Capitalise on growth

The expansion of sweet potato demand in the lucrative UK, US, and EU markets provides an opportunity for growth in the sweet potato trade. These primary export markets are much bigger than the supply potential of the countries in the region, even at maximum production growth thrust. This increased demand represents an opportunity for financial learning to become credit-ready and more sustainable, as well as being an opportunity to invest in this agricultural sector in order to capitalise on growth.

Timely access to appropriate finances

Most of the business risks which inhibit the growth of sweet potato production in the CARIFORUM region can be alleviated if the primary constraint, the lack of timely access to appropriate finances, is addressed.

The existing loan instrument offered by traditional financial institutions does not meet the needs of the sweet potato value chain because of the requirements of hard collateral and a steady monthly cash in-flow to meet amortised monthly loan repayments. The creation of an economic cluster, either in the form of a farmer aggregator, processor, or value chain coordinator (VCC) can represent the farmers' interests in terms of markets and financial returns, monitor and facilitate the management of the business systems for the stakeholders, and enhance the chances of business success.

It is equally important to establish a dynamic agricultural information system that provides production information for marketing intelligence and marketing information for production intelligence, which will facilitate the investment decision-making process for agribusiness development in the region.

Economic clustering

In the region, sweet potato producers are a diverse set of disaggregated small farmers who have to be coordinated. They are the primary entrepreneurs, but often do not get a fair share of the net profits. The proposed economic cluster (farmer aggregator, processor or VCC) has been introduced as a potential solution to look after the interests of farmers, including the efficiency of operations in the value chain system. The proposed economic cluster would have a major responsibility to look after the needs of farmers to ensure that they are not restricted to a fixed farm gate price and that they also benefit from the fluctuating net fortunes of the export market.

Most farmers are in remote or isolated locations which underlines the need for new financial models that consider the strengthening of farmer organisations. It is important to realise that the sweet potato sector offers investment opportunities for the short, medium and long term.

Financial security and efficient management of business systems

The success of any sweet potato export initiative will depend on the positive response to investment (financial security) from financial institutions and the efficient management of the other business systems: corporate governance (laying a sound foundation for operating rules through a trust), marketing (product promotion to generate revenue), operations (resilience, adoption of technology, and growth) and people development (sustainability).

 

CTA FAST GUIDE cover

Download your Investment Guide here

The Finance Alliance for Sustainable Trade (FAST) has partnered with the Technical Centre for Agricultural and Rural Cooperation (CTA) to develop an investment guide for the sweet-potato sector in the Caribbean Forum (CARIFORUM) region for financial institutions (FIs), with financial support from the Intra-ACP Agricultural Policy Programme (APP).

 

Contact CTA

CTA
PO Box 380
6700 AJ Wageningen
The Netherlands
E-mail CTA
 
Visiting address:
CTA
Agro Business Park 2
6708 PW Wageningen
The Netherlands
Tel: +31 (0)317 467100
Fax: +31 (0)317 460067
Map it

Contact FAST

FAST
Suite 801
1255 Blvd. Robert Bourassa
Montreal, QC
H3B 3W3
Canada
Tel: +1-514-759-6626
Fax: +1-514-759-6603
Map it