The Tonga Government has allocated $1 million to finance a new Agricultural Export Marketing Fund aimed at providing short term loans to exporters who buy exportable produce from farmers. Three agricultural produce exporting companies have been selected to access the funds.

The Minister of Finance Hon. Lisiate 'Akolo held a range of public consultation meetings with growers throughout Tongatapu this week and explained the purpose of the fund, which had remained unclear among some growers.

It was revealed that three agricultural produce exporters had been selected to access the fund after it was advertised in November last year. But it is also understood that the fund remains open for a possible second round of applications.

The three are Pacific Exotic Foods operated by Mele 'Amanaki, Hammah Consulting owned by Taniela Hamala, and the Young Farmers Federation Ltd. in Tongatapu.

Produce that the fund will give priority to are taro, tapioca, watermelons, and yams. Export of squash pumpkins is not included.

Exporters

Two of the successful exporters Hammah and Young Farmers have each received $40,000 pa'anga from the fund. While Pacific Exotic Foods will receive $20,000 in July.

Taniela Hamala said his first six tonnes of guinea yams was shipped to New Zealand today with more exports to follow until June.

"I have secured a distributor/importer company in New Zealand for my produce. That market has confidence in me that I can supply the demand and that is one of the reasons why I was selected to access the funds," he said.

Taniela said he was happy that Government set up the initiative because it was providing upfront payments to growers who sell him their produce.

"This is a farmer's livelihood and for them to get paid upfront for their produce and not have to wait until it gets to the other side is good," he said.

The company has a package facility at Kolonga in eastern Tongatapu and their growers come from both the eastern and western districts.

Mele 'Amanaki of Pacific Exotic Foods asked to defer their $20,000 pa'anga approved, until July when they harvest sweet yams for export.

"I will export to Auckland to a distributor. I am glad Government initiated the fund although it is a short term loan it enables me to pay my growers upfront," she said.

Watermelons

Koloti Seluini the Director of the Young Farmers Federation Ltd which has 50 members, received $40,000.

He said they are targeting to export 24 containers of watermelons to New Zealand, starting in July and through to September. "At the same time we are looking to export butternut which is being trialed," he said.

"We have an importer/distributor company in Auckland. There are many opportunities for us in the market but we are just starting small in terms of our quantity to make sure that we will meet the supply and build from there," he said.

They were grateful to Government for making available the funds for the short term loan.

"But this fund is only to pay growers for their produce but Government should also consider funds for the intial production costs because most farmers can't afford it," he said.

Fund

The fund administered by the Ministry of Finance and Planning was publicly advertised on 9 November and applications for the first round closed on 23 November  2012.

The purpose of the fund is to provide a short term loan to exporters that buying exportable commodity from farmers. The fund is to alleviate growers risk exposure to external marketing shocks such as fluctuation in exchange rate, post harvest lost due to freights and other costs.

Criteria for accessing the funds included: obtainment of the required export and business licenses, proven import market in the destination country (with focus on New Zealand, Australia, Pacific Islands and USA), export proceeds paid directly to the fund to settle amount lent and a clear business plan including purchasing produce from a network of growers and employment creation.

This included the ability to pay a 1 percent administration charge, as well as approved information on farmers, production, harvest time, quality control, compliance, quarantine with market and guaranteed demand from overseas.