The USAID Agriculture Growing Rural Opportunities Activity (AGRO) in Ukraine partnered with suppliers of agricultural inputs to enable larger loans for Ukrainian farmers. AGRO will support credit facilities in designing and extending financial instruments tailored to meet the needs of small agribusinesses and farmers amid the war. This will help increase the scope of trade credit. AGRO anticipates that in the next 12 months, a minimum of 600 micro-, small-, and medium-sized agribusinesses will benefit by purchasing plant protection products, seeds, and fertilizers, with a collective expenditure of UAH 460 million.

Due to war-related risks, financial entities scaled back the funding available to farmers. Trade credit, which was previously one of the primary funding sources for Ukrainian farmers, particularly smallholdings, are now being offered on a significantly smaller scale. In the past, trade credit enabled farmers to acquire essential seeds and plant protection products, with the provision to repay the loans after selling the harvest. Limited export and depressed prices for agricultural produce in Ukraine have sapped farmers’ resources, which otherwise could have been invested in seed or plant protection products. Access to loans and agricultural inputs is paramount for farmers in war-torn Ukraine, enabling them to sustain operations, foster growth, and generate employment.

USAID AGRO will support three agricultural input suppliers to extend financial instruments tailored to wartime exigencies. Among such companies, ADAMA and UKRAVIT have already started working on financial solutions for farmers. The companies will be able to mitigate their credit risks and renew trade credit for small farmers, who in turn will gain access to the resources necessary to work efficiently. For each dollar invested by AGRO, the private sector is expected to facilitate $4.2 of trade credit to small farmers.

“Access to funding empowers farmers to respond to the wartime challenges, maintain operations, and ultimately invest in recovery and expansion after the war,” says Kseniya Sydorkina, USAID AGRO Chief of Party. “However, the market has undergone structural changes. We need new solutions that enable credit facilities to adapt and manage risks, while at the same time allowing farmers to procure seed, fertilizer, and plant protection products expediently and on favorable credit terms. The partnership between the private sector and USAID AGRO, an international technical assistance activity, will cultivate novel programs and tools that will revitalize funding in agriculture. In doing so, we will bolster the resilience of the agricultural sector in these trying times.”

This initiative will integrate into USAID AGRO’s broader effort to enhance funding accessibility for small agribusinesses. Since February 2022, 764 micro-, small-, and medium-sized agribusinesses have received $49.8 million in bank loans through the fintech apps developed with AGRO support. This activity is part of the Agriculture Resilience Initiative (AGRI-Ukraine) spearheaded by the United States Agency for International Development (USAID).

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USAID Agriculture Growing Rural Opportunities Activity (AGRO) is a seven-year program of the U.S. Agency for International Development (USAID) implemented by Chemonics International. The Activity aims to accelerate the economic development of rural Ukrainian communities through a better governed agricultural sector that encourages more productive, modern, and profitable micro, small, and medium (MSMEs) agricultural enterprises. USAID AGRO’s objectives are to improve productivity and market access in target value chains, improve support functions, and legal and policy framework in Ukraine’s agricultural sector. Learn more about USAID AGRO: www.facebook.com/usaid.agro