Kiev, Ukraine, April 29, 2014
—IFC, a member of the World Bank Group, is partnering with global companies BASF and Syngenta to support the introduction of crop receipts, a new financial instrument for Ukraine that will make high-quality seeds and other inputs more affordable for small and medium-scale farmers, helping boost agricultural productivity.
Working with the Ukrainian government, input suppliers BASF and Syngenta, and other market players, IFC’s Advisory Team will help develop legislation and pilot the first use of crop receipts during the autumn agricultural season. Crop receipts will allow farmers to use a crop as security to purchase seeds and other materials.
The instrument, which has been modeled on a successful program operating in Brazil aims at overcoming the existing lack of acceptable security in Ukraine that imposes a major constraint on financing SME farmers.
“Ukrainian agriculture has great export and yield potential but the main growth constraint is cheap and accessible financing,” said Helen Fairlamb, Head of Business Development at Syngenta Ukraine.
“Based on our experience in Brazil, where there is a similar product, we believe that crop receipts could be a simple, understandable, and transparent way of releasing financing, helping improve the confidence of input suppliers and banks in supplying greater credits to agriculture.”
Tom Wetjen, Head of Marketing Crop Protection in Ukraine, Moldova and the Caucasus at BASF, said: “Crop receipts will make the high quality, innovative crop protection products of our company and other materials more affordable for farmers. Considering the existing difficulties in getting credit and limited market liquidity, it will be a very convenient instrument to attract the financing, and cheaper than other financial instruments on the market today.”
Elena Voloshina, head of IFC’s operations in Ukraine, explained: “Ukraine’s agricultural sector has been a major driver of the country’s economy for several years. Our new advisory initiative aims to unlock millions of dollars in additional financing from agricultural input suppliers, traders, and banks to ensure long-term growth of the sector.”
With support from IFC and other international financial institutions, including the European Bank for Reconstruction and Development, Ukraine’s parliament passed the law on agricultural receipts in November 2012. Yet more work on legislation is required to ensure the success of the instrument. Activities under the new IFC advisory initiative will include establishing a government register to be used by notaries to prepare the legal documents and finalize legislative regulations governing their use.
IFC supports the entire agriculture and food value chain, from farm production to collection, processing and distribution, and has already invested over $800 million in Ukraine agribusiness.
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. Working with private enterprises in more than 100 countries, we use our capital, expertise, and influence to help eliminate extreme poverty and promote shared prosperity. In FY13, our investments climbed to an all-time high of nearly $25 billion, leveraging the power of the private sector to create jobs and tackle the world’s most pressing development challenges. For more information, visit
www.ifc.org
.
Stay Connected
About BASF
About Syngenta
