Federal assistance sought to bring crop insurance here
With the recovery of tourism-based businesses from the financial slump remains a far-fetched possibility, the CNMI government is exploring alternative ways to spur economic growth through subsistence livelihood that includes commercial farming and fishing.
Part of the strategy currently being looked at by the Commonwealth Development Authority is to secure the investments poured by local farmers and fishers into their businesses through the implementation of crop and marine insurance.
CDA is the largest government-controlled lending agency that provides loan packages to local residents for the start-up or expansion of small- and medium-scale businesses in the Northern Marianas.
Executive Director Mary Lou S. Ada said work is now underway to seek the assistance of federal government agencies to enforce crop and marine insurance in the CNMI, thereby, providing local farmers and fishers some form of financial security.
Ms. Ada said local farmers have persistently taken a conservative approach on vegetable production due to the absence of appropriate measures to protect them from financial losses.
Local farmers and fishermen have manifested 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.
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.
However, Ms. Ada admitted that bringing crop and marine insurance into the Commonwealth has been a difficult task due to the scope of farming and fishing activities in the Northern Marianas.
She said CDA is seriously looking at seeking support from the Rural Development Program under the United States Department of Agriculture for the enforcement of crop and marine insurance on the island.
“There are complex legal issues and impediments that need to be resolved before we can bring crop and marine insurance here, although marine insurance is already in place but only for big fishing boat operators,” she explained.
Ms. Ada also told in an interview that the development authority has started opening dialogs and discussions with local insurance companies on the possibility of them offering crop and marine insurance here.
She pointed out 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.
“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.
Government previously disclosed plans to establish a fishing and farming cooperative 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.
