- Primary investments are needed to provide cultivation and irrigation equipment, climate change adaptation technology, and to enable value chain integration.
- Working capital advances and term financing required as traditional financial instruments with collateral and monthly repayment schedules are not appropriate for farmers with non-monthly production cycles.
- Financing is required for farmers, who will then pay other members of the value chain for machinery and input.
- Jamaica and Trinidad & Tobago currently rank higher than the Latin American average for ease of access to credit. Along with the Dominican Republic, they also rank highly in terms of credit information sharing.
- The main financial services providers to agricultural small and medium-sized enterprises in the region are microfinance institutions and credit unions.
- Investment Cycle
The traditional loan model is not ideal since it is predicated on collateral and monthly repayments, neither of which can be accommodated in the sweet potato model. Working capital advances against sales contracts, with an adjusted repayment period of four to six months, would fit better with the production cycle.
The sweet potato cash in-flow period is about four to six months. The retail financial institutions, coupled with sources of developmental finance, social lending and risk mitigation measures, have the opportunity to finance advanced sweet potato initiatives in the region through profitable and risk-mitigating financial instruments and schemes.
Even though the sweet potato export market pull is strong, Jamaica and Saint Vincent and the Grenadines are still in the throes of putting a smooth, sustainable, global value chain system in place. Challenges include coordination of the value chain stakeholders, improvement of productivity, and access to technology.
Import trends in major markets
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. Nevertheless, smaller local markets should not be ignored.
- The UK and the US are major Caribbean sweet potato importers, and along with the EU, are seeing increases in demand.
- US imports of sweet potatoes increased by 50% from 2011 to 2015otato have increased by 50% from 2011 to 2015.
- Based on factors such as quality specifications, cost reduction practices, continuity of supply, and timeliness of delivery, some small and medium-sized enterprises in countries such as Jamaica and Saint-Vincent and the Grenadines can be considered export-ready.
- Investment needs for production include resources to address infrastructure: land cultivation and irrigation equipment, climate adaptation technologies, national agriculture statistical information systems, and value chain coordination.