Blog » Agricultural Finance During COVID-19 and Recovery: Instruments and Elements for a Strategy

Agricultural Finance During COVID-19 and Recovery: Instruments and Elements for a Strategy

Created May 06 2020, 3:27 PM by Fotios Stravoravdis

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.

  • Thank you Fotios for sharing this timely - Strategy to Support Agrifinance COVID document.  I am working with a new C4D Group that will focus on South Asia Agriculture Policy. Likely, your two groups can collaborate on the Collaboration for Development (C4D) Platform.  Keep up the great work. - Bruce
  • 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; 

    • Impact of COVID-19 on the rural poor and on food security in developing countries. 
    • How crisis can be moderated.
    • What positive breakthroughs could be provoked by this shock to move us into a better new normal life.
    • How can donors and implementing organizations do to support low and middle-income countries during and beyond this crisis.