Blog » Agricultural Finance During COVID-19 and Recovery: Instruments and Elements for a Strategy
By Panos Varangis, Juan Buchenau and Toshi Ono
Agriculture Finance Team
Finance, Competitiveness and Innovation
Agriculture and agribusiness constitute a significant percentage of employment and still a sizable proportion of GDP in many developing economies, particularly in lower income countries. Incoming reports indicate that COVID-19 could have a significant impact on agriculture and MSME (Micro, Small and Medium Enterprise) agribusinesses through disruptions to the logistics, distribution, and production of food. At the same time, COVID-19 can be expected to further reduce the supply of finance to agriculture by adding to the challenges it faces among other things due to a) the heterogeneity and dispersion of farmers and MSME agribusinesses, b) the seasonal nature of production, c) the bulky finance requirements, and d) its exposure to political interventions. The timing of any financial support has to consider agriculture production cycles and logistics. This is critical to ensure continuous food production and distribution to consumers. Financing, even more than before, needs to look at the whole value chain, from farm to fork.
My understanding from the report I read is that members of the Agriculture and Rural Development working group of the international Scaling Up community of practice held a virtual meeting to discuss these questions and how scaling-up innovations could help to recover from the current crisis and mitigate future ones. Issues to discussed are;