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October 8th, 2019

Financing agribusiness and value chain development in the Pacific

Published by Technical Centre for Agricultural and Rural Cooperation (CTA),

This article (PDF) from CTA suggests that several policy actions are required to improve the performance of the agri-food system in the Pacific Island Countries to a more organised and efficient way of producing, processing, marketing and trade, from farm to plate, and a wider view of the opportunities for diversifying diets and incomes. CTA states that this suggests the need for mobilising significant financial investments, including for the development of infrastructure such as transport networks and ICTs, markets and services. Currently, agriculture receives limited funding from government sources and only a fraction of total lending from banks and other financial institutions. The cost of doing business is very high, especially for agro-based small- and medium-sized enterprises (MSMEs). Addressing this situation comprehensively will require changes in the policy environment for agriculture, MSME development and financial sector, and a clear emphasis on the provision of innovative inclusive financial services by development financial institutions (DFIs) and commercial lenders. It also calls for the application of a value-chain approach to finance, as well as the development of public-private partnerships and innovations in financial technologies to bring currently un-banked farmers and agribusinesses into the traditional financial sector. Farmers’ organisations – currently underdeveloped in the Pacific Island Countries but growing in strength – will have a key role to play in raising the financial literacy of members and agribusinesses and in increasing the uptake of new technology and services to boost agricultural-led sustainable economic transformation.

Curated from cgspace.cgiar.org