Agricultural finance and credit infrastructure in transition economies : proceedings of OECD expert meeting : Moscow, February 1999.

387 Pages·1999·2.004 MB·English

by  OECD

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OECD PROCEEDINGS
OECD CENTRE FOR CO-OPERATION WITH NON-MEMBERS
Agricultural Finance
and Credit Infrastructure
in Transition Economies
Proceedings of OECD Expert Meeting,
Moscow, February 1999
PUBLISHER’S NOTE
The views expressed are those of the authors
and do not necessarily reflect those of the Organisation or of its Member countries.
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT
ORGANISATION FOR ECONOMIC CO-OPERATION
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The CCNM manages thematic and country programmes. The thematic programmes, which are multi-country
in focus, are linked to the core generic work areas of the Organisation (such as trade and investment, taxation,
labour market and social policies, environment). The Emerging Market Economy Forum (EMEF) and the
Transition Economy Programme (TEP) provide the framework for activities under the thematic programmes. The
EMEF is a flexible forum in which non-members are invited to participate depending on the theme under
discussion. The TEP is focused exclusively on transition economies. Regional/Country programmes, providing
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FOREWORD
Creating efficient financial systems is indispensable to a viable agro-food sector. This has been
among the most difficult structural and systemic challenges in the transition to a market economy.
The process has been further complicated by the Asian and Russian financial crises, which to varying
degrees have impacted countries of central and eastern Europe and the Commonwealth of Independent
States.
At this critical juncture, the second Expert Meeting on Agricultural Finance and Credit Infrastructure
in Transition Economies was organised to share OECD country experience with counterparts from
emerging and transition economies in building up a finance and credit infrastructure in support of the
agro-food sector. Experts from 33 countries and four international organisations were brought
together as part of the Programme of the OECD’s Centre for Co-operation with Non-Members. This
meeting was co-sponsored by the Government of Japan. The Deputy Minister of Agriculture of the
Russian Federation chaired the first session, which set the stage with an overview of agricultural
finance in transition economies, including the current circumstances in Russia, as well as some of the
prerequisites for viable financial support to agriculture. Subsequent sessions discussed the
international experience with banking for agriculture as it has evolved in a number of OECD
countries, the latest non-traditional complementary credit schemes and techniques, and the use of
credit subsidies and guarantees.
These proceedings present a summary of the discussions, together with papers presented by
23 international experts and nine specific country situations. A brief abstract precedes each paper.
They offer the reader a valuable collection of experiences and precise technical information
concerning agricultural credit and finance policies and systems from a variety of countries world-wide.
Traditional approaches including co-operative systems and preferential credits are presented, together
with techniques such as agricultural insurance, grain receipts and trade credits. Participants’
discussions about the relative merits and applicability of the various systems and techniques to current
situations in their countries are recorded. They provide insights into the problems faced in financing
agriculture ten years into the transition, as well as agricultural financing issues faced by emerging
economies more broadly in the wake of the financial crisis. They also help to clarify the appropriate
roles for government policies in creating the necessary financial infrastructure for a modern,
sustainable agricultural and food sector. Russian translations of the materials presented to the
participants and of the proceedings summary are also available.
These proceedings are published under the responsibility of the Secretary-General of the OECD.
Kumiharu Shigehara
Deputy Secretary-General
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ACKNOWLEDGEMENTS
The organisation of the conference and the preparation of these proceedings were carried out with the
support of the Japanese government by staff from four units of the OECD: Fujiki Hayashi and
Dina Nicholas, Directorate for Financial, Fiscal and Enterprise Affairs; Makoto Asano and Alexandra
de Miramon, Centre for Co-operation with Non-Members; Alexandra Trzeciak-Duval, Andrzej
Kwiecinski, Olga Melyukhina and Anita Lari, Directorate for Food Agriculture and Fisheries; and
Svetlana Volkova of the OECD Office, Moscow, as well as by Renata Yanbykh, Agrarian Institute,
Moscow. John Slater, Consultant, edited the Proceedings.
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TABLE OF CONTENTS
FOREWORD...................................................................................................................................3
Acronyms, Symbols and Abbreviations..............................................................................................9
SUMMARY....................................................................................................................................11
S ESSION I . SETTING THE STAGE: OVERVIEW OF AGRICULTURAL FINANCE IN
TRANSITION ECONOMIES.......................................................................................................19
Results of the previous “Expert Meeting on Agricultural Finance in Transition Economies” –
Mr. Fujiki Hayashi......................................................................................................................21
Situation in the banking system and on financial markets in Russia and
selected countries in transition – Mr. Douglas Sutherland.........................................................25
Preconditions for sustainable agricultural finance and credit systems –
Mr. J.D. Von Pischke..................................................................................................................38
Agricultural finance and institutional reforms in transition economies – Mr. Johan Swinnen.....54
Agricultural finance and institutional reforms in Romania – Ms. Camelia Serbanescu................67
Status and prospects of creating a favourable investment climate in the
agroindustrial complex of Russia – Mr. Victor Khlystun..........................................................83
S ESSION II . BANKING FOR THE AGRICULTURAL SECTOR............................................89
Banking for the agricultural sector in OECD countries: perspectives from the
United States experience – Mr. Marvin Duncan.........................................................................91
Case study: New Zealand, commercial banking and the agricultural sector – lessons from
economic restructuring – Mr. Neil Gow..................................................................................105
Conditions for creating a farm credit system – Mr. André Neveu...............................................132
The groundwork for agricultural co-operative finance in a transition economy –
Mr. Shinji Kawai.......................................................................................................................141
Rural banking in emerging markets: can it work? – Mr. Jean-Jacques Deschamps...................148
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Prospects for the participation of commercial banks in providing credit to the
agriculture and food sectors in Russia in view of the financial crisis – Mr. Jury Trushin.......159
SESSION III. COMPLEMENTARY COMMERCIAL CREDIT SCHEMES IN THE
AGRICULTURAL SECTOR......................................................................................................165
Leasing, trade credit and commodity financing in OECD countries – Mr. Glenn Pederson.......167
The impact of FDI in the downstream sector on agricultural finance, investment and
production: evidence from the CEEC – Mr. Hamish Gow.....................................................184
The impact of FDI in the upstream and downstream sectors on investment in
agriculture in the NIS – Mr. Christian Foster...........................................................................198
Practice and problems of agricultural crediting by private food market operators –
Mr. Arkadiy Zlochevskiy..........................................................................................................212
Grain receipts in economies in transition: an introduction to financing of
warehouse receipts – Mr. Eusebio Martin................................................................................218
Agricultural insurance in a transition economy – Mr. Jerry Skees..............................................233
SESSION IV. CREDIT SUBSIDIES AND CREDIT GUARANTEES IN
AGRICULTURE..........................................................................................................................251
Preferential credits in countries in transition from the perspective of a commercial bank –
Mr. Gerard Van Empel..............................................................................................................253
Credit support schemes provided by the Support and Guarantee Fund for Farmers and
Forestry in the Czech Republic – Mr. Tomas Doucha.............................................................263
The agricultural credit guarantee system in Japan – Mr. Takao Yurugi.....................................277
The activities of the Rural Credit Guarantee Foundation in Hungary – Ms. Aniko Ulrich........289
Agricultural Loan Guarantee Fund for Nizhny Novgorod Oblast: key design issues –
Ms. Vera Matusevich................................................................................................................293
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COUNTRY NOTES.....................................................................................................................305
Belarus – Ms. Teresa Degtyareva...................................................................................................307
Brazil – Mr. Marcelo Guimarães....................................................................................................311
Bulgaria – Experts from the Ministry of Agriculture, Forestry and
Agrarian Reform (MAFR) and State Fund for Agriculture.........................................................319
China – Mr. Shaojun Yang............................................................................................................327
Croatia – Ms. Vesna Matijasevic...................................................................................................331
Estonia – Ms. Katrin Noorkõiv......................................................................................................341
Indonesia – Mr. Dibyo Prabowo....................................................................................................345
Kazakhstan – Mr. Muratbek Takambayev.....................................................................................353
Slovak Republic – Ms. Zuzana Chrastinová..................................................................................358
ANNEX.........................................................................................................................................365
Programme.....................................................................................................................................367
List of Participants.........................................................................................................................373
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ACRONYMS, SYMBOLS AND ABBREVIATIONS
ABC Agricultural Bank of China
ACB Agricultural Credit Bank
ACC Advances on Exchange Contracts
ACDI/VOCA Agricultural Co-operative Development International/Volunteers in Overseas
Co-operative Assistance
ADB Agricultural Development Bank
ADBC Agricultural Development Bank of China
ADF Albanian Development Fund
AFC Agricultural Finance Corporation
AIC Agro-industrial Complex
APRCA Asia Pacific Rural and Agricultural Credit Association
ARKO Agency for Reconstructing Credit Organisations
ARLCF Agriculture and Rural Life Credit Fund
BGL Bulgarian leva
bn billion (thousand million)
BNB Bulgarian National Bank
BNDES National Bank of Economic and Social Development
CAT Catastrophic Insurance Options Contract
CBR Central Bank of Russia
CBRD Croatian Bank for Reconstruction and Development
CCC Commodity Credit Corporation
CCET Centre for Co-operation with Economies in Transition
CEC (Casa de Economii si Consemnatiuni) Savings House
CEE Central and East European
CEEC Countries of Central and Eastern Europe
CEFTA Central European Free Trade Agreement
CIS Commonwealth of Independent States
CP Certificate of Pledge
CPB Croatian Post Bank
CT Certificate of Title
DEM Deutschmark
EBRD European Bank for Reconstruction and Development
ECU European Currency Unit
EFF Extended Fund Facility
EU European Union
FAD Fund for Agricultural Development
FCB Farm Credit Bank
FCL Farm Credit Leasing
FCS Farm Credit System
FCSIC Farm Credit System Insurance Corporation
FDI Foreign Direct Investment
FDIC Federal Deposit Insurance Corporation
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