Accessing agricultural finance and insurance in TT

Riyadh Mo­hammed

Over the past 20 years, Trinidad and To­ba­go’s agri­cul­ture sec­tor has stag­nat­ed and de­clined, with its GDP con­tri­bu­tion falling be­low 1 per cent in re­cent years as the en­er­gy sec­tor has tak­en cen­tre stage. In the midst of de­clin­ing oil prices in 2015, the Gov­ern­ment pushed for di­ver­si­fi­ca­tion, but prob­lems in­clud­ing low pro­duc­tion, the ef­fects of cli­mate change, and a lack of fi­nance have re­mained. Small­hold­er farms that are dis­persed and ex­pe­ri­ence ex­pen­sive in­puts, in­ad­e­quate in­fra­struc­ture, have to con­tend with the con­se­quences of cli­mate change, such as de­creased rain­fall and flood­ing. Our lo­cal com­pet­i­tive­ness and val­ue ad­di­tion have been ham­pered by poor post-har­vest fa­cil­i­ties, a dis­or­gan­ised mar­ket and in­sti­tu­tion­al flaws. Re­liance on food im­ports is made worse by land degra­da­tion, un­pro­duc­tiv­i­ty and in­suf­fi­cient sup­port for re­search and de­vel­op­ment.

Agri­cul­ture SMEs in TT

De­spite the sec­tor’s gen­er­al de­cline, small­hold­er farms and agro-pro­cess­ing busi­ness­es make up the ma­jor­i­ty of Trinidad and To­ba­go’s agri­cul­tur­al small and medi­um-sized com­pa­nies (SMEs). These SMEs, which are fre­quent­ly home busi­ness­es or sole pro­pri­etor­ships, strug­gle with is­sues like scale con­straints but gain from gov­ern­ment in­cen­tives (for those who can ac­cess them with a farmer’s badge).

The ma­jor­i­ty of SMEs, which are pri­mar­i­ly small­hold­er busi­ness­es de­pen­dent on per­son­al funds or short-term loans with high in­ter­est rates, still strug­gle to ob­tain af­ford­able cred­it. Up un­til re­cent 2026 ex­emp­tions, VAT and levies on ne­ces­si­ties im­pede cash flow, while ris­ing in­put costs for feed, fer­tilis­ers and equip­ment—made worse by re­liance on im­ports—squeeze mar­gins.

High post-har­vest loss­es (up to 30–40 per cent for per­ish­ables) are caused by poor roads, in­suf­fi­cient ir­ri­ga­tion and in­ad­e­quate cold stor­age, which re­stricts mar­ket reach be­yond lo­cal sales. Mech­a­ni­sa­tion and ef­fi­cien­cy ben­e­fits are im­ped­ed by frag­ment­ed farm hold­ings (av­er­age less than five hectares). Cli­mate cat­a­stro­phes (droughts, floods) im­pair yields with­out ex­ten­sive in­sur­ance and com­pe­ti­tion from fre­quent­ly cheap­er im­ports un­der­cuts prices for es­sen­tials like veg­eta­bles and chick­en. SMEs are sus­cep­ti­ble to ill­ness­es, pests and low tech adop­tion due to un­der­staffed and in­ad­e­quate­ly equipped ex­ten­sion ser­vices and R&D.

T&T’s SME fail­ure rates are still star­tling­ly high, with new com­pa­nies fac­ing a 90 per cent clo­sure risk in a mat­ter of years. This risk is made worse by eco­nom­ic con­straints in 2026, such as re­stric­tive fi­nance and ris­ing costs. Due to sec­tor vul­ner­a­bil­i­ties, agribusi­ness SMEs—which are fre­quent­ly small­hold­er-dom­i­nat­ed—suf­fer at high­er rates; yet, pre­cise num­bers, de­pend­ing on re­gion­al trends, hov­er around 70–80 per cent with­in five years. As seen by re­cent bar and re­tail waves that have spilled over in­to agri-ven­tures, high op­er­at­ing ex­pens­es (en­er­gy, in­puts, com­pli­ance) out­strip rev­enues, com­press­ing mar­gins and forc­ing shut­downs. For fi­nan­cial­ly strapped busi­ness­es that lack re­silience, cash flow stress­es from late pay­ments and im­port com­pe­ti­tion ex­ac­er­bate prob­lems.

Ac­cess­ing fi­nance for agribusi­ness­es

Can­di­dates must be in­hab­i­tants over the age of 18 or cit­i­zens of T&T, and their busi­ness­es must be reg­is­tered lo­cal­ly. ID (pass­port or card), proof of ad­dress (util­i­ty bills), and farmer reg­is­tra­tion are among the nec­es­sary doc­u­ments.

Project-spe­cif­ic de­tails in­clude cash-flow pre­dic­tions, land con­sents, vet re­ports for dairy and live­stock, ves­sel own­er­ship for fish­ing, fi­nan­cial ac­counts (three years au­dit­ed for com­pa­nies), and en­vi­ron­men­tal clear­ances. Due to their small-scale op­er­a­tions and in­for­mal arrange­ments, SME agribusi­ness­es in Trinidad and To­ba­go face sub­stan­tial ob­sta­cles when ap­ply­ing for agri­cul­tur­al loans. The largest ob­sta­cle is high col­lat­er­al re­quire­ments be­cause SMEs usu­al­ly don’t have as­sets or prop­er­ty ti­tles to of­fer and frag­ment­ed land hold­ings hard­ly ever qual­i­fy as se­cu­ri­ty. Many peo­ple with­out prop­er deeds or leas­es are ig­nored by banks in T&T be­cause they re­quire mort­gages, guar­an­tees or cash de­posits.

Ap­pli­ca­tions are ham­pered by poor fi­nan­cial records, par­tic­u­lar­ly for in­for­mal house­hold farms, which make up 58 per cent of hold­ings. These records in­clude no au­dit­ed state­ments, cash flows, or cred­it his­to­ry. Due to in­ad­e­quate record-keep­ing, small op­er­a­tors find it dif­fi­cult to gath­er the nu­mer­ous sup­pli­er quotes and ver­i­fy re­ports re­quired for project es­ti­mates. Busi­ness own­ers are dis­cour­aged by high loan rates notwith­stand­ing con­ces­sions and a lack of knowl­edge about pro­grammes such as these. Due to pay­ment de­lays, banks are re­luc­tant to grant gov­ern­ment con­tract loans, which ex­ac­er­bates cash flow prob­lems for agribusi­ness­es.

Agri­cul­tur­al In­sur­ance

We have no agri­cul­tur­al in­sur­ance in TT!

Agri­cul­tur­al in­sur­ance in Trinidad and To­ba­go would serve to pro­tect farm­ers from fi­nan­cial loss­es due to risks like floods, pests, fires, droughts, dis­eases and prae­di­al lar­ce­ny. It cov­ers crops, live­stock, aqua­cul­ture and api­cul­ture, help­ing pro­duc­ers re­cov­er quick­ly and main­tain op­er­a­tions af­ter dis­as­ters. This sup­port fos­ters sta­bil­i­ty in the sec­tor, es­pe­cial­ly giv­en the coun­try’s vul­ner­a­bil­i­ty to trop­i­cal weath­er events.

With­out agri­cul­tur­al in­sur­ance, agribusi­ness stake­hold­ers in T&T face height­ened fi­nan­cial vul­ner­a­bil­i­ty to dis­as­ters lead­ing to di­rect ab­sorp­tion of loss­es by farm­ers and re­liance on lim­it­ed gov­ern­ment com­pen­sa­tion. This ex­po­sure dis­cour­ages in­vest­ment in pro­duc­tiv­i­ty-en­hanc­ing tech­nolo­gies and in­no­va­tion, per­pet­u­at­ing low agri­cul­tur­al out­put and stag­na­tion in the sec­tor. Farm­ers ex­pe­ri­ence sharp in­come drops from crop or live­stock loss­es, of­ten re­sult­ing in debt ac­cu­mu­la­tion or farm aban­don­ment with­out a safe­ty net. Banks hes­i­tate to ex­tend cred­it due to el­e­vat­ed de­fault risks, lim­it­ing ac­cess to cap­i­tal for ex­pan­sion or re­cov­ery.

Pro­duc­tion de­clines con­tribute to high­er food im­port bills and in­fla­tion, strain­ing na­tion­al food se­cu­ri­ty in a dis­as­ter-prone is­land na­tion. Gov­ern­ment bud­gets bear re­peat­ed re­lief costs, di­vert­ing funds from in­fra­struc­ture, re­search, or ex­ten­sion ser­vices. Per­sis­tent risks sti­fle com­pet­i­tive­ness and youth en­try in­to farm­ing, ac­cel­er­at­ing rur­al de­pop­u­la­tion and eco­nom­ic over-re­liance on non-agri­cul­tur­al sec­tors like en­er­gy. Small­hold­er-dom­i­nat­ed agribusi­ness­es re­main trapped in sub­sis­tence cy­cles with­out risk mit­i­ga­tion.

Caus­es of re­ject­ed doc­u­men­ta­tion to ac­cess fi­nance

When it comes to agri­cul­tur­al SME loan ap­pli­ca­tions, banks fre­quent­ly re­ject in­ad­e­quate, in­con­sis­tent, or un­ver­i­fi­able doc­u­men­ta­tion. Cost es­ti­mates that don’t in­clude itemised in­voic­es or quotes from two or more sup­pli­ers are at the top of the list since they don’t show fea­si­bil­i­ty and rea­son­able pric­ing dur­ing ap­praisals. For on­go­ing ini­tia­tives, miss­ing in­come state­ments or cash flow es­ti­mates in­di­cate in­ad­e­quate fi­nan­cial plan­ning, which fre­quent­ly leads to small­hold­ers with­out records be­ing re­ject­ed.

In ad­di­tion to miss­ing Farmer Reg­is­tra­tion Cards or ev­i­dence of site tenure (deeds/leas­es), ad­dress proofs such as util­i­ty bills that don’t match the re­port­ed domi­cile, ex­pired IDs, or fuzzy scans raise im­me­di­ate red lights. Name dif­fer­ences be­tween doc­u­ments (ID vs. ap­pli­ca­tion, for ex­am­ple) are against KYC reg­u­la­tions. Se­cu­ri­ty eval­u­a­tions are com­pro­mised by un­doc­u­ment­ed col­lat­er­al such as land ti­tles or guar­an­tees, as well as miss­ing sec­tor re­ports (live­stock vet cer­ti­fi­ca­tions, en­vi­ron­men­tal ap­provals). Re­jec­tions are al­so caused by weak com­pa­ny strate­gies that lack rev­enue cy­cles and com­pli­ance ev­i­dence.

Lack of fi­nance

SME agribusi­ness­es in Trinidad and To­ba­go are se­vere­ly ham­pered by a lack of fund­ing, which keeps them in sur­vival mode and sti­fles growth in the face of a sec­tor-wide de­cline. Low yields on dis­persed small­hold­er farms are typ­i­cal­ly the re­sult of SMEs’ in­abil­i­ty to pay for mech­a­ni­sa­tion, ir­ri­ga­tion, green­hous­es, or high-qual­i­ty in­puts like feed and seeds with­out loans. This pre­vents scale-up for ex­port by main­tain­ing re­liance on hu­man labour and an­ti­quat­ed tech­niques. Pro­duc­tion halts, in­ven­to­ry short­ages, and lost mar­ket op­por­tu­ni­ties re­sult from the in­abil­i­ty to close gaps caused by high in­put prices or post-har­vest loss­es, par­tic­u­lar­ly in the face of im­port com­pe­ti­tion. Lack of fund­ing for in­sur­ance or cli­mate-re­silient mea­sures in­creas­es the dan­ger of pests, floods, and droughts, which re­duces farmer par­tic­i­pa­tion and prof­itabil­i­ty.

Rec­om­men­da­tions to ac­cess fi­nance

By im­ple­ment­ing flex­i­ble cri­te­ria and as­sis­tance sys­tems to ad­dress col­lat­er­al short­ages, doc­u­men­ta­tion de­fi­cien­cies and risk per­cep­tions com­mon among small­hold­ers, banks and in­sur­ance agen­cies in Trinidad and To­ba­go can im­prove fi­nanc­ing ac­cess for SME agribusi­ness­es.

Re­duce re­liance on land ti­tles for small­er, frag­ment­ed farms by im­ple­ment­ing group guar­an­tees through farmer co­op­er­a­tives or as­so­ci­a­tions, crop in­sur­ance-linked lend­ing, or ware­house re­ceipt fi­nanc­ing against stored pro­duce. For com­pa­ny plans, cash flows, and sup­pli­er quotes, of­fer free tem­plates, on-site sup­port, and dig­i­tal sub­mis­sion por­tals.

For in­for­mal SMEs, ac­cept oth­er forms of proof, such as mo­bile bank­ing records rather than au­dit­ed state­ments. To re­duce re­jec­tion rates due to in­com­plete es­ti­mates, col­lab­o­rate with ex­ten­sion ser­vices for cost val­i­da­tions and vet­eri­nary re­ports. There is a lot that can be done to help our lo­cal agri­cul­tur­al SMEs, but it re­quires co­op­er­a­tion and com­mu­ni­ca­tion from all par­ties in­volved.

Riyadh Mo­hammed (LLM, MBA, MSC, BSC, DIP) lead agri­cul­ture con­sul­tant at Trop­i­cal Agri­cul­ture Con­sul­tan­cy Ser­vices mob:1 868 307 5444 email: riyadhmo­hammed07@gmail.com

http://www.guardian.co.tt/business/accessing-agricultural-finance-and-insurance-in-tt-6.2.2502840.7c489b5ad6