The Nicaraguan Foundation for Socio Economic Rural Development has created a line of long-term credit to finance the renovation of coffee plantations affected by rust.
For this year, 2013, the Foundation (Fundeser) plans to increase, by $2.5 million, its provision of credit supply lines to the coffee sector in the long term for the renovations.
The general manager said, "We plan to participate directly and indirectly with our own funds and public funds in the renovation of coffee plantations that the country will need... They have to be additional resources because they are long-term loans, four to five years. "
The appropriation of productive land by peasant groups has caused the rejection of $8.2 million in loans requested by agribusiness.
The invasion of land housing mills and palm oil farms has increased credit risk. President by law to the Honduran Association of Sugar Producers (AHPA), Robert Vinelli said that because of the increased risk, banks will have more requirements and there will be an increase in borrowing costs because of uncertainty.
Improved grain prices encouraged banks to increase their loan portfolio for coffee production to about $56 million.
The bank approved $56 million for coffee planting in El Salvador between January and November 2011, 29.8% more than the same period in 2010 ($43.24 million), revealed the Superintendency of the Financial System (SSF).
"This implies that farmers received $12.92 million more to finance their activities," estimated the SSF according to an article on ElMundo.com.sv.
Better prospects for coffee and maize production compared to 2010, are generating a sustained demand for credit in El Salvador for these sectors.
According to information from Banco de Fomento Agropecuario (BFA) from January 2011 until July 13, 201 loans were granted to the coffee sector, totaling $11.03 million, of which 60% was allocated to maintenance .
The rise of grain prices internationally is an incentive for investment in the sector.
In just four months, financing in the country’s coffee sector has grown by over 150% compared to the same period in 2010.
One of the main reasons seems to be the excellent performance of the grain abroad. Due to high prices and the high demand in the market, producers are being seen as more credit worthy.
State banks are offering reduced interests rates to increase agricultural loans and assist in the recovery of the sector.
BFA, the Agricultural Support Bank, is providing $12 million in loans at an interest rate of 4%, in addition to $25 million provided by the Multi-Sector Investment Bank.
"Guillermo Lopez Suárez, head of the Agricultural Ministry, explained that these loans will encourage farmers to plant more, increasing the production of basic grains".
The Swiss cooperation will be for the Rural Competitiveness Project, COMRURAL.
The project will be implemented by the Ministry of Agriculture and Livestock (SAG), and will increase the competitiveness of small and medium producers through partnerships.
"The owner of the SAG, said the Swiss cooperation has been good enough to generate a pre-investment fund that will facilitate and implement a series of activities which will strengthen this project over approximately 6 years and will invest about one billion Lempiras in that sector." reports Latribuna.com.