A study on the agricultural value chain financing in India

Agriculture in developing countries is experiencing profound, fast-moving changes. Globalization, although advancing more rapidly in some countries than others, has hastened the transition from the traditional, low-productivity agriculture toward a modern, high-productivity agricultural sector. The resulting processes of structural change are having profound consequences for employment, the methods of generating income, risk management, poverty alleviation, and the wellbeing in rural households in these countries. This study describes the approaches for the organised value chains as a new business model in a globalized world and it describes about the great variety of financial arrangements found in India and the actors in the agri-food chain with varying degrees of formality and informality. The study also brings about the role of the value chain in promoting the rural financing deepening, the financial operators that use agricultural value chain to provide dynamic, innovative services with low cost transaction costs and the technical assistance programs to help the participants in the chain to upgrade their operations, to reduce risk and to improve the access to financial services and concludes by identifying the changes in paradigm.