RIYADH — The Agricultural Development Fund (ADF) has announced launching a new finance product dubbed “Contract Farming Finance Product”, with the aim of enhancing marketing of some agricultural produce from farms to end users through distributors, mediators, retailers or other farms.

This move would help all benefit from the local agricultural produce and market it under an agreement between the buyer and farmers, which requires producing and marketing one or more farm products.

The fund, through this financing, works on bringing together all parties related to farms, suppliers, marketing services and cooperative associations.

Deputy Fund Director for the Credit Sector Bader Bin Sulaiman Al-Malek noted that top goals of the new finance include securing the supplies of agricultural produce, facilitating the marketing and selling of local farmers’ products, contributing to the food security, and increasing reserves of main items.

This is in addition to other goals, such as contributing to the GDP growth, increasing the exports of items with high self-sufficiency levels and directing the participation of the private sector in local agricultural investments. Al-Malek noted that finance during the first phase would target: fruits, vegetables, rain-fed crops, coffee and wheat.

Al-Malek also pointed out that the “Contract Farming Finance" seeks to finance the operating capital to support farmers, reduce risks between buyers and producers, increase production and market share, diversify products, increase efficiency and boost cooperation.

It would also work on reducing imports of targeted crops through realizing integration between contract parties, supporting the food security initiative in Saudi Arabia, participating in creating job opportunities for citizens and increasing the use of local content, and developing the performance of marketing services and jobs. —SPA