09:47 | 30/03/2018 Finance - Banking
Vietnamese smallholder farmers will be provided with financial support from a new US$163 million deal, recently signed between the Asian Development Bank (ADB) and the Japan International Cooperation Agency (JICA).
|Vietnamese coffee farmers are expected to boost their production towards inclusive and sustainable development due to a new financial support deal recently reached between ADB and JICA|
With the aim of improving inclusive and sustainable agricultural value chains, the deal was reached by ADB and JICA on March 28 to provide loans for Olam International Limited (OIL) – an agribusiness operating across the value chain, and Café Outspan Vietnam Limited (COVL), a subsidiary of OIL.
OIL and COVL will directly offer support to 20,000 Vietnamese farmers, as well as those from Indonesia, Papua New Guinea and Timor-Leste, in expanding their production and improving livelihoods by promoting inclusive and sustainable development.
Accordingly, the Agricultural Value Chain Development Project will support OIL’s US$211 million investment plan until 2019 by financing an expansion in the firm’s processing of midstream products, while providing permanent working capital investments for smallholder farmers, particularly in coffee, cashew nut, cocoa and pepper cultivation in the aforementioned countries.
The assistance will also help OIL to develop processing plants to create a more seamless integration of farmers, markets, and customers, adding more value in local markets and improving agricultural value chains.
The project, which is ADB’s first non-sovereign assistance directly co-financed by JICA, includes US$3 million in technical assistance, partially financed by the Canadian Climate Fund for the Private Sector in Asia, to provide capacity building training to smallholder coffee farmers across the project countries. The technical assistance includes training in avoiding deforestation and increasing productivity through climate-smart agriculture practices, including water harvesting and soil management.
This loan agreement underpins the mutual aims of Olam, ADB, and JICA to support the economic prosperity of farmers, as well as helping them to become stewards of the environment, which is essential for the future of agricultural production, said Prakash Jhanwer, Regional Head for South East Asia at Olam International.