Subsidies as an Instrument in Agriculture Finance

The paper presents a literature review of the lessons learned in the use and misuse of subsidies as support instruments to enhance and increase agricultural finance and investment for development. The review paper includes an evaluation of five major interventions involving subsidies used to kick-start private sector activity in support of financial services: a) Microinsurance and weather-index-based insurance; b) Credit guarantee funds; c) Warehouse receipts; d) Specialized agricultural development banks; and e) Agricultural investment funds.