NGOMAGAZINEInternationalMagazineabouttheNGOSectorNo.

5December/2012

AGROLENDINGANINSTRUMENT
FORVIABLEAGRIBUSINESS

GoranKOVACHEV,PhD
CEAIndependentConsultantforFinancialPoliciesinAgriculture
goran.kovacev@mbdp.com.mk
www.cea.org.mk

Abstract
AgricultureandruraldevelopmentareoneofthekeypillarsoftheEuropeanUnion.
MacedoniaasacountrycandidateforjoiningEUisentitledtofinancialpremisesofthe
EuropeanInstrumentforPreAccessionRuralDevelopment(IPARD).Theimportanceof
agricultureandruraldevelopmentforthenationaleconomyisrecognizedbythe
Government,butfurtherimprovementofthefinancialsupportisneeded.Firststepin
thisimprovementismultilateralcooperationbetweenGovernmentbodies,NGOs,i.e.
farmersassociationsandthinktanks.

Keywords:Agricultureandruraldevelopment,agrolending,NGO,AgriculturalCredit
DiscountFund,financialsupport,expandingoutreach

Publisher:EuropeanCenterSN7&CenterforEducationandDevelopmentCED

NGOMAGAZINEInternationalMagazineabouttheNGOSectorNo.5December/2012

AgricultureandruraldevelopmentcoveredbytheCommonAgriculturalPolicy(CAP)are
keypillarsoftheEuropeanintegration.Assuch,CAPinsistsoncompetitiveagriculture
andintensiveruraldevelopment,thereforeprovidinganimmenseamountoffunds
(grantsandloans)tosupportthesepillars. 1 Nevertheless,agrolendingasaformof
agriculturefinanceisoneofthemajorprerequisitesforviableagribusiness.

RepublicofMacedonia,asacountrycandidateforjoiningEUisentitledtothese
EuropeanfundsmanifestedbytheInstrumentforPreAccessionRuralDevelopment
(IPARD).Recognizingtheimportanceofagriculture(about9%ofGDP)andagroindustry
(about6%ofGDP)forthenationaleconomy,theGovernmentintroducedanintensive
planofsubsidies(throughtheAgencyforFinancialSupportofAgricultureandRural
Development) 2 andlending(throughstateownedMacedonianBankforDevelopment
PromotionMBDP). 3

Onceestablishedanetworkoffinancialsupport,akeyquestionraised:Howtoexpand
theoutreach?

TheresponselaysinmultilateralcooperationbetweenNGOs,i.e.farmersassociations
andthinktanks.Inthebeginningof2012,individualconsultancycooperationhas
beenestablishedbetweenanemployeeofMBDPandCenterforEconomicAnalyses
(CEA) 4 ,anindependentthinktankcoveringagriculturalfinancialpoliciesamongother.
Thefruitsofthiscooperationgrewinstantly.CEAJournalofEconomicsissuedan
articleaboutAgriculturalCreditDiscountFundAgribusinessSupportCreditLinein
Macedonia(withinMBDP)inordertofurtherintroducesthiscreditlinetothepotential
beneficiaries(farmersandagroenterprises). 5 Apressconferencehasbeenreleasedon
1

see: http://ec.europa.eu/agriculture/capexplained/index_en.htm
see: http://www.ipardpa.gov.mk/Root/default_eng.asp
3
see: http://www.mbdp.com.mk/index.php/en/
4
see: http://www.cea.org.mk/html_english/english.html
5
see: http://www.cea.org.mk/documents/journal/CEA_Journal_XIII%20Issue.pdf
2

Publisher:EuropeanCenterSN7&CenterforEducationandDevelopmentCED

NGOMAGAZINEInternationalMagazineabouttheNGOSectorNo.5December/2012

thematter,statingthatthescarceofACDFfundsmaydamagetheagrolendinginnear
future.Fortunately,theseactivitiesprovokedtheGovernmentandtheMinistryof
Agriculture,ForestryandWaterEconomytoadopta5yearNationalProgramfor
AgricultureandRuralDevelopmentprovidingEUR22m.byyear2017forenriching
ACDF.

ThisbilateralcooperationisfurthermultilateralizedbyincludingtheFarmers
FederationofRepublicofMacedoniaasthebiggestfarmersassociationinMacedonia. 6
Severalseminarsandfieldtripswereorganizedsofar,wheredifferentfocusgroups
consistedofvariousshareholdersraisedquestionsandsharedopinionsandsuggestions
forimprovingagrolending,withanaccentonruralyouth,ruralwomenandruralpoor.

ItisobviousthattheclusteringbetweentheGovernmentsledinstitutionsandfarmers
andagribusinessorientedNGOs(CEAandFFRMinthiscase)isofcrucialimportancein
providingadequateconsensusforsolutionandfundsforonlendingactivitiesinagro
industrialcomplex.Theinflowoffinancialassetsandideas(hopefullyinnovative
alternativesinfutureaswell)willdefinitelyhelpinintroducingagriculturalbest
practicesandmeetingEuropeanqualitystandardsbyourfarmers,hencemaximizing
theirincomesandprofitsaswellasexportsandrevenuesoftheCountry.

Attheendofthedayclusteringofthinktanks,governmentandlendingfacilities
mightmakearichfarmerahappyfarmerandahappyfarmerultimatelybeingaState
inwelfare!

see: http://www.ffrm.org.mk/

Publisher:EuropeanCenterSN7&CenterforEducationandDevelopmentCED