Value-Chain Finance in Greek Agriculture

• Published in: Sustainability Vol. 16; no. 7; p. 2922
• Main Authors: Boufounou, Paraskevi, Lathiras, Nikolaos, Toudas, Kanellos, Malesios, Chrisovalantis
• Format: Journal Article
• Language: English
• Published: Basel MDPI AG 01.04.2024
• Subjects: Agreements; Agricultural cooperatives; Agricultural industry; Agricultural production; Agriculture; Banks; Economic crisis; Economic growth; Farmers; International economic relations; Manufacturing costs; Production costs; Questionnaires; Surveys; Sustainable development; Tax policy; Value added; Greece; United States > US; Romania
• ISSN: 2071-1050; 2071-1050
• DOI: 10.3390/su16072922

The primary sector is particularly important in Greece, especially considering the country’s current financial crisis, which has lasted since 2010. In an innovative way, this paper investigates the role of Contractual Agriculture as a tool for financing farming production costs in Greece. This study presents the findings of a survey of 222 producers, almost half of whom had used the Contractual Agriculture financing tool, utilizing descriptive statistical analysis via correlation analysis, statistical tests and visual plots such as bar charts. The main findings are that financed farmers are more positive than non-financed farmers about the importance and contribution of the value-chain finance of Contractual Agriculture in covering the cost of production. It ensures an uninterrupted supply of agricultural inputs, improves the possibility of negotiating the purchase price of pesticides and achieves more satisfactory bank terms and conditions for agricultural product financing, as well as the possibility of negotiating the purchase price of pesticides. Finally, in line with previous research, this study found that younger age groups are more hesitant to use this innovative financial tool, and producers with a higher level of education are more likely to use it. This study delves into the advantages and disadvantages for banks, farmers and commercial or manufacturing enterprises involved in such contracts, and its findings offer a comprehensive understanding of the practical implications for participants in Contractual Agriculture and for regulators. Hence, it demonstrates potential areas for improvement in the implementation of Contractual Agriculture in Greece, which could contribute to the growth of the Greek primary sector.