20% share of chain financing and contract agriculture from the total facilities of the agricultural sector

According to the report of the financial news, quoting from the public relations of the central bank, in order to improve the methods of financing the working capital of the supply chains in the agricultural sector and support agricultural production and rural employment with non-inflationary methods and following the notification of the implementation guidelines of “contractual agricultural financing”. In a notification to the operating banks, the central bank emphasized the need to grant twenty percent of payment facilities to the agricultural sector by banks and credit institutions, in the form of chain financing and contract agriculture in 1401, without imposing an additional financial burden on banking resources.

According to the notification that has been approved by the relevant bodies in the central bank, it was decided in 1401, twenty percent (20%) of the facilities paid to the agricultural sector by banks and credit institutions, in the form of chain financing and contract agriculture with the priority of the private sector and Support for knowledge-based and export-oriented productions (with priority to comply with the optimal national-regional cultivation model) and without imposing an additional financial burden on banking resources should be paid.

Therefore, in order to implement the above-mentioned resolution, the use of the “Contractual Agricultural Financing” executive manual, which has already been communicated to the banking network, as well as the use of chain financing tools such as “Gam Papers” and “Electronic Bills of Exchange” and the like in The framework of current rules and regulations is emphasized.

It is necessary to explain, “contract agriculture” is a method of production through which the producer (either natural or legal persons who directly or through a specific production organization, based on a contract with the project manager, produces products) from It produces agricultural products by signing a contract with a plan executive. Financing in contract agriculture includes financing producers for cultivation and procurement of production inputs, executive financing with the aim of completing the value chain, purchasing inputs, raw materials, machinery and development measures, as well as financing in order to provide educational, technical, development services, It will be knowledge-based and research to create added value in the plan. The mentioned method has several advantages, including the following:

• Transparency of project financing and increasing the efficiency of resource allocation in the agricultural sector
• Supporting the formation of integrated agricultural chains
• Supporting the development of rural employment with non-inflationary methods
• Reducing the cost of producing agricultural products
• Supporting farmers by using educational and technical assistance and providing inputs in exchange for setting up a contract
• The possibility of using agricultural contracts as collateral for facilities
• Contributing to the food security of the country by increasing the stability of supply of inputs