Catalyzing Finance and Investment for Inclusive and Sustainable Agriculture-Led Economic Growth: Resources and Tools from USAID's Investment Support Program
A core principle of USAID’s Global Food Security Strategy (GFSS) is to engage and partner with the private sector to achieve food security development objectives, and to promote inclusive agriculture led growth in new markets. Over the last five years the Investment Support Program (ISP), implemented by Dalberg Advisors, has conducted tens of engagements in multiple geographies across the sphere of private sector engagement in agriculture and investment facilitation. The following tools have been prepared as a result:
In 2020, USAID developed of a series of Primers to provide guidance to Missions, Operating Units, and others in the sector on the design and implementation of impactful programs that catalyze private sector engagement and investment. The Primers aim to capture and disseminate learnings and insights across the following three topics:
- Primer 1 – Identifying Sectors / Products with Potential for Commercial-Scale Investment – this primer discusses how to generate a long list of products with potential for commercial-scale investment and how to refine the list to land on high potential investment opportunities.
- Primer 2 – Mapping and Addressing the Barriers Limiting Investment and Shaping the Enabling Environment – this primer discusses how to understand and solve for barriers in policy, regulation, and the enabling ecosystem more broadly that hold back investment.
- Primer 3 – Engaging Investors and Investees around Prioritized Opportunities – this primer details how to bring investors and investees together to facilitate transactions that drive development impact.
- In 2019, USAID developed a Primer on Catalyzing Agricultural Finance to provide an introduction to agricultural finance and outline the tools that USAID can use to address agricultural finance gaps. This primer outlines how to use existing tools in new ways to tackle market failures and mobilize private sector finance for agricultural interventions.
In 2018, USAID produced a series of knowledge products to help global mission staff better integrate agricultural finance into mission activity within the context of the GFSS. These knowledge products are designed to help USAID staff better understand (i) the potential impact of agricultural finance, (ii) how to apply it in their day to day work, and (iii) learn from successful past examples of agricultural finance programming undertaken by USAID.
The knowledge products (linked in the sidebar) encompass topics like youth employment in agriculture, USAID tools for agricultural financing, case studies on successful past USAID engagements and understanding an agribusiness’ basic finances. Three types of knowledge products are available for download: podcasts, written primers, and trainings.
Podcasts: panel discussions and interviews with expert practitioners on different topics in agricultural finance
- Investor Panel: Agricultural Finance Perspectives from the Field – As part of a three-day Agriculture Finance Training at the Washington Learning Center, a panel of investors to spoke about opportunities and challenges of providing finance in the agricultural space. In particular, the panel focused on identifying the opportunities and challenges of financing agricultural projects, trends and innovations that are likely to shape the sector going forward, and reflections on where USAID can be most effective and impactful in this space. This panel discussion featured perspectives from Songbae Lee, Senior Investment Officer, Calvert Impact Capital; Mariana Petrei, Senior Investment Officer, International Finance Corporation; Titianne Donde-Ommes, Regional Advisor, Council on Smallholder Agricultural Finance; and, Chris Isaac, Director of Investments & Business Development, AgDevCo.
- Applying Agricultural Finance in Reality – In this podcast, two agricultural finance practitioners, Hal Carey and Mukhtar Amin, talk about lessons learned from two different USAID projects in Ethiopia and Tanzania that helped catalyze private sector investment in agriculture.
- Blended Finance for Agricultural Development – This podcast explores the role that blended finance can play in agriculture, featuring insights from Dan Zook, Executive Director of ISF Advisors.
Primers: 3-5-page documents which outline various facets of agricultural finance
- Driving Impact through Agricultural Finance Interventions – This primer showcases the importance of agricultural finance to economic development and includes examples of the impact of successful interventions.
- USAID Agricultural Finance Tools – This primer explores the five principal tools available for USAID mission staff to implement financial interventions in agriculture: grants, guarantees, policy advocacy, convening and technical assistance.
- Using Blended Finance to Mobilize Capital for Agricultural Development – This primer reviews the fundamentals of blended finance, the substantial potential impact it can have in agriculture, and several case studies of blended finance in agriculture.
- Case Study: Improving the Investment Climate for Agriculture in Ethiopia – This primer outlines an impactful USAID engagement that resulted in policy recommendations for the Ethiopian government which upon implementation significantly increased private investment in agriculture.
- Case Study: Driving New Investments into Agriculture in Tanzania’s Edible Oils Sector – This primer showcases a successful USAID program aimed at helping the Tanzanian government enact policy reform to increase private investment in a key agricultural sector.
- Updated Case Study: Driving New Investments into Agriculture in Tanzania’s Edible Oils Sector – This primer provides an update on USAID efforts to support the Tanzanian Government’s commitment to drive industrialization, increase domestic edible oils production and reduce agricultural imports.
Trainings: 60-90-minute interactive recorded video webinars, presented and moderated by Dalberg Advisors and USAID staff members.
- Introduction to Agricultural Systems and Finance – In this webinar, we introduce the basics of agricultural systems and finance. We cover (1) what do we mean by agricultural finance and why it is important, (2) what are the different types and needs of agricultural finance, (3) what are the unique challenges and barriers that limit the supply and demand of agricultural finance, and (4) how do we diagnose these challenges and start to develop solutions.
- Mobilizing Capital for Agricultural Development with the Development Credit Authority – This training explains how the DCA works, when it is best employed, what its five principal guarantee products are and how they can be utilized in agricultural interventions.
- Investing in Agribusinesses: What Makes an Agribusiness Attractive from an Investor’s Perspective? – This webinar discusses the fundamentals of how investors balance risk, cost and return in evaluating agribusinesses and their financial positions, as well as key financial documents and ratios.
- How to Engage with Finance Providers on Agricultural Programs – This training reviews the role of different types of finance providers in agricultural finance programming and how USAID can select the appropriate financial partner for a given intervention.
- How to Use Agricultural Finance Interventions to Drive Youth Employment – This training covers the pressing global issue of youth under and unemployment, the key barriers to youth employment in agriculture, how agricultural finance can address these issues and how USAID mission staff can go about designing impactful interventions for youth.
- Podcasts: panel discussions and interviews with expert practitioners on different topics in agricultural finance
Here is a selection of the types of reports and analyses developed under ISP. Additional ISP outputs can also be found on the DEC.
- 2019 Niger Investment Opportunity Identification
- 2018 Rwanda Investment Opportunity Identification
- 2018 Orange Flesh Sweet Potato Commercialization Opportunities
- 2018 FtF Trade Flows Diagnostic
- 2018 Cambodia Opportunity Identification
- 2017 R&R Guidebook
- 2017 Partnerships Guide
For further information on any of the above, please contact Janet Lawson ([email protected]).