Microfinance

Microfinance for Seed Growers

This project, we believe, is an important key to the success of the Seed Grower Network.  Once farmers have completed their training, they need appropriate tools in their hands to put ideas into action, and therefore need access to capital to invest in specialized tools for the task.  Farmers who have completed the training and entered the Network would be eligible to apply for a microfinancing fund administered between AABDA, members of the Network, and the Seed Company.

In Argentina, because of historical financial shocks, people are mistrustful of banks.  Most people in the rural environment, whether out of mistrust or poverty, do not hold bank accounts.  It is anyhow not common that banks have the propensity or structural patience to understand that farming is an organic process, interwoven with the processes of life that must be respected.  We believe therefore that by putting the financing process into the hands of farmers will be a way to reconstruct trust.   By bringing the issue of borrowing and lending into a circle of trust and confidence, built up by the Grower Network, we believe people will be engaged to take the risk.

Structural support for harvest and threshing machines, drying racks, or greenhouse tunnels, are only a short list of the tools and equipment that one may need for seed production.  A loan could be drawn in a rotating system of guarantee, where fellow farmers are guarantors against the loan, and who would then also have a vested interest in the success of the return.  Another model, in the case that little initial funding is acquired, is to create lending circles, where the farmers themselves all pool money together, and where each member in their turn can access the fund as the loans are returned in due time.  This second model will also help build bonds between the farmers and develop a community sense of shared stakeholders.  Another approach, through our links with the “Secretariat for Small- and Family Agriculture”, is to encourage growers in a particular region to organize and ask for microfinance loans from this entity, since the Secretariat has supported such group initiatives in many provinces in the past.  The Seed Initiative Whether the initial capital is acquired by a grant, through crowdfunding, put up by the Seed Company, or by the Growers themselves, there are many ways to administer the funds collectively.  We expect that regional groups will also invest in machines cooperatively, such as harvest or threshing machines, that are often costly although they might only be used perhaps once or twice a year by a farmer.

This project is still in exploratory phases and will continue to develop once the Grower Network and Training program begin.  The plan will be further clarified in the next couple of years.