Finance Plus: Value-Added Services, Technology and Food Security for Rural Farmers in India

As part of the Rural Agricultural Finance and Food Security (RAFFS) Practitioner Learning Program (PLP), the Kahzi Kadaimaidai Farmers Federation (KKFF) explored the connection between rural finance, value-added services and food security for group members in South India. Following the 2004 tsunami, KKFF designed a bundled package of services including agro-advisory services, risk mitigation/insurance and warehouse receipts financing tailored to meet the specific needs of rural farmers in Tamil Nadu state.

KKFF’s hypothesis was that by providing these value-added services along with financing options, farmers would be able to customize and expand upon traditional rural finance products to improve crop production, increase income and, as a result, improve household food security.

About RAFFS: In 2010, the number of undernourished people worldwide topped 925 million. Among the many factors responsible for this figure are high domestic food prices, lower household incomes, and increasing unemployment, all of which have significantly reduced access to food for the poor. Research has shown that a healthy agricultural sector can provide an economic buffer during financial crises. In addition, financial services responding to the food security needs of rural households can lead to more successful outreach and have a greater impact on the poor.

The Rural Agriculture Finance and Food Security Practitioner Learning Program (RAFFS) is an action-learning project focused on approaches to and connections between rural and agricultural finance and household well-being, including food security. The envisioned impact is that rural households and enterprises will have increasing finance options that serve their needs and contribute to a vibrant rural economy both on and off the farm.