Bill passed to assist WINFARM
July 12, 2013

Bill passed to assist WINFARM

A bill which authorizes the government to borrow EC$1million from the National Insurances Services (NIS) to provide technical and financial assistance to WINFARM was passed in the House of Assembly on July 3.{{more}}

The Public Sector Loan Bill 2013 was moved by Prime Minister and Minister of Finance, Dr Ralph Gonsalves.

WINFARM is the company charged with marketing and exporting bananas from St Vincent and the Grenadines.

“The government of St Vincent and the Grenadines, in its efforts to assist the banana industry and farmers’ organizations involved in the banana industry and to strengthen the rural community, we have decided to provide technical and financial assistance to WINFARM,” Gonsalves said.

“In order to stabilize and broaden its operations the actual financial assistance is what is now covered by this Bill,” he explained.

Technical support will be provided up to $250,000, with the balance being financial assistance, which would be a direct subvention from the government.

It is expected that the government will pay the NIS an interest rate of 6.5 per cent on the loan, the Prime Minister said.

The money will be used to help WINFARM pay off some outstanding debts, some fully, and others partially Gonsalves said.

He explained that the company has had some difficulties in the past and the total government subvention spent on WINFARM so far amounted to $300,000.

The Prime Minister said WINFARM could not borrow money directly from the NIS, even if government guaranteed the loan, because they would not be able to repay the money.

As part of the support, the government has decided to help WINFARM by providing the grant he said.

Since the dissolution of the St Vincent Banana Growers Association, the company’s main stream of income has come through the sale of bananas.

In 2009, according to the Prime Minister, the company grossed EC$12.7 million in sales; however, since then, there have been steady declines in gross sales receipts.

In the process, WINFARM has accumulated debt of $1.5 million.

The Prime Minister stated that based on the examination of WINFARM’s accounts and reports, money is owed for cartons purchased, outstanding cess and payments to farmers. There were also some challenges with salaries and money which was owed to the Agriculture Input Warehouse for inputs.

Some money is also owed to WINCROP, and for utility bills and audit fees.

And while the company’s performance can be attributed mainly to production losses due to unfavourable weather conditions, including the drought in 2010, Hurricane Tomas and the freak storm in 2011, there were also some management and governance inefficiencies, the Prime Minister said.

The company also lost half a million dollars in an investment in a regional financial institution.

But despite these challenges, Gonsalves said that there were still some opportunities available for the marketing of bananas and non-banana commodities.

And there is a plan to return the company to some financial viability by 2015, the Prime Minister said.

There are also plans to increase the net profit by 10 per cent per year and to improve the financial and economic sustainability of the company, he stated.(DD)