Subsidies as an Instrument in Agriculture Finance : A Review

Meyer, Richard L.

World Bank, Washington, DC

关键词: ACCESS TO CREDIT;    ACCESS TO FINANCIAL SERVICES;    AGRICULTURAL BANK;    AGRICULTURAL BANKS;    AGRICULTURAL COOPERATIVES;   

RP-ID  :  70730

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

This paper presents a literature reviewof issues related to recent subsidies and investments in thefinancial sector that have been designed to address theimmediate effects of the crises and to develop the financialinstitutions necessary to modernize agriculture. Section twoof the paper discusses the impact of recent food, fuel, andfinancial crises on developing countries and the emergencyactions taken by countries and international agencies toreduce the suffering inflicted on poor people. It alsodiscusses the challenge of finding a balance betweenpragmatic immediate responses and longer-term objectives.The third section discusses the role of finance inagricultural development and poverty alleviation. Sectionfour deals with the challenge of creating credit markets indeveloping countries. The fifth section covers shifts in theparadigm used to intervene in credit markets and summarizesthe main features of the old directed-credit and the newfinancial systems paradigms. This is followed by a sixthsection that summarizes highlights in the development of themicrofinance industry. It covers guidelines created fordeveloping microfinance, microfinance penetration into ruralareas and agriculture, innovations and prospects for futureagricultural lending, and insights gained about the impactof finance on poor households. The seventh section addressestopics related to the demand for credit, including rates ofreturn earned in agriculture and in microenterprises, andresearch results analyzing sensitivity of loan demand tointerest rates. Section eight describes major interventionsby international agencies and points the way forward foragricultural credit. It reviews the debates about the use ofgrants and subsidies, especially in the food, fertilizer,and credit markets, and the rationale for smart subsidies.It then describes experiences in five major areas ofinternational agency activities: micro-insurance andweather-index-based insurance, credit guarantee funds,warehouse receipts, specialized agricultural developmentbanks, and agricultural investment funds. Section ninesummarizes the main conclusions based on literatureconsulted for this review. It identifies major lessonslearned with suggestions for priorities that ImprovingCapacity Building in Rural Finance (CABFIN) members mightconsider supporting in their projects and programs.