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Improving credit allocation to sustainable agriculture in Sub-Saharan Africa: Review of bio-based economy benefits

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  • Benjamin, Olatunbosun

Abstract

Financing of agriculture by commercial and non-commercial institutions in rural Sub-Saharan African in recent years has being relatively constant despite remarkable increase in the number of institutions operating within this area. This development may be attributed to how these institutions rate the business of agriculture and the risks involved. However the slow pace of financing sustainable agriculture such as bio-based economy in the presence of internationalization i.e. Clean Development Mechanism CDM and voluntary carbon market needs to be analyzed. Diverse literature are used in exploring the potential of “bio-based economy” with emphasizes not just on carbon sequestration but agricultural value added. The results suggest that if financial and non-financial institution re-evaluate and reassess their stands on sustainable farming, development of sustainable agriculture in rural areas is inevitable. Constraint to agriculture financing due to lack of access to credit may be reduced if innovative and sustainable smallholders are identified.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 41313.

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Date of creation: 28 Mar 2012
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Handle: RePEc:pra:mprapa:41313

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Keywords: agricultural credit; carbon (CER); sustainable agriculture; collateral;

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  1. Simtowe, Franklin & Zeller, Manfred & Diagne, Aliou, 2009. "The Impact of credit constraints on the adoption of hybrid maize in Malawi," 2009 Conference, August 16-22, 2009, Beijing, China 51627, International Association of Agricultural Economists.
  2. John M. Antle & Bocar Diagana, 2003. "Creating Incentives for the Adoption of Sustainable Agricultural Practices in Developing Countries: The Role of Soil Carbon Sequestration," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(5), pages 1178-1184.
  3. Ani L. Katchova & Peter J. Barry, 2005. "Credit Risk Models and Agricultural Lending," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(1), pages 194-205.
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