Toledo farmers seek D.F.C. loan cancellation
As controversy swirls around Government’s plans to liquidate the Development Finance Corporation there will come the inevitable finger pointing and calls for investigation. How could one of the nation’s premier financial institutions go from powerful engine of economic growth to bankrupt mendicant, bringing down not only itself but crippling the Social Security Board and Government of Belize? No doubt any post mortem will cite the thirty million dollar loan to Novelos, the millions wasted at Mahogany Heights and other ill conceived housing ventures. But a thorough audit of D.F.C. will also uncover some failed transactions that are not so easy to characterize. What follows is the story of one set of unpaid loans, none of which was larger than twenty thousand dollars. What it suggests is that even with the best intentions by all concerned, success cannot be guaranteed.
Janelle Chanona, Reporting
Twenty-four year old Santiago Choc was born and raised in Aguacate Village, located deep in the forests of the Toledo District. Like many communities in the southern part of the country, there is a severe lack of economic opportunities for residents, forcing hundreds into subsistence farming.
Like his father and the generations before them, Santiago survives by working his milpa. Colloquially called slash and burn, this farming technique is as crude as the name implies. The forest is slashed of underbrush and small trees, and then burned before farmers plant corn, rice and beans. When the soil?s nutrients have been used up, another plot of land receives the same treatment. It may be an environmentally destructive process but it?s rooted in centuries of Mayan culture.
In the late 1980s, an initiative known as the Toledo Small Farmers Development project came to Aguacate Village to convince residents to switch to more sophisticated farming methods by investing in mechanized rice, citrus and cattle. The intent was to bring dollars into their impoverished community.
Santiago Choc
?They held a meeting with the community so they told them about this these lands and that they could get loans to invest their lands in planting citrus, cattle and mechanized rice. So that was where the farmers decided to get into this because as they could see, from that time they weren?t making any money much from just making their plantations.?
Using agricultural models constructed by the United Nation?s International Food and Agricultural Development Agency, coordinated through the Ministry of Agriculture and financed by the Development Finance Corporation, the idea was to break communal land into thirty acre parcels that would be leased to the individual project participants. Those interested in mechanized rice received approximately three thousand dollars while as much as fifteen thousand was lent to farmers investing in citrus and cattle.
Janelle Chanona
When the project first started in 1989, more than twenty farmers from the Blue Creek and Aguacate villages eagerly embraced the idea. But right about the time they were supposed to be making their first harvest, the farmers say they were forced to abandon their crop.
Manuel Cal, Aguacate Farmer
?The way as I understand it, it is not we farmers that have the fault, it is the project, they didn?t fulfil the promises that they told us before. They didn?t fulfil their promise. We the farmers do lot of hard work, but the project is the one that has the fault.?
Forty-five year old Manuel Cal planted citrus, but says he had to desert his fields because after investing thousands of man-hours and his precious few dollars in the soil, his only market was the citrus factories in the Stann Creek Valley. One trip there left him with hundreds of damaged fruit from the long bumpy ride and any monies that he was to collect was held by the factory as payment towards his D.F.C. loan. That reality has led to some tough decisions for him and his eleven children.
Manuel Cal, Aguacate Farmer
?I don?t make no money for the week, all I do is my farming, I do my milpa rice every year, there?s where I make my little money out of my milpa rice, that?s every year, yearly, not every week or every month. Because as a farmer, every day I?m working in the farm, but I?m not getting any money in the farm.?
?Right now I could tell you I didn?t make money this year. I have a son that is going to high school this year. He stopped going to high school because there is no money. I can?t afford to pay the school. I am sorry and my son is sorry because there is no money.?
Thirty-five year old Domingo Cal?s story is strikingly familiar, who claims his rice rotted in the paddies because there was no combine to harvest the crop.
Domingo Cal, seven children, 35, 8000 dollars
?We did try to find a way to get the machine to come in time but you see when they promise, they she they will cut your one time until the next time so and so and when time reach, you see nothing di happen.?
?You know rice, when it?s time to harvest, it have to be harvested the same time. But if that time gone, everything broke neck and then the whole part of the rice drop down. So I couldn?t get anything from it and that is where I lose my work and my labour.?
Through the Toledo Small Farmers Development project, the participants were to have received direct agricultural expertise and technical support, machinery, and marketing assistance, but most of those resources failed to materialize…as did their expected financial returns. More than two hundred and sixty thousand dollars in debt, farmers of Aguacate Village began to receive letters from the D.F.C., threatening to foreclosure on the loans because of non-payment. The desperate farmers turned to another operation working in the south, the Environmental and Social Technical Assistance Project for help. Fred Hunter Jr. was the ESTAP?s project manager at the time.
Fred Hunter Jr., project manager, ESTAP
?Farmers have to work with weather and with the different seasons of the year. The bureaucracy, the paper work that went along, a lot of the implementation was delayed. A lot of the disbursements were delayed causing a lot of frustration and lot of costly production and failure.?
As part of their analysis of the situation, ESTAP commissioned a review of the project. The report concluded that ultimately, IFAD should pay the total amount of the loans or Athe D.F.C. as a branch of G.O.B. should forgive the loans?. Hunter agreed with the findings.
Fred Hunter Jr.
?They should take responsibility for something but the majority of the responsibility should be taken by the project or by the Ministry of Agriculture who whoever was in charged of implementing and write off at least a large portion of those loans or work with them–well the ones who are willing because some of them have given up–by writing off half or more the loan, reschedule and help them to get going again.?
After several meetings with Prime Minister Said Musa, the Government of Belize has offered to freeze the interest on the loans but that still leaves the remaining principal. Aguacate farmers say in the face of their crushing debts, several families have moved out of the village, looking for greener economic pastures elsewhere. Those left behind are hoping for miracle.
Domingo Cal
?I can tell you that I will pay back, but you see the thing is I couldn?t get nowhere to get this money because that money is big for me because we the farmers here, it?s difficult for us, especially myself because I don?t usually get job nowhere, or look for jobs nowhere. I stay on my own and do my little works for my own family. That?s the only way I could maintain my family and then the little money I get, I use it for my home use and that?s the only way I live.?
Ironically, the greatest chance for the Toledo farmers to find relief lies in the D.F.C.’s own demise. The asset value of the Aguacate and Blue Creek loans, with only leased land as their collateral, cannot be more than pennies on the dollar. With the imminent liquidation of the entire corporation it would seem that neither the buyer nor seller would suffer any harm in a cancellation of the debts.
