Challenges and Opportunities in Food Value Chain Financing
Explore the experiences, challenges, and opportunities in value-chain financing within the food value chain program. Learn about the agricultural value chain concept, value chain finance, food supply chain program, and essential agreements for production, technical, and marketing aspects. Discover how the program addresses constraints and adopts business models to enhance productivity and market demand.
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Presentation Transcript
Experiences, Challenges and Opportunities in Value-Chain Financing : THE FOOD VALUE CHAIN PROGRAM THE FOOD VALUE CHAIN PROGRAM
The Agricultural Value Chain Concept It covers a full range of activities and participants involved in moving the agricultural product from the farmers field to the consumers table. - Eva Galvez Nogales (2007)
The Agricultural Value Chain Concept At an industry level, it consists of various processes that are involved in producing goods (and services), starting with raw materials and ending with the delivered products (also known as supply chain) Farm Input Supplier Farmer/ Producer Institutional Buyer Processor End Customer Service Providers
Value Chain Finance The flow of funds or provision of financial services to and through the value chain to address the needs of those involved in the chain
Food Supply Chain Program Legend: LANDBANK Commodity Flow Funds Flow Loan Repayment Working Capital Production Loan Working Capital Fixed Asset Loan Working Capital Fixed Asset Loan Repayment Repayment Repayment Credit Conduits Sales Proceeds Sales Proceeds Coops Ass n ABEs CFIs MILLER PROCESSOR MANUFACTURER Market Outlet for local/foreign buyers Raw Materials Agri Produce Relending Agri Produce Farmers and Fisherfolk
Production, Technical and Marketing Agreement Salient Provision: Product specification/quality standard, volume Delivery schedules Pricing and payment scheme. Auto-debit arrangement
FSCP as a Business Model Addressing Constraints Demand-driven production Matching production capacities to market demand - production scheduling - consolidation Adoption of win-win pricing scheme - based on current market price, in some cases with guaranteed floor price -improving productivity
FSCP as an Agricultural Business Model Addressing Constraints Building long-term business relationship
Status and Prospects 1.0 Program Accomplishments Oct. 2010-Dec. 2011 140 140 381 Indicators Jan.-May 2012 No. of Projects No. of Anchor Firms No. of Co-op/FO/NGO Producers Loan Releases 88 88 158 P9.839 B P2.751 B 2.0 Targets LBP target loan releases of P10 Billion for CY 2012
Towards Sustainability Strengthen the producers cooperative as intermediary Business management competency Support services to its members Foster technology support Tie-up with SUCs for mature technologies Improve technical assistance Link with DA Innovative financial products and services
