Grant Signing Ceremony: Agricultural Development Fund Talking Points: USAID Administrator Dr. Rajiv Shah
July 21, 2010
“The importance of agricultural credit in Afghanistan”
Salaam Alaikum. Minister Rahimi, Minister Zakhilwal, distinguished guests, ladies and gentlemen. On behalf of the United States Government, it is a real pleasure to be here today at the grant signing ceremony for the Agricultural Development Fund.
After decades of conflict, Afghanistan’s agricultural sector is becoming more competitive. This is especially good news for small commercial farmers, who comprise 40% of the rural population and produce over 80% of the total agricultural output.
Towards this end, the U.S. and Afghan Governments together finalized their combined Agricultural Strategy last year to support the Government of Afghanistan’s National Agricultural Development Framework.
Under Ministry of Agriculture leadership, Afghan and American agricultural experts are working together to increase jobs and income—through greater access to inputs, such as credit—and to improve the Ministry’s capacity to deliver services though direct budget and technical assistance.
The new Agricultural Development Fund will help us reach both of these important goals.
Access to credit is one of the main obstacles small commercial farmers encounter when trying to expand their production. Unfortunately, many banks and other sources of credit are reluctant to lend to the agricultural sector.
This is why U.S. Embassy, USAID and the Ministry of Agriculture, Irrigation and Livestock decided to establish the Agricultural Development Fund with $100 million in capital to lend to the agricultural sector. The Agricultural Development Fund will provide funding to banks, microfinance institutions, farm stores and agricultural depots among others, who will in turn use these funds to on-lend to farmers. The goal is to provide farmers with increased inputs, materials and equipment to expand their farm production, thus increasing their incomes.
As this is an urgent and critical priority, lending activities will start during the fall planting season.
To assist the Ministry of Agriculture in lending these funds, USAID will work with the Ministry to develop loan officers who are familiar with agricultural lending practices, as well as with technical advisors who will work with borrowers to strengthen their agricultural business, in particular to find new market opportunities to sell Afghanistan agricultural products.
As the credit needs in the agricultural sector are significant, in time we intend to expand the Agricultural Development Fund with donations from other donors. While much remains to be done, the establishment of the Agricultural Development Fund is a significant step forward in addressing the needs of the agricultural sector.
We are particularly pleased to conduct this ceremony at Badam Bagh Demonstration Farm. This farm is an example of the good partnership between the U.S. Embassy, USAID and Ministry of Agriculture. Badam Bagh Farm instructs Afghanistan farmers in new, modern techniques that increase farm production.
Today we will expand on this successful partnership between our American Embassy, USAID and the Ministry of Agriculture by establishing the Agricultural Development Fund to further assist farmers in their efforts to increase farm production. I congratulate all of you here today and wish you much success.