Innovation in agriculture and finance

Innovations in agriculture and finance - a solution for development. Small scale innovations in agriculture and in financial instruments can have a big impact on issues such as food, fuel and financial crisis, the key is that decisions made at global level do not have ‘unintended consequences’ for developing countries.

 The debate on the regulation of banking flows, for example, could strangle and over-regulate financial flows to SMEs in developing countries. For agriculture, there are tools, mechanisms, and financial innovations. It is a question of modernising [agriculture]. Small-scale financial innovations that can have a big impact: "Crop insurance has been introduced in Malawi, insuring farmers against [heavy] rainfall. In the Caribbean, a catastrophe risk pooling system has been introduced to protect farmers in the event they are hit by a hurricane.

There is a need for new financial instruments must be developed to meet the new needs of development finance, climate change finance and other challenges. For example, a financial transaction tax could be a financial solution to stabilise financial markets or reduce the volatility of financial flows and calm speculators.

Published on 1 January 2012