KEY CHARACTERISTICS OF FINANCING MECHANISMS FOR SUSTAINABLE AGRICULTURE
Abstract
The article is devoted to current issues in developing financing mechanisms for sustainable agriculture in the context of global environmental and socio-economic challenges. It analyzes and systematizes the latest global and Ukrainian practices in the field of sustainable agricultural finance, with a focus on integrating environmental, social, and governance (ESG) principles into financial decision-making. Particular emphasis is placed on identifying and describing the key features of sustainable financing tools, such as green bonds, sustainability-linked loans, blended finance schemes, agricultural insurance products, crowdfunding platforms, and innovative digital financial technologies. These mechanisms are evaluated in terms of their ability to support the transition toward sustainable farming practices, increase climate resilience, and promote financial inclusion for smallholder farmers and rural communities. The article also explores the influence of specific sustainable agriculture practices–such as organic farming, agroforestry, climate-smart agriculture (CSA), regenerative agriculture, precision farming, and sustainable livestock production–on the development and adaptation of financing instruments. Special attention is paid to Ukraine’s experience in forming and implementing sustainable financing models in agriculture, including green banking initiatives, inclusive investment approaches, government support programs, and low-carbon financing strategies. Ukrainian and international cases are compared to assess the effectiveness, accessibility, and scalability of various financing models. The article concludes that the success of financing mechanisms for sustainable agriculture depends on their ability to balance environmental protection, economic viability, and social equity. These mechanisms are essential for achieving long-term food security, reducing greenhouse gas emissions, fostering rural development, and aligning the agricultural sector with the broader goals of the green economy and sustainable development.
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