My experience as an agricultural engineer has led me to delve into the management of capital and investments in the agricultural world. Over the years, I have witnessed how families, companies and associations have worked hard to expand their assets and generate employment for thousands of people. However, one of the biggest obstacles faced by agricultural enterprises, especially small and medium-sized farmers, is the lack of access to financing.

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Faced with this difficulty, instead of focusing on a pessimistic environment, we should direct our attention towards the opportunities that exist in Colombian agriculture to bring capital closer and transform the reality of the countryside.

The potential of agriculture in Colombia is undeniable. In previous columns, I highlighted the abundance of land with agricultural vocation throughout the length and breadth of our country, however, the current conversation should focus on how to supply the demand for capital for the agricultural sector and reduce the risks associated with investment.

To achieve this, we need to establish an open and constructive dialogue between financing entities, agricultural enterprises and Fintechs focused on agricultural investment.

One of the most effective solutions to bring capital closer to agriculture lies in understanding the biological dynamics of crops and their cash flow. Through this knowledge, we can create attractive financing alternatives, with returns in excess of double digits, since in many crops it is possible to obtain profitability figures of more than 15% or 20% per year, thanks to markets with growth potential both nationally and internationally.

It is essential to promote partnerships between farmers and specialized marketers to reduce the risks associated with investment. Marketing is a key factor in reducing uncertainty in agricultural projects, since it ensures demand for the products grown.

Currently, there are public and private entities in Colombia that offer agricultural loans, but their analysis and risk criteria are often not aligned with agricultural dynamics.

Against this backdrop, it is necessary to strengthen the use of instruments such as Finagro, which manages credit placement through first-tier banks, however, we must go further and advocate for greater understanding and support from financial institutions towards agricultural business models.

Although Banco Agrario is a relevant actor in the agricultural sector, with presence in most of the national territory, this entity can strengthen its support to farmers in the construction of sustainable and profitable business models.

This requires greater attention and focus so that farmers can demonstrate the viability of their projects and convince financial institutions that investing in agriculture is a safe bet.

Private investment, technology-based entrepreneurs and venture capital funds represent a great opportunity to boost agricultural development through fair credit and with full understanding of the biological and commercial particularities of agriculture.

Let us take as a reference neighboring countries that have found in the countryside an important source of wealth generation and good capital placement. It is time for Colombia to follow their example to attract significant investments to boost agricultural and livestock development through the adoption of technology and the strengthening of marketing models.

I already envision a connection between technology, marketing contracts and an understanding of cash flow, conditions that will allow better management of capital and generate a real national impact on agricultural development.

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We can create disruptive environments in the financial world, using the agricultural sector as a lever for economic growth. Our nation has the knowledge, skills and talent necessary to carry out investment projects that generate headlines with millionaire financing rounds, focused on agricultural and livestock development.

Investment in the Colombian countryside has significant potential and it is in the hands of all of us as a society and actors involved in the sector to transform this reality and build a more prosperous and sustainable future.

Steps to improve the financing of the agricultural sector

Open dialogue: establish a constructive dialogue between financing entities, farmers and agricultural entrepreneurs to understand the specific needs of the sector and find appropriate solutions.

Specialized knowledge: strengthen the education and training of credit risk analysts in agricultural issues for a more accurate assessment tailored to the particularities of agriculture.

Incentives for associativity: encourage the formation of agricultural associations and cooperatives to reduce risks and improve product marketing.

Use of technology: encourage the adoption of agricultural technologies that make it possible to monitor and reduce uncertainty in production, which will give investors greater confidence.

Promotion of success stories: disseminate success stories in the agricultural sector that have achieved a positive return on investment and thus demonstrate the potential of agriculture as a profitable option for investors.

Financial support: strengthen technical assistance and financial support to farmers to develop sound business models that are attractive to financial institutions.

Facilitate access to credit: simplify procedures and requirements for accessing agricultural credit with competitive interest rates and terms adjusted to the production cycle.

Strategic alliances: encourage collaboration between the public and private sectors and international organizations to promote agricultural financing and the development of the sector.

Diversification of financing sources: seek new sources of financing for the agricultural sector, such as investment funds, angel investors and crowdfunding platforms oriented to agriculture.

Transparency and accountability: promote transparency in the use of financial resources earmarked for agriculture and accountability to generate confidence among investors

Agricultural financing is a challenge that can be overcome if we work together to create an enabling environment for investment in the countryside, with a strategic vision and a comprehensive approach we can attract capital to promote sustainable and transformative development of the agricultural sector in Colombia. It is time to join efforts and bet on agriculture as an engine of economic and social growth for our country.

The future of the field is in our hands!

The National Agrarian Reform System in Colombia, the key action for the development of the countryside