MINISTRY PAPER
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AGRICULTURAL CREDIT BOARD ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2011 The matter for tabling in the Houses of Parliament is the Annual Report and Audited Financial Statetitents of the Agricultural Credit Board (AC Board) for the year ended March 31, 2011. This Ministry has perused the report and proposes to have it laid in the Houses of Parliament, in accordance with the provisions of Section 11 (2) of the Agricultural Credit Board Act.
2. OVERVIEW The Agricultural Credit Board, a department of the Ministry of Agriculture and Fisheries was established under the Agricultural Credit Board Act with the specific responsibility of regulating and monitoring the operations of the National People's Co-operative Bank (NPC Bank) and its thirty-seven branches.
3. FUNCTIONS OF THE AGRICULTURAL CREDIT BOARD The AC Board is the monitoring and regulatory body established for the governance and control of the National People's Co-operative Bank. During the period under review, the AC Board carried out its mandate as a regulatory body to the National PC Banking Movement by reviewing and analysing reports on the activities of the National People's Co-operative Bank.
4. ACIDEVEMENTS During the period under review, the AC Board's achievements included the following: • Initiated the process for the establishment of a Deposit Insurance Scheme geared towards protecting the NPC Bank shareholders' deposits which stood at $2.7 billion at the end of the review period. • Resumption ofthe registration of Agricultural Loan Societies with a view of expanding agricultural loans available to farmers. • Providing farmers with access to loans by monitoring the Financial Access for Responsible Members (FARM 2) programme, and negotiating a partnership between the Development Bank of Jamaica (DBJ) and the NPC Bank. Irish potato and onion farmers benefitted from the FARM 2 programme, while the pig farmers were able to access loans through the DBJINPC Bank loan scheme.
• Continued facilitation of the process of re-titling four properties belonging to NPC Bank shareholders and former AC Board's direct borrowers by using the lost title application method and the Facilities for Title Law as required by the Registrar of Titles. • Monitored the utilization of $20.7 million of the AC Board's investment to serve as loans to the Jamaica Egg Fanners Association (JEFA) and the All Island Jamaica Cane Farmers Association (AIJCFA). These .loans, disbursed through the Ministry of Agriculture and Fisheries, had a $1.17 million return on investment. Negotiation continues as the Board seeks to make these investments current. • The National PC Bank's Head Office and its thirty-eight (37) branches were audited. • Facilitated eight (8) staff members with additional training at the operational, supervisory and managerial levels at the Management Institute for National Development (MIND) and the Ministry of Agriculture and Fisheries' Human Resource Division. • Monitored the AC Board's grant of five million dollars ($5M) to the Jamaica 4-H Clubs for a goat rearing project - the progress report indicated that it was a worthwhile venture. • Participated in the annual Denbigh Agricultural and Industrial Show. 5. THE NATIONAL PEOPLE'S CO-OPERATIVE BANK
During the period under review, the AC Board carried out continuous monitoring of the Bank's operations. Loans for agricultural and business purposes were issued at 9.75% to 13%. Share capital loans were issued at 23% and loans from savings were issued at 12% and 19%. General operations during the fiscal year April 2010 to March 2011 saw the Bank experiencing some level of growth in membership, savers and savings deposits and paid-up share capital. The loan portfolio however experienced a decline of eleven percent (11 %).
National People's Co-operative Bank Statistics for the Period April 2010 to
March 2011
r
April 1, 2010
i
March 31, 2011
I Increase/(Decrease)
\
Percentage (%)
I
! I
I
Savings Portfolio ($)
1,715,981,083
1,990,092,091
274,111,008
16
239,749
13,619
6
I
226,130
No. of Savers
I
Loan Portfolio ($)
1,667,992,896 313,577
321,363
16,192,870
18,135,353
Membership Qualifying Shares
1,491,436,243 •
(176,556,653) i 7,786 1,942,4831
(11)
2 12
6. CONCERNS OF DIRECTORS OF THE AGRICULTURAL CREDIT BOARD The Directors of the AC Board expressed concern about certain aspects of the NPC Bank's operational functions especially its potential to provide funding for small and medium size farmers in rural Jamaica on a timely basis. Areas of General Concern Included: 1.
11.
Lack of adequate and marketable securities. High arrears due to poor loan repayments.
111.
Lengthy processing delays of loan applications.
IV.
Slow disbursement of funds by Development Bank of Jamaica to NPC Bank.
v.
The inability of the NPC Bank to generate a yearly surplus.
7. SALARY AND EMOLUMENTS The fees, salaries and emoluments of the Directors and Senior Executives are set out at appendices I and II respectively. 8. AUDITORS' REPORT The audit of the AC Board was conducted by Mair Russell Grant Thornton. They have stated that in their opinion, the financial statements gave a true and fair view of the financial position of the Board as at March 31, 2011 and of the Board's financial performance, changes in reserves and cash flow for the year then ended in accordance with International Financial Reporting Standards.
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9.
The Annual Report and Audited Financial Statements of the Agricultural Credit Board are hereby submitted to be tabled in the Houses of Parliament in accordance with the provisions of Section 11 (2) of the Agricultural Credit Board Act.
Minister of Agriculture and Fisheries April. File No. 12/1116
16
,2012