Leasing, trade credit and commodity financing in OECD countries

Commercial financing alternatives for serving agriculture's investment and working capital requirements have expanded significantly in OECD countries. This paper focuses on non-traditional financing sources for agriculture. Cost competitiveness and demand by producers, input suppliers and integrators are recognised as factors that are driving the process in OECD countries. Examples of leasing and vendor credit arrangements are provided along with a discussion of commodity financing. The paper also explores the institutional framework underlying non-traditional financing arrangements from a strategic perspective. Finally, several preconditions and implications are identified for the expansion of non-traditional financing arrangements in the economies in transition.