Challenge
Rural farmers around the world provide a critical source of food, as well as work and income, to their communities. But the COVID-19 pandemic threatens to disrupt production as well as the value chains that are essential for bringing food to local and global markets. Female farmers are particularly vulnerable because they tend to have less access to resources and greater caretaking responsibilities.
Solution and Impact
A DFC loan guaranty facility is helping Root Capital sustain livelihoods of more than one million farmers—more than half of them women—in 21 countries in Africa and Latin America.
Root Capital, a nonprofit social investor that provides both credit and capacity building to rural agriculture businesses in developing countries, has responded quickly to the pandemic by surveying all of its borrowers about the risks they face. These include health risks, labor shortages and related production disruptions, as well as, road and border closures that threaten to slow sales and reduce farm revenues.
Root Capital is taking a blended finance approach to the COVID-19 pandemic, using donor and grant capital along with DFC financing to provide farmers access to capital, virtual training in crisis management, and access to items like masks and soap that are essential to farming safely.
Root Capital is using donor capital to provide resilience grants of emergency cash or credit for purchasing supplies to help to withstand any COVID-related delays in production. In Africa, Root Capital deployed “Operation Soap-PPE” to provide grants for gloves, handwashing stations, soap, masks, and educational materials to local agriculture businesses that are reaching almost 200,000 rural farming families. In Peru, where coffee and cocoa harvests are threatened by the pandemic, similar grants have reached about 20,000 farming families.
Root Capital has also shifted much of its work to a digital model, remotely training farmers on crisis management, financial management, and safe farming practices that mitigate disease risk so that farmers can maintain their livelihoods and continue to produce food and provide for their families while also taking precautions to reduce the spread of COVID-19.