Article written by RAFAEL LÓPEZ/ Milenio/ Mexico City
The federal government requested 5 billion pesos from the Inter-American Development Bank (IDB) to boost credit and financing for small and medium-sized rural producers, with investments in environmental sustainability and climate resilience projects.
This financing will help the 4T to cover the demand for rural credit that national institutions cannot fully meet and that generates a backlog of small producers.
According to the report to which MILENIO had access, the majority of financial services are dedicated to higher-income farmers, so their penetration in municipalities with a high degree of marginalization is almost zero.
In the justification of the request for the 5 billion pesos to the IDB, it is noted that the agricultural sector is considered a “priority area in the design of public policies in Mexico given its representativeness in economic activity.”
The general objective of the requested credit is to contribute to raising the productivity of that sector, rural financial inclusion and environmental sustainability, as well as climate resilience.
The primary sector has grown on average 3.2 percent between 2012 and 2017, compared to 2.4 percent of the total economy. Furthermore, agricultural productivity has increased at average rates of almost 3 percent, reversing the negative behavior during the two decades prior to 2012.
Despite the above, per capita production since 2010 has grown at lower rates compared to other Latin American countries, which is why it is necessary to “consolidate recent gains and strengthen the contribution of capital to growth.”
The low productivity is attributed to the low levels of capitalization of the sector and the incorporation of agricultural technologies and technical models by the Rural Economic Units (UER). Another challenge that affects its productivity is the degradation of natural resources and is highly vulnerable to the impact of climate change.
The resources will be channeled through the National Financial Institution for Agricultural, Rural, Forestry and Fisheries Development, which in turn will finance the eligible UER, from the primary or agro-industrial sector, with productive investment projects.
The explanatory statement explains that the government has seen the need to reform the rural financial system “to comprehensively serve the sector, achieve synergies between its intervention instruments, efficiently channel resources and achieve a greater impact on its development.” ”.
For this reason, it created the financial institution that will assume the responsibilities of promoting agribusiness, through capital operations and the formation of credit subjects that are executed through two public trusts.
In addition, it will concentrate its credit activity on the strata of small and medium producers, coordinate activities of a new national credit guarantee system and assume share control of Agroasemex.
AND ALSO THE ORGANISM IN CHARGE The National Financial Institution for Agricultural, Rural, Forestry and Fisheries Development is a decentralized agency of the federal public administration, sectorized in the Ministry of Finance, which promotes the development of rural areas through inclusive financing for producers and MSMEs. .