Crop insurance mulled to protect NMI farmers

Local farmers will continue to take a conservative approach on vegetable production unless measures are put in place to protect them from potential financial losses, according to Commonwealth Development Authority Executive Director Marylou S. Ada.
CDA is currently advocating the institution of a crop and fishing insurance service in the Northern Marianas to address concerns raised by local farmers and fishermen who have remained skeptic toward expansion.
Ms. Ada said local farmers and fishermen have been manifesting apprehension in investing bigger capital in crop production and fishing due to the absence of a fallback mechanism in case things do not work right.
She pointed out that this attitude is displayed on CDA records which indicate that Northern Marianas farmers have not been asking for bigger loans.
In Fiscal Year 1999, the government’s prime lending agency loaned out more than $1.897 million for commercial fishing purposes. Farming loans totaled only $273,000 during the same year.
CDA approved some $551, 174 worth of commercial fishing and $445,000 agriculture loan agreements in 1998, which accounted for almost 50 percent of total direct loans okayed by the lending agency that year.
“Most of our farmer-clients don’t go for big amount of loan. They come to CDA asking for working capital or whenever they would feel the need to improve their inventory of seedlings and fertilizer,” she said in an interview.
Ms. Ada explained that farmers are more likely to start their respective businesses small and would only submit bigger loan application for supplemental funding once they notice progression.
“What they want to do is to start small and once they see that they are making good profits, that’s when they come in to ask for supplemental funding to buy big tractors, more seeds and fertilizer, and hire more laborers,” she added.
In the absence of surety companies that offer crop and marine insurance, Ms. Ada said public perception that farming and fishing are too risky to get involved with will remain.
“Farming and commercial fishing are perceived to be a risky business that’s why people don’t go out and get big loans basically because there’s no crop or marine insurance in the islands,” she said.
Instituting crop insurance services in the island would provide security that farmers have something to fall back on in case natural disasters like drought and storm damage their vegetation.
“These are the two critical factors that hinder growth in farming and fishing sectors in the Northern Marianas. It is really difficult at this point to go on a big scale farming and fishing because of their high-risk nature due to lack of insurance,” Ms. Ada said.
Government previously disclosed plants to establish a fishing and farming cooperative, a move seen to revitalize the islands’ agriculture sector amid dramatic slowdown in garment manufacturing and tourism industries.
The plan is part of the government’s intensified efforts to minimize the Commonwealth economy’s heavy reliance on only two major business activities, which are both vulnerable to suffer adverse impacts from external forces.
The cooperative is expected to alleviate the difficulties faced by local farmers and fishers in marketing their daily harvest and catch. It will also allow easy access by CNMI consumers to fresh agricultural produce.
The Department of Commerce has been asked to study the feasibility of establishing an agriculture cooperative, including the costs and benefits such a program entail.