Innovative Agri-Food Value Chain Financing in Greece
This paper presents the experience of Piraeus Bank in innovative agri-food value chain financing, beginning with an answer to the question of what elements could differentiate an agri-finance model and make it considered as innovative. In nowadays, the an
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ntroduction Globalization has increased the role of internationally traded agricultural commodities in the world food economy. In addition, increased international awareness is observed regarding the importance of agriculture as a generator of income, employment, foreign exchange, tax revenues, as well as for poverty reduction and preservation of natural resources (see, e.g., Ahmed et al. 2012). Further, the increasing commercialization of agriculture, i.e., the production by agricultural households of food and raw material for the market rather than for their own consumption, links poor agricultural household to markets and increases their need for finance and credit, implying an increasing requirement for agricultural finance as a facilitator of economic development. Furthermore, consumers of agricultural
I.E. Chaniotakis () Agricultural Sector Operations Development, Piraeus Bank, Athens, 105 64, Greece e-mail: [email protected] © The Author(s) 2017 G. Mergos, M. Papanastassiou (eds.), Food Security and Sustainability, DOI 10.1007/978-3-319-40790-6_8
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products demand information not only on the availability of a food product but also about the characteristics of its production and processing activities. Therefore, the entire agri-food supply chain has become important because there is increasing public awareness and concern about the availability and safety of the food being consumed (Handayati et al. 2015). As a result, agricultural finance is related to a number of issues, including the production of agricultural commodities for the market, poverty reduction, and preservation of natural resources, food security and sustainability (Echeverria and Beintema 2009). Access to agricultural finance differs from market to market because the situation on the ground in each market is different. For this reason, a successful agricultural finance innovation in one country may not be suitable in another. For example, constraints on access to agricultural financing are related to factors that vary from one country to another (Gashayie and Singh 2015). It is argued that although most agricultural finance constraints are common in almost all countries and have been identified by international research (operational, capacity, vulnerability and politico-legal), their importance in different countries in slowing down the availability of agricultural finance may be quite different, depending on the specific country characteristics. To alleviate such country-specific constraints, agricultural financing innovations are evolving with each country facing different challenges in implementing such innovations (Gashayie and Singh 2015). For this reason, before discussing the implementation of agricultural finance innovations, it is important to discuss the importance of the characteristics of each market, related to conditions not only of the value chain but also of the country and the entire banking system. The main body of literature on these subjects refers to developing countries, with particu
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