[Photo: File]

Farmers need more affordable financing if Fiji is to attract greater investment and diversify its agricultural sector.

Public Accounts Committee member Sachida Nand is calling on the Fiji Development Bank to review its lending rates for agriculture, saying high borrowing costs can discourage farmers from expanding their operations.

Nand says cheaper loans could encourage farmers to invest in new commodities instead of relying heavily on sugarcane.

“So I urge FDB to relook at its interest rates, especially in the agricultural sector, and make it attractive for farmers to come in, apply for investment loans, go and invest in the agricultural sector, and start producing, because a lot of times we are talking about sugar, sugarcane, there are other commodities apart from sugarcane, and we need to grow all these commodities.”

FDB Acting Chief Relationship Officer Ramesh Chand says the interest rate is only one part of the bank’s lending arrangements.

He says farmers can access lower rates where government subsidies apply, while the bank also offers longer repayment terms.

“As I said, if subsidy applies, then the loan becomes a lower rate, but if the subsidy doesn’t apply, then the rate’s a bit higher. But having said that, besides the interest rate, there are other facilities which we add to it, and those include a longer term.”

Chand says the bank also considers a farmer’s ability to repay and the performance of the project when structuring loans.

He says the bank can also review lending arrangements when farmers are affected by natural disasters.

“We have also been very, very lenient in terms of when there is natural disasters or impact of any natural disaster on the project itself. Initially, it might be that the interest rate is coded as high, but as we go along, we have reviewed interest rate as they go along, because the risk is reduced, and we have always matched up to the expectation of the farmer as we go along.”

Nand says agricultural lending needs to become more competitive if Fiji wants to expand production and develop new industries.
He says farmers should have access to financing that reflects the long-term nature and risks of agricultural investment.