December 22, 2014 / 5:45 PM / 5 years ago

UN warns Ebola-linked farm losses could threaten banking in W. Africa - TRFN

ROME, Dec 22 (Thomson Reuters Foundation) - The Ebola epidemic threatens rural banking in three West African countries with the potential to disrupt agriculture next year as farmers won’t have access to credit to buy seeds and fertilizer, two UN officials warned on Monday.

Several million farmers across Guinea, Sierra Leone and Liberia are struggling to repay small loans of between $100 and $500 as border closures, movement restrictions and fears from consumers have left many agriculturalists insolvent.

If farmers are unable to repay borrowed money, a local banking crisis could sweep affected-countries causing small rural lenders to default and wrecking havoc on future food production even after the health emergency subsides.

“A lending freeze-up is a possibility,” Abdoul Barry, country manager for Guinea with the UN’s International Fund for Agricultural Development (IFAD), told the Thomson Reuters Foundation.

“Next year (many farmers in effected countries) won’t be able to borrow money.”

Exact numbers on how many growers are expected to default, or on how much food production has dropped due to the crisis, are not available, as conducting research during an epidemic is nearly impossible, UN officials said.

More than 7,370 people have died from Ebola in the three worst affected countries since March, the World Health Organisation reported on Saturday.

The tide has turned in the fight against the epidemic in much of the region due to improved sanitation, said Ndaya Beltchika, IFAD’s programme manager for Sierra Leone and Liberia but trouble looms on the horizon.

“Food production will be impacted, but to what extent, it’s hard to say,” Beltchika told the Thomson Reuters Foundation.

Communities with large numbers of reported Ebola cases could face long-term stigmatization, leaving local farmers unable to sell their products next year, even if they can gain access to credit, she warned.

The risk of a banking collapse, starting with farmers who can’t pay their debts and ending with the collapse of lending institutions causing a credit crunch, is possible, she said.

Liberia has an annual per capita income of just $700, Guinea $1,100 and Sierra Leone $1,400, according to the U.S. Central Intelligence Agency. Any drop in food production or price rises will force families to go hungry. (Reporting By Chris Arsenault, Editing by Belinda Goldsmith)

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