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YOUNG FARMERS
PROGRAMME AGRICULTURAL
CREDIT SCHEME (ACS) (DOCUMENT) PROGRAMME OVERVIEW
I.
The
population of the Commonwealth of Dominica at 2002 is estimated at 71,000 for
Dominica, of these numbers, the share of youthful population defined as the
total number of persons within the 15 - 30 age group is 35% in Dominica.[1]
The challenge for youth participation becomes apparent when unemployment among
youths is examined. In Dominica, the level of unemployment within the target
age group was approximately, 68% in 2000, even though the level of unemployment
approximated 25% for the country as a whole.
II.
Overall,
the social-economic and structural elements have conspired to constrain youth
participation in the development process in general and in particular in agricultural/economic
activities in the Commonwealth of Dominica through the mechanism of three key
factors. These are: inadequate
institutional support services, weak attitudinal and technical preparation of
youth, and inadequate access to technical, physical and financial resources. As
the average age of the Dominican farmer increases, the number of young people e
entering into farming is decreasing at an alarmingly rate. The Population and Household Survey (2001)
reveal that of the persons between the ages 15-34 only 4.83% of the employed
individuals are engaged in Agriculture/Fishing/Hunting. Furthermore
III.
the percentage of individuals working in the
Agricultural sector declined from 30.8% in 1991 to 21% in 2001[2].This downward trend is due to
a number of reasons. Two of the most common reasons sited for this trend are
the lack of resources (financial and land) available to young people and the
lack of support which is a result of the poor image associated with
agriculture. This creates a serious threat to our productive agricultural
sector and our national food security. The dangers presented by this situation
are not captured in most agricultural development initiatives and many
interested young agriculturalists feel alienated from agricultural initiatives namely
funds, plans and programs.
IV.
The
agricultural sector in Dominica has a very strong relationship to the national
economy[3]
and continues to play a pivotal role in the stabilization and growth of the
economy. The liberalization of global trade and the proliferation of multiples
markets within the Banana industry forced out older, inefficient producers and
target a more commercially-focused farmer base. The changes in the market also
demands strong links between producers and the consumers, creating niche
markets out of a challenging situation.
V.
The
trained young farmer operation in the small island states produces safer
products of higher appeal because of the competitive advantage in producing
with more attention to details in chemical use, pest and disease control, and
direct farm value-added activities that are cheaper and easier to control and
monitor. These detailed production systems are characterized as sustainable
systems and represent the future of agriculture in Dominica coined the ‘Nature
Isle of the Caribbean’.
VI.
The
challenge to meet the market requirements in product specifications, quality,
certification and volumes is fully embraced by the agriculturists today. The
introduction of market protocols such as EUREP-GAP
and HACCP and the development of
trade and economic blocks such as the CSME
are prime examples; they illuminate the level of consolidation necessary to
sustain the viability of individual farmers as they produce for national and
international markets. Dominica therefore needs a cadre of trained, youthful,
educated and well-supported farmer base to embrace the opportunities created by
the market-led challenges.
VII.
Youths
involved in agriculture are faced with these market challenges, which are
further compounded by: i)
Lack
of credit and credit policies geared at facilitating young farmers and
producers receipt of financing for their endeavors; ii)
High
difficulty and stiff competition on accessing production resources such as land
and credit within the local banking sector; iii)
Lack
of specialized agricultural support services for young farmer entrepreneurs;
VIII.
The
need therefore lies in identifying and securing capital financing to meet the
demand of young farmers in seeking and supplying alternative market outlets for
Dominica’s produce and to encourage young farmers to capitalize on their
training and experience in developing commercially viable farms and
agribusinesses.
IX.
PROGRAM RATIONALE The MOAE recognizes the current
prognosis that the agriculture sector requires an influx of capital: human,
social and financial, to develop the market prospects of the agricultural
industry in the Dominica among young people. The agricultural sector is in dire
need of capital investments targeting young and beginning agri-entrepreneurs as
they prepare for embracing the emerging markets opportunities. Over the years, we have
witnessed a decline in output of major crops and a decline in the contribution
of agriculture to the national economy. There are inadequate incentives for new
entrants into our agricultural system. There is a need to provide the young
farmers with a production and marketing support system necessary to ease the
operational stress and market risks and create an atmosphere to expand
agricultural productivity and potential within Dominica. Therefore, the
Ministry of Agriculture, Fisheries and the Environment (MOAFE) is seeking to
implement a Young Farmers Programme (YFP) entailing the implementation of an
innovative youth development programme that would enable youth to access
training, and gain knowledge, skills and experiences through the implementation
of practical, income-generating economically sustainable pilot demonstration
plots and facilitate the establishment of commercially viable agricultural
enterprises, by accessing limited funds available under a credit revolving
component. STRATEGIC
POSITION Youth in Dominica are part of a vibrant and creative culture and if
engaged can offer innovative strategies and solutions for the sustainable
development of the country as a whole. Reinvigorating agricultural development
through the creative vision of youth and the development of vibrant leadership
in the country is critical for the way forward, if agriculture is going to be
perceived by the youth as a “prosperous and entrepreneurial” profession. SCHEME PURPOSE The Young Farmers
Agricultural Credit Scheme (ACS) therefore seeks to capitalize and
consolidate on the productive base of young farmers with the aim of setting up
a special financing facility in the Ministry of Agriculture, Fisheries, and
the Environment (MOAFE) in
collaboration with the National
development Foundation of Dominica (NDFD) to administrate funds for
providing short-term credit for production inputs procurement, marketing and
other enterprise development activities and initiatives. Specific Objectives: In its overall plans and activities, ACS will seek to: 1.
Improve
institutional support services in agriculture for increasing youth
participation in the development process; 2.
Strengthen
the technical capacity of youth to engage in agricultural development
activities; 3.
Improve
youth access to critical resources in order to enhance their participation in
agricultural development activities; ACS Strategic Initiatives Through the ACS initiative the YFP
will seek to: ·
Improve
the availability of and access to credit for youth farm enterprises that will
reduce the problems associated with the access of young farmers to credit; ·
Provide
credit for the expansion of crops production and marketing based on contractual
arrangements with licensed exporters and/or market outlets where possible; ·
Provide
inputs credit on a timely basis to young farmers; ·
Enhance
the use of farm management plans for sourcing credit, monitoring production,
managing cash flow, and reducing with the aim of eliminating credit access
bottlenecks; ·
Develop
and expand ACS to attract additional
technical and financial resources to sustain the fund. ACS IMPLEMENTATION STRATEGY The YFP seeks to
identify special young farmers and develop ACS
as a young farmer credit facility providing a range of services: specifically
input credit and training. Young farmers will be encouraged to become
registered young farmers and active members of a NAYA Chapter in their
agricultural region. Overall Strategies: 1.
YFP will institutionalize an
input credit facility with the capacity to supply production inputs and
marketing credit in the form of short-term financing to young farmers; 2.
Young
farmers will be required to register as a bona fide Young Farmer with the
MOAFE-YFP and as a scheme participant; 3.
Proceeds
of sales will pay credit installments and farm services as they are incurred; 4.
Critical Strategies for ACS Success: The following strategic activities will
be critical for the overall success of the project: · Timely disbursements of credit
to Young Farmers based on rapid
assessment of needs · Identification, mobilizing and
development of a minimum cadre of 15 commercially viable farms enterprises to
adopt and access the service within the first twelve-months · Development and implementation
of farm/businesses that ensures management, quality and productivity standards
are adopted and sustained · The support and endorsement if
all agricultural stakeholders; MOAFE, IICA, GOCD, CARDI, DEXIA, exporters,
market support service providers and farmers ·
Initiate
the process of expanding and institutionalizing the ACS to a Young Farmers Credit Program on a
national level within the second year of implementation of the scheme and
seeking additional capital financing for investment in the credit facility. ·
CREDIT SCHEME IMPACT The overall goal of the scheme is to have
a positive impact on the widest possible group of young farmers in the
community. The following, however, benefits directly or indirectly from ACS: Beneficiaries: 1.
Young Farmers: Reduced barriers to
credit access will encourage more young persons to invest in agriculture at
lower cost of production; the available credit will assist in the
diversification of young people revenue base, which will result in a better
standard of living for young farmers. 2.
Agricultural Sector: Improve the
quality of financial support service delivery to young farmers will provide
greater incentives for new young entrants within the agricultural sector. 3.
MOAFE-YFP: Allows it to expand its
mission of creating self–sustaining business extension services specifically
catering for youths who would be able to increase their participation in
Dominica agricultural development. 4.
Funding Agencies: Increase the
collaborative efforts of these agencies in providing financial support directly
to young farmer-recipients within their existing/established policies and
support systems. 5.
Dominica’s Economy: Provide increase
economic activity and agricultural productivity among rural youths that is
sustainable, easily available and will improve the quality of life for young
farmers. 6.
Expected Output: YFP
hopes to ·
Improve
and increase over 15 young farmers’ access to agricultural credit. ·
Provide
a secure and timely credit approval and disbursement system for young farmers. ·
Create
a source of income for the sustainability and continuity of the credit scheme. · Improve the linkage between
training programme deliverables and the use of credit · Increase participation of
youths in agriculture as business entrepreneurs ACS PROMOTIONAL PLAN The Scheme will
be promoted through print, radio and TV media; the official launching day will
serve as an event for general public awareness. The media event will be planned
by the PAC Committee on a date set by the PSC.
The PAC programme will highlight and promote the fund and the
beneficiary throughout the implementation of the YFP. ACS FINANCING YFP
through the GOCD intends to collectively invest approximately one hundred and
fifty dollars (EC$150,000). To ensure that the funds to meet the
intended demand of a targeted 15 additional young farmers, the YFP will
actively seek additional funds to increase the quantity and quality of low-cost credit to young farmers through
joint-venture and the development of similar credit scheme at other financial
institutions such as the AID Bank, NDFD. Sources and Use of Funds
CONCLUSION The overall
profitability of the proposed venture to farm credit support depends on our
ability to finance short-term capital investments for input purchases, sales
and distribution our target contracted youth farmers. This will reduce the
farmers’ dependence on regular commercial lending institutions. These
institutions failed to provide the quality of credit necessary for boosting
young farmers’ continuity or entry in agricultural production. This frustrates
our young farmers as there do not have the means to access the regular credit
facilities and the cost of credit is normally higher than they are able to pay
for it. We hope that this programme will provide a way out for a
significant few. Annex 4: Overall Administration and Credit
Policies: Lending Policy
1.
Submission
of a formal application form 2.
Interest Rate 5.5% per annum discounted 3.
Disbursement over a six (6) month period payments made directly to supplier or
as required (based on a formal arrangement with YFP and suppliers) 4.
Repayment Fixed monthly payments 5.
Grace Period based on nature of enterprise 6.
Credit Term up to a maximum of forty-eight months 7.
Security: Bills of Sale, Assigned marketing contracts, Youth Business
Trust Funds, Guarantor, Loan Agreement 8.
Maximum Credit available is ten thousand dollars ($10,000) Requirements
9.
Record
of leadership, business and or technical training in agriculture 10.
Invoice
and/or receipt of input, tool or equipment from a reliable and established
distributor or dealer 11.
Farm Status, Credit Needs Assessment and
Personal Credit Reports 12.
Formal Application with business/farm plan
attached 13.
Guarantee
or salary deduction authorization to be implemented in case of default General Uses of Funds
14.
Procure
inputs, farm supplies and tools and equipments 15.
To
undertake agricultural investments such as farm certification, greenhouse
production, irrigation, fencing, export marketing 16.
To
outsource farm development services and develop farm products POTENTIAL USE OF FUNDS
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