Financing Safe Food: Business Promotion

April 20, 2020
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Financing for Nutritious and Safe Food Business Promotion

(A Seminar Keynote by)

Professor Shah Md Ahsan Habib, Ph D

February 26, 2020

1. Background 

Ensuring nutritious and safe food are amongst the major challenges for the developing economies like Bangladesh. It is associated with the UN goal of ‘Food Security’[1] , however, at the enforcement level ‘Safe and Nutrition’ aspects remained unseen a bit.  The World Food Summit Plan of Action (1996) notes, ‘Food security exists when all people at all time, have adequate and physical access to sufficient, safe and nutritious food that meets their dietary needs and food preferences for an active and healthy life’. Thus, at this stage, having attained notable progress in sufficiency of food, the global key challenge of food security is associated with the efforts to ensure safe and nutritious food.

In Bangladesh, several stakeholders of the food sector are working for better food security, food safety, and public health of the country. Though the country has achieved remarkable success in terms of ensuring adequate food supply, certain concerns of food safety and the related public health issues remained critical. However, it is true that there are efforts to establish food safety regime through enacting regulations and involving different agencies.[2] The food quality and standardization control system in Bangladesh involves multiple ministries and agencies.[3]  

Financing food businesses are associated with multi sectors and purposes, and are related to different stages of supply chain of food sector. Though several natures of bank financing connected to food processing received boosts over the years, adequate and efficient financing to the agro-food production sector remained amongst the key banking challenges. Especially, unorganized market set-up or absence of formal food commodity market is obstructing the development and use of effective financing devices. In addition, the food sector is dominated by the smallholders, and thus their accesses to finance challenges are not different from that of the other micro and small enterprises.  Moreover, over dependence on bank financing is a generic challenge of the country. Regarding financing safe and nutritious food businesses, safety issues are hardly tagged as conditionality of bank financing.  The keynote paper attempts to analyze the status of financing the businesses associated with nutritious and safe food; and the need for initiating and innovating financing products dedicated to the agro-foods, food security and nutrition areas.

This is a secondary data based paper. To attain the objectives of the keynote and to put forward certain recommendations, several published documents were consulted and reviews in section 2. Section 3 discusses the status of financing food value chain by the instructional sources in the country with a few associated challenges. Certain generic recommendations are put forward in section 4 as way-out for effective financing for safe and nutritious businesses.   

2. Finance for Safe and Nutritious Food Businesses: Global Context

In the global context, massive investment is necessary in food sector to meet the growing need as global food supply is expected to upsurge dramatically to cope with the increasing demand. By 2050 the world’s population would reach 9.1 billion, 34 percent higher than today; and the growth, combined with increasing per capita meat consumption, will require a 60 percent increase in global food and feed production (FAO, IFAD & WFP, 2012). According to the World Bank (2019) estimates, demand for food will increase by 70 percent by 2050; and at least USD80 billion annual investments will be needed to meet this demand. To address this growing need, the world needs huge investment and financing. The investment and financing requirements are associated with the attainment of UN targets as financing to the sustainable food and agriculture is clearly associated with attaining Sustainable Development Goals (SDGs).[4] Today, need for greater investment and financing of the safe and nutritious food value chain is well recognized, however, efforts to find wide scale commercial financing avenues and products are relatively recent developments. The capacity of the low income developing countries to meet the investment gap with their budgetary resources is limited. It is crucial to involve private sector to meet the investment gap, and finding greater way and instruments for commercial financing.

There is huge but uneven growth of investment in food and agriculture around the world (Voloral Advisors, 2018). Empowering farmers is the primary task. Agriculture finance empowers poor farmers to increase their wealth and food production to be able to feed 9 billion people by 2050 (World Bank, 2019). The investment gap and complexity are particularly visible in developing countries where the food sector comprises a wide variety of companies pursuing a variety of roles in the production, processing, distribution, and sale; and the size of these entities range from multinationals to large regional and national companies to medium, small and micro enterprises. Variety of food items are also produced at the primary sector by the individuals at the farm level.  These entities/individuals offer different growth prospects and rates of return, and have different financing needs.

Large companies, engaged in delivering food items, are well positioned and have easy access to commercial financing in developing countries.  For example, big staple food companies(approximately 95 percent of wheat flour in Africa is processed and packaged in mills with a capacity of at least 20 metric tons a day) and salt (an estimated 60 percent of salt comes from large salt producers)  companies in Africa have easy access to commercial financing to meet their investment need. However, SMEs and smaller companies have generic challenge associated with access to finance. In regard to bank financing, micro and small enterprises have common barriers of limited collateral and uncertain growth prospects. A study by the International Finance Corporation (2017) estimates that nine million SMEs, 44 percent of all formal SMEs in developing countries, have unmet financing needs of USD 4.5 trillion a year. Financing farm level activities of agriculture sector from institutional sources are also very challenging. It needs different nature of products where presence of formal commodity market has a role to play.

For ensuring adequate and required financing for safe and nutritious food business promotion, probably the primary job is to get it recognized as a special sector or a different category. Practically, most investors do not recognize ‘nutritious food value chains’ or ‘companies that can improve access to nutritious and safe foods’ as a category or sector. As investment or financing sectors, these are simply part of financing to crop or agricultural sector, agro-processing sector, SME financing, working capital financing or even corporate financing.  To consider the category under the umbrella of a particular type of specialized financing (like Green Financing to address Environmental Risk) food security should be considered as a global public good.  Although less directly than other sectors as environment or health, safe food and nutrition security should be considered as global public goods as the food security is clearly a prerequisite for health; and hunger and food insecurity can be responsible for public unrest, political instability, a threat to peace (FAO, IFAD & WFP, 2012). To build a clearer understanding of the opportunities to invest and finance safe and nutritious food value chains, it is also important to identify nutrition investment opportunities. In this connection, there were initiatives[5] in developing countries. 

Considering the differential needs and diversified nature of entities engaged in agro-food value chains, types of financing products vary widely. Use of various hybrid financing products like bank financing, private capital, seed funds, grants, mezzanine finance, venture capital, blended finance[6] etc. and their combinations worked for the businesses. Global experiences might help throwing some light on the differential nature of financing in developing countries (Box 2.1-2.6). In addition, some insurance products and credit guarantee schemes are clearly relevant (Box 2.7-Box 2.8).  

Box 2.1: Warehouse Receipt Financing for Smallholders

South Africa has the most advanced receipt system, which also underpins trading on its commodity exchange – the only futures exchange in Africa. Warehouse Receipt System (WRS) in Tanzania is the most developed in Africa. Almost the entire crop of cashew nuts produced in country is marketed through the WRS. In the coffee sub-sector, the greatest benefit of the WRS to smallholder farmers is their ability to directly market value-added ‘clean coffee’. The 2007 law made way for a separate Warehousing Development and Regulatory Authority (WDRA) with an objective to develop scientific warehousing techniques in India. It is estimated that 25- 30 per cent of agricultural produce every year is lost due to poor storage and frail handling post-harvest in India.  The average tenor of loan against WHR is around six months. This helps banks with their asset-liability mismatch issues as they can churn portfolios quickly.

Note: Based on Agarwal, 2016.

Box 2.2: A Combination of Seed Capital, Mezzanine and Bank Financing

Faso Kaba in Mali is producing and selling certified seeds that are rich in vitamins A and E, including corn, rice and peanut, and that give farmers higher yields and incomes. To support its business growth, following an initial injection of seed capital[7], the company has attracted a package of mezzanine finance[8]. This in turn has enabled the firm to draw working capital and capital investment requirements, to meet growing demand. Faso Kaba more than doubled its sales from 700 tons of certified seeds in 2011 to more than 1,600 tons by 2015.

Note: based on Van, Manen et al., 2018.

Box 2.3: Venture Capital Financing

Founded in 2014, ColdHubs in Nigeria provides farmers with a solar powered walk-in cold room for 24/7 off-grid storage and preservation of perishable foods. Located on farms and in food markets, they extend the freshness and nutritional value of fruits, vegetables, and other perishable foods from two to about 21 days. ColdHubs enable farmers to sell more produce and increase their incomes. The company has partnered with a venture capital[9] firm focused on sustainable energy, which supports early stage entrepreneurs through access to risk capital and technical support.

Note: Based on Factor, 2016.

Box 2.4: Combination of Private Equity and Venture Capital Funds

Twiga Foods aggregates fruits and vegetables from producers and distributes to vendors with the help of an online portal. Started operations in January 2017 sales of the company increased remarkably.  The company has received investment from a number of international private equity and venture capital funds. Over USD6 million in equity financing and USD4 million in debt have been acquired.

Note: based on Van, Manen et al., 2018.

Box 2.5: A Combination of Technical and Grant Assistance, and Bank Loans

Established in 1996, Happy Cow is a dairy manufacturer producing a diverse portfolio of high quality milk, cheese, yogurt, and butter brands. It distributes to retailers, food and catering service companies across East Africa.  A recent addition to its nutritious product range is a low-cost fortified whey-based yogurt called Yogies, which is aimed at low income consumers and distributed in affordable serving sizes. Technical and grant assistance helped the company to secure a bank loan to fund working capital requirements and capital investment in new processing equipment required to produce fortified yoghurt. Since its launch in July 2017, sales of Yogies have increased by 89 percent and Happy Cow has expanded distribution from three to six regions in Kenya.

Source: Jenkins and Gilbert, 2018.

Box 2.6: SME Cluster to Ensure Access to the Small Enterprises

There are significant beneficial impacts of SME clusters on the bank financing through offering cooperation, linkages, inter person relationship and inter firm relationship.  Some developing countries such as India, Colombia, South Korea and Sri Lanka have been able to establish clusters in agricultural and seafood processing. In the context of different global economies the approach and status of SME clusters are not very similar, and thus their importance and benefits appeared to be different. In China, though clusters are important, they differ from the way in which the western world understands them. In recent time, China has introduced a specialist division within local government. In India, the Ministry of Micro, Small and Medium Enterprises runs programs to address common issues such as improvement of technology, skills, market access and access to finance and provides support by setting up facility centers and help groups and by providing access to banks and credit agencies. Clusters are growing trends in a few African countries as a way of building competitive advantage and ensuring access to small enterprises.

Note: based on Habib, et al, 2016

Box 2.7: Index-based Agriculture Insurance in Kenya

The Kilimo Salama (Safe Agriculture in Kiswahili) product has been successful in protecting farmers against risks from drought or excessive rainfall, both of which can have disastrous effects on the harvest. Most insurance in Kenya is indemnity-based, meaning the company insures against crop loss or damage.  Kilimo Salama, an index-based insurance product that covers farmers’ inputs in the event of drought or excessive rainfall. It is a tool for farmers to avoid the risks associated with rainfall variability that directly affect their livelihoods. This insurance product is index-based, meaning payouts are determined by comparison to historical, regional rainfall patterns. During the planting season, actual rainfall is measured using a solar-powered weather station in the area. If the rainfall is determined to be too little or too much then there is a payout, the amount of which is based on the deviation from the rainfall index.  The insurance allows them eliminate the drought risk and spread the costs of protection over a longer period. Agricultural banks can bundle weather risk management with their loan packages, for example, loans are forgiven if there is a drought, and the bank claims its money back from an insurance company. Price risks can also, under certain circumstances, be addressed by price insurance schemes based on future markets tools.

Note: based on World Bank, 2011; Habib et. al, 2016.

Box 2.8: Guarantee Fund for Bank Credit

The reluctance of banks and other financial institutions to finance the agricultural sector, due to the perception of excessive risks, is one of the major drawbacks for agricultural development in the developing countries, and especially in Africa. The idea to reduce banking risk by granting a partial guarantee to banks, designed to cover a portion of the risk without relieving the banks from their credit responsibility, has been tried and launched at different occasions in the agricultural credit sector in developing countries. This instrument has been widely and very successfully used by EBRD in its agricultural financing activities in transition countries. Credit guarantee schemes usually imply on one side commercial banks and micro finance institutions, who extend credit to farmers or agribusinesses and, on the other side, a guarantee provider (which can be a development bank, a central bank or a specialized institution like ARIZ), who takes a share of the default risk on a given portfolio, usually against a guarantee fee. The guarantee provider needs a guarantee fund to cover the possible loss in case the default rate exceeds the guarantee fee.

Source: FAO, IFAD & WFP, 2012.

3. Financing Safe and Nutritious Food Businesses: Bangladesh Context

Promotion and financing of the safe and nutrition food businesses are associated with the broad arena of Sustainable Growth and Sustainable Financing. More specifically, these are mainly associated with agricultural and SME sectors- priority areas of the government. National policy goals and plan documents[10] of the country offer due direction to banks and other financial institutions to support agricultural and food productions. Considering agriculture as one of the driving sectors of sustainable development, GoB introduced an institutional system of providing credit to ensure the availability of agricultural credit in time.[11] Besides, the Ministry of Agriculture has prepared an outline of an institution titled ‘Agricultural Credit Foundation’ to strengthen the agricultural credit system. The efforts in this sector was also reflected in its National Food Policy Plan of Action, 2008-2015 by  improving productivity of smallholder agriculture,especially through enhancing access of small and marginal farmers to improve demand-driven extension services, as well as irrigation, credit, and modern inputs. Considering the need of supporting small enterprises, government formulated and adopted country’s first separate policy for SMEs in 2005. Subsequently, the government also established the ‘SME Foundation’ in 2006 as an apex institution for SME sector. In 2019, the Cabinet approved SME Policy 2019 to boost the industry and increase its contribution to the GDP up to 32 percent by 2024 from the existing 25 percent.[12] Government’s initiatives to foster small enterprises in the country have also been complimented by the positive responses of donor agencies. Currently, several promotional projects for agriculture and SME sectors are being implemented by the Bangladesh Bank under ADP.[13] GoB has also projects[14] for supporting promotion of other key segments of the financial sector-capital market and insurance sector, very relevant for the financing of safe and nutritious food businesses. 

Bangladesh Bank has been very active for promoting agriculture. The Central bank has notable policy and refinancing support[15] to promote agriculture enterprises and farmers through bank financing at different segments of the food value chain. Equity and Entrepreneurship Fund (EEF) was in operation to support risky agro-based initiatives that was later transformed into Entrepreneurship Support Fund. To boost up the agricultural finance, banks were asked to formulate a separate Agricultural Department/Cell in their head offices and an officer need to be assigned in the branch level to handle different issues linked with agricultural credit[16]. In regard to the facilitation of agricultural financing in Bangladesh, there are two state controlled agricultural lending specialized banks to offer credit services. Alongside this, all commercial banks operating in Bangladesh are now extending agricultural credit, directly, through regulated Micro Finance Institutions (MFls) or through intermediaries in value chain. Agricultural credit at concessional interest rate is being extended by banks to farmers. Banks get interest subsidy from government through BB against these loans. In 2015, Bangladesh Bank has given a firm push to ensure private banks including foreign banks to meet agriculture financing targets. These banks have been told to deposit the undisbursed funds meant for agriculture financing with Bangladesh Bank. No interest is paid on these funds and they remain blocked[17].

Bangladesh Bank allocated special emphasis on micro, small and medium enterprises to overcome their challenges of access to institutional financing.  A separate department namely ‘SME and Special Programs Department’ is solely responsible for policy formulation, facilitating fund, monitoring and development of entrepreneurship in the SME sector. Besides, a separate inspection department has also been established in BB to effectively monitor this type of credit. BB, with the help of government and different development partners, is now implementing refinance schemes for banks and financial institutions against their disbursed SME credit. With a view to mainstreaming SME credit, banks and financial institutions are advised to adopt cluster approach and Bangladesh Bank has already undertaken various initiatives for the development of the cluster financing. Regulatory driven green financing activities of the banks and NBFIs have also notable implications for financing food businesses in the country. Especially, a few solar irrigation models are replicable cluster financing ventures in the country.[18] Promotion of safe and nutritious food businesses may be tagged with the CSR activities of banks that have received due impetus from the Central Bank.

Not different from other developing countries, financing to safe and nutritious food businesses by banks cannot be segregated from institutional financing to the agro-food and other types of bank financing. Considering the classification of advances of the Bangladesh Bank (Scheduled Bank Statistics), major portion of food financing activities are part of ‘Agriculture, Fishing and Forestry’, ‘Industrial Financing’ (mainly SME and micro enterprises). Moreover, certain portion of food financing are also part of other broad heads of advances like transportation, commercial constructions, commercial building (cold storage, warehouse etc.), and trade and commerce.  From the policy perspective, a portion of food financing (as fragments of agricultural or farm financing and micro and small enterprise financing) are specially addressed by the policy makers and the central bank of the country as part of their financial inclusion drives. Currently, the Generally, food safety and nutrition issues are not tagged with the financing tools and mechanisms of the institutional financing, and are perceived out of the scope of the finance modalities. The generic perception is that the responsibilities of ensuring safe and nutritious foods rest on government agencies and other stakeholders/pressure groups. Thus, generally the existing institutional financing are promoting food businesses, and does not exactly have the required support factor or conditionality to promote safe and nutritious food businesses. Only, certain import financing processes have safety conditionality as these credit facilities are associated with trade regulations of the country.[19] As a whole, the key support force in the form of enforcements of regulations do not seem to be strong, however, import restriction on the issue is strictly enforced. According to a recent study by USDA (2019), the enforcement of food safety laws and regulations in the country are very weak, however, despite having various shortfalls in the food safety framework, the act and regulations that cover imported products, especially bulk imports, are strictly enforced. As a price risk management tool in commodity trading, the Central Bank allowed commodity hedging (subject to permission) in the country, however, absence of formal commodity exchange remained a critical challenge for facilitating effective financing in international trade and in agro-food value chain.  

Bangladesh is a bank based financial system. NBFIs comprise small proportion. Banks have practically been playing the roles of both banks and non-banks in the county by the meeting both the short term and long term financing needs of the businesses.  For effective financing in safe and nutritious food sector, it is important to have equity, bond and venture instruments in the system (as may be observed in the previous section on global experiences). Though the Government and the Bangladesh Bank have been working for the development of these fundamental segments of the financial sector, underdeveloped equity and bond market remained critical challenges for the financial sector of the country. The venture capital financing, crucial for supporting innovative ideas, is yet to create due foundation.[20] However, there are success stories[21] on venture financing that have proven workable environment for the venture funds in the country. 

MFIs have also been playing notable role in supporting and promoting agriculture and food production activities, and microenterprises. As the wholesale agency of the micro-finance activities, Palli Karma Sahayak Foundation (PKSF) have financing scheme to support food security and commercialization of agriculture.[22] MFIs came under formal regulatory set up[23] and more organized in recent years and expended activities to promote micro enterprises mainly in the rural areas. Some of the linkage programs of MFIs with banks and NBFIs have notable implications in the agricultural and rural economy. Insurance is another key relevant sector. Crop-insurance products are very useful for weather sensitive food production system. The insurance sector is yet to offer the required supportive product for risk management in food production. It is good that insurance firms-both public and private-are at work on running pilot projects on what is called weather index-based crop insurance. However, lack of structured commercial partnership of insurance companies with banks/NBFIs/MFIs is clearly visible.

4. Way-out for Effective Financing of Safe and Nutritious Food Businesses

Based on the discussions, the paper came up with the following generic recommendations and comments.

One, probably, the immediate job is to recognize ‘safe and nutritious food’ as a different sector or subsector to get due impetus in policy and financing arena. Practically, investors or financing institutions hardly recognize ‘safe and nutritious food value chain’ as a category or sector. In addition, to draw special attention under the umbrella of a particular type of specialized financing (like Green Financing to address Environmental Risk) food security should be considered as a global public good as it is clearly a prerequisite for health and hunger and food insecurity can be a threat to peace. There should also be policy initiative to identify the investment opportunities of the sector and the investment/financing gap.

Two, In spite of several initiatives, financing and market development in agriculture remained less attended. Though warehouse receipts system by itself or as part of commodity exchange arrangement contributed significantly in ensuring financing to the agricultural sector in several developing countries, Bangladesh could hardly reach that level. Micro insurance has also been very successful in several instances. There are huge potentials of designing and offering credit and insurance products targeting agricultural sector of the country.

Three, Small, micro and cottage industry financing is another important approach for financial inclusion of the relatively smaller players of the food value chain.  Though banks have finances in the SME clusters (in terms of geographic proximity), but true cluster approach is missing in SME financing. It is possible to use cluster approach by forming groups and thus ensuring access of SME enterprises engaged in food businesses. Cluster development should get due focus for effective cluster financing in near future.

Four, specially designed, innovative and customized financing products are the true solutions of the safe and nutritious business promotions, as observed in the literature review. In this context, underdeveloped nature of equity, bond and venture capital market is a critical challenge. Alongside working for the promotion of these finance segments, policy initiatives should be there to draw more blended finance for the promotion of safe and nutritious businesses in the country.

Five, Banks and financial institutions may work as a pressure group by adding safety and nutrition related conditionality with the process of financing at different stages of value chain of food production and supply. For big push, the ‘Safe and Nutritious Food Financing’ might get special finance category status of the Bangladesh Bank (like Green Financing); and separate policy and strategic framework may be the future action agenda of the Central Bank.      

Six, Awareness and literacy have no alternative. Financing for the safe and nutritious food sector may find place in the financial literacy drives of the banking and financial sector.  A portion of the CSR funds may be allocated to promote awareness and financing in the area. Greater integration amongst regulatory agencies might bring integrated and effective approach for better financing framework for the promotion of safe and nutritious businesses in near future. 

References

Brooks, Jonathan (2016) ‘Food security and the Sustainable Development Goals’, in Patrick Love (ed.), Debate the Issues: New Approaches to Economic Challenges, OECD Publishing, Paris: https:doi.org/10.1787/9789264264687-27-en

GoB (2019) Activities of Banks and Financial Institutions, Ministry of Finance, Dhaka, Bangaldesh.

Habib, Shah Md Ahsan, Toufic Ahemd Chowdhury and Sarwar Uddin Ahmed (2016) Designing Financial Service Products to Promote Financial Inclusion, A Project Report for the Prime Minister’s Office funded by the UNDP.

Habib, Shah Md Ahsan, Nehal Ahmed, Sohail Mustafa, Atul Chandara, Sanzida Parween (2018) Venture Capital Financing in Bangladesh: An Exploration, A Research Study by BIBM, Dhaka.

Habib, Shah Md Ahsan, Nehal Ahmed, Sohail Mustafa, Rexona Yasmin (2019) A Review of the Sustainable Banking in Bangladesh, A Review Study by BIBM, Dhaka.

FAO, IFAD and WFP (2012) ‘Economic growth is necessary but not sufficient to accelerate reduction of hunger and malnutrition’: http://www.fao.org/publications/so/en

Factor (2016) ‘Preserving Produce: Factor[e] Presents ColdHubs’, Online at http://www.factore.com/2016/09/13/ preserving-produce-factore-presentscoldhubs/

International Finance Corporation (IFC) ( 2017) “MSME Finance Gap: Assessment of the Shortfalls and Opportunities in Financing Micro, Small, and Medium Enterprises in Emerging Markets.” Online at https://www. smefinanceforum.org

Jenkins, Beth and Richard Gilbert (2018) Fueling the Business of Nutrition: What will it take to attract more commercial investment into nutritious food value chains? Discussion paper, Harvard Kennedy School. 

Rockefeller Foundation (2014) ‘Food Waste and Spoilage Initiative’, Online at https://assets.rockefellerfoundation. org/app/uploads/20141215004017/ Food-Waste-and-Spoilage.pdf

Valoral Advisors (2018) ‘Global Food and Agriculture Investment Outlook’: http://www.valoral. com/wp-content/uploads/2018-Global-Food-Agriculture-Investment-Outlook-Valoral-Advisors.pdf

Van Manen, Bert  (2018) ‘Critical Capital for African Agri-Food SMEs’, A review of demand for and supply of risk capital for agri-food SMEs in Sub-Sahara Africa commissioned by AgriProFocus, Rabobank Foundation, and ICCO Cooperation. Online at https://www.icco-cooperation.org/

United States Department of Agriculture or USDA (2019) Food and Agricultural Import Regulations and Standards, FAIRS Annual Country Report on Bangladesh, US Embassy, Dhaka. 

[1] Food security, as defined by the United Nations’ Committee on World Food Security, means that all people, at all times, have physical, social, and economic access to sufficient, safe, and nutritious food that meets their food preferences and dietary needs for an active and healthy life (https://www.ifpri.org/topic/food-security).

[2] Realizing the importance of a secure and safe food supply to consumers, the Ministry of Food established the Bangladesh Food Safety Authority (BFSA) in October 2013, and the Food Safety Act, 2013 came into effect from February, 2015 that sets out general food safety and health protection rules, regulates inspections, detention, and seizure rules of suspect food and classifies breaches. In addition, several major laws and orders in Bangladesh were enacted pertaining to safety and standards of imported food like Food Safety Regulations, 2017; Packaged Food Labeling Regulations, 2017; Bangladesh Standard and Testing Institution Amendment Act, 2003; Import Policy Order, 2015-18; Plant Quarantine Rules, 2018; and Bangladesh Animal and Animal Product Quarantine Act, 2005. In addition, the Food Safety (Food Hygiene) Regulations, 2018 regulates and guides various sanitation and hygiene issues like cleanliness of food processing establishment, health guidance for health workers, rules of cleaning drainage system, equipment used for food processing, and storage. The regulation helps BFSA to raise awareness about waste management at home and processing industry, water supply to the food processing industry, food and food material transportation, use of food wrapping and packing, controlling temperature in food preservation, and conditions applicable for selling street food 9USDA, 2019).

[3] Fifteen ministries are involved in food safety and quality control, while ten ministries are directly involved in food inspection and enforcement (USDA, 2019).

[4] SDGs include significant number of interconnected objectives related to agriculture and food; SDG 2 deals food explicitly by seeking to ‘end hunger, achieve food security and improved nutrition and promote sustainable agriculture”, but multiple other goals relate to challenges in the food system (Brooks, 2016).

[5] In 2018, the Global Alliance for Improved Nutrition (GAIN) commissioned iGravity, an impact investment advisory firm, to assess the financial needs of companies in safe and nutritious food value chains in Kenya and Tanzania. These included primary producers, food processors and manufacturers, and providers of value chain services such as cold storage. Most of these companies were relatively small, family-owned, medium growth businesses (Jenkins and Gilbert, 2018).

[6] Blended finance is the strategic use of public or private funds, including concessional tools. For example, in addition to providing commercial financing for our own account, IFC uses a number of complementary tools to crowd in private sector financing that would otherwise may not be available to projects with high development impact, thus to blend concessional funds-typically from development partners-alongside IFC’s own commercial funding (https://www.ifc.org).

[7] Seed capital is the initial funding used to begin creating a business or a new product. 

[8] Mezzanine financing is a hybrid of debt and equity financing that gives the lender the right to convert to an equity interest in the company.

[9] Venture capital is a form of Private Equity financing that is provided by Venture Capital firms or funds to start-up’s, early-stage, and emerging companies.

[10] The Perspective Plan of Bangladesh 2010-2021 has provided the road map for materialization of the national goals of attaining the sustainable development agenda in the Vision 2021, and beside promotion of equitable, environment friendly, inclusive and socially sustainable pro-poor accelerated growth, it also sets its target regarding agriculture sector to eliminate food deficiency by 2021.

[11] National Agriculture Policy, Government of the People’s Republic of Bangladesh, April, 1999.

[12] https://www.banglanews24.com/business/article/79716/SME-Policy-2019-for-entrepreneurs-okayed

[13] SME Development Project 2; Small and Marginal Farmers Agricultural Productivity, Improvement and Diversification Financing Project; SME Entrepreneurship Development Project etc.

[14] Capital Market Development Program and Bangladesh Insurance Sector Development Projects.

[15] For Agro-Processing, supporting sharecroppers and vulnerable farmers etc.

[16] ACFID Circular No. 03, 2015.

[17] ACFID Circular Letter No. 2015.

[18] In group lending approach, farmers got loan for crops, pump for irrigation and drainage.

[19] Alongside regular trade documents like commercial invoice, transport documents, weight list, packing list, bill of exchange, certificate of origin, certificate of analyses etc., some special types of documents are required for agriculture and food imports like Health certificate (Fit for Human Consumption) for any kind of food; Radiation certificate issued by competent laboratory of exporting country; Phyto certificate issued by agricultural department of the exporting country; Animal health certificate for live animal; Fumigation certificate; and Conformity certification (USDA, 2019).

[20] In Bangladesh, so far 11 companies have got the necessary license as Alternative Investment Fund under ‘Bangladesh Securities and Exchange Commission (Alternative Investment) Rules, 2015’. Almost all the companies are relatively new and initiating the ventures (Habib, et al, 2019).

[21] Popular Pharma; bKash; docola.com etc.

[22] Food Security Bangladesh Project with EU-Ujjibito; Promoting Agricultural Commercialization and Enterprises (PACE) etc.

[23] Close to 800 MFIs are in operation in the country Regulated by the Micro credit Regulatory Authority (MRA).

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