Agricultural Value Chain Finance

Agricultural Value Chain Finance Tools and Lessons
Calvin Miller and Linda Jones
Published by Food and Agriculture Organization of the United Nations and Practical Action Publishing 2010
195 pages

The purpose of this book is to provide an understanding of the emerging field of agricultural value chain finance. Key questions include:

• What is value chain finance, how is it applied and what can it offer to strengthen agricultural development?
• How can financial systems, governments and services be prepared for the demands of financing modern agri-food chains?
• How does agricultural value chain financing affect inclusion, especially for small producers and what can be done to make these systems more inclusive?
• What can governmental and non-governmental (NGO) agencies do to support increased and more effective agricultural financing through value chains?

Understanding value chain finance can improve the overall effectiveness of those providing and requiring agricultural financing. It can improve the quality and efficiency of financing agricultural chains by:

1. identifying financing needs for strengthening the chain; 
2. tailoring financial products to fi t the needs of the participants in the chain; 
3. reducing financial transaction costs through direct discount repayments and delivery of financial services; and
4. using value chain linkages and knowledge of the chain to mitigate risks of the chain and its partners. As agriculture and agribusiness modernize with increased integration and interdependent relationships, the opportunity and the need for value chain finance becomes increasingly relevant.