Credit and finance issues in the Eurasian wheat belt

Abstract

Availability of financial means is critical to the growth and development of production and productivity in the Eurasian wheat belt, but this has been one of the constraints on realising the agricultural potential of this region. This chapter uses examples from Kazakhstan, Russia and Ukraine, as well as other countries in Central and Eastern Europe, to identify key constraints on well-functioning credit and finance markets and discuss issues and potential remedies for the future. The scope of the chapter includes short-term operating capital, medium-term credit for durable assets and long-term credit for investment through bank credit as well as various other alternatives. It is recognised that the basic conditions for well-functioning market institutions, including for commodities, land and finance, take a long time to achieve, so innovations are needed to bridge these gaps. Successes and failures in the past experiences of transition countries in Europe and Central Asia are used in assessing future strategies and alternatives.