1. Agricultural Value Chain Financing: A strategy towards replacing OR complementing conventional financing
International Conference on Innovative Agricultural Financing
State Bank of Pakistan and FAO
Islamabad, April
Prasun Kumar Das
Asia-Pacific Rural & Agricultural Credit Association (APRACA)
Bangkok, Thailand

2. Integrated AgVCF Framework : BAAC, Thailand
PREOCESS FOLLOWED:
1. Search for MAIN ACTIVITIES in the Up/Middle/Downstream
2. Search for main actors of each activity in AgVCF
3. Search for appropriate VCF Products (Savings, Credit, Insurance)
4. Search for factors of success and failure to come up with correction and prevention measures
1. Retailers/Wholesalers
2. Community enterprises
3. AMCs
4. Supermarkets
5. Exporters
1. Community Enterprises
2. Agri Coops (AMCs)
3. Logistics
4. Processors
5. Buyers
1. Input Producers
2. Input sellers
3. Farmers/Growers
Upstream
actors
Middle stream
Downstream
Savings Product
SMART FARMER Credit
Crop Insurance
Production Credit
Machinery Credit
Consumption Credit
Entrepreneur Credit (Legal Entity)
Logistic/Warehouse Credit
Credit for Postponement of Sale
of Produce
Investment Credit
Packing Stock Credit
Credit for Export Business
Credit for gathering + buying of produce
Credit for improvement, maintenance of quality, environment overseeing
AIM:
1. Increase productivity& develop efficiency of the actors throughout the agriculture value chain.
2. Supply premium grade commodities to the market
3. Satisfaction of consumers for product and service
4. To strengthen its role as a public bank to facilitate sustainable rural finance
5. Targeted disbursement

3. Palm Oil Value Chain Finance: BAAC, Thailand
Thasae Land Settlement Cooperative with 3,700 Coop Members
Palm Oil plantation
102,710 acres
Yield =522,000 MT
Private Refining Factory
Appropriate Farm Practices
Scientific Harvesting & Collecting
Coop crude Palm Oil marketing
Coop crude Palm Oil extraction facility
Production loan and input supply by Cooperative
Farm Practices Supervision by coop
Farmer/Coop collection center
Waste water treatment
Coop biogas power (1.82 KW/hr)
Provincial Electricity Authority
Profit from CPO Business: US$3.7 million
Produce price gain to members US$1.6 million
Organic manure returned : US$0.8 million
Substantial return from electricity generation
Job creation: 218 employees
Welfare measures for members
Financial Support to coop for on-lending (working capital and investment)
Capacity building of coop
International banking services
BAAC
Coop

4. Kalasag Farmer’s Producers’ Cooperative: ASKI, Philippines
Small Onion Producing Farmers (Luzon Province)
Jollibee Foods Corporation
ASKI (MFI)
NLDC
&
CRS
Strong Commitment of the Stakeholders
Capacity building of small farmers
Lending ++ approach
Linking with Institutional Market
High Risk financing by ASKI
Lack of Infrastructural facilities
Quality of produces
Sustainability of the collaboration

5. Alcoy Coffee Project: Philippines
CHMI Agro-Forest Development Corporation
Farmer Groups
Smal Coffee Farmers
ALCOY Coffee Coop
Importers
Domestic Coffee Traders
Domestic Consumers
Overseas Consumers
Flow of Funds
Flow of Tech Assistance
Flow of Products
Commercial Banks

6. Facilitating Role in Potato Value Chain : BRAC, Bangladesh
Contract farming with marginal farmers to grow potato seeds
Technical support and working capital
POTATO SEED DEALERS
Grading, Packaging and selling
Payment made directly to BRAC
Payment made to farmers after deducting the cost
COMMERCIAL BANKS
Working capital loans
Direct Repayments
Buy back the seed produced

7. Financing models to Small Tea Leaf Growers
Innovative Models of AgVCF: YES Bank Ltd., India
Financing models to Small Tea Leaf Growers
Customized financial product for milk aggregators

8. Small Ruminant Value Chain Finance: ADBL, Nepal
Input suppliers
Goat Producers
Traders
Butchers/ Processors
ADBL
3-Party agreement
RETAIL MARKRT
A. Individual Consumer
B. Institutional Buyers (Hotels, Restaurants, Offices, Hostels etc)
EXPORT MARKET
A. Processed meat
B. Meat Products
Kids
Feeds
Fodder

9. Lessons From the Experiences
Rural finance is unwieldy as long as value chains are weak. With weak value chains, rural finance cannot be viable or sustainable.
A value chain is only as strong as its weakest link. Even if there are many players, the weakest link determines the strength of the whole chain.
Moreover, a value chain can be enhanced or damaged by external environment whether natural or man-made. The effects of the environment are created by the players of the value chain.
Financial institutions must have a healthy risk appetite. Risk avoidance will not bring about any improvement

10. Thanks for your patience listening!
Time for Q & A??