BEIRUT: The Lebanese Banks Association signed on Wednesday a memorandum of understanding with the Agriculture Ministry to provide investors in the agriculture sector with soft loans ranging from LL3 million ($2,000) to LL25 million to finance small and medium enterprises (SMEs) for a four-year period at low interest rates.

In a speech on the occasion, president of the banks association Joseph Torbey placed great importance on the agriculture sector, which he described as “a dynamic sector that highly contributes to achieving balance in population and society.”

“The agriculture sector contributes 5 or 6 percent of the GDP according to statistics issued in 2008 and employs 7.5 percent of the Lebanese working force,” he said.

Torbey added that exports of animal and plant products increased from $86 million in 2005 to $135 million in 2009, contributing 5 percent of total Lebanese exports. However, he said, no matter how modest these statistics may seem, the sector contributes to reaching national food security.

Torbey said loans provided to the agriculture sector remain very modest despite the fact that their value increased from LL344 billion in 2005 to LL421 billion in 2009.

“The value of subsidized loans offered to the agriculture sector reached LL404 billion during the period extending from 1997 to 2009, which is equivalent to 9.4 percent of total subsidized loans,” he added. “These statistics are very optimistic and they reflect a positive contribution by this sector to the national economy.”

He also stressed the importance of investment to improve the sector by adopting modern irrigation methods, advanced technology and proper agriculture guidance in the use of pesticides, in addition to securing the necessary funds to help in developing this sector.

For his part, Agriculture Minister Hussein Hajj Hassan said agriculture loans were unfortunately at their minimum level due to the absence of clear and effective policies by previous governments in dealing with this sector.

“The current government has adopted the new strategy offered by the Agriculture Ministry and showed seriousness in developing the sector by enhancing the skills of human resources and allocating more financial resources to improve its performance,” he said.

He added that the ministry’s new strategy was based on developing laws and regulations pertaining to agriculture.

“I will be signing eight developmental resolutions during the next week for the improvement of the milk, meat, potato and veterinary medicines sectors in addition to imposing more control on the proper use of fertilizers and farm feeds,” the minister said.

He also emphasized the importance of providing proper agriculture guidance, which has already been achieved to a certain extent. “The results of the new guidance adopted were reflected in the low costs and better quality of grapes, olives and potato crops,” he said. “The new strategy also includes the increase of control on the quality of imported products and those that are locally produced.”

Hajj Hassan also stressed the importance of improving infrastructure which is also included in the new strategy.

“We currently have a lot of funding resources including the $18 million offered by the International Fund for Agricultural Development for the development of ponds, agricultural roads,” he said.

Hassan said that the role of the Agriculture Ministry was to conduct feasibility studies in addition to securing proper guidance and free laboratory tests. “When we secure loans then we will be able of providing free water and soil tests,” he said. “SMEs mostly are in need of proper guidance and soft loans because they are the ones most vulnerable to the decline in productivity.”