In the Pre-Crop Banking Model the production is never owned by farmer. The risk is managed through hedging in the futures market. Selling price, type of production & quantity are fixed at the beginning. The production risk (flood, drought, etc.) is covered by insurance. The repayment risk is transformed in performance risk. Monitoring is by conducted by the investor/bank or the insurance company. Farmer remuneration is the fixed price of the production, less the inputs cost and the investor/bank interest.
PRE-CROP BANKING
Our finance and production model conceptual framework is based on the comprehensive agricultural development finance value chain. The state and local governments are responsible for the enabling environment including policies, regulations, institutions and the overall business climate. This serves to support the financial and information flows needed to facilitate the inputs, production, processing, distribution and consumption along the agribusiness value chain. Farm Trellis takes responsibility for the finance and supporting services.
Other aspects of the framework include interdependence between the different segments of capital and information circulation along the value chain. Integration of primary production and finaince in an overall cycle. Spreading our the risk of the investment with insurances and collateral minimization. Implementation of new finance and productive mechanisms through this value chain integration.
PROJECT FEATURES
PROJECT INFORMATION
Date: 2022
Client: Global Investors
Website: farmtrellis.com
Location: USA & Nigeria
Value: $1,000,000+
EXPLORE PROJECTS
OUR RECENT PROJECTS
INPUT FINANCE & MANAGEMENT
This model allows for detailed management agreements and economies of scale.