The U.S. International Development Finance Corporation (DFC) and the United States Agency for International Development (USAID) today made an announcement that they are jointly sponsoring a $55 million (approximately 400 crores in Indian rupees) credit guarantee to address the economic impact of COVID-19 by supporting loans to farmer producer organizations, ag-tech companies, and companies engaged in clean energy solutions for the agriculture sector.
The initiative will introduce and support clean technologies for smallholder farmers, particularly women, that improve market linkages and increase incomes while having a positive impact on the environment.
Titled as the “India Covid Response Program for Agriculture Transition”, this eight-year program will reach more than 200,000 smallholder farmers in India and is supported by direct grants from several international foundations and the United Kingdom’s Foreign, Commonwealth and Development Office.
Furthermore, the financial support will be complemented with technical assistance led by the Rabo Foundation to focus on areas of business management and help in building stronger linkages to the markets. Loans to farmer producer organizations will be provided by three Indian lenders – Samunnati Financial, Maanaveeya, and Avanti Finance.
“At USAID, we believe that providing farmers with access to cleaner, more affordable technology can improve the livelihood and climate resilience of the community. In addition, clean technologies offer a sustainable alternative to meeting agricultural demand, address food insecurity and improve nutritional outcomes. This support will address the health and economic needs of vulnerable farmer communities severely impacted by the COVID-19 pandemic,” said Warren Harrity, Director, Program Support, USAID/India.
“Only by joining forces and creating valuable partnerships, can we provide smallholder farmers the space and opportunities they need to improve their livelihoods and adapt to the challenges of climate change. This not only supports the farmers who receive the direct support; it also benefits their local communities and environment in India,” said Pim Mol, CEO, Rabo Foundation.
“We are glad to be part of this mission empowering collectives for the benefit of smallholder farmers with a transition towards more sustainable livelihoods. We strongly believe that aggregation can solve multiple problems faced by smallholder farmers and this initiative can go a long way towards scaling the collectives through encouraging participation by mainstream capital providers,” remarked Manish Thakkar from Avanti Finance.
Anil Kumar SG from Samunnati Financial mentioned “This initiative will offer customized financial solutions to entities interested in adopting climate smart and green solutions.”
“To counter COVID-19’s effects on the agricultural sector, this timely project will play a catalytic role in making smallholder farmers more climate change resilient while simultaneously directly impacting the communities we serve,” said Dr. Gouri Sankar from Maanaveeya.