Investing in Agriculture for Poverty Reduction

Topic :

Increases in commodity food prices have not only raised awareness of the urgency to increase agricultural investment, they also have set up opportunities for profitable investments. The capital required to invest comes through debt or equity but both rely upon financial service providers such as banks and credit unions to facilitate the needed money flows for loans, deposits, money transfers, guarantees and other financial products. They provide access to the assets required to increase agricultural productivity and reach a scale that will lead to higher incomes and asset growth for the rural poor. However, providing financial services to agriculture and rural areas involves risks, high transaction costs and historically low returns on investment to agriculture. For small-scale agriculture, financial services are even more limited.

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