The Government has secured an agricultural loan of US$7.8 million (J$6.24 billion) from the Caribbean Development Bank (CDB), for on-lending to farmers.

Minister of Agriculture, Dr Christopher Tufton, speaking in the House of Representatives on Tuesday, said the loan, which was approved by the board of directors of the CDB last week, will be channelled to the agricultural sector through the Development Bank of Jamaica early next year, at an interest rate below eight per cent.

"These loan funds are going to be used to encourage the modernisation of the agricultural sector," said Tufton.

Dr Tufton, in the meantime, pointed to the need for a dedicated and sustainable source of funding for the agricultural sector and said the ministry was preparing a proposal to submit to Cabinet, in the New Year, for the establishment of an Agricultural Development Fund, which will provide a critical mass of funds, at low cost to deal, with the modernisation of the sector, including commodity areas.

Pursuing initiatives

Tufton indicated that the ministry was pursuing initiatives to encourage the Development Bank of Jamaica and other financial institutions to relax some of their collateral requirements.

The Government, he said, was reviewing different models of financing for small farmers including the Grameen Bank Model.

He told the House that the Food and Agriculture Organisation was assisting the Government to undertake a study, which will determine the appropriateness of the model as a micro finance tool.