- Maintaining the quantity and quality of staple grains throughout the year.
- Managing the persistent price seasonality in grain commodity markets. In Mbeya, Tanzania, where our experiment was conducted, for the last two years maize prices in the lean season were 80% higher than prices at harvest.
The winning proposals lay out a clear plan for commercial and export-oriented agriculture initiatives that facilitate private sector investment, provide technical assistance, strengthen farmer producer organizations and promote smallholder–agribusiness partnerships.
The goal is to increase their competiveness, business orientation and market position in order to make them more attractive business partners in the value chain. It’s an ambitious task, but Sri Lanka’s agri-entrepreneurs have risen to the challenge.
Matching grants scheme supports agribusiness
The matching grants scheme, implemented by Sri Lanka’s Ministry of Primary Industries comes under the Agriculture Sector Modernization Project. Supported by the World Bank, with additional funding from the European Union, the project is implemented through the Ministry of Primary Industries, the Ministry of Agriculture, and five participating provinces including the Northern, Eastern, Central, North-Central and Uva Provinces.
A rigorous and transparent selection process was used to create a shortlist. Successful applicants would be offered up to 50 percent of the investment required through the scheme, matched by their own funds or raised from commercial loans.
These small enterprises need the boost. Today, beside a few major agriculture companies, most operators in Sri Lanka are small-scale cultivators who face problems related to low productivity and lack of diversification, absence of market linkages, non-availability of inputs and limited access to credit facilities. Farmers are not organised and tend to focus on low value crops that limit income generation.
Ugandan’s access to financial services has improved dramatically in recent years. More than half of Uganda’s adult population now has access to an account at a formal financial institution. This is almost twice as many as in 2009. The entry and fast penetration of mobile money is the main reason for the increase, having allowed 8 million Ugandans to conduct financial transactions.
Risk is a financial term that can mean life or death for a budding entrepreneur. Many entrepreneurs need to take out loans from banks in order to have enough money to start their businesses. Banks, though, need to be able to reliably determine which of these potential entrepreneurs will repay the loans and which will default. In developed countries this is usually accomplished through credit reports, which contain an individual’s credit history as reported to a credit bureau by lenders. This system, however, can be problematic in developing countries where many people do not have bank accounts, don’t interact frequently with formal institutions, or are paid informally in cash. As a result, banks often lack verifiable information on the probability that a loan applicant will be successful.
Interestingly, one set of data that is available in most countries is mobile phone records. By the end of 2015, there will be more than 7 billion mobile cellular subscriptions, with a penetration rate of 97%, up from 738 million in 2000. Due to the incredible market saturation of mobile phones and the ability of mobile phone operators to keep records of call activity (even with prepaid plans), operator records can provide rich information about individual behavior and social networks. For example, phone records indicate whether or not an individual keeps their balance top-upped so that they can make calls in case of an emergency, how many people they call during the day, how long their calls last, and so on.
Daniel Björkegren, an economist at Brown University and Darrell Grissen of the Entrepreneurial Finance Lab (EFL) wondered whether these phone records could reveal insights into an individual’s behaviors that could be applied elsewhere- specifically whether this information could determine an individual’s creditworthiness.
Despite tremendous progress in poverty reduction over the last two decades, poverty still persists. Along with South Asia, Africa is a region where large numbers of people continue to live in extreme poverty. It is also a region where there is clearly room for higher foreign trade levels (see Chart). Given that trade can generate growth – and thus poverty reduction – focus on trade-related reforms (e.g. lower tariffs, better logistics, and trade facilitation) deserves to be a high priority of the region.
If the global financial crisis -- and the events that led up to it -- have taught us anything, it is,“No complacency with asset price booms”. We know first hand the dire consequences of bubbles, so it is clear monetary policy makers can no longer passively observe the evolution of asset prices. If an economy is to pursue macroeconomic and financial stability, they should coordinate with financial supervisors – in an economic marriage of convenience – to ensure financial regulation and monetary policies are complementary, and implemented in an articulated way.