By Keisha Phillips
St Lucia banana
farmers seek US$3.7M funding
"However, the banks are still wary as the SLBGA is
reluctant to
take the hard, cost-cutting measures to return to viability."
The St. Lucia Banana Growers' Association (SLBGA) has asked
Eastern Caribbean Banks for a EC$10 million (US$3.7 million) funding
facility to support its restructuring plan. According to a spokesman
from the association, if the funding is not forthcoming, the industry
may not survive.
But the banks, particularly the St Vincent-based National Commercial
Bank, are calling for government guarantees for the programme,
since the Association is already indebted to the institutions
for $60 million.
"We have had to call a meeting of all the banks, because
the National Commercial Bank (NCB) has said that they alone could
no longer fund the banana industry," says SLBGA Chairman,
Rupert Gajadhar.
He said the NCB, which provides most of the SLBGA credit, indicated
that they had reached their limit and could not fund the entire
restructuring programme.
"Apart from restructuring the industry, the Association also
needs funds to support its operations to the end of the first
quarter of the year, when prices are expected to increase again.
Gajadhar said the industry started the year on a low note,
as the European market had all but collapsed under the cold winter
weather."
As a result, he continued, very little fruit was sold, and the
Association now receives 22 cents per pound for the fruit, with
14 cents going to packaging material and 8 cents to management
fee.
"This means there is no money whatsoever to pay the farmers.
So, we called a meeting of all the banks, in the hope that we
could get a consortium loan," he added.
Gajadhar also said the meeting was well attended, but not concluded,
as the banks required additional information related to a long-term
cash flow, which the Association did not have readily available.
The banks are still wary of the deal, as the Association, was
again reluctant to make cuts to realise savings.
"The Association seems to be maintaining its track record
of not sticking to targets for restructuring the industry,"
says one banker. "The executive is also being pressed by
the growers, who are saying that they alone are being called upon
to make the sacrifices," he added.
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