New funds to perk up local coffee industry
Gary Spaulding, Senior Gleaner Writer
The ailing coffee industry has been given a lifeline with a J$310.5-million injection through a Ministry of Agriculture and Fisheries initiative.
The ministry was also at the receiving end yesterday, when the European Union (EU) donated 65 laptop computers and a spanking new vehicle to enhance its database and, ultimately, boost food productivity.
EU Ambassador Marco Mazzocchi Alemanni said yesterday's donation was valued at J$16 million and forms part of the €5.9 million of its two-year food-security programme.
In the meantime, the $310.5 million that was pumped into the coffee industry has been provided jointly through a fully secured loan by the Development Bank of Jamaica (DBJ) and the EXIM Bank.
The DBJ will provide 70 per cent of the total loan, amounting to J$214 million, at interest of 10 per cent, and EXIM Bank the remaining 30 per cent at an interest rate of between seven and eight per cent.
Agriculture Minister Dr Christopher Tufton said the loan would finance the purchase of 135,000 boxes of Blue Mountain Coffee.
Tufton said the first payment to farmers would amount to J$1,500 per box and an anticipated final payment would be in the sum of J$800 per box.
The financing arrangement was approved on Monday by Cabinet.
Tufton said he felt compelled to intervene to find an interim solution to the problem.
Japanese market dries up
The once-assured Japanese market, which ate up the bulk of high-quality Jamaican coffee, has all but collapsed, leaving coffee producers to fend for themselves.
"The Jamaica coffee is now at a crossroads," asserted Tufton. "The sector is running at huge excess capacity as demand is not matching supply."
Tufton noted that the crisis in the sector was precipitated by the decision of the Japanese to terminate the advance-payment system.
"This also means that instead of Japanese importers bearing the cost to carry the inventory of Blue Mountain Coffee, Jamaican exporters will now have to bear this cost," he noted.
Tufton said the new developments have placed the sector at great risk as coffee farmers may not reap the cherry coffee and the crop could be lost.
"This means a loss of income for coffee farmers, especially as we approach the holidays," Tufton added.
Milverton Reynolds, DBJ managing director, said the bank was pleased to be of assistance to the coffee workers and expressed confidence that the loans would be repaid on a timely basis.
He was supported by Lisa Bell, managing director of the EXIM Bank, who echoed the sentiment that the loan would provide a unique opportunity to restructure the industry.