Blended Finance Can Unlock Agriculture Potential

Luke Smith

Government, donor and philanthropic funds alone are not sufficient to cover the investments needed to transform today’s agriculture sector. Governments lack the fiscal space to finance all the investment required to enhance the commercial potential of smallholder farmers both small and medium enterprises (SMEs) in agriculture, including the required skills and technical expertise. On the other hand, the private sector on its own fear the risk involved in investing into agriculture because of its uncertainty with returns on investment. As such there is a need to strategise in order to attract additional public and private finance to drive growth of an ever-changing agriculture sector.

Despite the tremendous potential of agriculture, it is lagging behind when it comes to investments due to over reliance on public support, it has been widely recognized that there is a need for private investment and expertise to fully unlock the industry’s true potential.

Simply put the blending4Ag conference sought to capitalize on partnerships among a multitude of developmental and private sector partners including international organizations, donor agencies, technical assistance agencies and private enterprise. Bringing all these key stakeholders together in order to create an enabling business environment to improve financing in agriculture along the value chain.

As you may have grasped already, the term blended finance refers to a mixture of public and private funds in a common investment scheme to mitigate business risks and impact social and economic growth by leveraging private investment flows where both sides complement each other’s expertise.

Do you agree that more blended finance structures need to be implemented in order for the agriculture sector to survive?





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CTA is a joint international institution of the African, Caribbean and Pacific (ACP) Group of States and the European Union (EU). CTA operates under the framework of the Cotonou Agreement and is funded by the EU.