Smallholder farmers in developing countries face substantial constraints to boosting production—chief among them a lack of financial services. Smallholders often cannot access the credit necessary to invest in new crops or technologies and to provide security in the face of risks and shocks. A 2013 paper found that in South and Southeast Asia, only 1 percent of smallholders’ credit needs for longer term investments are met. Women, low-income groups, and ethnic minorities may face even larger challenges to meeting their finance needs. Farmers also often lack insurance needed to make risky investments that can also boost their production.
Photo: Alan de Brauw/IFPRI
