Bankability	  of	         aquaculture	  	                        –	  Insights	  from	  other	     commodi9es	             ...
Insights on bankability of small      holders:1) Value chain needs to bestreamlined2) Farmers need to save3) Certified far...
Business has great leverage                              Top	  200	  mul*na*onals	                                15	  key...
An emerging business casev
IDH in a glance                                                 Profile•  Accelerating + up-scaling sustainable trade     ...
IDH in a glance                                                 Profile•  Accelerating + up-scaling sustainable trade     ...
Bankability of commodities  Bankability = the ability to pay back = the ability to meet the                   organization...
Finance and aquaculture           “Cautious due to past experiences”•  Country risks   Difficult for (foreign) lenders to ...
Finance and cocoa
Finance and cocoa                              •    Economic growth                              •    Employment          ...
Finance and cocoa1.  Farm finance: The farmer group takes a bank loan for fertilizer for its    members, with risk-sharing...
Finance and aquacultureAverage annual growth in global per capita food consumption, 2012-2021:                     Source:...
Finance and aquaculture                 Feed             Seed     FI                                   Policy &           ...
Finance and aquaculture: de-risking                    •  Savings                    •  Organising capacity building & tra...
Insights on bankability of small      holders:1) Value chain needs to bestreamlined2) Farmers need to save3) Certified far...
Key messages:1) Value chain commitmentsincrease access to finance2) Certification is a tool:‘aggregating receptivefarmers’...
Bankability of aquaculture - insights from other commodities
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Bankability of aquaculture - insights from other commodities

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Presentation by Esther Luiten from the Sustainable Trade Intiative presented at the Seafood Summit 2012, 7 September, 2012.

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Bankability of aquaculture - insights from other commodities

  1. 1. Bankability  of   aquaculture     –  Insights  from  other   commodi9es   Esther  Luiten  Senior  Program  Manager  Aquaculture  
  2. 2. Insights on bankability of small holders:1) Value chain needs to bestreamlined2) Farmers need to save3) Certified farmers controlrisks better
  3. 3. Business has great leverage Top  200  mul*na*onals   15  key  commodi*es     35  most  threatened   regions    
  4. 4. An emerging business casev
  5. 5. IDH in a glance Profile•  Accelerating + up-scaling sustainable trade Founded in 2008•  Convening impact oriented coalitions•  Co-funding private investments to achieve Investment package sustainable production Euro 600 M for•  Stimulate private sector development 2011-2015•  Impact on MDG1, MDG 7 and MDG 8 12-16 commodity programs International coalition: Reaching ‘tipping point’ -  70 companies, -  10 NGOs Scaling impact Endorsed by Dutch Accelerating (and other) governments 35 staff members
  6. 6. IDH in a glance Profile•  Accelerating + up-scaling sustainable trade Founded in 2008•  Convening impact oriented coalitions•  Co-funding private investments to achieve Investment package sustainable production Euro 600 M for•  Stimulate private sector development 2011-2015•  Impact on MDG1, MDG 7 and MDG 8 12-16 commodity programs InternationalPublic Co- Impact Commercial coalition:grants funding investing finance -  70 companies, Reaching ‘tipping point’ -  10 NGOs Scaling impact Endorsed by Dutch Accelerating (and other) governments 35 staff members
  7. 7. Bankability of commodities Bankability = the ability to pay back = the ability to meet the organizational objectives Ecological Social Business performance •  ↓ use of agro- •  Contracts with workers •  Quality mngt chemicals •  Community relations •  Health mngt •  Control use of feed •  Insurances •  Monitoring of farming •  Nature and bio- •  etc. •  Farming protocols diversity conservation •  ↑ Supply chain links •  ↑ Productivity •  Traceability •  etc. •  Market positioning •  etc. Certification = more robust management = increased ability to meet organizational objectives (less risks, less costs, higher profitability)
  8. 8. Finance and aquaculture “Cautious due to past experiences”•  Country risks Difficult for (foreign) lenders to register collateral Macro economy: fast growth and high trade deficit lead to growing inflation•  Market risks aquaculture Price volatility: raw material and farm-gate prices Increased international competition Difficult to differentiate through quality•  Farming risks Diseases Production failures Environmental and social risks•  Financial and currency risks Informal financing (small holders shrimps) High interest rates (for farmers)
  9. 9. Finance and cocoa
  10. 10. Finance and cocoa •  Economic growth •  Employment •  External balance •  Secure long term supply •  Fertilizer business opportunity•  Profitability•  Community welfare•  Food security •  Environmental preservation •  Reduce pressure on land clearing
  11. 11. Finance and cocoa1.  Farm finance: The farmer group takes a bank loan for fertilizer for its members, with risk-sharing from the other supply chain agents2.  Fertilizers-for-beans: The cocoa supplier is partially paid in fertilizer upon delivery of beans to the trader3.  Cash-and-carry: Building on the supply chain infrastructure, fertilizer is made available at selling points close to farmers to buy in cash Need for innovative financing models: •  Robust •  Efficient •  Outreach
  12. 12. Finance and aquacultureAverage annual growth in global per capita food consumption, 2012-2021: Source: OECD-FAO Agricultural Outlook 2012-2021, 2012
  13. 13. Finance and aquaculture Feed Seed FI Policy & regulation Farming Middle- men Middle- men Need for innovative financing models: Proces- •  Robust sor •  Efficient •  Outreach
  14. 14. Finance and aquaculture: de-risking •  Savings •  Organising capacity building & training On farm •  Aggregation •  Certification as risk-mitigator? Finance •  Risk assessment profiles in aquacultureinclusive supply •  Risk-sharing arrangements (supply chain) chain •  Professionalization of suppliers and chain management partnerships •  Support farmer aggregation Government & •  Clarity on land-titles Investors •  •  Patient money for investments in capacity building Diseases: monitoring & control
  15. 15. Insights on bankability of small holders:1) Value chain needs to bestreamlined2) Farmers need to save3) Certified farmers controlrisks better
  16. 16. Key messages:1) Value chain commitmentsincrease access to finance2) Certification is a tool:‘aggregating receptivefarmers’ + streamliningvalue chain + risk-tool
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