On Thursday, September 19, 2019, the Prime Minister of Belize, the Rt. Hon. Dean Barrow, and representatives from the banks, the Ministry of Agriculture, and the Department of the Environment met to hold a press conference to detail the Government of Belize’s (GOB’s) measures being taken to address the problem of drought in the country. This drought has been regarded as one of the worst in Belize’s history. The Global Disaster Alert and Coordination System (GDACS) says that Belize, Guatemala, Honduras, Mexico, Nicaragua, and El Salvador have all been affected by the drought, but that Belize is among the hardest hit. In August, the Belize Meteorological Office issued a drought warning for the Corozal and Orange Walk Districts and a drought watch for the Belize, Cayo, and Stann Creek districts.
Due to this prolonged drought, the Prime Minister announced that a state of emergency is being declared in those areas of the country that are most affected. Those areas include Orange Walk and Corozal, and the farmers in these districts are among the hardest hit through the reduction of cash crops and livestock production. “The Solicitor General is preparing a statutory instrument that will be sent to the Governor General under the Constitution, in terms of natural disaster occurrences. Those sorts of events can trigger the declaration of a state of emergency. And it has nothing to do with the state of emergencies for criminal conduct, or for rioting. This is simply because of the natural disaster crisis. But, that declaration will extend to the Belize, Cayo, Orange Walk, and Corozal Districts.”
The Ministry of Agriculture puts the losses suffered in consequence of the drought currently as being in excess of $50 million. The drought and these losses are only making worse the current state of our agriculture industry, already taking falls in citrus production, reductions in international sugar prices, and challenges in the banana sector. A threat to our agriculture directly negatively impacts our economy and food security and it is with these in mind that a working group was formed; the Central Bank of Belize, along with the Ministry of Finance and the Ministry of Agriculture have put together a working group comprising the banking and agricultural sectors to offer emergency relief to farmers. That group has put together benefits to farmers including low interest loans and the relaxation of some regulatory requirements at certain banks and credit unions.
Joy Grant, Governor at the Central Bank of Belize, says that while it might be assumed that a bank only considers money and economics, which is not the case. “Actually, the people are at the foremost in everything that we do and so we realized that there would be a situation in the country whereby people would have loans, need loans and that we would have to step in to make sure that they could get these facilities and get it at rates that they can afford.” As such, the Central Bank of Belize will allow lenders to restructure loans, reduce interest rates, extend principal or interest moratorium, and allow for extended loan maturities where farmers will benefit despite the vulnerabilities faced by the agriculture sector. There is also the aim to extend the non-performing classification period from six months to eighteen months for loans adversely affected by the drought. Loans will be reclassified from a 100% to 50% risk weight for a specific period in order to provide an additional buffer to mitigate losses suffered by the drought.
Emergency financial assistance measures are also being undertaken by the Central Government. They have been classified as emergency relief, medium term opportunities to enhance the business environment for farmers, and long term strategies. In the first category, the Central Government has committed to identify funding for the Development Finance Corporation (DFC) to lend seed capital at concessionary rates to those affected by the drought; provide assistance through the Ministry of Agriculture for the purchase of seeds, fertilizers, chemical inputs, and feed for livestock; and offer limited tax and duty exemptions on necessary equipment and machinery. In the medium term, they will explore opportunities for tax and duty exemptions and specific lines of credit facilities for irrigation and drainage and specific inputs to agriculture production. In the long term, the aim is to develop and implement a national water management plan; develop a disaster response plan for agriculture; and explore the establishment of a government-supported crop and livestock insurance scheme.
Senator Godwin Hulse, Minister of Agriculture, gave details to the losses already incurred on the agriculture sector. There has been a 30% to 50% damage to sugar crops, resulting in a significant decrease to sugar yield. Nearly 15,000 acres of corn, both yellow and white, have been affected in the Cayo District and 2,300 acres were completely lost. This has resulted in an increase in the price of foods such as tacos and tamales, a multiplier effect. Soybean, which we depend on for export to Jamaica, were lost in large amounts in both Corozal and Orange Walk. Livestock, which Hulse says “will come back”, also suffered losses but not deaths. Approximately 60,000 heads of cattle lost weight, around fifty pounds each, due to decreases in grass, feed, and water.
