Farm workers remittance backbone of many families

Canada-based Jamaican farm workers who are sending money to multiple families back home are driving the increase in remittances from the North American country, one money-transfer service is reporting.

The disclosure was made by VM Money Transfer Services CEO Michael Howard in a Gleaner interview on Wednesday when he underscored the importance of Jamaicans living and working overseas.

“There’s a trend that is clearly there for farm workers, especially in Canada. During the summer times, when that team moves from Jamaica into Canada and do their transactions, we see an increase,” Howard revealed following the launch, on Molynes Road in St Andrew, of the seventh VM Money Transfer Services location.

“In talking to these guys on the sending side, they indicate that they get paid every two weeks, and when they get paid, they send money back to at least two families or two sets of persons. So they send money back to their house and to another place,” he added.

Canada ranked third behind the United States and the United Kingdom on the list of countries that serve as major remittance sources to Jamaica. Inflows totalled over US$3 billion in 2021, with the US accounting for US$2.1 billion; the UK, US$328 million; and Canada, US$312 million.

However, transaction volumes from the country, which totalled 1.5 million, eclipsed that of the UK, which recorded 1.3 million in 2021, according to Bank of Jamaica data, while the US remained ahead of the pack with 8.3 million transactions.

“In Canada, you have about 15,000 (farm) workers who go up at a particular time in early summer. Midsummer, you have those 15,000 persons sending back two times every two weeks. So it creates a significant increase in inflows back to Jamaica, coming back to their households,” said Howard.

He said that a similar trend exists in the US but noted that the pool, in terms of professions, is much wider, with teachers and nurses key among the Jamaicans boosting remittances.

Additionally, he said unregularised Jamaicans holding down multiple jobs within the US also form part of the core of senders who remit funds to assist families, friends, build houses, and save as part of retirement plans.

“On the receiving side, the profile of the customers shows that they are mostly women aged 25 to 44 years, and they collect at least one time per month,” Howard, who is also vice-president of the Jamaica Remittance Association, said.

“We have seen it inch up over the past few years where it’s averaging one and a half times per month. They are mostly unemployed or are entrepreneurs,” he added.

For VM Money Transfer Services, there has been a steady increase in the money remitted through the agency, with its share of the market moving from fewer than 1 per cent seven years ago to over five per cent.

Money remitted through the agency for the last five years totalled J$77 billion, moving from J$5 billion in 2021 to J$30 billion in 2021.

Howard said peak periods for remittances occur around Mother’s Day, back-to-school, and the Yuletide season, with millions often channelled into small business, the retail sector, and consumerism.

“We want persons, though, to try and save more, and that’s the challenge. That has been the challenge for years. You get the funds, you’re unemployed, you’re struggling, you pay the bills, you feed the kids, and that’s it. They’re not saving anything, and that’s concerning,” said Howard.

That is one of the reasons why VM is promoting the transition to direct-to-account remittances, with such recipients perceived to be less likely to spend all the funds than when they collect hard cash.

kimone.francis@gleanerjm.com