Crop receipts enable farmers to use future harvests as collateral to secure capital financing to purchase quality seeds, seedlings, fertilisers and other inputs
IFC has supported more than 2,000 small farmers in the country gain access to $1bn of financing through crop receipts. (Credit: Catkin from Pixabay)
World Bank Group member International Finance Corporation (IFC) has provided Ukrainian small farmers with access to $1bn of working capital financing.
IFC has assisted more than 2,000 small farmers in the country gain access to $1bn of financing via crop receipts, a financial instrument that enables to manage productivity and profitability.
Crop receipts facilitate farmers to use future harvests as collateral to secure capital financing to buy quality seeds, seedlings, fertilisers and other inputs.
IFC first launched crop receipts in selected regions of Ukraine in 2015
In 2015, IFC had launched crop receipts in selected regions of Ukraine and expanded across the country in 2018. It was implemented with the support of Ukraine Crop Receipts Project in partnership with the State Secretariat for Economic Affairs of Switzerland (SECO).
Small farmers have issued 4,000 crop receipts to secure $1bn in the financing, to date. The funding helps Ukraine to advance its development, as the country is having fertile land and favourable geography.
SECO private sector development unit deputy head Lukas Schneller said: “SECO is pleased that crop receipts have provided $1 billion in access to finance for small and medium agribusinesses in Ukraine, including farmers in the conflict-affected Donetsk and Lugansk regions.”
IFC has also helped to create a registry to track crop receipts, in addition to working with the Ukrainian government to support develop the relevant legislation that is significant for the crop-receipts initiative.
Currently, crop receipts are said to cover more than 40 unique value chains, including traditional grains and oilseeds, as well as niche, organic crops, and other agricultural products such as hay, honey, milk, and cattle.
IFC is also a major investor in Ukrainian agriculture, with a commitment of more than $1bn to support the country since 2004.
IFC Ukraine, Belarus, and Moldova regional manager Jason Pellmar said: “Introducing crop receipts in Ukraine is an initiative that IFC commenced from the bottom up, including legislative work, training of financial institutions, and raising awareness among farmers.”
In January 2020, the IFC agreed to provide $24m in financing to Zalar Agri, a Moroccan fruit producer, for job creation and to spur export-led economic growth in rural Morocco.