Providing loans to agriculture

Description

Providing loans to agriculture involves supplying targeted financial resources to farmers and agribusinesses to enable investment in seeds, equipment, technology, and infrastructure. This strategy directly addresses barriers such as lack of capital, low productivity, and vulnerability to climate and market shocks. By facilitating access to credit, it empowers agricultural producers to improve yields, adopt sustainable practices, and enhance food security, thereby supporting rural livelihoods and economic development.

Implementation

In thirty-three years of operations in Latin America and the Caribbean, the Inter-American Development Bank (IDB) has made 586 loans for US$10,900 million finance agricultural and fisheries projects costing a total of $25,400 million. Some of the largest agricultural loans in 1993 include $48 million for agricultural development in the Dominican Republic, and $7.25 million and US$8.75 million to strengthen agricultural services in Nicaragua.

The UN Food and Agricultural Organization (FAO) Investment Centre helps countries to identify and formulate investment projects and directs capital to agricultural development. By 1992, some 873 FAO assisted investment projects had been approved for a total of US$45,000 million. More than half of this sum was provided in the form of loans from financial institutions such as the World Bank, with the balance made up by recipient countries.