1. Agri-finance support mechanism Asian Development Bank Mark Bezemer Senior Country Economist

2. Instruments Agriculture Commodities Derivatives Market Agriculture Insurance

3. Agriculture Commodities Derivatives Market Promotion of private entrants Abolishing distortionary price settings Infrastructure and supervision Warehousing and standardization Settlement mechanism Awareness raising campaign

4. Agriculture Insurance Weather index insurance Catastrophe (re)insurance Catastrophe bond

5. Policy Options Risk sharing mechanism for subsidized lending Locally reinvestment mechanism Setting floor for FIs on agriculture business financing (wholesale to MFIs) Preferential tax rates for agribusinesses Introduction of incentive mechanism for increased productivity Preferential requirements for establishment of non-deposit-taking-FIs in the rural areas

6. ADB support for Agri-business Description ARDP-1 (2009-2015) ARDP-2 Proposed Funding ADB Grant: $14.7 mln GOM: $1.4 mln ADB Loan: $50.0 mln GOM: $1.0 mln Project objective Foster sustainable agriculture and rural development through developing of value chains Project components 1.Rural infrastructure development 2.Value chain investments (VCI) 3.Marketing and brand development 1.Rural infrastructure development 2.Value chain investments (VCI) 3.Enterprices’ marketing and technical capacity improvement 4.Marketing and brand development 5.Credit guarantee support Corporate level of Value chain support 1. Sectoral level of value chain support; 2. Cluster development VCI loan conditions 1.ADB - 50%, banks – 50% 2.Total loan fund: $ 22.3 mln; 3.7 years (3 years grace period) 1.ADB – 100% 2.Total loan fund: $ 41.0 mln; 3.7 years (3 years grace)