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Blended finance for agriculture: exploring the constraints and possibilities of combining financial instruments for sustainable transitions

Author

Listed:
  • Tanja Havemann

    (Clarmondial AG)

  • Christine Negra

    (Versant Vision LLC)

  • Fred Werneck

    (Clarmondial AG)

Abstract

Transitioning to sustainable agricultural systems is imperative to meet the global Sustainable Development Goals (SDGs). Achieving more sustainable agricultural production systems will require significant additional capital, however this cannot be covered by the current financial market setup, which dissociates public and private funders. Blended finance, where concessionary development-oriented funding is used to mobilize additional private capital, is essential. To ensure that the limited pool of concessionary funding is used efficiently and effectively, a shared understanding of the roles and limitations of public and private funders is necessary. In this paper, we describe the high-level funding gap for sustainable agriculture, the general landscape of agricultural finance, and the concept and potential roles of blended finance in this context. This paper introduces the conditions under which different financing mechanisms can contribute to addressing barriers related to sustainable agriculture investments. It highlights that multiple funding modalities must be utilized in order to achieve agricultural investment at a meaningful level and encourages greater exploration of the range of blended financing structures to increase SDG-related agriculture investments.

Suggested Citation

  • Tanja Havemann & Christine Negra & Fred Werneck, 2020. "Blended finance for agriculture: exploring the constraints and possibilities of combining financial instruments for sustainable transitions," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 37(4), pages 1281-1292, December.
    • Handle: RePEc:spr:agrhuv:v:37:y:2020:i:4:d:10.1007_s10460-020-10131-8
    DOI: 10.1007/s10460-020-10131-8
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    References listed on IDEAS

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    1. Carter, Patrick & Van de Sijpe, Nicolas & Calel, Raphael, 2021. "The elusive quest for additionality," World Development, Elsevier, vol. 141(C).
    2. Sarah Velten & Julia Leventon & Nicolas Jager & Jens Newig, 2015. "What Is Sustainable Agriculture? A Systematic Review," Sustainability, MDPI, vol. 7(6), pages 1-33, June.
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    Cited by:

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    2. Omobolaji Omobitan & Aditya R. Khanal, 2022. "Examining Farm Financial Management: How Do Small US Farms Meet Their Agricultural Expenses?," JRFM, MDPI, vol. 15(3), pages 1-15, March.
    3. Leslie Lipper & Romina Cavatassi & Ricci Symons & Alashiya Gordes & Oliver Page, 2021. "Financing adaptation for resilient livelihoods under food system transformation: the role of Multilateral Development Banks," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 13(6), pages 1525-1540, December.
    4. Bas Louman & Erica Di Girolami & Seth Shames & Luis Gomes Primo & Vincent Gitz & Sara J. Scherr & Alexandre Meybeck & Michael Brady, 2022. "Access to Landscape Finance for Small-Scale Producers and Local Communities: A Literature Review," Land, MDPI, vol. 11(9), pages 1-26, August.
    5. repec:ags:ijaeri:334605 is not listed on IDEAS
    6. Gerlinde Behrendt & Sarah Peter & Simone Sterly & Anna Maria Häring, 2022. "Community financing for sustainable food and farming: a proximity perspective," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 39(3), pages 1063-1075, September.
    7. Monica Laura Zlati & Andrei Mirel Florea & Valentin Marian Antohi & Marius Sorin Dinca & Florentin Bercu & Costinela Fortea & Stanciu Silvius, 2023. "Financing Romanian Agricultural Cooperatives’ Investments for the 2023–2027 Horizon," Sustainability, MDPI, vol. 15(3), pages 1-28, January.
    8. Ying Tang & Menghan Chen, 2022. "The Impact of Agricultural Digitization on the High-Quality Development of Agriculture: An Empirical Test Based on Provincial Panel Data," Land, MDPI, vol. 11(12), pages 1-16, November.
    9. Linus Nyiwul & Niraj P. Koirala, 2022. "Role of foreign direct investments in agriculture, forestry and fishing in developing countries," Future Business Journal, Springer, vol. 8(1), pages 1-12, December.
    10. Olga Mapanje & Selma Karuaihe & Charles Machethe & Mao Amis, 2023. "Financing Sustainable Agriculture in Sub-Saharan Africa: A Review of the Role of Financial Technologies," Sustainability, MDPI, vol. 15(5), pages 1-20, March.
    11. Yong Jiang, 2023. "Financing water investment for global sustainable development: Challenges, innovation, and governance strategies," Sustainable Development, John Wiley & Sons, Ltd., vol. 31(2), pages 600-611, April.

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