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“We need fresh ideas for mobilising private-sector funds for agriculture”

September 6, 2016

Smallholder farmers in developing countries are getting only about a quarter of the finance they need to enable them to invest in the inputs and tools and transform their productivity. The gap – some US$150 billion a year – dwarfs current investment in agriculture by governments, development agencies and the likes of the Rockefeller or Bill & Melinda Gates foundations.

Filling this gap means getting the private sector on board – banks, commercial investors, pension funds and the like. But how to do this is the subject of much debate, and is the topic of two high-level panels at the 6th African Green Revolution Forum (AGRF2016) on Wednesday, 7 September 2016. CTA’s Director, Michael Hailu, is one of the panellists.

The question of how to mobilise finance for smallholders is a long-standing element of CTA’s programme, as illustrated by the Centre’s ground-breaking Fin4Ag conference in 2014 and numerous publications both before and since.

Recently, there has been a growing recognition of the possibility of using public funding to create the environment to encourage private funding. This is approach, known as ‘blending,’ has been widely used to raise funds for healthcare, infrastructure and in the energy sector, but is new and largely untried in the agricultural sector. Now, CTA, together with the European Commission Directorate General for Development and Cooperation (DG DEVCO), the Organisation for Economic Co-operation and Development (OECD) and Convergence, is planning a conference on ‘Blended Finance for Agriculture (Blending4Ag): Innovative Partnerships for Agricultural Finance,’ which will be held in Brussels on 7 and 8 November 2016.

“We need fresh ideas for mobilising private-sector funds for agriculture,” says Michael Hailu, CTA’s Director. “In blending, funds from public sources and foundations are brought together with funds from impact investors, ideally in such a way that further finance is attracted from commercial sources,” he explains. “Blending4Ag is an opportunity to bring together key players who can make this happen.”

“We are hoping to attract decision-makers and advisers involved in blending operations and those from private-sector financiers – banks, investment funds, agribusiness firms and the like – to join us in developing this concept and finding ways to put finance in the hands of smallholder farmers in the developing world,” says Lamon Rutten, head of CTA’s Policies, Markets and ICTs programme and a leading finance expert.

The Blending4Ag website will go live before the end of September, allowing people to sign up to participate.

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Revolutionising Finance for Agri-Value Chains Revisiting agricultural finance: A special report from the fin4ag conference - July 2014

Revolutionising Agricultural Finance: A post Fin4Ag Conference Special report

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