Agriculture ministers have emphasized the need to scale up financing for smallholder farmers to enhance agricultural productivity through targeted subsidies, irrigation projects, and other financing mechanisms.
During a panel discussion on public investment, de-risking private investment, and creating enabling environments for scaling finance, officials highlighted the importance of supporting smallholder farmers to ensure food security and economic growth.
A key point raised was the significance of subsidies for smallholder farmers, particularly in the form of inputs like seeds and fertilizers. Small interventions, such as comprehensive soil analysis and improved access to quality inputs, were noted as essential for increasing productivity. One minister pointed to a fertilizer subsidy program as a pivotal policy shift, arguing that subsidizing production rather than consumption yields higher output and mitigates economic challenges. Additionally, there was a call for greater farmer participation in shaping subsidy policies to maximize effectiveness.
Another official highlighted how subsidies had significantly boosted food production in their country. By implementing a co-financing model where farmers contribute a portion of input costs while the government covers the rest, production levels have improved considerably. Targeting small plots of land for staple crops such as maize and beans has been particularly successful in achieving higher yields.
Irrigation infrastructure was also identified as a critical factor in supporting smallholder productivity. Investments in water resource development, including the construction of dams, have been instrumental in enhancing resilience to climate change and ensuring sustainable agricultural output. One government, with support from international financial institutions, has been constructing a dam to provide irrigation for thousands of hectares of farmland.
Infrastructure development was another major theme of the discussion. Officials stressed the necessity of investments in water resources, road networks, power supply, and processing facilities to facilitate the smooth transition from production to consumption. A specialized agro-industrial processing program, aimed at strengthening value chains for crops such as rice, cassava, ginger, and tomatoes, was highlighted as an effective model for agricultural transformation. This program integrates essential infrastructure elements, enhances market access, and facilitates technology transfer, ultimately improving overall efficiency and productivity.
Financial mechanisms for smallholder support were also explored. One effective approach mentioned was matching grant facilities, where eligible farmers receive one-time investment grants in the form of agricultural equipment, processing machinery, or other resources. To qualify, farmers are required to contribute a percentage of the investment cost, either in cash or in-kind contributions. This co-financing structure encourages farmer participation while ensuring sustained benefits.
Formalizing smallholder farmers into cooperatives was identified as another crucial strategy to improve access to financing. By organizing into cooperatives, farmers can develop business plans, establish financial accounts, and access larger pools of funding from both lending institutions and government grants. One minister highlighted the success of such an approach in their country, citing a multimillion-dollar grant initiative that had enabled cooperatives to increase food production and improve food security for thousands of people.
The discussion underscored the necessity of collaborative efforts between governments, financial institutions, and farmers to create a sustainable agricultural financing ecosystem. Strengthening public-private partnerships, enhancing infrastructure, and developing targeted financing mechanisms were identified as key priorities for driving smallholder productivity and ensuring long-term food security.
