Innovative Financing for Inclusive Agricultural Development

This issue of Capacity.org contains a selection of articles on innovative financing in the agricultural sector. The focus of these articles is to describe solutions that would be relevant for the day-to-day practice of development professionals working at the meso- or micro levels. The conclusions that can be drawn from all of the articles include:

• There are limitations to the inclusiveness of innovative financing from private sector sources. Up to a point, the inclusiveness can be enhanced through loan guarantee funds;
• In order to help marginalized farmers strengthen their position in the economic system and become players that can engage in business relationships, subsidies or grants from public or philanthropic sources will still be needed;
• Grants and subsidies can be effective only when they are well targeted and properly designed;
• Grants need to be of the right size in order to work as an incentive and not distort markets by creating unfair competition between those who receive the grants and those who do not.