistant to pest and diseases and has a shorter production time of three times more harvest annually to that of other varieties [over 400 varieties of sweet potato globally].
The CARICOM’s Caribbean Agricultural Research and Development Institute (CARDI) has produced proper practice guidelines for sweet potato which have been used successfully in Jamaica and Saint Vincent and the Grenadines.
The CTA Director Michael Hailu added, “Access to finance is one of the critical challenges that small-scale producers across the Caribbean and other regions where we work face in modernising their operations and reap greater benefit from farming. We hope the investment Guide will help in attracting badly needed finances to the regions’ promising sweet potato sector.”
A noteworthy aspect of the guide is that it discusses challenges and identifies favourable conditions or potentials within the value chain. It summarises that for outstanding production and export values, technical aspect must be carefully addressed. Such was the lesson learnt from these CARIFORUM countries as the Dominican Republic, Jamaica and Saint Vincent and the Grenadines. However, more attention needs to focus on the management of value chains and business systems as the industry expands. It identifies additionally the need for ‘coordination of the value chain stakeholders, improvement of productivity and access to technology’ as challenges faced by the sector.
Interesting Facts about Sweet Potato from the Investment Guide:
- The leaves, shoots and root are edible;
- Sweet potato vines also provide the basis for a high-protein animal feed;
- It has a high starch content and is well suited to processing;
- It has become an important source of raw material for starch and starch-derived industrial products;
- Added value includes a variety of products and ingredients made from the sweet potato root, including flour, dried chips, juice, bread, noodles, candy and pectin.
- New products include liquors and anthocyanin pigments from purple varieties for use in food colouring and in the cosmetics industry.
- It is an excellent linkage with the livestock and cosmetics industries and can be another way to mitigate the risks of investments as the product portfolio diversifies.
For more information on the sweet potato investment guide, please visit: http://www.cta.int/en/news/investing-in-caribbean-agriculture.html firstname.lastname@example.org
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