Financing a farm in Mauritius
In Mauritius, a planter or livestock farmer finances inputs, greenhouses or equipment mainly through Development Bank of Mauritius Agro Loans, commercial banks and cooperatives, while Sugar Insurance Fund Board cover protects sugar cane harvests.
Farming dominated by sugar cane
Sugar cane still covers most of the cultivated land in Mauritius, alongside tea in the uplands of Bois Cheri, vegetables, pineapples and livestock. Small planters deliver their cane to the mills owned by the large sugar groups on the island.
DBM Agro Loans
The Development Bank of Mauritius groups its farm financing under the Agro Loans banner, including an Agricultural Loan Scheme for inputs, machinery or land improvements. Terms follow the policy of the Ministry of Agro-Industry and successive national budgets.
Crop insurance from the Sugar Insurance Fund Board
The Sugar Insurance Fund Board insures cane planters against losses caused by cyclones, drought or fire. This cover reassures lenders, because the payout offsets part of the drop in income after a poor harvest season for the grower.
Market gardening and greenhouse crops
Many young farmers invest in greenhouses or hydroponics to grow tomatoes, peppers or salad crops for supermarkets and hotels. The loan finances the structure, drip irrigation and the first growing cycles until sales start coming in.
Cooperatives and the Small Farmers Welfare Fund
Planters' cooperatives pool fertiliser purchases and deliveries, and some grant small loans to members. The Small Farmers Welfare Fund supports registered small farmers; modest amounts are covered on the microcredit in Mauritius page.
Technical advice from FAREI
The Food and Agricultural Research and Extension Institute advises growers on varieties, irrigation and plant diseases. A crop plan endorsed by an extension officer strengthens the credibility of an application to the DBM or to a commercial bank.
Leased land, sharecropping and collateral
Many planters farm land leased from the State or from a large landowner, sometimes as sharecroppers. Without a title deed, a mortgage is impossible, so the lender relies on the registered lease, the financed equipment or a guarantor.
Livestock, deer and poultry
Raising poultry, goats, dairy cattle or deer on hunting estates rounds out Mauritian agriculture. Loans finance buildings, herds and feed, subject to health requirements checked by the veterinary services before and after the animals arrive.
Rodrigues, an island of livestock farming
On Rodrigues, livestock and subsistence crops dominate in a drier climate. The DBM offers a scheme there to finance rainwater harvesting systems, which are essential for watering livestock and irrigating crops through long droughts.
Solar panels and pumps on the farm
DBM Green Loans finance photovoltaic panels, pumps and tanks, which are useful for irrigation and cold rooms. Lowering the electricity bill improves the profitability of a farm exposed to price swings on the wholesale markets.
Seasonal income and repayment schedules
Cane is paid after harvesting, between June and December, and vegetables as each crop is sold. A well-designed farm loan matches its instalments to this income rather than to fixed monthly payments common in the Mauritian credit market.
A look at farming finance in Madagascar
Madagascar, Mauritius's farming neighbour, finances rice growers and herders mostly through rural microfinance and donor-backed projects, far removed from Mauritian public schemes. Comparisons are drawn on the farmer loans in Madagascar page.
Obtaining farm finance in Mauritius
- Register as a planter or livestock farmer with the relevant services, and with the Small Farmers Welfare Fund if eligible.
- Draw up a crop or livestock plan with technical support from FAREI.
- Gather supplier quotes for greenhouses, irrigation systems, farm machinery or the livestock you plan to buy.
- Submit an Agro Loan application to the DBM or a farm loan file to your bank.
- Take out SIFB crop insurance for cane or suitable cover for other crops.
- Align repayments with harvest periods and the dates cane payments arrive.
Costs of a farm loan in Mauritius
| Item | Level | Factor |
|---|---|---|
| DBM Agro Loan rate | Indicative, often preferential | Scheme in force, national budget |
| Bank farm loan rate | Indicative, linked to the prime rate | Collateral and planter's track record |
| SIFB insurance premium | Based on area and output | For cane planters |
| Arrangement fee | Variable | Amount and type of project |
| Security | Lease, equipment, guarantor or mortgage | Land tenure of the farm |
Documents for a Mauritian farm loan
- National identity card
- Planter or livestock farmer registration card or number
- Title deed or registered land lease
- Crop or livestock plan
- Quotes for equipment and inputs
- Cane delivery or sales records
- Bank statements
Why farm loan applications fail in Mauritius
- Farming land without a written lease, which makes it impossible to prove access to the land for the life of the loan.
- Skipping SIFB crop insurance and losing all ability to repay after a cyclone or a drought.
- Investing in a greenhouse without market research, when vegetable prices collapse at the height of the season.
- Accepting the fixed monthly payments of a personal loan instead of a schedule matched to the harvests.
- Paying a commission to a middleman who claims he can speed up an Agro Loan or public grant.
Farm credit in Mauritius: answers for growers
What is a DBM Agro Loan?
It is the Development Bank of Mauritius range of agricultural loans, which includes the Agricultural Loan Scheme. It finances inputs, machinery, greenhouses or livestock, on terms set in line with the government's agricultural policy.
Can a sharecropper borrow in Mauritius?
Yes, but without a title deed the lender looks for other security: a written sharecropping agreement, financed equipment, a guarantor or a record of deliveries. The amounts granted are often smaller than for a landowner.
Does the SIFB cover vegetable crops?
The Sugar Insurance Fund Board has historically focused on sugar cane. Vegetable growers need to look into other public or private cover available and into one-off assistance granted after exceptional bad weather.
Do farmers on Rodrigues have their own schemes?
The DBM notably offers a rainwater harvesting scheme on Rodrigues. Rodriguan livestock farmers and planters can also apply for the other Agro Loans, with support from the services of the Rodrigues Regional Assembly.