expanding agriculture and food security activities in ... - part - usaid

While many farmers cite the need for credit to purchase agricultural inputs very few have done the
analysis to determine total costs versus likely returns, factoring in interest rates, costs of all inputs and
costs of transport and marketing. There is little understanding of these business concepts at farmer,
government or NGO levels. Financial institutions are also very limited in their understanding of
agricultural systems, and do not have suitable techniques to assess and mitigate risk.
A third confounding factor is the widespread use of grants and subsidized loans, revolving funds and
other mechanisms being applied under many of the recovery activities in Southern Sudan. While there
may be scope for some kinds of subsidized risk sharing, most of these programs have not built in exit
strategies. Several projects actually provide capacity building to communities to prepare successful grant
applications, and therefore the concepts and acceptance of business finance is further eroded.
EXPANDING AGRICULTURE AND FOOD SECURITY ACTIVITIES IN SOUTHERN SUDAN 34