Question

what is the biggest challenge in agricultural finance?

Answer 1

As per the reports of the World bank the biggest challenge in agriculture Finance is addressing systematic risk through insurance and lowering the operating cost while dealing with small farmers. Insurance is extremely necessary for covering the risk to farmers which is very high. However firstly the risk is very difficult to assess and secondly it is very difficult to cover the small farmers who are at maximum risk. There are few Financial Institutions which will cover agricultural risk and there is a need of improving the understanding as well as creating new products which would cater to the needs of agriculture. Moreover agricultural finance is plagued with very high operating costs which are difficult to be lowered especially in the case of small farmers.