4 managing risks in agriculture finance by mr. almario

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4 managing risks in agriculture finance by mr. almario

  1. 1. MANAGING RISKS IN AGRICULTURE FINANCE<br />JOSELITO S. ALMARIO<br />Bridging the Supply and Demand Gap on Financial Services for Rural Households<br />4th Microfinance Best Practices Forum<br />Crown Regency Towers, Cebu City<br />June 9-10, 2011<br />
  2. 2. SOME FACTS ON AGRICULTURE FINANCE<br />For decades, a priority of the Philippine Rural Development Strategy<br />Financing traditionally provided by input suppliers, traders and processors<br />Private sector FIs still reluctant to lend to small farmers due to poor repayment rates<br />Government still tempted to provide subsidies<br />
  3. 3. WHY RELUCTANCE TO LEND TO AGRICULTURE<br />PRODUCTION RISKS<br /><ul><li>Natural Calamities
  4. 4. Pests
  5. 5. Diseases</li></ul>MARKET RISKS<br /><ul><li>Infrastructure
  6. 6. Access to Markets
  7. 7. Information</li></ul>POLITICAL RISKS<br /><ul><li>Government Subsidies
  8. 8. International Agreements
  9. 9. Smuggling</li></li></ul><li>COMMON INTERVENTIONS<br />Subsidies<br />Fertilizers<br />Seeds<br />Credit<br />Guarantees<br />Crop Insurance<br />Are they effective?<br />
  10. 10. WHAT CAN BE DONE<br />Household income and Frequent Payments<br />Contractual Arrangements<br />Micro-insurance<br />Agri Risks<br />Moveable Collateral Registry<br />Credit Information System<br />
  11. 11. AGRIFINANCE FACES MANY RISKS THESE RISKS MAY LOOK FORMIDABLE BUTTHEY ARE NOT INSURMOUNTABLE<br />

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